business agenda issue 11

businessagendaTHe Official business publicaTiOn Of THe MalTa business bureau

THIS ISSUE neWspaper pOsT

HUman RESoURcESThe importance of flexible work

arrangements as a proven means of increasing workers’ productivity.

page 19

FoREwoRdMBB President George Vella on his new role and goals to further the Bureau’s relevance to Maltese businesses.

page 5

InTERnaTIonal BUSInESSAn overview of the outcome of an international conference held in Malta on the business opportunities that exist in the North African region. page 36

Issue 11 | July - sePT 2012

MalTa’s yOuTH uneMplOyMenT is aMOng THe lOWesT in THe eu

a cOMMOn cOnsOlidaTed cOrpOraTe Tax base is deTriMenTal TO MalTa’s ecOnOMy

At 14 per cent of youth unemployment, Malta’s situation is not the worst in Europe as only Germany, the Netherlands and Austria register a better ranking. However according to MBB CEO Joe Tanti further initiatives need to be undertaken as it is still proving difficult for local businesses to recruit personnel with the required skills.

Business Agenda provides an overview of the local as well as

the overall EU situation within the youth labour market and speaks to a number of authorities in the sector who discuss the importance of equipping today’s youth with the adequate skills and the need to bridge the gap between academia and the labour market, particularly in the light of the current economic climate and increased competition.

Recent statistics issued by the National statistics Office show that in spite of an initial 4 per cent dip in tourist arrivals recorded in the beginning of the year, the success registered in the months of April and May, and the positive results expected for summer could make up for the lost numbers and possibly bring about another record year for the tourism sector in Malta.

The Malta Hotels and Restaurants Association President Tony Zahra is optimistic that this result can be

achieved and that 2012 could be yet another record for tourism, however the authorities have said that they will remain vigilant to ensure that the current economic hardships do not dampen the sector’s potential.

Business Agenda talks to a num-ber of stakeholders in the tourism sector to discuss the results so far, the shifting travel trends and the elements Malta should continue to strengthen in order to further its tourism product and maintain its competitive edge.

See full story on page 16.

2012 cOuld be yeT anOTHer recOrd year fOr TOurisM

Further to an impact assessment study commissioned by MBB in collaboration with Bank of Valletta, the MBB, the Government and Opposition agree that should the european Commission’s proposal for a Common Consolidated Cor-porate Tax Base be adopted it could diminish the competitive edge of member states and could lead to an exodus of businesses that may look beyond the eu for better fiscal treatment.

so far the eu has not reached an agreement in this area because any harmonising measure pro-posed by the Commission requires unanimous agreement between all member states.

Business Agenda takes a detailed look at the proposal, discusses how it will affect Malta and analyses the MBB’s position as well as the Mal-tese Government and Opposition’s opinion on the matter.

See full story on page 28.

InTERVIEwMeP Joseph Cuschieri speaks of his experience as Malta’s newest member of the european Parliament whilst analysing the current economic scenario. page 8

See full story on page 7.EU polIcyMBB’s Permanent Representative in Brussels, Omar Cutajar reports on the european Commission’s efforts to boost the presence of the service industry within the eu’s single Market. page 15

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BUSINESS AGENDA | jUly - SEpt 20122

3BUSINESS AGENDA | jUly - SEpt 2012

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malta Business Bureau

Casa leone

Pjazza Robert samut, Floriana

Tel: 00356 2125 1719 (Malta Office)

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editor: Joe Tanti

Deputy editor: yolande Spiteri editorial Team: chiara Bonello, omar cutajar, daniel debono, mariella Scicluna

Business Agenda is the quarterly publication of the Malta Business Bureau. It is distributed to all members of the Malta Chamber of Commerce, enterprise & Industry, all the members of the Malta Hotels & Restaurants Association, and to all other leading businesses by Mailbox Distribution services, part of Mailbox Group. Business Agenda is also distributed by the Malta Business Bureau to leading european and business institutions in Brussels.

COllABORATING PARTNeRs:

The Malta Business Bureau is a non-profit making organisation acting as the european-Business Advisory and support Office of the Malta Chamber of Commerce, enterprise and Industry and the Malta Hotels and Restaurants Association. The MBB has two offices, the Head Office in Malta and the Representation Office in Brussels.

ediTOrial

By Joe Tanti, Chief Executive Officer, MBB

eurostat estimates for April show that 24.5 million people were unemployed in the eu. Moreover, yet another dip in european GDP growth is expected for 2012: from the eu27 1.5 per cent GDP growth registered in 2011 to an expected nil GDP growth in 2012. This increase in unemployment and decrease in growth is of serious concern and an issue that eu leaders should con-tinuously seek to address.

In this respect, the need to strengthen growth policies while respecting the deficit-curtailing rules was an issue high on the agenda of the extraordinary euro-pean Council (eC) meeting held last May. The member states also agreed to discuss the issue in sub-sequent eC meetings, starting with the one held on the 28th of June.

In a recent address, Herman Van Rompuy, the President of the euro-pean Council, explained that the discussions within the eC revolve around the three main pillars of the eu’s Growth strategy: the mobilisa-tion of eu policies to fully support

growth, the stepping up of efforts to finance the economies through investment, and the strengthening of job-creation.

Maltese business joins the wider european businesses community in decisively calling upon the eu decision-makers to ensure that europe’s ambitious reform targets are reached in a rigorous, swift and effective way. Businesses all around europe are encountering scarcity of financing and are finding them-selves facing skills mismatch prob-lems. These business barriers need to be tackled if europe wants to achieve growth.

To this end, eurochambres sub-mitted two specific recommenda-tions for initiatives to tackle these structural impediments to business growth. The first recommendation suggests the creation of a euro-pean Guarantee Fund to stimulate lending to sMes. Managed by the european Investment Fund, this new fund would increase access to finance for businesses. sec-ondly, the establishment of robust

vocational education and training schemes is also suggested in order to tackle the failure of the employ-ment market to meet the needs of business employers, which is lead-ing to the paradoxical situation of high levels of unemployment cou-pled with significant job vacancies particularly for highly-skilled work-ers.

The economic turmoil brought on by increasing unemployment and contracted growth is impinging on the sustainability of businesses, resulting in the weakening of pub-lic finances, lack of value-added investment and importantly, from a policy perspective, it showcases significant limitations in the com-pletion of the single Market project.

The MBB concurs with Businesseu-rope that the starting point should be for the eu member states to consolidate their public finances, as it is a pre-requisite for financial sta-bility. It is also important to increase productivity, lower production costs and improve innovation through the completion of structural reforms.

These include pension reforms and cost of living adjustments.

Improving the workings of the euro-pean single Market entails the veri-table reduction in administrative burdens and government-induced costs. Finally, the more market access opportunities for cross-border trade, the more likely that foreign business investment can be successfully enticed into the eu’s internal market. New market access opportunities would tangibly contribute to the eu’s growth goal.

The MBB believes that europe should switch to growth-oriented policies while at the same time address in a proper manner bud-getary consolidation. Both elements would produce the much-needed

results if the eu finds the right bal-ance in its policies and strategies. In fact, both fiscal consolidation and economic growth are embraced by the europe 2020 strategy.

The current economic situation is not the best possible. However, there remain reasons to look to the future with optimism. Political con-sensus has been reached in order to effectively tackle this difficult situation. Businesses are key play-ers in order to produce growth and create jobs. It is all about giving the right tools and tackling the needs of enterprises. This would lead the eu to achieve economic prosperity again, which would directly affect in a tangible and positive way the eu member states, european citizens and all eu-based enterprises.

realising THe grOWTH expecTaTiOns Of THe eurOpean business cOMMuniTy


fOreWOrd

A word from the MBB’s President, George Vella

MalTa business bureau: THe Way fOrWard

The last few years have witnessed a consistent increase in the rate of work carried out by the Malta Business Bureau (MBB). estab-lished just over 15 years ago, the Bureau has represented Maltese business in Brussels ever since. During the tenure of my predeces-sors, the organisation intensified its focus on serving the local pri-vate sector by keeping it abreast of the changes occurring at eu level, safeguarding its business interests and linking business to opportuni-ties resulting from eu member-ship.

I was indeed honoured when I was asked to consider taking on the role of President of the Bureau. In recent years, I had closely fol-lowed MBB’s activities and con-sider it a privilege to be given this opportunity to share my ideas and experience in steering this organ-isation forward. I believe that with

the support of my Board and the solid commitment of our executive Team, we can continue to improve our relevance to business and the country as a whole.

During my term, I intend to build on the foundations that the MBB has set for itself in recent years and focus on rendering the Bureau more effective – both on the issues and projects that are currently underway as well as on new ones that we intend to embark on. The MBB’s three main roles – Inform-ing, safeguarding and Promot-ing – remain crucial to its future success. We shall endeavour to fulfill these roles to the best of our knowledge and capabilities in all priority areas that were iden-tified as being at the core of our strategy. In the coming years we believe that our businesses and economy will be facing challenges related to:

• the need for continued growth in employment;

• the importance of operating in an environmental sustainable manner;

• improving the competitiveness of our Manufacturing, Tourism and services Industries.

During my term, it is my intention to see the Bureau improve its rel-evance to business by becoming more effective in the way we man-age our consultation processes. In my view, it is imperative that we understand the challenges that businesses face, if we want to be effective in communicating to and influencing policy makers at an eu level.

We shall strive to be more effec-tive in communicating eu-related issues as they unfold to our parent organisations, the Malta Cham-ber of Commerce, enterprise and Industry, and the Malta Hotels and Restaurants Association (MHRA); in order to stimulate debate and collect direct feedback from busi-ness representatives coming from various economic sectors. We are also personally meeting local entrepreneurs to assess how we can support their individual or sec-torial concerns at eu level.

Another area I intend to develop during my tenure is the collabo-ration with a number of Brussels-based organisations that have a similar function to the MBB. Dur-ing a recent visit to Brussels with John A. Huber (my predecessor) and Joe Tanti (CeO), also accom-panied by MBB’s Permanent Dele-gate Omar Cutajar, we met various organisations which exposed us to the potential of working with others in order for the Bureau to become

a better and more effective lobby organisation in Brussels. This will not be an easy task; nevertheless our vision is to strengthen our resources to have a stronger voice at the heart of the eu. We shall use these connections to learn and improve our internal processes as to improve our effectiveness.

To date, the MBB is leading three eu-funded projects; namely• the eu lIFe+ Investing in

Water project• a leonardo Mobility Pro-

gramme entitled sHIFT (sup-porting Human Resources In Family friendly Training); and

• is a strategic partner in a Com-petitiveness Innovation Pro-gramme entitled AMIe (Ambas-sadors in Malta for Increasing women entrepreneurs).

We wholeheartedly believe that these projects are the most effec-tive way of fulfilling our third role – that of promoting eu opportuni-ties with local business. I am in full support of such initiatives which I believe also help to bring our

organisation closer to business. The MBB will seek to keep sub-mitting proposals for eu-funded projects in order to support areas within our economy, where as a country we may not be faring as well as our european coun-terparts. These will be identified together with our parent organ-isations whereby the necessary investment is made to remedy the situation.

