CorporateDispatch Pro - Edition 26

Corporate Issue No. 26 | April 2022

Malta’s Next Chapter 1

Corporate Issue No. 26 | April 2022

Contents Malta’s Next Chapter

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The SME’s View

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The Bigger Picture

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Malta Insights

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European Insights

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The long and winding road between Russia and Ukraine

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Climate change, Russia, Inflation: The trilemma of EU Energy Policy

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Europe needs to be strategically autonomous – Metsola

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EU.Review

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Over a Coffee

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A Fresh Look At The Past

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Express Trailers plants 270 trees, a tree for every employee

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Interview with Mark Aquilina and James Sammut

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Local knowledge and a strong work ethic are the key pillars of success

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More Growth in the UK Healthcare Market

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for Maltese virtual agent company EBO Climate Change: No time and luxury to wait

Editorial Team Managing Editor - Jesmond Saliba

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Contributors Lawrence Zammit, Director, MISCO Abigail Mamo, CEO, SME Chamber Mark Aquilina, Founder and Chief Visionary Officer, NOUV Dr Charlene Vella, Senior Lecturer, UoM

Corporate ID Group Isabelle Micallef Bonello Shirley Zammit Keith Zahra Tonio Galea Denise Grech James Vella Clark Matthew Borg Nicholas Azzopardi PRODUCTION

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ADDITIONAL SOURCES

Corporate

COVER STORY

Malta’s Next Chapter Lawrence Zammit Director, MISCO Consulting Ltd.

“Malta at the crossroads” might be considered as a political cliché mentioned by some politicians in the past weeks. Yet, these past two years were witness to events that in some way or other altered the way of life of those who call the Maltese islands home.

Following the unprecedented events brought about by the pandemic and the war in South East Europe, Malta is faced with challenges that necessitate tangible actions on several fronts, including the preservation of our environment, the use of digital technologies to enhance our competitiveness, the upskilling and reskilling of our workforce and the polishing of our corporate governance framework.

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hese unprecedented events can be turned into positive opportunities to accelerate action on issues which have been long overdue for action. Although constructive debates and content-heavy presentations during national conferences help in the trajectory of a country, I have hope that these unprecedented and extraordinary events will accelerate actions and help stakeholders walk-the-talk.

On a social level we have an increasing inwork poverty. The proportion of working people who earn less than 60% of the national median income has increased from 4.8% in 2015 to 7.0% in 2020. This is a poverty trap, with many instances of hard work not resulting in a decent level of income for a decent living. One cannot also omit the fact that 16.9% of the population live in households with a national equivalised income below the at-risk-of-poverty line. Although decreasing (albeit at a glacial pace) year on year, this is a substantial portion of the population, especially when one takes into consideration the rate of increase in the inflation in the last months, where the cost of necessities in a food basket has risen substantially over a very short of period time. The supply-chain disruptions have been greatly attributed to this inflationary increase, but it is a wrong assumption if one is to think that the inflationary increase in the basic basket will be reversed.

In the years prior to the pandemic Malta witnessed an economic growth which was robust by any standard. A fiscal surplus was recorded for four consecutive years, while the main economic pillars of activity including tourism, the financial and gaming sectors and the construction and property market witnessed growth that translated into better working and living opportunities to many working in these sectors or in their multiplier activities. It also resulted in an influx of new talent through foreign workers as the local employment market was saturated, as evidenced by the low consistent This situation calls for action through unemployment levels. tangible actions which have long been voiced by various stakeholders including the The reality of today is that after four years revision of the minimum wage, the pensions, of fiscal surpluses, Covid-19 reversed the and the adoption of the well-being index as country to a fiscal deficit mainly due to the an integral part of policymaking. It is evident fiscal aid granted by the Government to the that the most at risk are those with limited businesses and employees, the increase in fixed income mainly the elderly who survive the public health expenditure as well as the on their pension and have no additional deferral of tax payments to businesses in income and those with limited opportunity of order to help with liquidity. work including the long-term unemployed, those living off government allowances and single parents.

This is a poverty trap, with many instances of hard work not resulting in a decent level of income for a decent living.

One cannot also omit the fact that 16.9% of the population live in households with a national equivalised income below the at-risk-of-poverty line.

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The carbon-neutral targets set by the EU and the consumer sensitivity to climate change are also a game-changer which will trickle into actions that have a direct impact on our businesses and consumers. Malta committed to 19% reduction in carbon emissions by 2030.

This will mainly be achieved through a series of actions related to mobility since transport is the main polluter in Malta. Government has already committed and is rolling out several

schemes related to electrification of vehicles, popularisation of public transport and use of alternative transportation such as e-bikes and shared rides. The challenge in the sector is the availability of the infrastructure for electric transportation and convincing the locals to switch to alternative modes of transport.

Another major challenge towards our carbonneutral goals is the construction sector. The property boom experienced in the last ten years not only resulted in more build-up area in our towns but also had an impact on our landfill capacity and air pollution. Shifting to more sustainable buildings is no mean feat as the industry shifts to more sustainable building and insultation materials, which, as confirmed by the developers themselves, will increase the cost of building which will eventually be passed to the buyer. While at consumer level the Government - through various incentives - seems to be effective in switching households to more energy-

efficient methods, the delicate perennial challenge is for Malta to strike a balance between the influx of foreign labour and its corresponding demand for accommodation versus the need to contain the number of new build developments.

The transition to a green and digital economy will require the mastering of new skills both by those already in employment and those joining the labour market. According to the UN Environment Programme’s Global Guidance for Education on Green Jobs Report (2021) the transition to a green economy will result in an estimated 60 million jobs to the market by 2030. The skills needed are not only those in low carbon and environmental goods but across all economic sectors as businesses switch to more sustainable ways of operating and use alternative resources.

STEM skills will be in greater demand across multiple sectors. Such skills are in shortage

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across Europe, with Malta being no exception.

The challenge will be to allow our children while still in mandatory schooling to develop creative, critical thinking and computational skills through new modes of teaching and learning.

In the recently published Cedefop 2022 European Skills Index, Malta ranked 14th (out of 31 countries). Although Malta ranked very well (2nd) in matching the individual’s aspirations, interests and abilities to that of the labour market, action is needed in skills development where Malta ranked 26th. This indicator refers to the delivering of skills the country needs including re-skilling and upskilling. The transition to meet the carbonneutral targets as well as the adoption of technology across the economy requires a wide re-skilling effort involving various stakeholders including the private and public education institutions. The National Employment Policy 2021-2030 refers to the commitment by Government towards Green Jobs in order for the green economy to flourish in Malta. The dearth of skills is a major concern in all EU member states.

This can be leveraged on by Malta were bringing all the right stakeholders across a table is facilitated by the size of the country. In a small island country with very limited natural resources, human resources are a major USP in our attractiveness efforts for foreign investment. The next steps in the realm of education and skills development can have a major impact on Malta’s propensity to attract new sustainable innovative investments which locate to operate from here to service the EU continent. One can also look at the potential of encouraging special groupings including women and early-school leavers to follow training programmes in skills which will be in high demand as the economy moves towards more sustainable revenue generating segments and more technologyintensive operations.

The next steps in the realm of education and skills development can have a major impact on Malta’s propensity to attract new sustainable innovative investments which locate to operate from here to service the EU continent.

As the mandatory ESG reporting for large companies comes into effect as of 2023 financial year, businesses are being driven towards more sustainable ways of operating encompassing the interests of a wider ecosystem of stakeholders. ESG reporting will be binding on a wider net of businesses including small and micro companies which make up most commercial enterprises in Malta as of financial year 2026. But the ESG way of doing business is not the future because of its mandatory obligations but also because the consumers, particularly Gen Z, are very sensitive to ESG principles driving businesses towards revenue generating activities that preserve the habitat, care for society and follow good governance principles.

References: • Update of Stability Programme, 2021 – 2024, 2021-malta-stability-programme_en.pdf (europa.eu) • NSO, News Release, EU-SILC 2020: Salient Indicators, News2021_175.pdf (gov.mt) • 2022 European Skills Index, Technical Report (CEDEFOP), European Skills Index Technical Report (europa.eu) • Global Guidance for Education on Green Jobs, 2021, GGEGJ.pdf (unep.org) • NSO, News Release, EU_SILC 2020: Material Deprivation and Monetary Poverty, News2021_221.pdf (gov.mt) • In-work at-risk-of-poverty rate by full-/part-time work, EU-SILC survey, Statistics | Eurostat (europa.eu)

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Corporate

STAKEHOLDER OUTLOOK

Malta’s Next Chapter The SME’s View Abigail Mamo Chief Executive Officer - SME Chamber

Malta needs to reposition itself. Malta’s priorities as a country require a reality check to mitigate the harsh circumstances our country has started to experience.

Malta is said to be a miracle economy. Smart decisions and entrepreneurial spirit have kept Malta afloat very well. Malta is however a country which is very exposed. When push comes to shove, we have seen that the common goal is side lined and protectionist measures are adopted to reserve resources. The national takes priority over the Union principle.

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his works well for many countries who can be self-sufficient. Malta might never be self-sufficient, yet it should become a priority to reach as close a position to becoming selfsufficient as possible. Malta needs to build its own strength inwards and take a bold approach in so doing. Reducing our country’s exposure levels and reducing our share of total dependency must be a main priority.

