In the latest of our exclusive ‘Executive’ series, SiGMA’s Trudy Kerr is joined by the Minister for the Economy and Industry, Hon. Silvio Schembri, for a rare and candid interview
The year 2020 has certainly been a tough one for many families and businesses which resulted in a significant amount of companies closing down and subsequently, unemployment around the world rising. Governments around the globe have also faced tough challenges to prevent this from happening, by introducing measures that gave back to their people as much as possible.
However, some countries have managed to perform well during 2020, amid all the challenges. Hon. Silvio Schembri, the newly appointed Minister of the Economy and Industry of Malta, felt that Malta were in a good position to minimise the impact of COVID-19 due to their robust economic growth and strong GDP. However, the country still felt the pandemic’s effects since one of Malta’s main pillars of the economy – tourism – was brought to a halt in March as the airport closed to mitigate the spread of the virus.
In Malta we had one of the most robust economy growths in Europe but in March all this had changed, one of the most important pillars of economic growth in Malta is tourism, it represents a third of our economy and we were in a situation were?tourism was growing year on year but in March it came to a standstill, from growth?to zero in a matter of days.
The Minister of the Economy and Industry also opened up about how he was presented a report back in the beginning of 2020 that showed the potential damage the virus could cause on the island. It was reported that a potential 50,000 people could become unemployed, effecting a number of families and businesses along the way. This resulted in the government coming up with an effective and efficient immediate plan which will help the regeneration of the country’s economy.
This plan was definitely successful as Malta has the lowest unemployment rate among the EU member states and therefore, it is in the best position to record growth next year according to Fitch Ratings. Malta was able to implement a successful plan due to their GDP ratio and helped families live near to normality as much as possible by letting them go out, attend school and work.
Hon. Silvio Schembri also opens up about the challenges the government faced due to the fine balance between health issues and economic issues. He stated how there were previous economic crisis’ but never one like this which included a combination of factors such as health, welfare and the economy.
Moving away from COVID-19, Trudy Kerr touches on Silvio’s passion and something very close to his heart – The Digital Sector. Prior to being appointed the Minister of the Economy and Industry, Silvio Schembri acted as Junior Minister for Financial Services, Digital Economy and Innovation. It was during this time that he put Malta’s digital economy on the map by introducing blockchain legislations, policies on AI and Esports and video game development.
We are now seeing an infusion of the traditional economy into a digital economy. As I see it, the future is the digital economy.
The Esports and video game development plan was launched last year and its strategy forms part of the gaming industry. Hon. Silvio Schembri wishes for this area in Esports to represent 1% of Malta’s GDP – as of now it represents 0.1% with 200-300 working on the project and there are plans to increase the number of employees to 3,000.
However, when it comes to licensing in regards to blockchain, the Minister for the Economy and Industry felt a bit let down and disappointed as he feels that the MFSA could have done more but understands their decisions due to pressures from Moneyval and other financial pressures.
It is quite impressive how Malta has created economic growth out of nothing, with no natural resources. Therefore, it is the island’s aim to continue to push the growth of human capital through tourism, gaming and financial services which will be built around the Maltese people. Many activities are moving into the digital world and Malta must invest and evolve in that area.
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