I am convinced that the MBB can continue developing by diversify-ing its profile to become more rel-evant to a wider spectrum of busi-ness across the Maltese economy. We shall continuously persevere to promote MBB’s leading role as the eu-business advisory and support office of the Malta Chamber and MHRA. I am sure that interesting times lie ahead and I look forward to working together with my Board and the executive Team in order to achieve these renewed objectives that we are focusing on and striv-ing to achieve for the benefit of Maltese business.

a WOrd Of THanksafter long years of sterling service, in recent weeks, Ing. Ray Muscat moved on from his post as director general of the Malta chamber of commerce, enterprise and indus-try. george Vella would like to thank ing. Muscat for the invaluable commitment and support he showed through-out his tenure towards the Mbb. Mr Vella also extends his regards to ing. Muscat for the input he wholeheartedly gave to the bureau when recently appointed as acting Trustee on the Malta business foundation – the governing body of the Mbb. He wishes ing. Muscat farewell and success in his future endeavours.


cOVer sTOry

‘2012 cOuld be anOTHer recOrd year fOr TOurisM’ – MHRA President

a record in tourist arrivals for april and May counteracts the dip registered in the first quarter of 2012, promising better results for the months to come and possibly another record year for the tourism industry in Malta. yOlande spiTeri reviews the current situation and discusses how the rest of the year is expected to unravel.

“ The sector’s success lies in the fact that Malta manages to attract different niches of tourists which are spread over the year.”

– Mario de Marco

With last year registering an all time record for tourism in Malta, one would think that the tougher economic climate in 2012 makes it all the more harder to maintain last year’s numbers let alone surpass them. Performance however shows that in spite of such trying times, the industry continues to be resil-ient and this year may moreover prove to be another record year for the industry.

After a dip of 4 per cent in the first months of the year, the National statistics Office’s (NsO) most recent report shows that tourist arrivals in May were up by 2.5 per cent when compared to the same month last year.

This indicates that although the situation may be worrying, things seems to be looking up, as the months of April and May registered an all time record for tourist arriv-als.

The Malta Hotels and Restaurants Association’s (MHRA) President Tony Zahra is very optimistic to the point of believing that this year could possibly be another record year for tourism. “We can see a slight increase of seat occupancy this summer over the previous one and although the country suf-fered a decrease of tourist arriv-als in the first quarter, the positive results received in May, June and the beginning of July are enough to make up for the loss in numbers.”

MHRA has once again stressed that hotels should not reduce their rates because summer could promise to have the potential of another record number of arrivals.

Nonetheless, authorities face the numbers with mixed feelings as performance tended to vary from one niche to another; for instance a notable decrease was observed among those travelling for busi-ness or professional reasons. How-ever in May tourists spent a total of over one million nights in Malta, an increase of 12 per cent and expen-diture was estimated at €109.7 mil-lion, up by 3 per cent when com-pared to May last year.

In June, the Malta International Air-port (MIA) reported an increase in traffic of 8.5 per cent whilst within the first six months of the year pas-senger traffic increased by 1.6 per

cent – a record total of 1.58 million movements. In a statement, the MIA stated with confidence that the dip registered in the first quarter of the year had been counteracted by an increase in the second quarter of 2012.

Despite these positive results, air-craft movement for the first half of the year was 2.8 per cent less than the same period in 2011, whilst seat capacity was 3.1 per cent lower than last year’s.

The past winter was particularly challenging mostly because of the drop in seat capacity of various airlines – which amount to a total of approximately 141,000 two-way less seats flying to Malta.

When interviewed by Business Agenda, Tourism Minister Mario de Marco explained that to counter this drop, Malta increased its efforts with tour operators for them to sell a higher volume of the seats avail-able to Malta during the winter sea-son. “Moreover we advertised more aggressively particularly on the internet to push up the load factors on the flights to Malta, given that in winter the average load factor is lower than that in summer, provid-ing the opportunity to make up in part for the reduced seat capacity,” he explains.

In terms of tourist expenditure the NsO report indicated that in spite

of a decline in volume, expendi-ture is actually on the increase, in line with trends observed over the past few years. Despite the 20,000 drop in tourism figures during the past winter, tourist expenditure in the period between November 2011 and March 2012, was €260.8 mil-lion, €7.4 million or 2.9 per cent more than that registered in the previous winter.

Although the competition gets stiffer every year, in Dr de Marco’s opinion “the sector’s success lies in the fact that Malta manages to attract different niches of tourists which are spread over the year.” For instance, the sector is equipped to welcome Meetings, Incentives, Conferencing, exhibitions (MICe) related travel, language learning, dive and other sport related activi-ties and events, culture and rural tourism.

Whilst agreeing on the strength of the MICe sector in Malta, Oppo-sition spokesperson for tourism Gavin Gulia believes that the seg-ment which requires urgent atten-tion is Gozo. “It is indeed a pity that such a gem for the discerning tour-ist, in an age of green tourism, is falling behind by the day in terms of product quality and staying visi-tors,” he says.

On the other hand, Dr de Marco admits that “we need to keep investing in our forte which is the

rich historic patrimony that few Mediterranean destinations can offer, ensuring that our cultural activities remain rich and vibrant.”

Whilst Dr de Marco believes that the industry’s resilience and innovation are the two main factors which help Malta achieve its results, Dr Gulia is of the opinion that Malta’s main weakness is its ageing accommo-dation product since most hotels were built 20/30 years ago. He explains that nowadays the modern traveller expects excellent ‘well-ness’ facilities in hotels.

As expressed by Dr Gulia, Malta’s tourism sector is experiencing a shift in trends, which the industry should adjust itself to in order to remain competitive. Dr de Marco explains how booking trends will continue to favour late decision making and people will seek value for money deals. “shifts from long to short haul may be beneficial to us but attempts by large source markets to retain people in domes-tic holidays may work against us. Arab spring destinations are slowly making a comeback and are thirsty for huge volumes,” he explains.

The latest travel mega-trend has seen more travellers resorting to ‘dynamic packaging’, meaning that individuals are now building their own holidays via the internet and low cost carriers to Malta. This has made the island more attainable to tourists seeking a short low budget holiday.

Whilst Dr de Marco is confident that the rest of the year will unfold in a positive manner in spite of the sur-rounding economic woes, Dr Gulia

sees the rest of 2012 unfolding at par with 2011 which is, in his opin-ion, not satisfactory. MHRA Presi-dent Tony Zahra says that “the eco-nomic situation in europe is what it is and right now it is difficult to pre-dict how the economies are going to perform in the next few months; however the numbers registered in Malta over the previous months point to a positive year ahead. MHRA believes that we should be focusing on those countries which are doing relatively well economically as the spending power in these countries will be much greater.” In fact May 2012 welcomed an increase in Ger-man tourists and a loss in British tourists.

In this respect, Dr Gulia adds that “we should at this very moment be tactically exploiting the weakness of the euro vis-a-vis the sterling in our core uK market. For this rea-son, 4 million Britons are heading for Greece this summer, double the average number. spain is already practically sold out. We must there-fore work to turn threat into oppor-tunity.” In effect NsO statistics show that Malta’s British market registered a decrease of 4 per cent.

Although the numbers point to a positive year ahead, the industry will continue to face its fair share of challenges. so far, authori-ties seem to be throwing in the right mix, and our fingers remain crossed in the hope that the fig-ures continue to rise in the coming months to ensure that Malta’s main industry will remain resilient and make it through the economic hard-ship, bringing forward a surprising record – yet again.

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inTerVieW

“ lOgic Of ausTeriTy Measures clearly nOT WOrking OuT”

– MEP Joseph Cuschieri

THE cURREnT EconomIc SITUaTIonClearly against austerity, Mal-ta’s newest Member of the euro-pean Parliament Joseph Cusch-ieri believes that the Conservatives and liberal majorities within the european institutions have failed to address the current economic issues by means of effective solu-tions such as the creation of jobs and striving for growth.

“europe is in the middle of the worst economic crisis since the Great Depression. High and rising unem-ployment, low economic growth, high public debts and budget defi-cits are all evidence of the current crisis,” he maintains.

“Greece’s dire situation is a clear example of the mishandled situa-tion,” Mr Cuschieri says. europe’s social agenda is ambitious and

designed to ensure that european union policies respond effectively to today’s economic and social chal-lenges. However, for it to be truly effective, Mr Cuschieri believes that “progressive and socialist govern-ments are best placed to implement it successfully.” For instance, the newly elected French socialist Pres-ident François Hollande has insisted that austerity measures announced

by former French President Nicolas sarkozy are not the only way to fix europe's financial woes. Mr Cusch-ieri asserts that “Hollande’s elec-tion is a welcome development and may be a factor that can start turn-ing back the clock.”

THE pRIoRITIESOn the core issues that he intends to address during the rest of the eP

legislature, Mr Cuschieri explains that his top priority delivering the promises that he outlined in his own personal electoral manifesto during the eP campaign in 2009. “First of all I am, and intend to remain, the voice of the workers. To achieve this objective I need to continue giving particular impor-tance to the various industrial and

service oriented sectors operating in Malta,” he explains.

since occupying his post as the sixth Maltese MeP, he has already delved into a number of important issues such as the evolving situa-tion at Air Malta, developments in the tourism sector, the proposed Financial Transaction Tax, the financial sector and youth unem-ployment. “There are other issues which I shall address in the coming months such as illegal immigra-tion, education, environment, the economy and cost of living, always within the set framework, that of being the workers' voice,” Mr Cus-chieri affirms.

commITmEnT To BUSInESSIn Mr Cuschieri’s view, further-ing the single Market concept will impinge on all sectors of the local community especially our eco-nomic activity, which in return will have an impact on Malta’s busi-ness community.

In light of this how does Mr Cus-chieri intend to engage in dialogue with stakeholders, including the the business community?

“During my mandate I look towards building bridges not only with the Maltese business community but also with a number of other stake-holders,” he maintains. The new MeP explains that he has already started establishing periodic meetings with interested parties with a view to reaching two objec-tives: “Firstly, I shall be working to ensure that the european Commis-sion’s current initiatives provide further opportunities to local busi-

“ europe is in the middle of the worst economic crisis since the great depression. High and rising unemployment, low economic growth, high public debts and budget deficits are all evidence of the current crisis.” – Joseph Cuschieri

following the ratification of the lisbon Treaty, Mep JOsepH cuscHieri now occupies the sixth seat as Malta’s Member of the european parliament. in an interview with yOlande spiTeri, Mr cuschieri discusses the current economic scenario, his experience in the european parliament and his main priorities as an Mep.


inTerVieWness to expand their operations both locally and within the single Market. secondly I’d like to identify and tackle effectively the problems facing small and medium-sized enterprises with an eye to securing the best future for the local busi-ness sector.” Within this frame-work he hopes to gear his efforts to lobby for policy changes and new initiatives to ensure economic growth that will serve to benefit the local business community and consequently workers.