The Chamber of SMEs does not believe that this job should be entrusted to the state but should be facilitated by the state. Investing in manufacturing and in developing and growing Malta’s own is not always a viable operation. Sustained support could be necessary for identified priority areas where Maltese businesses would be supported to invest and venture in.

Maltese businesses are currently going through a very worrisome patch. Everywhere they look they see costs spiralling out of control and stocks becoming scarce or unobtainable. Following two years of Covid, this level of pressure is difficult to endure. The increase in costs naturally affect consumer confidence and with tourism picking up at too slow a pace, doing business is becoming difficult.

Whilst appreciating fully the drive to FDIs and how beneficial they are to Malta, we cannot deny that local businesses do not feel encouraged and treated with the same level of devotion.

Once again Malta is no player in the world game, yet Malta must do its utmost to take control of its own destiny.

Diversification is key. This is true both at enterprise level and also in terms of Malta’s economic strategy. Malta must diversify and invest serious energy into building new indigenous sectors, building on Malta’s strategic position to create formidable trade routes, and become a leader in the smart and sustainable. Businesses will follow suit and are already leading in some areas. With more support and facilitation this will surely gather a lot of traction by local SMEs. The SME Chamber has long been advocating that Malta must identify its investment priorities and goals for the country.

Businesses should be the main tool through which such strategies are implemented, with all the backing necessary.

Trying moments are however what makes us most inventive and there are many An in-depth Over a Coffee interview with opportunities that can be explored to Abigail Mamo features on Page 37 of this redirect business attention from the current publication. frustrating situation which Malta has limited control over, into something that can generate positive energy and benefit the country as a whole.

The Malta Chamber of SMEs is looking forward to the international markets becoming more stable, yet we are cognisant of the fact that the world will take time to recover from the big shocks to the system it has experienced during the last years. Once again Malta is no player in the world game, yet Malta must do its utmost to take control of its own destiny.

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Corporate

STAKEHOLDER OUTLOOK

The Bigger Picture Mark Aquilina Founder of NOUV

“We all know what challenges businesses are facing. But more importantly, besides addressing these challenges, we need to look at the bigger picture by addressing the country’s most pressing priorities,” says Mark Aquilina, Founder and Chief Visionary Officer of NOUV.

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fter two years which saw businesses the world over united in their struggle against a global pandemic which no one ever saw coming, many of the same businesses are now being compelled to live with the aftermath of that pandemic which is the disruption occurring in the supply chain.

“This must be coupled with the raging conflict between Ukraine and Russia which will undoubtedly also leave economic repercussions such as uncertainty and energy cost increases. These in turn, are causing the price increase of raw materials which is leading to the global inflation being experienced. Not to mention the lack of human resources across many sectors, partially also driven by Covid-19.”

and equanimity in the local banking system.

We also need to push on digitising the island further so that we can bolster transparency across public administration and services, especially in the law courts. The latter needs modernisation across the whole ecosystem.”

Mark explains how at NOUV, a consultancy firm offering a complete portfolio of management and financial advisory services coupled with a range of business support services, the company’s vision is to steer businesses’ journeys towards a more sustainable future.

“If we want our businesses to operate more sustainably, Malta needs to ensure a sustainable environment. The country needs to seriously get its act together to start Mark Aquilina’s concern is businesses in thinking long term when it comes to urban Malta and how they are bound to be affected planning, the tangible reduction of carbon by the wider market forces. emissions, ensuring more open spaces and a modern transportation infrastructure that “The indications, pre-Ukrainian war, were truly works.” that domestic demand would be one of the drivers leading the expansion in economic activity. We now know, and we have started “This must be coupled with the raging conflict between seeing it happening, that when the price of Ukraine and Russia which will undoubtedly also natural resources and raw materials increase, the consumer will feel the pinch and spend leave economic repercussions such as uncertainty and less. Malta has its tourism sector to look energy cost increases. These in turn, are causing the forward to and we all hope this year will be a price increase of raw materials which is leading to the better one however, the lack of resources in global inflation being experienced. Not to mention the the industry remains a question mark.”

lack of human resources across many sectors, partially

Pondering the country’s priorities going also driven by Covid-19.” forward, Mark Aquilina lists a number of measures and the first of these priorities in his opinion, should be the lowering of tax rates and the modernisation of the respective “But over and above all this, a modern Malta will need to take the governance aspect legislations. seriously, and this can only happen if we “However, I have other priorities in mind as have a political system that is well paid, well. One of these is for Malta to get off the attracts quality and includes technocrats in grey list as quickly as possible, though this the system.” does not depend entirely on us. In parallel with this, government and regulators need to “It is always important to think long-term. intervene and bring some sense of normality Vision, after all, is about thinking long-term

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and planning thr journey accordingly. But right now, businesses have to adapt to a fast-evolving landscape. Therefore, they need to keep a close eye on their respective supply chain and adapt quickly to avoid disruptions by looking for alternatives closer to home. This can also mean that the local manufacturing scene can take unexpected positive twists and outcomes.”

“Secondly, local businesses should look at opportunities in emerging foreign markets and build alliances accordingly.

Businesses in the same industry could also consider teaming up to explore areas of collaboration, synergies, and the possibility of joint exploration of new markets. Finally, innovation need to be placed at the forefront of business, if they aim to deliver high-quality services or products,” concluded Mark.

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Corporate

Malta Insights

Malta: War threatens post-pandemic recovery

As the war ravages Ukraine, the international economy is set towards a collision course for the second time this decade, after a two-year pandemic which has wiped out years of growth and increased fiscal deficits across the growth. Although the longer-term implications of the Russian invasion of Ukraine and the unprecedented sanctions imposed by the West are hard to quantify at this juncture, the stage is set for a continuation of the challenges that have beset most open economies in the past few years.

A strong, but uneven recovery

The Maltese economy suffered one of the widest contractions around the eurozone in 2020, owing partly to its significant exposure to tourism and export markets. However, as restrictions were removed, Malta experienced a strong recovery in 2021 with capital investment and domestic expenditure pushing growth levels to cover most lost ground. Even before the Ukrainian crisis erupted, recovery remained uneven, as the coronavirus pandemic, despite high vaccination rates across the continent, continues to hamper the recovery of economic sectors linked to the tourism and the entertainment industries. Moreover, the supply-side challenges which have created a global logistical nightmare and record inflation levels were already threatening to derail this recovery.

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Economic growth

Provisional data published by the NSO has shown that the Gross Domestic Product (GDP) for 2021 amounted to €14,533.8 million, registering an increase of €1,473.9 million. In volume terms, GDP rose by a significant 9.4%, exceeding by over 1% the drop sustained in the first year when the pandemic struck. The services industry was by far the key driver of this growth, with industry and constructions playing a smaller role. Zooming in on the services industry, the largest contributors were transportation and storage (37%), Information and communication (12.5%), wholesale and retail trade (11.8%), and accommodation and food service activities (55%).

While services rebounded, partly pushed through by cash to spend which had been accumulated the year before, industrial growth remained subdued.

In December 2021, the total production generated by the Maltese manufacturing and energy industries went down by 6.6% from December 2020. The largest decrease was registered in the production of consumer goods (17.3%) followed by the production of intermediate goods (11.0%). This decrease represented the fifth consecutive drop.

The tourism sector has shown signs of recovery, although tourist numbers remain below 2019 levels.

2,540,335 passengers travelled through Malta International Airport last year. While this full-year

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traffic result translates into an increase of 45.3% over 2020 figures, it marks a recovery of just 34.8% of 2019 passenger numbers.

A strong job market

This positive economic performance produced record low unemployment levels. In January 2022, the monthly unemployment rate was 3.1%, levelling at 8.8% for persons aged 15 to 24 years. Administrative data provided by Jobsplus shows that, over a period of one year, the labour supply (excluding part-timers) in September 2021 increased by 2.9%, reaching 242,947. This was mainly attributed to a year-on-year increase in the full-time registered employment (8,937) and a decrease in registered unemployment (2,033).

Construction, government jobs sustain job growth: Comparing September 2021 to September 2020, the highest increase in employment was brought about by the construction sector and human health and social work activities with 1,257 and 1,165 persons respectively. Registered full-time employment in the private sector went up 7,459 persons to 190,191. The significant increase in public sector jobs continued in 2021, with public sector full-time employment increasing by 1,478 persons to 51,404. The number of persons registered as fulltime self-employed rose by 1,152 when compared to September 2020, while the number of persons

registered as employees increased by 7,785. Fulltime employment for males and females went up by 3.3% and 4.7% respectively over 2020.

According to Government’s projections, the deficit was to top 11% in 2021, falling to 5.6% this year. Debt levels are forecasted at 61.8%.

Inflationary headaches

Confidence derailed?

The cost-of-living remains a big headache for authorities, inflation spiking at the start of the year, reaching 4.1% in January 2022, from 2.6% in December 2021, one of the highest upward jumps recorded in recent times. Consumers felt the pressure of this increase, with the largest upward impact on annual inflation being measured in the Food and Non-Alcoholic Beverages Index.

Finance dilemmas

While Malta continues to outperform its peers in terms of employment and economic growth, the financial situation of the Maltese coffers remains a challenging one, with deficit levels increasing over the past two years. Revenue collapsed in 2020 with a number of businesses forced to shut down as restrictions severely impacted business activity. In addition, a significant injection of funds was directed at ensuring that the majority of firms would be able to sustain their employment levels throughout the crisis. Accusations of government profligacy and an ever-growing public service sector are also a key consideration in such context.

