JP Fabri, economist and Partner at Seed Consultancy, believes that COVID highlighted the “inherent weaknesses of a globally interconnected economy” and the growing realisation that “every business is part of a web which continuously faces a volatile, uncertain, complex and ambiguous environment.”
Indeed, being cognisant of the challenges such an environment presents is key to surviving upheaval. “This means that it is always important that, when the going is good, the country and businesses build up their coffers to face such unexpected circumstances,” he asserts, adding that the pandemic has thrown in high relief the necessity for business continuity plans and enterprise risk practices, which will buffer companies through rocky times.
Moreover, it has shown the need for digitisation and – echoing Dr Cordina – an emphasis on quality over quantity in hospitality.
“This crisis has shown that much more sustained effort – done in a concerted and coordinated way – needs to be undertaken to ensure that Malta truly becomes a much-needed digital society.
“Another lesson that should have been learnt is that a greater reliance on quality rather than quantity needs to be undertaken in Malta in relation to most sectors, including general economic growth and more importantly, tourism. Higher quality is typically more resilient to external shocks,” he explains.
This resilience, he adds, can be built into Budget 2021, which needs to “carve out a personalised and tailored approach wherever possible” to be able to help businesses confront the difficulties developed in the wake of the pandemic.
“Hospitality, accommodation, retail and supporting services are still feeling the brunt although the second-round effects will soon start to be felt across a broader category of local businesses.
“This also very much depends on the situation within Malta’s external trading partners. Therefore, the Budget is going to be a very delicate exercise in trying to stimulate short-term economic activity, direct economic activity towards longer-term goals,” he asserts.
Moreover, due to the uncertainty which persists, businesses should continue to gain access to much-needed liquidity, “through incentives to support investment”, though there must be a “greater emphasis on conditionality”, he insists.
Added to that, diversifying the country’s economic base remains imperative, while, at the same time, transforming current industries and determining “how these can be made future-ready whilst also building on the intersectoral synergies and complementarities.”
Supporting the vulnerable in Maltese society is also key to a long-term focus in Budget 2021, Mr Fabri continues. “This means that growth needs to be more inclusive and, therefore, Government needs to continue supporting the most vulnerable in our society by ensuring that everyone benefits from growth in Malta.
The recent statistics on social and living conditions have shown that poverty is on the rise locally and this needs to be addressed,” he says.
Greening the economy by incentivising households and companies “to embrace investments in greening their houses and offices,” while also “kick-starting the green economy which can contribute to economic activity and jobs” will be just as pivotal, he asserts, going on to say that teleworking will become part and parcel of our working environment and this will aid in supporting work-life balance and the environment.
This is an extract of a feature first carried in the September edition of the Commercial Courier