THE naTIonal aIRlInE ISSUEOne of the first appointments for Mr Cuschieri after taking up the post of MeP was on the european Parliament’s Transport and Tour-ism Committee, and as a substi-tute member in the Committee for Regional Development – two very relevant committees for Malta.

Having previously been shadow spokesperson on Air Malta he admits to being very concerned about the fate of Malta's national airline. “I wouldn’t like to see Air Malta miss out on profitable routes, relinquish key slots in other airports and reduce capac-ity by 20 per cent to the detriment of the travel and tourism indus-try. This would have serious con-sequences for the whole Maltese economy at a time when Malta, like other eu member states, is doing its utmost to bolster eco-nomic growth in a worrying finan-cial context.” he says.

He explains that he is currently consulting stakeholders in Malta to analyse how Malta may be affected by the legislative proposals pre-sented by the european Commis-sion which seek to address capac-ity shortage at europe’s airports and improve the quality of services offered to passengers as well as encourage growth, connectivity and sustainable mobility.

The legislative proposals are to be discussed and approved by the european Parliament and the Council before they can become law. Mr Cuschieri explains that after gathering feedback on the impact of these proposals on Malta, he will be able to contribute accordingly to the discussion in the Transport and Tourism Committee as well as within the Progressive Alliance of socialists and Demo-crats Group.

The discussion turns to the local scenario as we discuss Mr Cus-chieri’s time as a Maltese MP. He feels that there is a stark differ-ence between the Maltese Parlia-ment and the eP. National parlia-ments are bound by eu rules and policies while the european Parlia-ment seeks to safeguard the inter-ests of all 27 member states. In Mr Cuschieri’s view, with the com-ing into force of the lisbon Treaty, the eP has been given more power and this has added to the respon-sibility of each and every MeP. “Transfer of competences to the eu has reduced the sovereignty of national parliaments over the years since eu institutions tend to favour action at the european level,

limiting the role of national parlia-ments,” he explains. Nonetheless, the lisbon Treaty also encourages national parliaments to keep the eP in check and to ensure that its policies respect the principles of subsidiarity and proportionality.

This is where the challenge lies; to draw links and continuously serve as an intermediary between the european union and Malta, whilst safeguarding and voicing the inter-ests of the latter, especially in such turbulent times – a challenge Mr Cuschieri is fully geared to take up.


TOurisM

80,000 fOreigners VisiTed MalTa in 2011 TO parTicipaTe in business MeeTings and cOnferences

in spite of the decreasing numbers in business travel to Malta registered in the past months, the economic significance of these visitors to the island is impressive. yOlande spiTeri takes a look at the strategic importance of the conference and incentives segment within Malta’s tourism industry and its contribution to the country’s economy.

The meetings, incentives, con-ference and exhibitions segment (MICe) within Malta’s tourism industry generates much activ-ity and value added in economic and financial terms for the Mal-tese islands. It is estimated that last year alone the MICe indus-try welcomed 80,000 foreign visi-tors, accounting for 5.7 per cent of total tourism inflows. However their economic significance was far greater than mainstream tourism.

Tourism Minister Mario de Marco believes that the MICe industry is a critical segment of the Maltese tourism industry. “MICe visitors’ trip duration is around one third of an average leisure tourist, but spend three times as much. They provide employment to a variety of specialised Destination Manage-ment Companies and to companies providing audiovisual, transport, animation and re-enactment ser-vices,” hence contributing to the overall local economy.

Malta is an ideal destination for business meetings and confer-ences, as it is well equipped with the required amenities. The coun-try also offers a perfect climate, serving as a winter weather break for those coming from colder coun-tries, along with an extensive range of recreational facilities that blend well with this type of travel mar-ket. such facilities include high quality restaurants and bars, sPAs and well-being centres, nightlife entertainment venues as well as a dynamic cultural and artistic cal-endar of events. Among its unique selling points the country also boasts easy accessibility to most european countries at very attrac-tive fares.

Malta’s rich heritage is another determining factor which serves to complement the business experi-ence. Most historical sites, such as Pjazza Regina and the Mediterra-nean Conference Centre, are made available to conference and incen-tives groups for private functions; hence offering Malta’s cultural heritage as a backdrop, rendering the experience all the more unique.

In Malta, business clients are able to get better deals when compared

to competing cities. These include cheaper five-star accommodation options with top conference facili-ties, as well as modern or histori-cal venues equipped with the latest technological equipment. The MICe segment is in turn very important for five-star hotels and contributes immensely towards maintaining a steady stream of tourists during the slower months.

Malta Hotels and Restaurants Association (MHRA) President Tony Zahra believes that this segment is extremely important for Malta, “the MICe market has been very impor-tant for a long number of years and will remain so for Malta – one can safely say that without the MICe market our five-star hotels and some four-star hotels would find it difficult to remain open during the shoulder and winter months.”

Dr de Marco explains that MICe business is also important as it exposes Malta to corporate cli-ents, thus enhancing investment opportunities. “It also helps to strengthen the image of Malta by moving it away from being a mere leisure destination towards a more diversified and sophisticated econ-omy. Furthermore, most MICe visi-tors eventually return with their families for a leisure holiday, thus strengthening our reputation as a destination for repeat visitors, which constitute one in every three tourists visiting Malta annually.”

Nonetheless the MICe segment is rather unpredictable and may be affected in different ways to mainstream tourism, particularly since it performs better in winter than in the summer months, and in fact compensates for the qui-eter months earlier in the year. Although the overall tourism sec-

tor performance for 2011 was an all-time record, in the last sea-son MICe traffic underperformed, Mr Zahra clarifies. This May, for instance, business travel to Malta decreased notably with total arrival figures dropping to 10,881 from 15,357 registered in May 2011.

“The MICe business is unusual as it is driven by businesses and therefore it is also susceptible to economic cycles,” he explains. It is also affected by political shifts such as the libya crisis. Clive Cordina, Director of sales and Marketing at Hotel Phoenicia, explains that “dur-ing the early stages of the turmoil in libya, we experienced a reduc-tion in MICe requests, and other hotels also experienced cancella-tions for conference and incentive group bookings for the immedi-ate future; that is March and April. However, this was quickly forgotten with enquiry and booking trends resuming to normality after a few weeks.”

Hotel Phoenicia recognises MICe as one of its main segments, hence allocates a considerable part of its yearly budget towards this end, mainly for overseas sales and mar-keting initiatives for the core mar-kets including uK, Germany, Italy, France and scandinavia.

Chiara ellul, sales Director at le Méridien, also believes the MICe sector to be a very important mar-ket for Malta, which contributes to around 12 per cent of the hotel’s yearly sales. However, she warns, “other destinations are becoming more competitive in terms of flight tariffs, accessibility and overall pricing.”

The hotel has also experienced lower performance in this seg-ment over previous years and cur-rent indicators until the end of the year are not positive. In Ms ellul’s view, “this is mainly due to the cur-rent economic situation in europe, whereby companies are reducing international travel and trying to retain conferences at a domestic level, thus reducing overall costs. some companies are also reduc-ing the amount of conferences they organise as a whole.” In order to counteract this, le Méridien is focusing on exploring new, emerg-ing markets, while also investing in maintaining its quality products.

Mr Cordina, from the Hotel Phoe-nicia, believes that as a result of the economic crisis, expensive air-fares, lack of direct flight acces-sibility and the inconvenient flight timings such as those of the Air Malta scandinavia route, have all played a part in affecting the MICe sector in Malta.

When asked whether the hotel will be counteracting these challenges by shifting its marketing strategy, Mr Cordina explains that “this year we managed to replace the drop in MICe industry with business from other segments such as individual leisure from tour operators, web business and domestic corporate. And in the meantime we will be increasing our marketing initiatives for MICe business for 2013.”

Mr Cordina calls for a joint analy-sis from all parties, authorities and stakeholders and for joint initia-tives to improve the current situa-tion in this sector. He concludes by asking whether an overall rebrand-ing of the local product is required to boost sale opportunities and keep up with stiff competition – a strategy the authorities may have to consider.

“ The Mice market has been very important for a long number of years and will remain so for Malta – one can safely say that without the Mice market our five-star hotels and some four-star hotels would find it difficult to remain open during the shoulder and winter months.”

– Tony Zahra

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eu affairs

‘expOrT cOnsOrTia’: an innOVaTiVe cOncepT THaT cOuld benefiT MalTese businessesThrough the mechanics of export consortia, three or more companies, which are not in direct competition, product or service wise, are encouraged to join forces to be stronger when entering a new geographical market, notably by exploiting complementarities. yOlande spiTeri explores this concept which can be a very effective tool for sMes to exploit the opportunities of the single Market.

It is the large multi-national corpo-rations that make the headlines in europe, but statistics clearly show that small and medium sized enter-prises are critical for the european economy. sMes create jobs and generate business activity, and the eu is clearly recognising their importance in the individual mem-ber states – including Malta. The significance of sMes stands out even more in the prevailing turbu-lent economic times. The european Commission and the european Parliament are therefore putting their heads together, to continue unleashing the potential of sMes in these times of economic hardship.

A Communication issued by the european Commission entitled ‘small Business, Big World— a new partnership to help sMes seize global opportunities’, outlined the Commission's efforts to encourage and finance the establishment of training programmes for manag-ers of clusters, business networks and export consortia in order to enable them to steer internationali-sation operations. In the meantime it will continuously seek to promote the creation of export consortia between sMes established in dif-ferent member states through a range of measures including infor-mation campaigns and financial incentives as to encourage the cre-ation of synergies.

As described by the united Nations Industrial Development Organisa-tion (uNIDO), an export consortium is a voluntary alliance of compa-nies which through joint-action promotes the export of goods and services of the various compa-nies which make up the consor-tium. This joint effort is thought to help sMes access foreign markets, whilst allowing each member to maintain its commercial autonomy.

When entering foreign markets, sMes may sometimes lack the nec-essary knowledge and financing or fall short of foreign regulatory requirements. Therefore through such cooperation, they can improve their export potential as well as reduce the risks and even costs involved in penetrating foreign mar-kets.

The Malta Business Bureau describes this concept as a fresh approach towards beating the chal-lenges european sMes encoun-ter, which could benefit Maltese businesses. MBB’s CeO Joe Tanti explains that “consortia of sMes can help facilitate the solution of export problems for Maltese businesses which to date are not exploiting the full potential of the european single Market.”

Karl Hartleb, Deputy Director General of Advantage Austria, an organisation which seeks interna-tional business opportunities for Austrian companies explains that this concept reinforces the principle that ‘together we are effective and efficient’, which is especially impor-tant when entering a new market.

For instance, by taking opportuni-ties in North Africa as an example, Mr Tanti explains that a new eco-nomic reality is unfolding in this region, which in turn provides new business opportunities for Maltese and other european enterprises. “In this respect the concept of export consortia can facilitate the internationalisation efforts for Mal-tese sMes. In turn, Maltese busi-ness can truly serve as a bridge for european enterprises wanting to do business in North Africa,” Mr Tanti explains.

