Today’s EY conference saw strong statements by both the Prime Minister, and the Leader of the Opposition, with Dr Muscat slamming banks on access to funds policies and Dr Busuttil attacking the Prime Minister on the country's reputational risk caused by the Panama Paper revelations.
They were speaking during a conference organised by EY, held at the Chamber of Commerce in Valletta. EY Malta have released their proposals for a focus on five areas, which they believe have potential for growth and investment on the island. At last year's Malta Attractiveness Survey conference EY planted a number of seed policy ideas in various areas. The scope was to look beyond the current economic horizon. With input from various public and private stakeholders EY have now matured them into policy proposals The five policy areas are Fintech, Commodities trading, Logistics hubbing, Malta as a distribution centre for online purchases from Asia, and Legal immigrants.
Dr Muscat, during his speech, turned his gaze to banks and access to finance, slamming them for their practices. “I am disappointed by the way which major players are putting the cart before the horse. The amount of bureaucracy which is turning away people from accessing finance is not the role of a bank in our economy. The role of a proactive bank in our economy is to take calculated risks. To be careful, yes, but not turn away people and threaten to close down accounts. Financial service providers were telling me that they put in more rigorous conditions than the OECB is putting in place to open accounts. I hear situations were some banks will say that if a client is operating in a particular sector, banks would close the account. I hope this comment will stimulate some reaction from the banks. Government cannot intrude in private banks, or the bank it has a shareholding in. My role is to make well known the business community’s frustration in all this”.
The Prime Minister explained that government is looking into the possibility of creating free trade areas to help the island develop into a logistics and transshipment hub. this, he said, cannot come at the expense of additional land. He said that government is looking at the possibility of using existing warehouses as free zones. “We will start with changes in our customs code and we are looking into enforcement”.
The Prime Minister also mentioned that the launch of a Public-Private Partnership for a logistics hub in Hal Far of 8,000 sq metres. He said that there are two companies involved who would employ around 350 people. The project, Dr Muscat explained, will soon be unveiled.
Dr Busuttil said he agreed with the EY policy areas, but argued that Malta is also facing a number of problems, one of which was the country's reputational risk“If good governance is not at the forefront of government actions and behaviour then it will create a reputational risk for our country. The Panama scandal has not gone away, and as long as it is there it will remain a reputational risk for our country. Everyone abroad knows about it. As long as we have done nothing about it, then the reputational risk will grow".
Turning to the Freeport, Dr Busuttil spoke positively about the work and investment there, but the Prime Minister mentioned that it should not physically expand. “I am not too keen on having more land down south eaten up by the Freeport. It’s an issue where the enterprise might grow too big for the island. I’m not too keen on it outgrowing Birzebbugia. We need to improve their productivity in ways that it does not take up additional land. This is why we are in the final phases of coming out with customs legislation and free zones,” Dr Muscat explained.