The estimated impact of the Russian-Ukraine war, placed at an estimate basis by the Minister of Finance at €200m will further add to the country’s financial woes.

The geo-political earthquake ushered by Putin’s invasion of a European nation will very likely further dent confidence in the economy. A Central Bank of Malta study has found that in the first two months of the year, economic sentiment remained well above last year’s level and also marginally exceeded its long-term average. When compared to December, confidence improved in services, construction and industry but declined in the retail sector and among consumers.

The European Commission and the Central Bank of Malta had both forecasted strong levels of growth, at 5.4% and 6.0% respectively, highlighting the necessity of a quick exit from Malta’s grey-listing predicament as well as a fast and strong increase in tourism levels for these forecasts to become reality.

Both CBM and the EC see domestic demand to be a key driver of growth, reflecting strong growth in private and government consumption. In addition, net exports are projected to also contribute strongly this year, as exports accelerate, while imports are projected to grow at a slower pace. In such a scenario, job creation levels are expected to remain positive, with increased Government revenue supporting a reduction in the current deficit and levels of the country.

As at end January 2022, Malta’s debt had registered a significant increase of €3 billion, or more than 50% – over the past two years, and now stands at €8.39bn. Malta’s deficit narrowed in the first two months of the year, as assistance related to the pandemic was scaled back. The difference between total revenue and expenditure resulted in a deficit of €80.7 million being reported in the Government’s Consolidated Fund at the end of February 2022.

Compared to the same period in 2021, there was a decrease in deficit of €247.0 million.

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Corporate

European Insights

War dashes hope of quick recovery

From one crisis to another: this could be the shortest resume of the state of the European economy, still reeling after two years of pandemic as it gets catapulted into unknown territory after the Russian invasion of Ukraine.

In this assessment, we look at the situation according to the latest available data, most of which covers the first couple of months of the year, during which despite pending challenges, the EU looked on track towards a continuation of recovery.

Despite an uncertain beginning to the New Year, given rising coronavirus cases around Europe, EU economic sentiment had rebounded in February 2022, increasing further above its pre-pandemic level. This increase was driven by mounting confidence in services, retail trade and, to a lesser extent, construction, while confidence stayed almost unchanged in industry and declined slightly among consumers. The results, however, are from the business and consumer surveys conducted before Russia’s military aggression against Ukraine.

Economic growth: GDP increased by 0.3% in the euro area and by 0.4% in the last quarter of 2021 in the EU, according to an estimate published by Eurostat, the statistical office of the European Union. In the third quarter of 2021, GDP had grown by 2.3% in the euro area and 2.2% in the EU.

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Following a notable expansion by 5.3% in 2021, the EU economy was expected to grow by 4.0% in 2022 and 2.8% in 2023. Growth in the euro area is also expected at 4.0% in 2022, moderating to 2.7% in 2023. The EU as a whole reached its pre-pandemic level of GDP in the third quarter of 2021 and all Member States are projected to have passed this milestone by the end of 2022.

Despite the geo-political situation taking a strong toll, it is the pandemic which continues to shape the nature of growth. Many EU countries continue to be restrained by travel restrictions as well as logistic and supply bottlenecks, including shortages of semiconductors and some metal commodities, are also set to keep weighing on production, at least throughout the first half of the year.

Economic activity is set to regain traction, the European Commission believes, also as supply conditions normalise and inflationary pressures moderate. Looking beyond the current turbulence, the fundamentals underpinning this expansionary phase continue to be strong. A continuously improving labour market, high household savings, still favourable financing conditions, and the full deployment of the Recovery and Resilience Facility (RRF) are all set to sustain a prolonged and robust expansionary phase.

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Employment

The job market also continued to show signs of a sustained recovery. In January 2022, the euro area seasonally-adjusted unemployment rate was 6.8%, down from 7.0% in December 2021 and from 8.3% in January 2021. The EU unemployment rate was 6.2% in January 2022, down from 6.3% in December 2021 and from 7.5% in January 2021. These figures are published by Eurostat, the statistical office of the European Union.

According to the latest Eurostat estimates, 13.346 million men and women in the EU, of whom 11.225 million in the euro area, were unemployed in January 2022. Compared with December 2021, the number of persons unemployed decreased by 216 000 in the EU and by 214 000 in the euro area. Compared with January 2021, unemployment decreased by 2.522 million in the EU and by 2.117 million in the euro area.

The number of employed persons increased by 0.5% in both the euro area and in the EU in the fourth quarter of 2021, compared with the previous quarter. In the third quarter of 2021, employment had increased by 1.0% in the euro area and by 0.9% in the EU. For the year 2021 as a whole, the number of persons employed increased by 1.1% in the euro area and by 1.2% in the EU, after -1.5% and -1.4% respectively in 2020.

Cost of living worries: Even before the onset of the conflict in Ukraine, inflationary trends were establishing new records on the continent. The euro area annual inflation rate was 5.9% in February 2022, up from 5.1% in January. A year earlier, the rate was 0.9%. European Union annual inflation was 6.2% in February 2022, up from 5.6% in January. A year earlier, the rate was 1.3%. After a number of years, interest rate hikes were again being considered by the European Central Bank.

the toll of sanctions begins to be felt, it is clear that it will have a material impact on economic activity and inflation through higher energy and commodity prices, the disruption of international commerce, including travel and trade and weaker confidence among consumers. As Christine Lagarde, ECB President, highlighted in a recent speech, the extent of these effects will depend on how the conflict evolves, on the impact of current sanctions and on possible further measures.

The lowest annual rates were registered in Malta, France (both 4.2%), Portugal, Finland and Sweden (all 4.4%). The highest annual rates were recorded in Lithuania (14.0%), Estonia (11.6%) and Czechia (10.0%).

Compared with January, annual inflation fell in two Member States and rose in 25.

In the first days of the conflict. European Central Bank chief economist Philip Lane told policymakers that the Ukraine conflict may reduce the euro zone’s economic output by 0.3%-0.4% this year, in what was described as a middle scenario.

In an in-depth assessment roughly four weeks into the war, Moody’s Credit Rating service said that among the rest of the G-20 advanced economies, the economic repercussions from the Russian invasion of Ukraine will be concentrated in Europe. As a result, it has revised downward its euro area GDP growth forecast for this year to 2.8%, 1.6 lower than previously expected. On the other hand, the OECD estimated that the Ukraine crisis could knock more than a percentage point off global growth this year and add two and a half percentage points to inflation, calling for targeted government spending hikes in response.

Overall, inflation in the euro area is forecast to increase from 2.6% in 2021 (2.9% in the EU) to 3.5% (3.9% EU) in 2022, before declining to 1.7% (1.9% EU) in 2023.

Exports on the rise: In January to December 2021, euro area exports of goods to the rest of the world rose to €2 434.8 bn (an increase of 14.1% compared with January-December 2020), and imports rose to €2.306.3 bn (an increase of 21.4% compared with January-December 2020). As a result. the euro area recorded a surplus of €128.5 bn, compared with +€233.9 bn in January-December 2020. Intra-euro area trade rose to €2 182.1 bn in January-December 2021, up by 20.8% compared with JanuaryDecember 2020.

Industrial Production

In the EU, production of non-durable consumer goods rose by 7.6%, energy by 5.2%, durable consumer goods by 2.2% and intermediate goods by 1.8%, while production of capital goods fell by 7.1%.

Among Member States for which data are available, the largest annual decreases were registered in Ireland (-20.0%), Portugal (-4.2%) and Malta (-3.8%).

The highest increases were observed in Lithuania (+24.7%), Austria (+17.3%) and Poland (+16.6%).

Impact of War: While it is to early to assess to potential impact of the conflict in Ukraine, particularly as

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Corporate

GEOPOLITICAL STORY

The long and winding road between Russia and Ukraine

by Tonio Galea

Russia and the Ukraine have a long and turbulent history deeply seated in the region’s past...the Communist past. A past that some argue was simply swept under the carpet with the end of the Cold War but in all reality was and still is, festering. A past, that like many other regional disputes, is deeply subject to conflicting interpretations of history.

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he problem that Ukraine faced was that it was divided between two powers: The Russian Empire and Austro-Hungarian Empire. And, very early on, the Russian Empire recognized the threat to the unity of the empire posed by a separate and particularly literary Ukrainian language. The language issue for Ukraine carries a lot of weight. Historically, Ukrainian was the language of the countryside.

Back to 2008, he told President George W. Bush that “Ukraine is not a country”. Six years later, in 2014, a major escalation in tensions between Ukraine and Russia occurred with Russia’s illegal seizure and ongoing occupation of Ukraine’s Crimean Peninsula.

Ukraine and Russia’s shared heritage goes back to more than a thousand years, when Kyiv was at the centre of the first Slavic state, “Kyivan Rus”, known as “the birthplace” of both nations. It existed roughly from the 9th to 13th centuries. Several armies “carved up” Ukraine after Kyivan Rus fell until the Russian Empire annexed the country in 1793.

The twentieth century brought modernisation and urbanisation, and with it the integration of former peasants into the urban culture through the Russian language. So, this created a group of people, that was quite large, who considered Ukrainian as their mother tongue and had Ukrainian identity, even though they Ukraine was independent from 1918 until spoke Russian.

1920 before it was incorporated into the Soviet Union.