In order to make the concept more attainable, capacity-building exer-cises need to take place bringing

together public and private insti-tutions, to provide the necessary support to promote and assist in the operation of such consortia, Mr Tanti adds.

THE pRESEncE oF SmEs wITHIn THE EURopEan SInglE maRkETTaking a larger perspective of the importance of sMes within the eu, lux Hendrickx, Director for enter-prise Policy and external Relations within ueAPMe (european Associa-tion of Craft, small and Medium-sized enterprises) tells Business Agenda that over the past five years, virtually all the new jobs created in the eu originated from sMes. How-ever, he explains “the current crisis and the measures taken by govern-ments to lower public debts and deficits have clearly taken their toll on european companies.”

Nowadays, sMes face a number of challenges; be they legal or infra-structural constraints, bureaucracy or poor access to finance for those companies willing to invest, espe-cially in riskier than average activi-ties such as business transfers and start ups. According to Mr Hen-drickx payment delays are another major challenge for sMes, although the crisis has exacerbated the situ-ation.

Moreover, “the downturn has led to a decrease in private demand, due to both a loss of purchasing power by consumers and an increased risk aversion both by consumers and investors,” he continues.

While it is understood that auster-ity programmes may be needed, Mr Hendrickx believes that this should be counteracted by action that seeks to promote business confi-dence and to encourage the struc-tural reforms.

Mr Hartleb explains how “perfor-mance of sMes in europe is nega-tively affected mainly by structural difficulties such as lack of skills and labour market rigidities, mar-ket failures in research, training and innovation as well as a general lack of entrepreneurial spirit.”

On the other hand, when asked about his expectations on how the eu should employ its efforts in this regards, he explains “any broad ini-tiative on a european level should be comprehensive, consistent in terms of goals, target group, geo-graphic reach, tools and means.

Further activities of the european union to support european sMes must most importantly be demand driven and avoid the duplication of existing structures” he points out.

The action employed by eu pol-icy which specifically facilitates the functioning of sMes includes efforts for a more resilient finan-cial sector and clearer rules on the governance of the monetary union. “When it comes to direct action, the new rules on late payments could certainly help, although not all countries have implemented them yet. In December of 2011 the euro-pean Commission had presented an action plan to boost sMes’ access to finance, and in April of this year an ‘employment package’ addressing both the demand and supply sides of labour market and encouraging structural reforms was also presented,” Mr Hendrickx explains.

less tax burdens for sMes is also a matter of concern, as highlighted by the rapporteur on the com-petitiveness and business oppor-tunities of sMes, Paul Rübig. In a recent intervention at eu level, Mr Rübig complained that tax in europe is too high for small and medium enterprises: "taxation in europe is ten times higher than in the us," hence creating a less welcoming environment for sMes to internationalise their business within the eu, often forcing them to seek investment outside the eu.

A measure like this does not only discourage european sMes to invest further in the continent, but also fails to encourage for-eign companies from investing in europe. The eu must therefore keep its thinking hat on as to forge ways of attracting foreign invest-ment, but never forgetting to foster the growth of its little ‘fish’.

Karl Hartleb and lux Hendrickx were key-note speakers at the Indus-try, Research and energy Committee Hearing on ‘sMes: competitive-ness and business opportunities’ held at the european Parliament on the 8th of May.


eu pOlicy

Making the european single Market work for the services industries

The services industries are return-ing to the forefront of the eu’s internal market policy-making with a special focus on ensuring the correct implementation of eu legislation at national level. The Commission is decidedly putting its foot down to emphasise the need for better management of the european single Market. This is the core message emanating from two action plans adopted in early June dealing with the governance of the european single Market and the state of implementation of the services Directive.

BETTER goVERnancE FoR THE SInglE maRkETFocused action on the way the european single Market operates for the mutual benefit of consum-ers and businesses alike is the agreed way forward for improving the performance of the services industries. The services and man-ufacturing sectors differ greatly in this regard as the latter lends itself far more easily to cross-bor-der commercial activities. Michel Barnier, the Internal Market Com-missioner, has stressed that the single market can indeed be bet-ter managed with the aim of a bet-tering the function of the services industries. “The Commission and member states must work hand in hand to improve the way the sin-gle Market rules are implemented, applied and enforced,” Mr Barnier appealed on the day that a Com-munication on Better Governance for the single Market was adopted.

This is a renewed political commit-ment towards helping the single Market to effectively deliver eco-nomic growth by embarking on a closer collaboration between the european Commission and the member states in overseeing the transposition of internal mar-ket legislation. In this respect, a ‘zero tolerance’ approach is being adopted.

This may, at face value, sound nothing more than political rheto-ric. However the timely and cor-rect transposition of eu legisla-tion by national authorities is of the utmost importance for economic operators. Indeed, no more so than in the area of the internal market where rules and standards can determine whether a particular product or a specific commercial service can be tendered or other-wise placed on the market.

According to the single Mar-ket scoreboard – a fitness check report compiled by the european Commission detailing the state of progress on the transposition of eu directives– Malta has the best record with the lowest transpo-

sition deficit in the eu. This is a remarkable achievement, testa-ment to the Maltese administra-tion’s ability, despite its relative small size, to handle a consider-able number of sometimes com-plex eu legislation.

Needless to say, it is of critical importance for Maltese businesses to operate in a fair and level play-ing field across the eu’s internal market. From a business perspec-tive, the implementation of single Market rules should be done in a smart manner whereby rules are clear and easy to understand, corresponding to the needs they address without causing unnec-essary burdens on companies. The addition of rules and require-ments, not originally foreseen in the eu Directive itself, is often one of the root causes of the kind of problems encountered by compa-nies when dealing with import and export regulations, customs pro-cedures and the necessary verifi-cations in cross-border trade.

The MBB calls on the Commission to ensure a greater focus to avoid such extra requirements. These constitute a veritable impediment for the everyday conduct of trade in goods and services across the internal market. It is advisable that in its proposed forthcoming annual reports of the single market, the Commission integrates a key indi-cator for such avoidance and that this indicator – along with the rest – is taken into account for the ‘european semester’ exercise with a view to putting remedial action in place as soon as possible.

EFFEcTIVE lIBERalISaTIon oF SERVIcESAlong with the improvements in the governance of the european single Market, the Commission is also focusing on the services sector. Certainly, the services Directive as adopted in 2009 leaves ample scope for further liberalisation. At this stage, the Commission is how-ever proposing its “full implemen-tation with a view to releasing its

untapped potential before extend-ing its scope.”

The MBB welcomes the Commis-sion’s stated intent in its policy communication to deliver the full effect of the services Directive. The Directive covers a large variety of sectors ranging from traditional activities to knowledge-based ser-vices, and given its wide scope it regulates several different kinds of service providers irrespective of the company size set up.

The Commission is proposing focused action over the period 2012-2013, on those service sec-tors with significant economic weight, and which demonstrate above-average growth potential. These sectors include professional services, construction, tourism and retail trade.

In practice, the Commission will be assessing the conformity of national provisions and looking out for potential inconsistencies in the application of the national imple-

menting texts and the services Directive. For example, the Com-mission will be on the lookout for practical difficulties resulting from disparate rules on professional qualifications and non-recognition of qualifications issued by another member state. It will also look at requirements restricting the choice of corporate legal set up for exercising professional activities or the real removal of prohibitions preventing cross-border commer-cial promotions for regulated pro-fessions.

The Commission’s intentions on the proper implementation of the services Directive are certainly laudable however the truth is that member states leverage consider-able responsibility as they are the ones in charge of ensuring that single market rules are imple-mented and adequately enforced. Consequently, the monitoring of the progress obtained will be key for ensuring that the european single Market will work better at least in the priority sectors identi-

fied by the Commission – inciden-tally, all four of which constitute a significant share of Malta’s GDP.

The four priority areas will consti-tute the backbone of the analysis of how the single Market works in practice, feeding into the proposed Annual Report on the integration of the single Market. The report will identify challenges and make policy recommendations for the coming year at both national and eu levels. It will be published on the occasion of the Annual Growth survey, thus contributing to the country-specific recommendations in the context of the european semester process.

The first report on the integration of the Single Market will be issued in time for the annual growth survey of 2013. The MBB looks forward to contributing to this reinforced monitoring process with the competent authorities in Malta.

“ The commission is proposing focused action over the period 2012-2013, on those service sectors with significant economic weight, and which demonstrate above-average growth potential. These sectors include professional services, construction, tourism and retail trade.”

– By Omar Cutajar, Permanent Delegate MBB


educaTiOn

With 14 per cent of youths currently registered as unemployed in Malta, this figure falls well below the 22 per cent eu average, but nevertheless it remains imperative that something is done about it. cHiara bOnellO speaks to authorities in the sector about how equipping today’s youth with specific skills can help ease the unemployment problem.

The problem of youth unemploy-ment has reached the extent that the european Commission recently called upon eu member states, workers’ representatives and busi-nesses to join forces and come up with a plan to help tackle this pre-dicament.

Fortunately the local situation is not so dire, as eurostat data reveals that it is only Germany, the Netherlands and Austria which are faring better than Malta in terms of youth unemployment.

In fact youth unemployment is highest in Greece, at 49.3 per cent, and in spain, where it stands at 48.9 per cent, as a sharp increase is often seen during periods of reces-sion, as fewer entry-level jobs are available and the less experienced workers are the first to go.

Malta Business Bureau CeO Joe Tanti agrees that the eu must address current labour market issues, so as to redress the struc-tural nature of youth unemploy-ment; as this can otherwise seri-ously threaten the future of the labour supply. He emphasises that from a supply perspective youths must be adequately trained, as for them to may make the best of the available opportunities.

Over the past years the employ-ment and Training Corporation (eTC) has directed resources towards a number of schemes and projects aimed at providing experience to render people more employable explains Nicola Cini, Department Manager at the Job-seekers Advisory services within eTC, citing the Job experience scheme (Jes) as an example.

“This scheme aimed to overcome the vicious ‘no job – no experi-ence/no experience – no job’ circle, by providing new labour market entrants with the opportunity to gain experience, self-confidence and self-esteem, and to prevent long-term unemployment,” she explains.

Ms Cini says that through Jes a total of 335 jobs were created, that is 40 per cent of all partici-

pants found employment, whereas just 29 per cent of them were still registering for employment six months down the line. The eTC was also involved in offering a number of other schemes and pro-grammes to help job seekers and those seeking to change their job, she says.

The university of Malta’s Rector Juanito Camilleri believes that in a rapidly changing world, the best skills to acquire are those which enhance one’s versatility and adaptability. The truth is that some jobs which exist today could not be conceived of just a few years ago, and the skills required have changed radically over time, he explains.

While he believes that a univer-sity must be utilitarian, in that it must be engaged in stimulating social and economic development and well-being through its gradu-ates, research and the transfer of knowledge and know-how, it must not be over-prescriptive and driven solely by the bias of perceived immediate needs.

“Through the creativity and know-how of the students it educates, and through communication with industry and civil society, a univer-sity should be stimulating the cre-ation of new types of jobs for the future,” Prof. Camilleri insists.

