What is the role of Malta Enterprise in the unprecedented situation we find ourselves in today?

Malta Enterprise is always the first point of contact for businesses, but today its role has spread to being the first point of contact for practically every productive economic sector in the country. Apart from that, we also have an agency responsible for foreign direct investment, and we also administer a number of support schemes for businesses.  Given that we are regularly responsible for the latter, we now have the responsibility of administering the government’s schemes related to financial assistance as a result of Covid-19.

The situation has obviously increased demand on Malta Enterprise; how much resources do you have to cope with this increase in demand?

Malta Enterprise’s workers are all hands on deck as a result of this situation. Where, previously, we had departments which were processing certain other applications and departments which were looking at continuing to promote Malta as a destination for investment, we have now shifted everything so that everyone in the organization is now focusing on being the first point of contact for businesses. 

The work being carried out at the moment by all workers around the clock is primarily to answer the queries which all businesses have and see that their applications are processed smoothly.  As soon as the government announced its economic measures, we set up a website with all the necessary information, and then proceeded to process the applications coming in. We wanted to create a system which, for businesses, is as seamless as possible.

Obviously, we received a lot of questions since this situation started. We received thousands of calls, emails, and Facebook messages – over 25,400 contacts via all those means. We received 13,000 telephone calls through the 144 helpline alone.

How many businesses have applied for help through the government’s wage supplement scheme?

The application for the wage supplement – wherein the government announced that employers can apply for a grant of up to €800 per month for each worker – came out last Monday.  As of Friday morning, we had over 9,000 applications.  That means that there are around 35,000 employees who will be benefitting from this scheme.

Simply put, that means that had it not been for this assistance scheme, the majority of those 35,000 workers would, today, be on unemployment benefits. As a result of the scheme, we are seeing that businesses are, instead of telling their workers that they cannot afford to pay them, applying to keep their workers with them. This was the rationale behind these measures.

These measures only apply for certain sectors – I know that in the last few days, that number of sectors has increased, but are there further plans to increase more sectors to this list or shift some sectors from the lower grade of help to the higher, €800 per month, aid scheme?

Part of Malta Enterprise’s work is also to take an active role in decisions and give feedback on policy to the government. Over the past few days, we have been gathering feedback from businesses and sectors which are feeling the squeeze of Covid-19, and passing that information on to the government.

Like in the last few days we saw certain sectors be added to the list, I am sure that what the government has announced so far is not the full package and that there will be other measures announced in the coming days.

To build onto this point in fact, I want to ask whether, given the feedback which you have received, you feel the need for more measures and, in that case, what you think they should be?

All those who are coming to take this type of help are applying through us and automatically receiving that help; so, they aren’t necessarily coming to us and telling us of their problems. Apart from the sectors already tackled by the government, other businesses in other sectors are starting to feel the squeeze – and as more time passes, there will be more who feel the impact.

It’s good to point out that there were a lot of businesses who, because things were going well, didn’t hide their money away but instead invested them into their own businesses, meaning that the impact is being felt almost straight away.

I think that in the coming days the government will continue providing more aid – perhaps through different schemes than this.  For instance, we saw the European Commission approve a loan guarantee scheme, meaning that businesses can take loans at a reasonable rate of interest so they can continue to operate.

In a more general sense, we know that one of the main foundations of the Maltese economy is investment from abroad.  How has the situation with regards to Covid-19 affected the level of foreign direct investment (FDI) into the country?

The amount of investment promotion and FDI requests which we had through January and February this year was on the increase – both months were very strong.  Obviously, since the investment is coming from abroad, automatically the exploratory visits which were scheduled for March, April, May, and the months after are all on hold. We are still in contact with those companies with whom we were in advanced negotiations for them to open business here, and none of them have told us that they are no longer interested in coming. At the moment we are working to maintain contact with them and update them on any information they may need.

It is noteworthy that in recent days we had international companies from countries which are from outside of the European Union showing interest in investing here due to the way in which the situation is being handled, both from a medical perspective and an economic perspective. These companies are contacting us because they are interested in investing in Europe, and that principle gives us hope that our economic recovery may be a good one as long as we keep handling things as we are.

At this point, while there is a relative sense of calm in terms of investment, we are starting to plan out how we want to be one of the first countries to emerge and seek investment, and to identify what type of investment we can attract to Malta. What was the Maltese strategy up till a few weeks ago will have to change in order for our promotion and for the businesses we want to attract to be good for facing the post-Covid 19 world.

So, in essence, we are seeing what type of investment, strategically speaking, makes the most sense for Malta, and it is crucial that we are amongst the first countries with such a strategy so we can ensure that our economic rhythm picks up again.

When you say that you are looking at types of investment than before, how would you define that?  What’s the difference between what you were working to attract up till a few weeks ago and what you will be trying to attract months down the line when this is over?

The truth is that the situation is so unpredictable that it is difficult to give a forecast of what is going to happen in the coming months.

However, areas we are looking at are, for instance, situations where industries are needing more stocks because of the supply chains that have now been broken.  We are also looking at research and development, and also the pharmaceutical industry – both of which remain very important for us.  

We are taking stock of things.  Due to the situation as it is, the first priority should be that we see that the companies which have invested and set up here, particularly in manufacturing, R&D, pharmaceuticals, and aviation, are saved and kept going so they can keep supporting the economy.

Obviously, we need to look at other sectors as well. One of the bi-products of this crisis is that face-to-face meetings have reduced, but contact has been kept up through new software.  So, for instance, we can look at the potential of having one of these software companies setting up its base here.

In a situation like this though it’s pointless saying what one thinks. Malta Enterprise will study the situation and we are engaging in discussions with stakeholders to come up with a strategy so that our economic recovery can be as quick as possible.  The world will obviously have changed, so when we do get to that period, we need to understand the situation around us and give lead businesses to work accordingly.

However, as an island one of Malta’s main need is connectivity with the Europe – so as long as this situation persists even outside of Malta, where maybe certain countries may take longer to solve the situation than Malta, how will our economic recovery work with in terms of bringing this FDI?

That’s the biggest question that exists at the moment, and that’s why I am saying that it’s difficult to make predictions.  Even if, medically, we succeed in moving forward, we cannot answer questions with regards to, for instance, people’s confidence in travelling. Things are evolving and developing, and will continue to do so, as time passes. 

If the situation is prolonged for a number of months, of course there will be an economic delay. The longer the medical situation takes to be resolved, the longer businesses will remain closed, the longer people will remain indoors, and the longer airlines will be grounded – so the ripple effect of that would be very big.

Something else which has to be kept in mind is the fact that even after releasing a lot of aid packages, one must be certain that countries can sustain that aid.  It’s useless spending everything in three months and then running out of money, or not having anywhere to lend from – that is just postponing the problem. 

Ultimately however, anything that we are saying can change within a day, a week, or even in months – so predictions aren’t the best thing to do.  The start of the economic recovery will only be when the medical situation starts coming under control.