The Russian side’s argument on the has been, claimed that they came to save them from Then, when the Soviet Union collapsed with cultural and various other types of oppression, dramatic speed in the last quarter of 1991, seeing as they were Russian speakers, so the the Ukraine was the first of 10 republics to assumption was that their loyalty should be secede from the Union between August and with Russia. But, in many big cities, among December of the same year. young people and especially university students, there was a conscious choice to More than wanting to restore the former switch to Ukrainian.

USSR, Putin wanted to see the Russian empire restored.

Putin’s ramblings on the status of the Ukraine are nothing new. This is a sore point with There’s a Russian adage that you can’t have Russian President, Vladimir Putin, who never a Russian empire without Ukraine, owing to made an effort to hide it. In a letter dated its long cultural and economic history as the July 21, Putin said that he does not recognise beating heart of the defunct Soviet Union.

Ukraine’s independence and believes Russians And Putin is hell-bent on re-creating a new and Ukrainians are “one people – a single empire to restore his declining country to whole.” superpower status.

The twentieth century brought modernisation and urbanisation, and with it the integration of former peasants into the urban culture through the Russian language. So, this created a group of people, that was quite large, who considered Ukrainian as their mother tongue and had Ukrainian identity, even though they spoke Russian.

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The long-term goals of Russia following the end of the Cold War, have been to recover the great power status of Soviet Union, to be seen as equal by the West and to be able to influence political developments in its smaller neighbours like Ukraine, Moldova or Kazakhstan.

The events leading up to Russia’s invasion of Ukraine

However, Ukraine has been integrating itself into the Western orbit of influence, and thus going against Putin’s interests.

Russia launched a large-scale invasion of Ukraine on Feb. 24. Here is a timeline of Some argue that Putin is less concerned Ukraine’s fraught relationship with Moscow about Ukraine joining NATO than he is about since it won independence in 1991 and the Ukraine becoming part of Europe “with its events that led to the current conflict. insistence on rule of law.”

Ukraine signed an “association” agreement with the European Union, on March 21, 2014, a month after the Maidan revolution and the same month Putin took control of Crimea.

Rule of law and a campaign against rampant corruption, both of which the U.S. and Europe have been urging on Kyiv with some success, further robs Putin of a tool to control or manipulate the country and its potential quislings, analysts say.

Experts and analysts say Putin now may not intend to take over all of Ukraine, but he certainly wants to swallow up enough of the country to render it a submissive ghost nation. One scenario floated by U.S. intelligence is that Putin would make the invasion swift and only long enough to install a new leader. But as the situation in the area explodes and evolves it is difficult to envision the near future as being a stabilised or serene one.

1991 Shortly after the fall of the Soviet Union, Ukraine declares independence from Moscow.

2004 Pro-Russian candidate Viktor Yanukovich is declared president but allegations of vote-rigging trigger protests, known as the Orange Revolution, forcing a re-run of the vote. Pro-Western former prime minister, Viktor Yushchenko, is elected president.

2005 Yushchenko takes power with promises to lead Ukraine out of the Kremlin’s orbit, towards NATO and the EU. 2008 NATO promises Ukraine it will one day join the alliance.

2010 Yanukovich wins a presidential election.

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2013 Yanukovich’s government suspends trade and association talks with the EU and opts to revive economic ties with Moscow, triggering months of mass rallies in Kyiv.

February 2014: Parliament votes to remove Yanukovich after bloodshed in the protests.

Within days, armed men seize parliament in the Ukrainian region of Crimea and raise the Russian flag. Moscow later annexes the territory.

April 2014 Pro-Russian separatists in the eastern region of Donbass declare independence. Some 15,000 people have been killed since 2014 in fighting between the separatists and the Ukrainian army, according to the Kyiv government.

Jan. 24 2022 NATO puts forces on standby and reinforces eastern Europe with more ships and fighter jets.

Jan. 26 Washington responds to Russia’s security demands, repeating a commitment to NATO’s “open-door” policy while offering a “pragmatic evaluation” of Moscow’s concerns.

Two days later Russia says its demands not addressed.

Feb. 2022 Amid growing Western fears Russia could attack Ukraine, the United States says it will send 3,000 extra troops to NATO members Poland and Romania. Washington and allies say they will not send troops to Ukraine, but warn of severe economic sanctions if Russian President Vladimir Putin takes military action.

2017 An association agreement between Ukraine Feb. 21 and the EU opens markets for free trade of goods and services, and visa-free travel to In a TV address, Putin says Ukraine is an integral part of Russian history and has a the EU for Ukrainians. puppet regime managed by foreign powers.

Putin orders what he called peacekeeping 2019 Former comic actor Volodymyr Zelenskiy is forces into two breakaway regions in eastern Ukraine, after recognising them as elected president.

Jan. 2021: Zelenskiy appeals to U.S. president independent.

Joe Biden to let Ukraine join NATO. In Feb. 22 February, his government freezes the assets of opposition leader Viktor Medvedchuk, the The U.S., Britain and their allies sanction Russian parliament members, banks and Kremlin’s most prominent ally in Ukraine. other assets in response to Putin’s troop order. Germany halts the Nord Stream 2 gas Spring 2021 Russia begins massing troops near Ukraine’s pipeline project. borders in what it says are training exercises.

Feb. 23 Nov. 2021: Satellite images taken by Maxar Technologies show ongoing buildup of Russian-backed separatist leaders ask Russia Russian forces near Ukraine with estimates for help repelling aggression from the Ukrainian army. soon surpassing 100,000 troops deployed.

Dec. 17 2021 Russia presents security demands including that NATO pull back troops and weapons from eastern Europe and bar Ukraine from ever joining.

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Feb. 24 Putin authorizes “special military operations” in Ukraine. Russian forces begin missile and artillery attacks, striking major Ukrainian cities including Kiev.

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Corporate

Climate change, Russia, Inflation: The trilemma of EU Energy Policy Exclusive Interview with Ms Maria da Graça Carvalho MEP

by Keith Zahra

The ushering of the war in Ukraine has accentuated a triple conundrum for European governments - the unenviable feat of seeking to balance the three diverse objectives of fighting climate change, keeping energy costs affordable and reducing external dependencies.

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W

e agree to phase out our dependence on Russian gas, oil and coal”, EU leaders promised in a declaration at a meeting in Versailles a few days after the invasion of Ukraine.

heavily dependent on other countries and prices are high”, Carvalho says, noting how it was her fellow countryman, José Manuel Barroso, Commission President, who raised the issue again on the European agenda.

Yet, getting there is a long, winding road The MEP, who hails from the centre-right ahead.

EPP Group and was formerly the Science and Higher Education Minister in her home Rising energy costs were already putting country, explains that Barroso had pushed significant pressure on European families, for a climate and energy strategy focusing as post-pandemic inflation took its toll, on three important components: the fight threatening to hamper an already uneasy against climate change, competitiveness recovery. and affordability of energy and the security of supply.

Seeking answers, CDPRO sat down with Maria da Graça Carvalho, an experienced While Europe has slowly but surely made Portuguese MEP, on the margins of a progress on two of these elements, that of European Parliament plenary session held keeping prices stable for a number of years in Strasbourg, to seek to disect the current thanks to liberalisation of markets as well situation. as on climate change, progress on reducing dependences has not been achieved.

This centrality was cast aside for a number of years, with Member States taking different paths in times of crisis, such as the infamous oil crisis during the Arab-Israeli war of the Seventies. “We have been speaking for years about climate transition, yet we are still heavily dependent on other countries and prices are high”

After the Russian annexation of Crimea back in 2014, Donald Tusk, former EU Council President, had starkly warned that “excessive dependence on Russian energy makes Europe weak”. In reality, despite EU investment in cross-border connections and new LNG plants, energy importation from Russia increased, with an Economist study estimating that Russian exports make up close to 38% of all fossil fuel consumed in Europe, a percentage which was actually meant to increase with the new Nordstream 2 project.

Setting out to put our discussion in context, Ms Carvalho tells us that understanding the current predicament requires moving the clock back quite a few years. She recalls the centrality of energy in the post-WW2 European project, with the first six nations setting up the European Economic and “During the pandemic, we started to realise Steel Community, the predecessor of today’s how important being independent is”, Carvalho says, referring to medical and Union. pharmaceutical products. Asked whether This centrality was cast aside for a number of this means building trade walls around years, with Member States taking different Europe, the MEP rejects such claims: “Our paths in times of crisis, such as the infamous intention is not to close Europe but to reduce oil crisis during the Arab-Israeli war of the dependence on third countries and become Seventies. “We have been speaking for years strategically independent particularly in about climate transition, yet we are still times of crises”.

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Putin’s reprehensile actions have now accentuated this situation. “The war has exposed our fragility on energy, exposing our dependence on Russian oil and gas”, the MEP declared.

In her statement at the informal European Council in Versailles, European Parliament President Roberta Metsola called for a future of zero gas from Russia. “Ambitious but necessary” she told European leaders. Many European countries, especially in Central and Eastern Europe import almost 80% of their energy needs from the Russian Federation.

So how do we get there?

The transition to sustainable energy is crucial, Carvalho argues, but it is impossible to do without gas for the forseeable future and thus, diversification is required. She believes that this can take place through a multipronged strategy.

In the short-term, Europe should push the use of other sources of gas, including biogas and hydrogen, and make better utilisation of LNG terminals, which allow EU countries to import from anywhere. In this context, the biggest challenge is the lack of a complete internal market, she laments, a concept Barroso had long pushed for. As an example, she mentions the existence of some seven LNG terminals in the Ibernian peninsula, a resource which cannot be maximised due to

lack of infrastructure connecting this to the rest of Europe.