He admits that whilst it is impor-tant to follow a degree programme with rigour, it is equally important that a university experience takes students way beyond the lecture room or lab.

“This is why DegreePlus was set up five years ago, to help students enrich their academic studies with extra skills and experiences that can add value to their knowledge base and enhance their employ-ment opportunities,” he explains, adding that the plan is for it to be able to facilitate both paid and unpaid placements, as well as job shadowing in industry and else-where in the very near future.

Furthermore a number of courses offer a direct link to the labour

market, as is the case with engi-neering and ICT students, and those within the Faculty of eco-nomics, Management and Accoun-tancy. In the healthcare and medi-cal sectors, students have a direct connection to the world of work through their clinical practice peri-ods, he says.

Ms Cini states that it is a known fact that knowledge and qualifica-tions are not always sufficient for a person to land a suitable job in today’s labour market, as previous work and life experience is gener-ally also required. This is why, she explains, the eTC offers a number of services to jobseekers through its Jobseekers’ Advisory services. The aim is to improve the employ-ability of jobseekers by offering a number of services such as indi-vidualised career guidance, sup-port in the development of person-

alised action plans for employment and in starting one’s own business.

On the local business perspective, Mr Tanti says that notwithstand-ing the huge investments made by Government in university, MCAsT and ITs, it is still proving difficult for business to recruit personnel with the required skills, particu-larly when it comes to ‘soft skills’ such as interpersonal and nego-tiation skills, which are in high demand across the board.

He refers to the eu’s ‘youth Opportunities Initiative’, which calls on member states to work on preventing early school leav-ing, helping youngsters develop skills relevant to the labour mar-ket, ensuring work experience and on-the-job training, and helping young people find a decent first job. He says that the initiative is a

good step towards addressing skill mismatches in europe but insists that more needs to be done within eu policy to develop a ‘workplace learning’ culture, whereby the transition from school to work is facilitated through apprenticeship and traineeships, which provide youths with practical experience.

Mr Tanti admits that one of the MBB’s most satisfying achieve-ments was seeing more under-graduate students from the uni-versity of Malta’s Institute of european studies undergo a train-eeship in MBB’s Malta and Brus-sels offices.

“In this respect we pride ourselves on having concluded an agreement with the university, which accred-its students for undergoing train-eeships with the MBB,” he says.

With economic uncertainty and ris-ing market place competition, it has become all the more difficult for students to find employment after completing their degree with-out any experience in hand. Hands on experience should be an inte-gral part of the academic training and not simply an added bonus, so as to ensure that the transition between the school bench and the workplace is as seamless as pos-sible.

“ Through the creativity and know-how of the students it educates, and through communication with industry and civil society, a university should be stimulating the creation of new types of jobs for the future.” – Juanito Camilleri

ensuring THaT TOday’s yOuTHs are MOre eMplOyable


ensuring THaT TOday’s yOuTHs are MOre eMplOyable


HuMan resOurces

flexible WOrk arrangeMenTs Make business sense

It is a well-known fact that flexible work arrangements provide a good opportunity for employees to com-bine their personal and profes-sional lives. They provide excellent proven means to enhance gender equality and can be endorsed by both the public and private sec-tors. The concept of family friendly measures has been supported by international governments as it enhances productivity, increases birth rates and provides financial security to families.

The adoption of these measures, most particularly by the private sector, is strategic for the develop-ment of the Maltese economy, con-sidering that females’ participation rate in the labour force is among the lowest when compared to the rest of europe. Moreover, Malta is characterised by an ageing popu-lation due to low birth rates. This rate could be altered by providing measures that encourage more people to enter the labour mar-ket, particularly females, who are more inclined and socially induced to take up family responsibilities – the major reason which has led to the infamous gender gap between men and women.

The endorsement of family friendly measures starts from the imple-mentation of flexible work arrange-ments which include numerous methods such as job-sharing and teleworking. Towards this end, the Malta Business Bureau intends to gather best practices from coun-

tries with an advanced human resources (HR) standard in order to raise awareness about flex-ible work arrangements and fam-ily friendly measures via its sHIFT (supporting Human Resources in Family friendly Training) proj-ect. The need to invest in such measures is also underscored by the HR committees of the Malta Chamber and MHRA. The eu2020 strategy also highlights the impor-tance of flexibility at the workplace, which is considered a key factor to achieving smart, sustainable and inclusive growth within the econ-omy.

In 2011 the european union effec-tively endorsed the european Pact for Gender equality which directly addresses the importance of bal-ancing work-life responsibilities as a means to attain higher productiv-ity and improved competitiveness. Germany is a showcase that such measures can be successful; in particular following the introduc-tion of its teleworking policy initia-tive which improved productivity particularly in large companies. A case in point is the International Business Mechanism Corporation, with 4,000 people on its books, which allowed telework for more than 50 per cent of its operations. Consequently, workers were more motivated and addressed their duties more diligently while being responsible for managing their time more effectively.

In Denmark, pregnant women are entitled to four weeks of leave before birth and are entitled to two weeks of leave after child-birth. In total, Danish mothers are entitled to a minimum of 14 weeks of maternity leave, with collective agreements providing the possibil-ity of extending to 52 weeks. More-over, fathers are entitled to two

weeks of paternity leave within the mother’s first 14 weeks after birth. In sweden, a different approach has been implemented whereby children spend an entire day at school which eventually benefits employees as they are in a better position to work more efficiently. This is also important to bridge the gap between men and women, and

contributes to the high percentage (71 per cent) of swedish women participating in the labour force.

Around 15 european directives focusing entirely on gender equal-ity have been enacted by the euro-pean Commission since 1975. These ensure that both sexes are treated equally, forbid any exclu-sion based on gender from social security benefits, protect preg-nant workers and provide for bet-ter access to employment for both genders. However according to a recent study carried out by the JuMP Academy, a Belgium-based woman’s academy that offers ser-vices such as workshops, events and online initiatives to empower and help women to advance their career, 95 per cent of women

Mariella scicluna looks into flexible work arrangements as a proven means to increase productivity and discusses the Mbb’s sHifT project which seeks to promote the concept of flexicurity among the private sector in Malta.

SHIFT participants in Denmark

“ 95 per cent of women across the eu believe that they are not recognised or promoted on an equal basis to men. This is an impressive and staggering figure when compared to the 67 per cent recorded in 2005.”


HuMan resOurces

keeping WaTer cOnsuMpTiOn in cHeck

a fruiTful experience

across the eu believe that they are not recognised or promoted on an equal basis to men. This is an impressive and staggering fig-ure when compared to the 67 per cent recorded in 2005. It is evident that women are becoming increas-ingly aware of their potential input within companies, for which they believe they are not being recog-nised enough for.

societies, particularly the Mal-tese society, are still very stereo-typical about the role of males and females in modern family struc-tures. It is only a fraction of the population, largely the younger generation, that perceives gender equality in its true form, in that both males and females equally

share familial responsibilities, and that females are recognised as being capable and worthy of pro-motions and senior positions at par with males.

A strong culture change is needed and this can only be sustained by providing families with the required infrastructure to allow both genders to form part of the labour force on an equal footing. With women finding it particularly challenging to lead a successful career, it is immensely important to bring both women and men on an equal level playing field, which will ultimately serve to reduce direct and most especially indirect discrimination.

It pays to monitor water consump-tion, both for its own sake but also as the money spent on expensive util-ity bills could easily be diverted and invested in other business areas. There may also be some other issues such as water leakages and

misuse which with some attention may easily save a lot of your money. Ing. Cremona explains that consum-ers of large amounts of water should monitor their consumption on a weekly, or for very large consum-ers even on a daily basis. Readings

should then be recorded to allow comparison to previous months, or even years. The mains water meter should be read at an established time at the beginning of each month. He explains that each business has a unique water consumption profile,

A number of local participants of the sHIFT project, which seeks to contribute towards enhancing expertise in innovative measures required within the HR field, dis-cuss their experience in Denmark and how it contributed to their overall understanding of flex-ible work arrangements and family friendly measures:

JoE ScIclUna, FInancIal conTRollER, F.X.B. HoldIngS lTd“The importance given to employ-ees and their private life gives employees a sense of security and flexibility. I was quite impressed by Beierholm, an auditing company, which was awarded the Great Place to Work Award in 2011. The key to succeed in this organisation is not only to be competent, profes-sional, modern and innovative in all areas of work, but also to be human and possess the value of compas-sion. The organisation's success is largely down to the dialogue-based processes between management and employees, which are used to formulate action plans that are designed to increase employee job satisfaction.”

nIcHolaS SalIBa, HR managER, gRand HoTEl EXcElSIoR“I was very much impressed by the attitude employees and employ-ers have towards the labour mar-ket in general in Denmark. The over-all attitude is non-confrontational and built on the value of trust and understanding between both the employers and employees.

I was particularly astonished by the high percentage of female employ-ees within the Danish labour market which exceeds 80 per cent. All this is

also possible due to the number of family friendly measures that com-panies practise within their organ-isations, some of which are models our culture is not used to.”

IVan REFalo, pERFoRmancE and dEVElopmEnT managER, playmoBIl malTa lTd“It was a very positive experience to meet HR counterparts from dif-ferent industry sectors in Den-mark. The family friendly measures offered depended very much on the relevant industry sector but what I found particularly interesting is the wide acceptance among employers and unions of the need for labour flexibility.”

maRIElla BoRg gIUlIano, TalEnT & pEoplE RESoURcE managER, cHI HoTElS & RESoRTS lTd“This experience enriched my per-ception and understanding of fam-ily friendly measures and flexicurity. I was fascinated how the concept is embedded within Denmark’s social system and how all stakeholders contribute towards it in an uncondi-tional manner. It was also reassur-ing to find out that there were com-monalities of best practices being exerted by both leading businesses in Malta and Denmark.”

oTHER paRTIcIpanTS:• Joanna Bartolo, HR executive

Hilton Malta• David Vella, Director HR &

Training, Intercontinental Malta• Norman Mifsud, senior Man-

ager – HR & Admin, MsV life• eveline Fenech, Human

Resources Manager, Corinthia Palace Hotel & spa

• Mariella scicluna, Project leader, Malta Business Bureau

business agenda speaks to the eu life+ investing in Water project’s water expert ing. MarcO creMOna who shares his tips on monitoring water consumption in business operations.

During the upcoming Foundation for Human Resources Development (FHRD) Annual Conference, the Malta Business Bureau will be hold-ing a Master Class entitled 'Promot-ing Flexible work and Family friendly Measures in the Private sector’, with a keynote speech by Ceaser szwebs – Manager AMu Nordjylland (a Voca-tional Training Centre in Denmark).

Mr szwebs will present Danish best practices in flexicurity that can be adopted by Maltese businesses. The economic and social disparities

between the two countries will also be addressed. subsequently par-ticipants will be encouraged to par-ticipate in workshops promoting an active discussion on the way forward to implement such measures in the private sector.

