The government continues to insist that Malta has not been affected by the global recession, or that the effects have been marginal, but the latest Eurostat figures that show a dramatic decline in the country’s exports should ring the alarm bells, especially considering that 2009 is predicted to be worse than 2008.

The statistics show that Malta’s exports have declined by 14 per cent in 2008, with Malta being one of just four EU states that recorded a negative year-on-year growth. Considering that, in the EU, there was an average of 6.2 per cent increase in exports, and that the “closest” country was Ireland with a drop of six per cent, the scenario for Malta looks rather bleak, to say the least.

Malta’s results were by far the worst, and with exports playing a big role in terms of competitiveness and foreign income, the government should quickly find out what is going wrong and make attempts to rectify the situation.

Many are predicting that 2009 will be a worse year than 2008, as the full effects of what happened in the last quarter of last year will continue to be felt. The first half or more of 2008 were positive, and these made up for the shortfalls of the latter months. But with 2009 starting on a wrong foot and with the prospects for the rest of the year not looking good, it is to be expected that this year will be worse than the previous one.

If one puts the downsizing of ST Micro in the balance too, then the state of affairs takes on a darker shade. ST is by far Malta’s largest exporter, and the announcement that it will be reducing the workforce by up to 450 employees – part of a restructuring process to tackle a drop in production – is not good news for Malta.

The effects of ST’s predicament seem to already have had an effect on Malta’s exports results, and one wonders what will happen if the company continues to face such difficulties in the months to come.

It has often been said that it is wrong for Malta to rely on one big exporter, as any difficulties that are faced by such a company would affect the country’s whole export market in a very negative way. Well, this seems to be happening now.

But it is not too late to make amends. For one thing, there are other, positive signs that need to be taken into account. The fact that, for example, Malta was one of only eight EU countries not to have resorted to bailout measures to assist the financial sector or other sectors of the economy is a good sign.

The news that Malta continues to attract foreign investment is also an indication that there is confidence in the country and in its workforce. A few days ago, it was announced that there will be a e10 million investment in a new pharmaceutical company and, although part of the investment will be local, German and Palestinian entrepreneurs are also involved in the project.

As long as Malta continues to transform its industry and go for high-end manufacturing, and at the same time continue to expand its services industry, the chances that the country will survive the prevailing complicated situation grow. The development of SmartCity is also something that we all look forward to as a means through which Malta can continue to be competitive, while at the same time attract foreign investment.

We are living in tough times, but over many years the Maltese have shown that they are resilient and determined to overcome the difficulties they face. We need to show the same resilience and determination, because what we are facing today is one of the biggest challenges in history.