She also calls for stronger relationships with third countries to take advantage of gas which exists in the neighbourhood, with Morocco and Israel being a possible example.

In the medium to longer-term, the MEP cites further investment in renewables, making them affordable for European families and firms, as well as in energy efficiency.

The latter is crucial given that while many associate the use of gas with the operation of power plants, its major use in Europe is actually for the heating of homes during the winter months.

Secondly, she calls for a a common strategy on storage as well as on procurement, the latter having been successfully implemented by the Commission for Covid-19 vaccines.

“I’d like to say yes to stopping Russian gas right now, but we need to make sure people can keep warm this winter and the next”, Carvalho concludes. “All these elements are required to achieve a zero-gas policy from Russia.”

Ms Maria da Graça Carvalho is a Member of the European Parliament. Previously, she was a Minister for Science and Higher Education in Portugal and an adviser to Jose Manuel Barroso in his capacity of President of the European Commission.

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Corporate

Europe needs to be strategically autonomous – Metsola

By Keith Zahra

The Russian invasion of Ukraine has strengthened Europe’s need to be “strategically autonomous”, European Parliament President Roberta Metsola told CD Pro in an exclusive interview in Strasbourg.

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M

etsola also called on Europe to cut off its for a conscious ‘European sovereignty’ and dependence on Russian energy, a key the German Chancellor, Angela Merkel, said that Europe would have to take its destiny source of financing for the same invasion. into its own hands, as it could no longer This autonomy would include “defence necessarily rely on the United States for capabilities” and “a proper defence Union”, protection.

Metsola said, referring to the reality highlighted by events in Afghanistan last The EP President also re-iterated her belief year, which show that Europe can no longer that the EU should move towards a ‘zero gas’ policy, which was an essential tool to stop depend solely on US support.

Russia in its tracks, adding that the continued Recent US governments have tended use of Russian energy sources meant that to disengage from large-scale military Europeans were actually financing the war. operations in Africa and the Middle East, “We have to see that we have enough gas to thus leaving Europe alone to deal with crisis survive in the short-term. But then we need situations and conflict resolution in the to plan for the longer-term, by identifying different sources of gas, which allow us to European neighbourhood. cut off dependency from Russia completely.

The world’s geo-political realities have This includes securing hydrogen gas from changed, she added, particularly with the the Mediterranean or even from the United emergence of China as another global force. States”.

Surveys carried out in the aftermath of the invasion in Finland and Sweden – two traditionally neutral countries – have shown that more than 50% of Finns and Swedes This article is part of a content series called Ewropej. now support joining NATO. This is a multi-media house initiative part-funded by The concept of strategic autonomy has gained ground in the late 2010s, after the French President, Emmanuel Macron, called

the European Parliament to bring the work of the EP closer to the citizens of Malta and keep them informed about matters that affect their daily lives. This article reflects only the author’s view. The European Parliament is not responsible for any use that may be made of the information it contains.

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YOUR PURPOSE IS YOUR BIGGEST ASSET

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Corporate

EU.Review

By Keith Zahra

FINANCIAL SERVICES

Commission proposes simpler rules to make settlement in EU financial markets safer and more efficient.

The European Commission has proposed changes to the Central Securities Depositories Regulation to enhance the efficiency of the EU’s settlement markets, while safeguarding financial stability. This proposal is a key component of the 2020 Capital Markets Union Action Plan. Central Securities Depositories operate the infrastructure that enables

the settlement of securities (such as shares or bonds) in financial markets. Their key role was also highlighted recently in the context of EU sanctions against Russia. On 25 February 2022, the EU agreed that the holding of accounts of Russian clients by EU Central Securities Depositories was prohibited, demonstrating the importance of Central Securities Depositories in the EU’s financial system. The overall aim of these proposals is to make securities settlement in the EU safer and more efficient, thereby improving the attractiveness of the EU’s capital markets and ultimately contributing to the financing of our economy.

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Taxation

Malta among four countries blocking EU corporate tax Malta has joined Poland, Sweden and Estonia in blocking a French proposal on how to implement minimum corporate tax across the European Union.

After years of negotiations, nearly 140 countries reached a deal at OECD level last October on a minimum tax rate of 15% on multinationals and agreed to make it harder for companies like Google, Amazon and Facebook to avoid tax by booking profits in low-tax jurisdictions. The French Presidency is pushing for further tax harmonisation at the European level. However, tax issues unanimous backing between Member States. French Finance Minister Bruno Le Maire said that he would put the issue back on the table the next time ministers meet in April.

Brexit

Equality

This decision will make available a total of €819.2 million by the end of March 2022 and the rest by April 2023. This funding will help the economies of the Member States in mitigating the adverse impact of Brexit on their economies and regions, through support to regions and economic sectors, small and medium sized companies as well as job creation and protection, such as short-time work schemes, re-skilling, and training. Malta is expected to benefit €35 million from this Fund to cushion the impact of Brexit.

The Women’s Rights and Legal Affairs Committees of the European Parliament backed talks with the Council of the EU on a bill to increase gender balance on corporate boards. Once confirmed by plenary, negotiations can move forward on the draft legislation aimed at ensuring gender parity on boards of publicly listed companies in the EU. The so-called “Women on Boards” Directive aims to introduce transparent recruitment procedures in companies, so that at least 40% of non-executive director posts are occupied by women. In cases where candidates are equally qualified for a post, priority should go to the candidate of the underrepresented sex. Despite progress made, only 30.6% of board members in EU’s largest publicly listed companies are women, with significant differences among Member States, ranging from 45.3% in France to 8.5% in Cyprus.

Commission approves €2 billion of pre-financing for 12 Member States: The Commission has approved the disbursement of more than €2 billion under the Brexit Adjustment Reserve to a group of 12 Member States.

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Women on Boards Directive clears Parliamentary committee step

Corporate

Over a Coffee

By James Vella Clark

CDpro Interviews ABIGAIL MAMO, CEO of the SME CHAMBER on how businesses fought the war on Covid and how they are now facing the challenge of a raging war on our doorstep. She also opens up on her personal experience over the past months: “We must work very hard to become more self-sufficient and less dependent on others for our own survival.”

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What would you classify as the main challenges for today’s businesses in Malta?

I would say businesses are facing some of the most challenging times ever experienced.

The most difficult challenges are the ones you have to live with and have no control on. Doing business in Malta is always more challenging due to the limited market and the insularity issues and Malta now is experiencing the perfect storm. Just when we thought the worse of the pandemic was over, another very worrying catastrophe was created, throwing the whole world into great difficulty and uncertain times once again.

Such global issues are impacting Malta significantly, and couple with this, there are also the challenges of over-regulation in many respects since Moneyval’s work started and the eventual greylisting.

Covid seems to be over.

What were the main lessons learnt?

present. As the country deals with fluctuating cases, there is always that lingering thought that a new variant could sprout. Several of our members are still highly impacted by the effects of the pandemic and there is a growing fatigue as businesses attempt a return to ‘business as usual’ whilst having to still adhere to health regulations. Covid taught us how global problems need to be tackled by a united front and a greater effort should be made to stick together to implement a more harmonised system. Whilst nothing can be taken for granted anymore, we must work very hard to become more self-sufficient and less dependent on others for our own survival.

This could sound conflicting, but it is possible to act smart and take care of ourselves whilst taking care of each other.

How do you expect businesses to react if a similar crisis had to repeat itself?

It was fascinating watching Maltese SMEs react so quickly by investing to get back Most of us don’t want the word ‘Covid’ quickly on their feet. Many have amplified uttered ever again but Covid is still somewhat and continue to invest in digitalisation to

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perfect their online presence. This is very important and needs to be maintained. In fact, businesses that already had a good online presence when the pandemic hit, fared much better than others who tried to catch up as fast as they could. So, any other crises should find most businesses ready on this front. Similarly, many businesses discovered the positive aspect of being diversified and not being dependant on just one income stream. The Covid crises left a huge impact on businesses, but it was also a very important and unforgettable learning experience.

We have seen businesses rely heavily on government subsidies over the past two years. Indeed, many were on the brink of closing down. Have businesses become lazy? Did the pandemic highlight who was robust and who was not?

Some businesses were already on their own future proofing journey, and these did markedly better. Others caught up and continue catching up in order to increase their resilience. We were lucky that Malta was in a good financial situation to be able to support the jobs where this was needed. Funds were also quickly put in place to support businesses in their own advancement, transformation, and journey. This maintained a level of serenity which was especially important. I do not believe it is in the nature of any business to rely on handouts even though these were important! Government covered only part of the wage of a segment of businesses but no business left its workers on the minimum covered by the government for this stretch of time. Businesses went into essential digital investments and running costs increased. The element of fighting for survival was therefore always there. Our recent surveys show that lack of strong consumption, low consumer confidence and low tourism numbers are the highest concerns. Businesses do not want to have to rely on support, it was however an unavoidable circumstance.

How have you personally lived these past two years of the pandemic?

What were your lowest moments?

And what were your highs?

The pandemic was very trying for myself and the organisation as a whole. It was also a time that gave us space to rise to the occasion and show what we are made of and so we did. The lows were getting to terms with a situation that went south overnight. The members’ own situation degraded fast and needed immediate and constant support.