For further information on the SHIFT project and the upcoming Master Class contact Project Leader Mariella Scicluna on [email protected] or 2125 1719.


enVirOnMenTdepending mainly on the nature of the business's operations, the num-ber of employees and the building's infrastructure.

Knowing your operations will give you an idea of how much water you should be consuming, Ing. Cremona states. Any variation of more than 15 per cent on an established average should immediately be investigated – as this could be down to a leak, a faulty machine or some other prob-lem. Not spotting this problem in time could result in the loss of thou-sands of euros in the medium and long term, affecting the business's bottom line.

How To REad a mETERThe water consumed during the past month is calculated by sub-tracting the last reading from the previous month's reading. This gives units of water, with each unit being equivalent to one cubic metre. If your business requires very accu-rate data, you could also record the unit fractions. The smallest fraction of a unit that can be read off a stan-dard water meter is one litre (1000 litres make up a cubic metre).

How To USE THE daTa – BUSInESSESIng. Cremona explains that the recorded amount of water con-

sumed in that particular month should then be divided by the num-ber of employees and the number of working days during that month. This gives the amount of water con-sumed per employee per working day. For a typical office-based busi-ness, this is normally in the region of 25-35 litres per employee per work-ing day, he explains.

Provided that there are no excep-tional situations during that par-ticular month, such as shut-down, this figure should be more or less constant. Any deviations of +/- 15 per cent from the standard con-sumption should trigger an alarm

to set off a more detailed investiga-tion.

How To USE THE daTa – HoTElS Apart from total water consump-tion, the most useful parameter for hotels is the amount of water con-sumed per bed night. Ing. Cremona explains that this is a simple case of dividing consumption for any period by the guest nights for that same period. However, this parameter changes month-on-month for every hotel, he says. This is attributed to the fact that all hotels have a fixed consumption of water which is inde-pendent of guest nights, which if not taken into consideration will make

the water per guest night statistic misleading. mETERIng yoUR oTHER waTER SoURcES IS ImpoRTanTApart from town water supplied by the Water services Corporation most hotels and a few businesses also use other sources of water such as in-house Reverse Osmo-sis desalination plants and rainwa-ter harvesting systems, to bowser purchase and direct groundwater extraction. Ing. Cremona explains, adding that to best manage your water, it is important that all sources are metered and the total consump-tion recorded and evaluated.

business agenda speaks to the eu life+ investing in Water project’s water expert ing. MarcO creMOna who shares his tips on monitoring water consumption in business operations.


business newsMbb updaTe

The MBB in collaboration with the Malta Chamber ICT Business sec-tion and eskills Alliance Malta organised a business seminar on ‘Fostering eskills for Growth’ at the Hotel Phoenicia - the sponsors of the event.

This was a good opportunity for employers from all sectors of the local business community to fur-ther their understanding on the need for eskills and their impor-tance for all types of business, big or small, in various levels of a company’s structure.

In the opening address John Ambrogio – Chairman of eskills Alliance Malta, gave a presenta-

tion on the Alliance’s role in fos-tering eskills and the work being done on a national level. This was followed by a key-note speech by Martin Bugelli – Head of the euro-pean Commission Representation Office – who discussed the euro-pean Agenda for eskills.

During the panel debate which followed, Fabianne Ruggier, who moderated the session, led a wider discussion which explored the opportunities that could be derived from eskills, when compared to the challenges they pose. Panel-ists included John Ambrogio, Keith Fearne – Chairman of the Malta Chamber ICT Business section and

ernest Cachia - Dean of the IT Fac-ulty at the university of Malta.

In his closing address, MBB Presi-dent George Vella stated that “developing and retaining skills required for business success is a necessity which ensures that enterprises have employees who have the right skills set in the right jobs at the right time.” “The pre-sentation of the eu’s work in this ambit shed considerable light on the scale of the challenges ahead. It is imperative for Malta to be pro-active and remain at the forefront of this field by implementing ini-tiatives that will ultimately benefit our industries and economy,” he concluded.

MBB CeO Joe Tanti was invited by the european Parliament Repre-sentation Office for Malta to par-ticipate in an ITReC hearing on ‘sMes: competitiveness and busi-ness opportunities’ in Brussels.

The hearing examined sMes, as an essential part of the eu's busi-ness fabric, and the various factors that could support their function in order to boost growth, which is of particular importance at this time of crisis. The first part focused on how to strengthen the competitive-ness of sMes through the ‘Com-

petitiveness of enterprises and sMes’ (COsMe) programme.

The second part of the hearing concentrated on ways of reduc-ing the administrative burden. The hearing also featured a panel debate on how to help sMes in the eu seize global opportunities for growth.

mr Tanti’s visit was supported by the European parliament Repre-sentation office for malta.

See page 12

The eu lIFe+ Investing in Water Project Manager Geoffrey saliba was invited to the Chamber of engi-neers annual general conference to present the results of the water audits carried out earlier this year. During the annual conference entitled: ‘Water, a 21st Century Challenge’, Mr saliba presented benchmarks in water consump-tion by businesses and hotels, and recommended standard flow rates for service water facilities through which enterprises could reduce their consumption by as much as 10 per cent.

26TH APrIL –

BusINess seMINAR ON FOsTeRING e-sKIlls FOR GROWTH

8TH MAy –

MBB CeO PARTICIPATes IN AN eP HeARING

9TH MAy –

MBB PROJeCT MANAGeR INVITeD TO ADDRess ANNuAl GeNeRAl CONFeReNCe OF THe CHAMBeR OF eNGINeeRs

MBB President George Vella addressing eSkills seminar

The AMIe Consortium of which the MBB is a strategic partner, held a stakeholders’ conference with the participation of other euro-pean delegation counterparts from serbia and Croatia. The event was well attended by numerous local female entrepreneurs.

In the opening address, Minister for Fair Competition, small Busi-

nesses and Consumers Jason Azzopardi stressed on the impor-tance of sMes and Micro Com-panies for the local economy and urged women to be proactive and encouraged them to start up their own business, in order to further contribute towards the Maltese economy. In a separate address, Anna Danti, an official representing DG enterprise and Industry, high-

lighted the importance of female entrepreneurship for europe.

leonie Baldacchino, who is cur-rently reading for a Phd in entre-preneurship, gave a presenta-tion on the theme with a special focus on female entrepreneurs. This was followed by an address by Marija stevanovic, a serbian AMIe ambassador, who related the

experience of the serbian project as part of the european Network of Female entrepreneurs.

The highlight of the conference was the introduction of the ten Maltese female ambassadors, who conducted an interactive session whereby the AMIe consortium and the Ambassadors were given the opportunity to relate their experi-

ences of the first 18 months of the project.

Katie Birch led a session on “Intu-ition in entrepreneurship” which was positively received by the audience. The conference was concluded by Annamaria Darma-nin, Vice-President of the euro-pean economic social Committee (eesC).

25TH MAy –

PROMOTING FeMAle eNTRePReNeuRsHIP – AMIe sTAKeHOlDeRs’ CONFeReNCe


Mbb updaTe

An MBB delegation led by John A. Huber presented an impact assessment on the Commis-sion’s proposals for a Common Consolidated Corporate Tax Base (CCCTB) to the Minister of Finance Tonio Fenech. Also present were Bank of Valletta representatives as collaborating partners of the Bureau, and PwC officials who

were commissioned to conduct the report on behalf of the MBB.

While addressing the media Mr Huber stated “The MBB welcomes in principle the rationale under-pinning the Commission’s CCCTB proposal in so far that the legisla-tive initiative is conceived to tackle cross-border obstacles in corpo-

rate taxation within the internal market, however after meticu-lously analysing all aspects of the report, the Board of Trustees con-cluded that the proposed Direc-tive is detrimental to the Maltese economy and its underlying busi-ness community.”

The MBB Board led by George Vella met a delegation from the labour Party, composed of Kar-menu Vella, Charles Mangion and edward scicluna, whereby it also presented the CCCTB report to the Opposition.

MBB President George Vella stated that “this harmonised tax system removes the competitive edge of eu member states that use their corporate tax system to

attract investment.” “The eu as a whole could also possibly witness an exodus of mobile business that would start looking for a better fiscal treatment,” he added.

The labour Party officials con-curred with the Bureau’s position and confirmed on behalf of the Party, labour's opposition to the proposed CCCTB Directive, claim-ing that this goes against the eco-nomic interests of Malta.

The MBB in collaboration with Bank of Valletta held a business seminar to inform the business community of the impacts that the CCCTB could have on Malta. A great number of financial con-trollers, auditors, accountants, general managers, CeOs, tax con-sultants and other stakeholders participated in the event.

The seminar was addressed by MBB President George Vella and BOV CeO Charles Borg. They were followed by detailed presenta-tions by Neville Gatt – Tax Partner Pricewaterhouse Coopers, who presented the results derived from the CCCTB study; Austin Demajo – Tax Partner Grant Thornton and Member of the Taxation Commit-tee Malta Institute of Accountants,

who discussed the practicality of adopting a CCCTB system in Malta; and Juanita Brockdorff – Tax Partner KPMG, who on behalf of Finance Malta delivered a presen-tation on the prospective effects of the draft CCCTB directive on the financial services industry.

See page 28 for more information on the cccTB proposal

MBB PReseNTs IMPACT AssessMeNT RePORT ON THe COMMIssION’s PROPOsAls FOR A COMMON CONsOlIDATeD TAx BAse27TH APrIL –

PReseNTATION OF RePORT TO MINIsTeR TONIO FeNeCH

28TH MAy –

MBB ReITeRATeD ITs sTANCe TO THe PROPOseD CCCTB TO OPPOsITION

19TH june –

BusINess seMINAR IN COllABORATION WITH BANK OF VAlleTTA

MBB delegation presenting CCCTB report to Minister Tonio Fenech

MBB delegation presenting CCCTB report to Partit Laburista

BOV CeO Charles Borg addressing CCCTB business seminar

A high-profile international con-ference was jointly organised by the MBB and the Ministry for Fair Competition, small Business and Consumers. The conference, mod-erated by Vanessa MacDonald, was attended by entrepreneurs, and provided a unique platform

for a technical and business dis-cussion on the opportunities that exist in libya, Tunisia and egypt for Maltese businesses as well as for european enterprises in general.

See page 36

15TH june –

MBB INTeRNATIONAl CONFeReNCe: BRIDGING BusINess OPPORTuNITIes FOR sMes IN THe NORTH AFRICAN ReGION

MBB President George Vella addressing the International

Conference

Audience attending the International Conference


Mbb updaTe

As part of its eu lIFe+ Investing in Water Project, the MBB supported by Malta Chamber and MHRA organised a national water confer-ence. The event was sponsored by Island Hotels Group, Pantalesco and FM environmental. Over 120 persons mainly from businesses and hotels participated in the con-ference with special guests who included Peter Gammeltoft from DG enterprise; officials from the

Ministry for Resources and Rural Affairs and the Ministry for Tour-ism, Culture and the environment; the environmental Health Direc-torate, the european Commission representation office, MeusAC, Malta enterprise, university of Malta, and various representatives from private industries.

See page 35

22nD june – MBB NATIONAl WATeR CONFeReNCe As PART OF THe eu lIFe+ INVesTING IN WATeR PROJeCT

For a second time this year, the MBB was responsible for hosting a week-long visit of DG enterprise and Industry official Gérald Petit, who visited Malta between the 18th and 22nd June, to undergo an experience with local sMes oper-ating mainly in the pharmaceutical sector.

Mr Petit had the opportunity to meet with and learn more about the MBB’s operations and those of

the Malta Chamber. He also held official meetings with Malta Cham-ber’s Healthcare, Pharmaceutical and Manufacturing Business sec-tions. Another key encounter was with officials from Malta enter-prise to discuss Malta’s role in the enterprise europe Network.

During the rest of his stay in Malta, Mr Petit had the opportunity to visit Crystals Pharma ltd, Amino Chemicals, VJ salamone Phar-

masal and Multigas ltd. These visits served the purpose of giving the enterprise experience Pro-gramme for Commission officials from DG enterprise and Industry a first-hand experience of how sMes operate across europe and to gain a direct understanding of the chal-lenges faced by firms on a daily basis. These experiences help Commission officials while devel-oping business-related policies at eu-level.

18TH TO 22nD june –

MBB HOsTs COMMIssION OFFICIAl As PART OF THe eNTeRPRIse exPeRIeNCe PROGRAMMe

MBB executive Team with Gérald Petit

MBB executive Daniel Debono par-ticipated in an e-procurement con-ference in Brussels, which brought together various stakeholders, including the european Commis-sion, procurement officials from all member states, business rep-resentatives, and firms from all across europe.

The european Commission intends to support the transition towards full e-procurement in the eu, as it believes that it will significantly simplify the way procurement is

conducted, and will also reduce waste and deliver better procure-ment outcome (i.e. lower price and better quality) by stimulating greater competition across the single Market.

The european union is lagging behind, both in its own targets and internationally. e-procurement is still used in only 5 to 10 per cent of procurement procedures in the eu. This is a staggering low figure in comparison to countries such as Korea for instance, which has

achieved 100 per cent electronic procurement, with Brazil trailing closely behind at 80 per cent.

The conference was addressed by various regional practitioners of e-procurement across the eu as well as key spokespersons from Korea and the World Bank insti-tute who exemplified their best practices. . eu Commissioner for the Internal Market and services Michel Barnier closed the confer-ence.

26TH june –

MBB exeCuTIVe PARTICIPATes IN e-PROCuReMeNT CONFeReNCe IN BRussels


finance

– Based on sound economic evidence the Malta Business Bureau is convinced

that corporate taxation consolidation would be detrimental to Malta.

The Mbb in collaboration with bank of Valletta commissioned an impact assessment study on the commission’s proposal for a common consolidated corporate Tax base (cccTb). business agenda takes a look at the report conducted by pricewaterhouse coopers and analyses the Mbb’s position on the proposed legislation, and presents the opinions of the Maltese government and Opposition on the matter.

The CCCTB Directive is by no means the first political effort by the european Commission, in the field of direct corporate taxation, aimed at bringing fiscal regimes among the member states of the european union closer together. A number of similar pan-european initiatives have been attempted in the past, a few of which have been implemented with mixed results.

One of the main priorities of the common market, following the signing of the Treaty of Rome in 1957, was to remove all obstacles to cross-border trade within the eu. The different systems of com-pany taxation employed by each member state were identified as constituting one such obstacle. unlike most indirect taxes, the eu has, to date, not managed to harmonise corporate income tax. Part of the reason for the lack of agreement in this area is down to the fact that any harmonising mea-sure proposed by the Commission requires unanimous agreement between all member states.

SomE kEy aSpEcTS oF THE cccTBNone of the eu Directives regulat-ing corporate taxation currently in force are as far-reaching as the proposed CCCTB Directive. This legislative proposal aims to har-monise the rules on how a com-pany which is resident or has a taxable presence in the eu cal-culates its taxable profits and tax losses. Furthermore, the proposed CCCTB Directive also seeks to allow such companies that belong to the same group to consolidate their taxable profits and tax losses into one single tax computation. If the aggregation results in a con-solidated taxable profit, such profit would then be distributed between

member states according to a pre-determined allocation formula. The formula for apportioning the consolidated tax base is based on three equally weighted factors: labour, assets and sales.

The labour factor is computed by taking account of payroll and the number of employees. The asset factor consists of all fixed tangible assets owned, rented or leased by a company in a member state expressed as a percentage of the assets owned, rented or leased by the whole group. Finally, the sales factor represents sales made to third parties by a company operat-ing in a member state as a fraction of total third party sales made by the group.

As currently envisaged, with an opting-in and out proposal, the Directive will not automatically apply to all companies. In order to apply the provisions of the CCCTB Directive, companies or corporate groups would have to opt into the CCCTB for a minimum of five years. Nevertheless, in recent weeks the european Parliament adopted a report on the CCCTB, with a wide margin proposing that it should be mandatory for companies to participate in this harmonised tax regime rather than optional.

mBB REacTIonSIn reaction to the impact assess-ment report, the MBB’s conclusion on the potential CCCTB impact on Malta is that while it welcomes in principle the rationale underpin-ning the Commission's CCCTB proposal to tackle cross-bor-der obstacles in corporate taxa-tion within the internal market, it believes that the proposed Direc-tive is detrimental to the Maltese economy and undermines the pre-

dictability of the tax environment for the business community.

When asked why the MBB took such a definite stance against the introduction of the CCCTB, MBB President George Vella states that “a CCCTB tax regime removes the competitive edge, both of individual

member states that use their cor-porate tax system to attract for-eign investment, and of the eu as a whole, which could possibly wit-ness an exodus of mobile business looking for better fiscal treatment.”

Mr Vella argues that “it is very likely that Malta will be placed at

a disadvantage when the share of the consolidated tax base is being attributed to all member states, due to the fact that the factors pres-ent within the Commission’s pro-posed CCCTB formula are reliant on the existence of tangible fixed assets, employees with higher payroll costs and revenues gen-erated in a particular state. With the possible exception of inbound investment involving manufactur-ing, due to its size and inherent tendency for greater engagement of labour, it is unlikely that Maltese companies within a foreign-owned CCCTB group will have significant tangible fixed assets and employ-ees situated in Malta. Moreover, it is unlikely that a significant part of the sales made by the group will be made to Malta-based customers,” he adds.

“ The Mbb’s conclusion on the potential cccTb impact on Malta is that while it welcomes in principle the rationale underpinning the commissions’ cccTb proposal to tackle cross-border obstacles in corporate taxation within the internal market, it believes that the proposed directive is detrimental to the Maltese economy and undermines the predictability of the tax environment for the business community.” – MBB

cOnsOlidaTing TaxaTiOn in THe eu: HOW Will MalTa fare?


finance

Mr Vella asserts that “in fact, in many instances, the significant assets of Maltese subsidiaries of a foreign-owned group are more likely to be composed of financial assets or intangible assets rather than fixed tangible assets. How-ever, these assets (with the excep-tion of financial assets in the case of banks and other financial insti-tutions) are ignored for the pur-poses of the formula.”

goVERnmEnT and oppoSITIon’S STandpoInT on THE cccTBBoth the Government and the Opposition publicly expressed their opposition to the CCCTB. Accord-ing to the Minister of Finance Tonio Fenech, “the principal area of concern for the Government is the inclusion in the proposal of a revenue apportionment formula

(the consolidation) which rewards inefficient economies that are still dependent on old labour-intensive economic sectors, while penalising those economies where productiv-ity is relatively high and that have moved to higher value-added eco-nomic activities despite their lim-ited market size.”

He goes on to explain that “as a result of this formula, the current Commission proposal will redis-tribute wealth between member states. It will improve the fiscal position and sustainability of some countries while decreasing that of others, not least through the ero-sion of their tax base. One can, technically speaking, also envisage the transfer of wealth from a rela-tively poor developing eu economy to a much more developed and richer eu economy.”

Furthermore, “there is also the probability that companies opt-ing for the CCCTB will begin to look outside the eu to locate their investments, if certain tax advantages are no longer avail-able to them in the eu, while they remain available elsewhere. This will impact on those eu econo-mies that are dependent on For-eign Direct Investment for their growth,” Minister Fenech notes.

Opposition spokesperson for Finance, Karmenu Vella states that “the Commission's CCCTB pro-posal will not only penalise the Mal-tese economy but also a number of locally operating foreign compa-nies. Tax harmonisation assumes a level playing field among countries irrespective of location, size and stage of economic development. This is definitely not the case for

Malta, a small developing island at the periphery of mainland europe,” he adds.

Mr Vella expresses concern that the tax base harmonisation – pos-sibly a first step towards tax rate harmonisation – deprives com-panies of the tax advantage they currently enjoy. It strips Malta of a potentially strong growth-friendly measure that outweighs some of the disadvantages associated with a small periphery island economy. “Without such motivations, why would foreign companies set up business in Malta? For good or for worse, we have given up our monetary sovereignty to Brussels. Without some fiscal flexibility, how can we address our country-specific problems and manage our own economy?” he questions.

Mr Vella explains that the labour Party is in favour of more growth-friendly measures rather than sole fiscal consolidation policies. These measures would focus, among oth-ers, on improving the nation's pro-ductivity and industry competitive-ness through better prioritisation and rationalisation of government expenditure; a veritable reduction in government bureaucracy and government induced costs; higher results-oriented investment in education and health; an appro-priate energy policy that does not penalise consumers and the pro-ductive economic sectors; and the generation and facilitation of growth investment.

“ it is very likely that Malta will be placed at a disadvantage when the share of the consolidated tax base is being attributed to all member states, due to the fact that the factors present within the commission’s proposed cccTb formula are reliant on the existence of tangible fixed assets, employees with higher payroll costs and revenues generated in a particular state. due to its size and inherent tendency for greater engagement of labour, it is unlikely that Maltese companies within a foreign-owned cccTb group will have significant tangible fixed assets and employees situated in Malta.”

“ The commission's cccTb proposals will not only penalise the Maltese economy but also a number of locally operating foreign companies. Tax harmonisation assumes a level playing field among countries irrespective of location, size and stage of economic development. This is definitely not the case for Malta, a small developing island at the periphery of mainland europe... ...without some fiscal flexibility, how can we address our country-specific problems and manage our own economy?”

Minister for finance, the economy and investment Tonio fenech

“ The principal area of concern for the government is the inclusion in the proposal of a revenue apportionment formula (the consolidation) which rewards inefficient economies that are still dependent on old labour-intensive economic sectors, while penalising those economies where productivity is relatively high and that have moved to higher value-added economic activities despite their limited market size.”