At the same time, we all had to work from home, caring for our young children and home-schooling. I recall many endless days and very little sleep. The highs start from the appreciation our members have showed us in being there for them when they needed, to being rewarded with both EU level and national awards for the work we did with businesses during the pandemic.

What is the current situation with regards to the shortage of human resources? How are SME’s being urged to counter this situation?

This is another major challenge and a very frustrating one. Our members have already learned to work with the least resources possible and they continue to invest to

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BRIDGING THE INVESTMENT GAP

SUPPORTING SMEs, INNOVATION, INFRASTRUCTURE & SOCIAL INVESTMENT

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www.mdb.org.mt

be able to do more of this. With all the challenges at hand, dealing with the human resources issue is not easy. Human resources have become the most precious and the costliest resource. Members already know how essential it is to care for and cherish employees. However, we are working a lot to make the recruitment of third country nationals a smoother process. Malta is dependent on this segment simply because we do not produce enough human resources locally. The process should therefore not be at par with a one-off requirement but of a continuous one that needs to be facilitated.

Is there room for Maltese SMEs to reinvent themselves to remain competitive and relevant in a world that is becoming more globalized?

Very much so. Maltese businesses have advanced greatly, and new generations of businesses are starting with a very innovative outlook and are continuously eager to overcome challenges and reinventing themselves. I believe that with better support, Maltese SMEs would be able to do much more. If we want our SMEs to be competitive on a global level, we must address our market inefficiencies and make up for Malta’s handicaps. There are several small businesses who managed to be innovative and successful, but they all share the same struggle to succeed with the limited infrastructure and support there still is in Malta.

The environment remains a prime concern and businesses are constantly being expected to adopt more environmentfriendly processes. How easy it really is to strike a healthy balance between cleaner operations and productivity?

but when this costs money, it becomes a commercial decision that is never simple or easy. There are challenges such as a lack of technical knowledge of how businesses can think outside the box and look into their processes with fresh eyes in order to change and invest to work smarter and more sustainably. It is a known fact that upgrading processes and being more sustainable improves the bottom-line and investments are eventually recouped. The homework takes time and needs to be done diligently to achieve a good level of success. This is why incentives are very important, because, with effective outreach they can bridge the gap and the necessary encouragement for businesses.

How is the current Ukraine – Russia crisis affecting some of the businesses here in Malta?

It is not easy at all. Many businesses want to contribute positively to the environment We are all experiencing the increase in

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prices first hand, which started before Russia invaded Ukraine, driven mainly by Covid which led to a dramatic increase in logistical costs. Before the Russia-induced war started, businesses were already at a loss, trying to come to terms with a 10-fold increase in the import costs related to freight charges and eagerly awaited things to calm down to perhaps regain some form of stability and normality in prices. Instead, besides global logistical problems, the war led to further increases in the price of raw material and outright shortages in areas where Ukraine and/or Russia were the main suppliers.

Maltese businesses are also seeing supply shortages from countries who have opted for a protectionist approach and prefer to keep certain basic needs for themselves.

Businesses are telling us that they do not see how they can increase prices further, but they are not seeing any options.

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What is the role of the SME Chamber today and how do you plan to ensure the Chamber remains relevant in future years?

The Malta Chamber of SMEs is a social partner and that is our main thrust. We are partner to the administration in our bridge with the business community and we are close to our members in whatever we do. I would not like to say that we have moved from being just representatives, but it would be more correct saying that we have strengthened our representation of businesses and widened our services to be more of value to our members.

Our members know that they can come to us with anything, and they will find a knowledgeable partner who will understand them and who will provide them with the support they need. Members also know that we are a resourceful organisation that provides them with many opportunities and possibilities for advancement. In terms of our future, our plan is to grow an even closer relationship of support with our members and to continue developing our services and work process according to their priorities and needs.

Abigail Mamo – Beyond her Profession How do you like to spend your free time?

Taking care of my community of indoor and outdoor plants, while listening to music and going on small adventures with the family.

What would classify as an ideal holiday?

since I have been on a Keto diet, my highlight now would be a nice piece of meat.

Favourite Colour?

Red

One very overwhelming life experience?

Exploring a fascinating country with all its landmarks and attractions, eating well, making memories, snapping out of the routine.

Amongst the many, I think having my kids would be the most important one.

Which countries would you like to visit in the near future and why?

I overburden myself sometimes and carry too much.

Morocco - I find it intriguing and rich.

Favourite music? I like all types of music; I am a music enthusiast. My favourite is probably symphonic rock music

Favourite food?

It used to be ravioli or baked macaroni, but

Your weak spot?

The quality you like least in people.

Arrogance

The quality you look out for the most in others.

Empathy

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Corporate

CULTURE AND ARTS

A Fresh Look At The Past

By Dr Charlene Vella

The Renaissance period centred on a cultural movement known as Humanism, a human-centred perspective, and, even in the portrayal of the divine, a natural appearance of holy figures was desired. While many Renaissance sculptures survive without any polychromy, they were originally painted and gilded in their entirety or in part, rendering them extremely realistic.

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other sculptures by Antonello Gagini and his father, Domenico Gagini (c.1420–92), and that of Francesco Laurana (c.1430–1502). These last two sculptors were largely responsible for the spreading of a Renaissance visual language in sculpture throughout Sicily in the second half of the fifteenth century.

The Dalmatian sculptor Laurana was active in Sicily from 1466 until 1471, while Domenico Gagini settled in Sicily in 1463, and remained there until his death. Domenico belonged to a family of sculptors from the district of Bissone in today’s Switzerland. Antonello Gagini was trained by his father, but he was also open to the influence of native Sicilian sculptors and stone carvers who worked in an anachronistic style. Antonello was extremely prolific and mature enough to lead his father’s workshop Renaissance sculpture representing the in 1492 on his father’s death, at just fourteen Madonna and Child in the church of St years of age.

Mary of Jesus or Santa Maria di Gesù (Ta’ Ġieżu) in Rabat, Malta, is a much-venerated This recent research project determined that object. It is an objets d’art that even Grand Antonello Gagini’s Rabat Franciscan sculpture Master Philippe Villiers de l’Isle Adam (1464– contained some original Renaissance paint 1534) worshipped in front of, and which also but also several other pigments that were gave the church its name. This sculpture is added to the original layer in at least two by the Palermitan sculptor, Antonello Gagini interventions of overpainting in its history.

(1478–1536), and it was commissioned from Traces of colour are visible under drapery folds and creases, and a cleaning intervention him in Messina on 23 February 1504. revealed the presence of floral motifs on the The artwork is a life-size Carrara marble Virgin’s mantle that were originally gilded sculpture that weighs c. 384kg. The notarial and which were hidden beneath a layer of deed that documents the commission stated plaster. Furthermore, a decorated hemline that (i) the sculpture was to be delivered in was also observed on the mantle that must time for the feast of Corpus Christi, therefore similarly have been gilded.

A

by June 1504; (ii) the statue and its pedestal were to be of a total of 7 palme in height, that is, c. 161 cm; (iii) the Madonna was to hold a flower in her right hand and the Child in her left hand, and (iv) the mantle and the dress of the Virgin were specified to be polychromised in azurite and gold.

This sculpture has had a traumatic past with three of the Madonna’s fingers on the right hand having been broken off, as well as four fingers on the Child’s raised right hand. Some of the edges of the Madonna’s drapery folds have also been broken and the Madonna’s head has at an unknown period been This last point served as the starting point reattached by means of two metal rods, since for a research project that investigated it had been completely detached. traces of colour found on the sides of the sculpture and an in-depth research into Part of this research investigation led to a

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hypothetical digital reconstruction of the sculpture as it would have appeared to worshippers back in the sixteenth century.

This digital restoration affirms that this sculpture, that was contracted to take just about three months to complete, was an elaborate one on which no expense was spared: it cost a considerable 20 uncie. The Observant Franciscans were among Malta’s foremost patrons of art in the early sixteenth century, helping in importing Italian Renaissance art to Malta before the arrival of the Knights of the Order of St John in 1530.

Acknowledgements

This research project, carried out under the direction of Dr Charlene Vella, consisted of scientific analysis, 3D scanning, and a conservation and restoration intervention.

All documentation, scientific analysis, cleaning, conservation and restoration have been entrusted to Pierre Bugeja at Prevarti Ltd.

Rabat, and thanks to funds obtained from the GAL Majjistral Action Group Foundation under the LEADER Programme 2014–2020.

The analysis of the diagnostic tests that have been carried out were interpreted together with Ms Jamie Farrugia for her 2021 undergraduate BA (Hons) thesis in History of Art carried out under the Dr Vella’s tutelage, titled ‘Antonello Gagini’s Franciscan Ta’ Ġieżu Madonna and Child: an art historical and scientific study’.

Professor Timmy Gambin from the University of Malta Department of Classics & Archaeology and his team have carried out the initial and final 3D scan of the sculpture that can be viewed online on www.skecthfab. com.

The Voluntary Organisation Association of St Mary of Jesus has obtained funds from The project was made possible thanks to the Malta Arts Council Restoration Funding the collaboration of the University of Malta Scheme in December 2021 in order to restore Department of Art and Art History and Prof and reconstruct the missing fingers on the Timmy Gambin from the Department of Madonna and Child which has also been Archaeology, the Observant Franciscans at entrusted to Prevarti Ltd.

CV bio

Dr Charlene Vella is a Senior Lecturer in the Department of Art and Art History at the University of Malta. She obtained her Undergraduate and Master’s degrees in Art History from the University of Malta and has obtained her PhD in Art History from the University of Warwick in 2016 where she was awarded a full scholarship under the Chancellor’s International Scholarship. Dr Vella leads several research projects in which she oversees the diagnostic testing, conservation and restoration interventions on Renaissance Art works in Malta. Her latest monograph is due to be published by Midsea Books in April 2022, titled ‘In the footsteps of Antonello da Messina: the antonelliani between Sicily and Venice’.

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Corporate

BUSINESS REVIEW

Express Trailers plants 270 trees, a tree for every employee Express Trailers has planted 270 saplings in Burmarrad’s Santa Katarina Valley, an initiative made possible following an agreement with Parks Malta who supplied the 270 saplings – representing the 270 employees at Express Trailers.

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way it grew, Express Trailers has always harboured great respect towards the notion of sustainability. Over the years, the company always sought to embark on initiatives that help it reduce its carbon footprint such as the installation of photovoltaic panels on the roof of its head office and the majority of its buildings, as well as investment in electric vans and forklifts into its fleet,” he added.

Express Trailers’ PV system reduces 672,512 kms in emissions every year. Since 2011, Express Trailers’ PV system has led to a total reduction of an equivalent 7,397,636 kms in CO2 emissions.

As a family business that started 60 years ago and that owes its success to the sustainable way it grew, Express Trailers has always harboured great respect towards the notion of sustainability. ***Additionally, Parks Malta also donated 25 saplings while NGO ACT donated another 15 saplings.*** According to Express Trailers, the planting of the 300 trees equates to a reduction of carbon emissions of 510,000 kms per year by its fleet.

“As Malta’s leading transport and logistics company, Express Trailers always acknowledged the fact that its strong presence on Maltese roads also has a social and environmental impact. We wanted to redress a small fraction of this impact and as the world continues to join in a collective effort to combat the challenges of climate change, we wanted to do our small part as well,” explains Franco Azzopardi, CEO of Express Trailers.

“As a family business that started 60 years ago and that owes its success to the sustainable

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Welcoming the initiative undertaken by Express Trailers, Minister for Sustainable Development Miriam Dalli said: “As Minister responsible for sustainable development, investing in open spaces has been a priority and through Parks Malta we are investing in parks, valleys and gardens within our localities. At the same time, we encourage the private sector to give society something back. This is the second partnership we have embarked on which will see the planting of more trees.”

Philip Aquilina from Parks Malta explained the benefits of planting young saplings compared to older and larger trees because “the survival rate of younger trees is much higher given that they tend to find it easier to adapt to their new environmental conditions when compared to older trees which would have already gotten accustomed to certain environments.”

Eleven species of trees have been planted

by Express Trailers which include Prunus Dulcis (Lewż), Celtis Australis (Bagullar), Vitex Agnus-Castus (Virgi), Fraxinus Angustifolia (Fraxxnu), Salix Alba (żafżaf kbir), Salix Pedicellata (Żafżaf żgħir), Tamarisk Africana (Bruka), Morus Alba (Ċawsli), Laurus Nobilis (Rand) Tetraclinis Articulata (Għargħar) and Ulmus Canescens (Ulmu).

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Interview with Mark Aquilina and James Sammut: ‘Companies become future proof when they embrace change’ A year ago, professional services company NOUV acquired Tuning Fork, a business advisory firm specialising in business process optimisation, cyber resilience, sustainability, and risk amongst others.

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“A year ago, we took a leap of faith because we wanted to give both our firms a unique position in the market. One year later, not only were expectations met but together we achieved more than we ever expected,” Mark Aquilina who founded NOUV in 2008, said.

Today, the firm, which also incorporates 36N Capital and GetGovernanz, is a uniquely positioned boutique consultancy firm offering a complete portfolio of management and financial advisory services coupled with a range of business support services.

“The idea of acquiring Tuning Fork was harboured from an increasing need to offer different skill sets from the traditional CPArelated services. From a cultural point of view, we were already very attuned, and we both knew that this synergy would give us a broader client base and more diverse competencies. I was convinced this would be a renaissance for both NOUV and Tuning Fork,” Aquilina said.

“Within a year, the group almost doubled in size and the achievements in 2021 were significant. We share common values and beliefs, and our next objective now is to grow sustainably, grounded on these solid values, guiding policies and robust systems.”

“From an operations point of view, we are still establishing and implementing a new way of doing things and to date, we have successfully centralised and consolidated the administration, finance and marketing functions,” James Sammut, who heads Tuning Fork’s operations, said.

“Within a year, the group almost doubled in size and the achievements in 2021 were significant. We share common values and beliefs, and our next objective now is to grow sustainably, grounded on these solid values, guiding policies and robust systems.”

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Obviously, the acquisition meant an increase in people working at NOUV. “Today, we are a headcount of 50. In fact, we have had to move to new and larger premises in Żebbuġ. This year, we also expect to onboard another eight new employees, four of which will join Tuning Fork’s operations,” Sammut said.

Synergies have led to new achievements.

In fact, as ESG increasingly dominates the agenda, this acquisition proved that the direction of NOUV to pursue the acquisition of an ESG specialist company was a correct and long-term decision.

“Today, with Tuning Fork on board, NOUV is positioned to offer medium to large-sized companies a one-stop-shop solution, combining technical and business development abilities to fine-tune certain services such as business transformation, cyber security and resilience, and ESG,” Aquilina said.

Tuning Fork’s competence in environmental management, sustainability and social accountability goes back to its roots in 2001, hand-holding organisations and managing their systems, ensuring compliance with regulations and enhancing internal systems in a way that helped them stand out from their competitors.

“Our capability and experience have put us at the forefront of ESG and in-house, we have home-grown a team of qualified and passionate experts who support local bluechip, corporate and SMEs in environmental, health and safety as well as social aspects.

We do not just compile reports but by integrating ourselves with the client’s culture, we present and implement solutions and strategic changes that enhance their systems,” Sammut said.

He explained how besides its standard portfolio of services, Tuning Fork recently started offering new services namely in ESG, PCI/DSS, SWIFT assessments and online learning.

“We firmly believe in the ethical reporting of non-financial performance to create value that is essentially a product of economic, environmental and social efforts. Our ESG advisory focuses on the strategy creation, execution, reporting and verification of Environmental, Social and Governance elements within any business. It is Win-Win situation for businesses, communities and ultimately for our environment,” he said.

Tuning Fork also opened up a cybersecurity arm to provide assessments in SWIFT for financial institutions and service providers offering services to organisations that make use of SWIFT services. It is also offering PCI DSS audits for financial institutions, software developers, card issuers/providers and data centres having electronic money transactions that includes cardholder data processing.

“And this month, we also launching our online Learning Management System to allow easy remote learning on controlled administration, tracking, reporting, automation, and delivery of educational courses, training programs, or learning and development programs,” Sammut said.

Besides a focus in niche areas such as food safety for catering establishments, food processors and importers, and penetration testing in cybersecurity, Tuning Fork’s Transformation pillar has been augmented with appropriate leadership and resources targeting change management projects and programmes for private and government entities.

Aquilina noted how 2021, with all its complications, still brought several success stories for the firm.

“Over the past eight months we have been assisting a local multinational medical device manufacturer in all its environmental and sustainability services, leading it to certification in international standards with our support being lauded and approved by the Senior EHS Director in Singapore.,” he said.

“Moreover, Tuning Fork and our governance arm GetGovernanz are now working more closely together with a local authority, assisting it in its transformation strategy to help it embrace a project management approach.

“Tuning Fork has also been commissioned by the European Commission’s representative office in Malta to establish environmental legal requirements and ensure its compliance obligations together with another commissioned project by a local Circular Economy authority to implement an integrated management system covering Quality and Environment in line with ISO 9001 and ISO 14001.”

Aquilina said that the beauty in all that the company is doing lies in how companies are opening up to their non-traditional advice. The acquisition has translated into more positive exposure to both NOUV and Tuning Fork which has led to more business opportunities.

“It is evident that companies are increasingly pursuing niche domains such as sustainability, cybersecurity, human capital and business optimisation in order to step up their performance and image,” he said.

“They have understood that embracing these principles and adapting to change will establish them into future-proof organisations.”

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Local knowledge and a strong work ethic are the key pillars of success After nearly twenty years at the helm of IZI Group plc, Johann Schembri, Founder and CEO, provides interesting insights to how he nurtured a small entity into one of the most prominent gaming group of companies in Malta. In this interview, we learn about IZI Group plc, their operations within the local land-based gaming industry and the internationalization prospects of the group moving forward.

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What can you recall about this 20-year journey at the helm of IZI Group?

When I started venturing into the gaming industry, I never imagined this journey would lead to the creation of one of the most established gaming group of companies in Malta. Although officially, the creation of the IZI Group (formerly known as Pinnacle Gaming Group) commenced in 2004, my first venture happened with the introduction of the first totalizator system at the Malta Racing Club and the establishment of a nationwide operation of Amusement with Prize (AWP) machines in Malta in 1998.

My vision was always to create an ecosystem that could provide a rich and versatile gaming offering in the local market while also creating gaming brands that would surpass the test of time.

initiated by the Privatisation Unit earlier in 2021.

What would you consider to be the key drivers of success in your business?

The most essential element in any business is to build a work culture that is based on core fundamentals. The people across the Group need to be like-minded and have the passion to succeed. Over the years, we have managed to find the right persons to form part of what I consider to be a formidable team. Most of the senior executives have been with the Group for nearly ten years, a sign of continuity, longevity and belonging.

At the same time, we are always on the lookout for the right people to fulfil the roles that continue to assist our growth. The overall objective is to improve the collective learning process of the Group, and to build knowledge across all the facets of the business.

When in 2002 I established Gaming Operations Limited, which to this day operates the retail arm of the Group, my intention was to create a gaming experience built on a robust product offering and service levels of the highest quality. Over time the company continued to grow from strength to strength, developing IZIBET as a gaming Yes, over the years we have developed household brand in the process. our business on the strengths of the local land-based gaming market. Over time we This pursuit for excellence was transferred managed to take a leading position in all those to the casino sector when in 2010, together business verticals we operate in. This is the with Novomatic AG, we were awarded the result of clear planning and a drive towards concession to manage and operate the attaining pre-determined objectives. Our key Dragonara Casino. In 2021, the Group was yet rationale is to put the customers first. All our again successful in retaining the concession processes are customer-centric and are built to operate the Dragonara Casino for another on local knowledge.

10 years.

While land-based gaming is the origin of We now look forward to extending our reach our business and contributes the lion’s share to the Lottery sector, as we prepare to take of our revenues, online gaming is also an over the National Lottery of Malta from Maltco important aspect of our business. In 2019, after Lotteries as from July 2022. After more than years of development, the Group obtained its 2 years of preparation, National Lottery plc a MGA online licence to be able to deliver the subsidiary of the IZI Group, was selected as Dragonara and IZIBET products online. We the Preferred Proponent in the RFP process anticipate exponential growth in this line of

Would you consider the local landbased gaming market as the primary market for the Group?

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for the past 18 years has been administered

by Maltco Lotteries, a subsidiary of the Intralot Group. We take pride in being the first locally owned entity chosen to operate a national concession of the calibre of the National Lottery. We look forward to bringing a local touch to the National Lottery and to operate this concession in the most enterprising manner possible.

We are also at the start of a new concession for the Dragonara Casino. We have big plans for the property as we continue in our efforts to position the Dragonara Casino as one of the most sought-after casino properties in Southern Europe. business and look forward to extending the online offering also to the National Lottery.

Our future aspirations are driven by an investment-led programme that focuses on growth in the various business verticals that we operate in. All aspects of our business require new investments. The National Lottery The gaming industry has evolved over time needs a fresh look and a modernisation and through this evolution, new challenges programme both at the level of product and emerge. The single most important challenge service delivery. that we face is that of meeting customer expectations in such a dynamic and evolving The Dragonara Casino needs another major market. Our philosophy has always been built investment to position it amongst the elite on the premise of offering gaming experiences in Europe, while IZIBET also requires a major in a responsible, fair, and transparent investment to drive innovation at the level of manner. This dictates a zero-tolerance policy the retail operations. to financial crime and a compliance culture that is ingrained in our operation. In many In the past 10 years the Group has invested ways we consider ourselves a role model €30 million to be able to deliver on its operator and are proud of our unblemished business objectives. We anticipate similar track record in terms of compliance. This investments in the next 10 years to grow drive towards transparency and fairness is the business to the desired levels. In the highly appreciated by our customers and is next 10 years we will also strive to bring in the main reason why we continue to be a an international dimension to our business. trusted operator by thousands of customers Over the past years we have been gearing up who regularly visit our establishments. to take what is essentially a local land-based gaming operation to international markets.

The last 5 years have been essential to gather knowledge at all levels of the business that will be required to internationalise our operations. The knowledge base of the Group This is a very important time for IZI Group. In will be imparted to other parts of the world, less than six months we will be entrusted to where big opportunities in similar lines of operate the National Lottery of Malta, which business exist.

What challenges do you envisage for the Group going forward?

What are the future aspirations of the Group and where do you see yourself in the next 10 years?

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More Growth in the UK Healthcare Market for Maltese virtual agent company EBO EBO Now Serving Six Of The Largest Public UK Hospitals One of the major breakthroughs for Maltese virtual agent company EBO was its penetration in the UK’s NHS when in 2020, together with UK health informatics firm Servelec, EBO started offering self-managed services to thousands of NHS patients to the East London NHS Foundation Trust and the Somerset NHS Foundation Trust.

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Serving six of the largest public hospitals in the UK is an achievement that makes us very proud because we have always been driven by the belief that healthcare should not only be accessible to citizens who are digitally literate.

In less than two years, EBO is now serving six of the UK’s largest public hospitals as it announces the 6th NHS hospital in its portfolio; the Gloucestershire Hospitals NHS Foundation Trust, which employs 8,000 clinicians.

“Serving six of the largest public hospitals in the UK is an achievement that makes us very proud because we have always been driven by the belief that healthcare should not only be accessible to citizens who are digitally literate. We therefore rethought the patient experience to deliver automated natural conversations so that patients get a simplified care experience,” explains Dr Gege Gatt, CEO of EBO. At the Gloucestershire Hospitals NHS Foundation Trust, EBO shall be providing its core AI-solution to automate patient

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engagement with the hospitals in this Trust, specifically focusing on automating the process of capturing digital consent, patient demographics and our flagship function, the end-to-end automation of appointments.

After partnering with UK health informatics firm Servelec in 2020, EBO started delivering innovative self-managed services to millions of patients within the UK’s NHS, allowing them to set hospital appointments, reschedule, or cancel them in real time, using their favourite communications app, instantly and 24/7.

EBO today runs a fully-owned UK subsidiary and has made multiple appointments including of a Senior Healthcare Consultant, a Healthcare Director, and Senior Clinical Consultant, specifically for the UK market.

“We are also proud to be playing such an important role in NHS’s five-year plan to make the UK a global leader in the development and use of digital health solutions and our work with the NHS will certainly prove an important step in our journey to become European leaders in conversational AI,” concluded Dr Gege Gatt.

For more information visit: www.ebo.ai

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Climate Change: No time and luxury to wait “While raising awareness remains important, we do not have the time and luxury to wait. Climate change is a real, immediate threat and we need to act now.”

Konrad Pirotta, Biology Head of Department within the Secretariat for Church Schools, one of Malta’s recently-appointed Climate Ambassadors in the context of the European Climate Pact, does not mince his words when sharing his views on the reality of climate change and the challenges faced by our country.

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“We need to act decisively, while at the same time ensuring that actions which are implemented serve to continue creating exposure on the challenges and possible solutions,” added Mr Pirotta. He shared his views together with a number of stakeholders at the first-ever Peer Parliament held in Malta, hosted by VisMedNet Association and the European Parliament office in Malta. The event focused on the European Climate Pact.

This event, organised in the wider democratic process of the Conference on the Future of Europe, brought together various stakeholders from all walks of life who exchanged success stories and best practices, while exploring possible new initiatives in the fight against climate change.

This theme, which perhaps has been on the Maltese backburner for decades, now tops Maltese citizens’ concerns, as confirmed by a recently-published Eurobarometer survey.

Mr Pirotta’s keen interest in nature and the wider environment is certainly not new, having been a marine expert and scientific diver for over thirty years. For a long time, he has strived to nurture a love for the environment among, students and young people, particularly by encouraging outdoor education, including through field trips in Malta and abroad, which provide first-hand experiences of nature to a generation which is increasingly urbanised. “Learning by doing is an effective way to get the young people involved and interested in doing what’s necessary for our planet”, he explains.

However, the recent COP26 climate conference has instigated a sense of urgency in his drive for change. In his mind, the fight against climate change needs to be twofold. Firstly, a level of mitigation: this implies acknowledging that climate change is here, that some changes are irreversible, and that therefore we all need to adapt to a new reality.

He suggests, as an example, focusing on the urgent need to devise new ways of making more freshwater available especially during the summer months when trees and plants suffer most, while trying to protect the soil from excessive dryness. On a second level, there are reversal efforts which we

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can undertake to try to roll-back some of the negative effects of this phenomenon, particularly through more aggressive afforestation.

Mr Pirotta’s current efforts revolve around getting educators and students aware of the perils of climate change, through practical experiences including through collaborative efforts with other island territories, facilitating experiences abroad. However, his concern is that while young people can be strong conveyors of change, they will struggle to succeed on their own. “All levels of society need to be involved. While young people are able to put their message across – and need to be well-equipped and determined to do so – it is hard to bring effective change if they learn one thing at school and then they experience the complete opposite the moment they get home.”

A second challenge he observes is that while Malta does have a growing number of experts in the field, many times their genuine efforts could be detached from the general public.

“It is therefore imperative to bridge this gap, which also needs to be supported through enhanced scientific literacy”, he argues.

Through his new role of Climate Ambassador, Mr Pirotta says that he will strive to help bridge that gap to make sure that there is a true understanding of the challenges that climate change poses, the immediate threats, and what effective action can be taken – not solely at national, industrial or enterprise level, but even in our own homes.

This reflects the spirt of the European Climate Pact, which is the key citizen engagement component of the European Green Deal, seeking to accelerate action and allow people to learn about climate change by showing them solutions from a bottom-up perspective.

Maltese citizens can have their say – through the organisation of Peer Parliaments or through direct submissions on the future of Europe. Further information is available on https://futureu.europa.eu.

www.malta2030.mt

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