Mbb president, george Vella

Opposition spokesperson for finance, karmenu Vella


aWareness

MalTapOsT reVOluTiOnises Online sHOpping

business firsT faciliTaTing life fOr businesses

THe iMpOrTance Of engaging cHief sTraTegy Officers

Online shopping in Malta is increasing at a fast rate, as with today’s busy lifestyles, many peo-ple prefer online to conventional shopping. However Maltese online shoppers are often left disap-pointed by the limited choice of goods when purchasing from uK online stores, as many uK vendors do not ship to Malta.

sendOn is a new forwarding ser-vice offered by MaltaPost that broadens the opportunities of online shopping. Thanks to this new forwarding service, not only may local online shoppers buy any-thing they like from all their favou-rite uK online stores, but they may also benefit from the competitive uK rates, take advantage of many uK retailers free shipping rates to

domestic addresses and avoid the prohibitive shipping rates charged by many uK online stores.

Registering for this service is very simple. Online shoppers just need to complete the registration form available online at maltapost.com/sendon. Following sign up, the customers will receive a reply via email with a unique user identi-fier and the uK address to be used when purchasing. MaltaPost will then arrange to ship the custom-ers’ orders right to their doorstep.

More information about this service is available at maltapost.com/sendon, or from MaltaPost Customer Care on 2122 4421 or [email protected]

Business First is hosting a rep-resentative from the Malta envi-ronment and Planning Author-ity, who can guide clients on the pre-screening process and on the general parameters of per-mits required for specific develop-ments.

The service, which is being pro-vided every Friday morning, adds to the comprehensive list of ser-vices provided by Business First under one roof, which already exceeds 50 Government services for businesses.

since its launch in January, more than 5,000 contacts have been made by clients with Business First, which saves time and unnec-essary running around for busi-nesses, who can thus focus more on the running of their operations.

Among others, services related to the legal entity establishment, employment registration, regis-tration for tax purposes, registra-tion for VAT services, residence permits, licenses, including trad-ing and tourism-related licenses and applications related to utility services – all of which were previ-ously provided only from different

locations – may now be provided through Business First.

The services are aimed at facili-tating the setting up, consolida-tion, growth and successful opera-tion of businesses and industries in Malta, which are also assisted through the myriad schemes and support services provided by Malta enterprise, which are also avail-able through Business First.

Further information may be obtained by calling on tel: 144 or visiting www.businessfirst.com.mt

Business companies can strengthen their management teams by engaging a Chief strat-egy Officer (CsO). The CsO is there to support the CeO through the rapid business globalisation, directives and regulations, as well as in business innovation and cre-ativity. The CsO usually oversees the entire business operation, from a ‘helicopter’ point of view, and challenges the Board of Directors in decision making.

The role of the CsO is diverse from that of a Business Development Manager, which is normally asso-ciated with the sales and Market-ing Department. CsOs can create and enhance the elements of a strategy by identifying sustain-able alternatives, which in the long run would benefit the company in increased profitability. They think macro strategies rather than micro initiatives, when facing recessions.

An effective CsO challenges work practices and mentors creative thinking among executives and the Company's Board. The job holder is also seen as having a consultative role, being an experienced vision-ary and an experienced executive with the responsibility of ensuring that the execution supports the strategy elements.

The CsO's activities need not be an internal or dedicated resource, or even a large fixed cost. Many firms have elected to outsource this role to domain experts, advisory firms or a dedicated Board member, who can bring the experiences, intel-lectual capital and best of breed processes to the organisation.

Fredrick Attard is Chief Strategy Officer at StudioSeven Malta.

– by Frederick Attard


aWareness

a feasT Of fOOdfesTa fridays aT le Méridien sT Julian’s HOTel & spail-pJazza OuTdOOr resTauranT Opens iTs dOOrs TO a Typical MalTese suMMer.

MalTa enTerprise regiOnal leaders delegaTiOn VisiTs sMarTciTy MalTa

Hsbcnet business MObile banking nOW in MalTa

eccO sHOe sHOp MalTa’s neW MObile siTe

On Friday 8 June, il-Pjazza – le Méridien’s outdoor restaurant offi-cially welcomed the summer sea-son and celebrated the colourful ways of wining and dining in Malta with the come-back of its popu-lar ‘Festa Friday’. le Méridien st Julian’s Hotel & spa in Balluta Bay invites this summer’s clientele to relax in a typical set-up inspired by the festa atmosphere that takes over the island throughout the summer months.

The name ‘il-Pjazza’ was born quite naturally when the hotel launched this original venue last year. What better term could describe a typi-cal gathering, at the heart of the village feasts in Malta?

Il-Pjazza is located on a wide ter-race of the hotel’s premises (level 1) and opens every Friday for this much-awaited Festa that is a delight for both Maltese patrons, who get the chance to indulge in each and every one of their favou-rite dishes, and for overseas visi-tors who can unveil the many culi-nary secrets of Malta’s cuisine.

The colours of Malta’s flag are the underlying theme for this special weekly event. Customers are invited to savour a number of home-made dips and appetisers.

As main courses, an array of typi-cal Maltese recipes are prepared before the guests’ eyes, with live cooking stations exuding mouth-watering scents all around the place. Folkloric entertainment with dancers and musicians complete the amazing summer vibe of the now very popular ‘Festa Friday’.

Il-Pjazza is definitely a great place to try out with friends and fam-ily this summer. It is also a great option for a summer gathering with colleagues or any type of cel-ebration.

To place your booking call on tel: 2311 0000 or send your query to [email protected]

The Malta enterprise Regional leaders, responsible for promoting international investment in Malta, recently visited smartCity Malta as part of an internal workshop which also included an update on invest-ment projects in Malta.

smartCity Malta is the largest for-eign direct investment in the ICT and media sectors in the coun-

try, and was chosen as the perfect showcase example for the Regional leaders.

The delegation was welcomed by suleiman Al Riyami, Country Director of smartCity Malta while Andrew Davies, Business Develop-ment Manager of smartCity Malta, gave a brief presentation followed by a tour of the premises.

The Regional leaders are respon-sible for promoting and enhancing business relationships between Malta and the region, by identify-ing and extending business devel-opment opportunities from com-panies in the region. They are also looking to help the region succeed in the Maltese market and to aid Maltese companies seeking to grow their business in the region.

HsBC Malta has introduced HsBCnet Mobile, a banking application for mobile devices that offers comprehensive mobile banking tools and financial solutions. HsBC is the first bank to offer a solution in so many major markets, including Malta.

“HsBCnet mobile is available to our business clients in 64 countries worldwide. It is a simple and secure service that meets today’s changing business needs and enables greater flexibility when managing working capital,” says Michel Cordina, HsBC Malta’s Head of Commercial Banking.

Available on iPhone, Android, and BlackBerry operating systems, HsBCnet Mobile can be accessed via a device’s web browser at www.hsbcnet.com/mobile, without the need to install or download any additional applications.

HsBCnet Mobile provides business clients with the ability to view account balances and statements, and authorise Priority Payments and Inter-Account Transfers on their mobile phone 24/7. Functionality also includes the option of receiving notifications of payments via email or sMs.

several key security measures are incorporated in HsBC-net Mobile, including highly advanced encryption technol-ogy and session time-out to automatically log the client off in the event that a device should remain inactive for a set period of time.

More information about HSBCnet Mobile is available on HSBC Malta’s website at www.hsbc.com.mt/commercialbanking or www.hsbcnet.com

eCCO shoe shop Malta has recently launched its new mobile site. Fan-tastic features include a one click call button to reserve your favou-rite pair of shoes in any one of its five outlets in Malta and Gozo, a list of the Top Five Best-selling styles of the current collection, show-ing colours and sizes available – updated monthly. Another feature is the useful locations tab, which pinpoints all outlets clearly on indi-vidual maps and includes a list of opening hours. It is also easily inte-grated with all popular social net-working sites such as Facebook,

Twitter and Google+, with one click links at the bottom of each page! What more could you want?

Simply visit www.ecco-shoes.com.mt from your smart phone and explore the world of eCCO. Keep a look out for the launch of King Shoe Shop’s iPad game!

Caption: Suleiman Al riyami, Country Director of SmartCity Malta (fourth right) , Andrew Davies, BusinessDevelopment Manager of SmartCity Malta (first left) and nicholas Schembri, Business Development Manager of SmartCity Malta (second right) with the Malta enterprise regional Leaders delegation.

HSBC Malta has introduced HSBCnet Mobile, a banking application available on iPhone, Android, and BlackBerry operating systems.


enVirOnMenT

cOnference reVeals WaTer saVings are definiTely pOssible

During the National Water Confer-ence organised on 22nd June as part of the eu lIFe+ Investing in Water Project, the Malta Business Bureau (MBB) revealed that water savings are possible in as many as 85 per cent of businesses and 75 per cent of hotels. These estimates are based on a set of 39 water audits carried out earlier this year among local businesses and hotels. The aim of the audits was to under-stand water consumption among various industries, identify water saving solutions, and recommend them to enterprises.

Commenting on the findings of the water audits, Ing. Marco Cremona, engaged by the MBB as the Water expert for the eu lIFe+ Investing in Water Project, revealed that “there is a strong element of over-design in many hotels and businesses. This leads to facilities giving off more water than is actually needed to get the job done well.”

The project has developed a set of water flow standards for showers, wash-hand basins and toilet flush-ing volumes. “By adopting uniform and standard flow rates, we are confident that enterprises could save at least 10 per cent on their current consumption,” added Ing. Cremona.

REcommEndEd STandaRd Flow RaTES:• showers

- 7 litres per minute• Wash-hand basins

- 5 litres per minute• Toilet flushing volumes

- 6 litres

non-conVEnTIonal waTER SoURcESRepresentatives from APs Bank and the Hilton Hotel, two enter-prises demonstrating excellent standards in water conservation, highlighted their organisation’s use of non-conventional water sources. APs Bank’s head office harvests rainwater which is used for flush-ing toilets. This rainwater provides 36 per cent of the enterprise’s total consumption. The Hilton Hotel operates its own sewage treatment plant which provides second class water for the flushing of toilets and irrigation.

In both cases, apart from being cheaper alternatives to town water supplied by the Water services Cor-poration, these practices are also sustainable.

THE STaTE oF malTa’S gRoUndwaTER Manuel sapiano, a hydrologist at the Malta Resources Author-ity, highlighted that Malta has only 40-80m3 of freshwater per cap-ita. Apart from being the small-est freshwater per capita reserves for any european country, the lack of natural fresh water also places Malta amongst the world’s top ten water poor countries.

Malta’s only viable source of natural fresh water is groundwater. supply, however, is limited and groundwa-ter bodies are over-exploited and polluted with nitrates. This has led to the deterioration of groundwater bodies.

Commenting on the obligations of member states as part of eu policy, Peter Gammeltoft, Head of Water Protection unit, DG eNV said “if you have bad quality water, it will either not be available for consumption or available at increased costs as more must be done to treat it up to necessary standards. The Water Framework Directive requires that member states ensure that their freshwater reserves are main-tained, or restored to ‘Good sta-tus’.”

“To maintain our natural water resources in a healthy state, it is important that all consumers man-age their water consumption care-fully and sustainably. Water sav-ing projects, such as the eu lIFe+ Investing in Water Project, comple-ment national efforts at improv-ing the sustainable use of water,” stated Mr sapiano.

The project’s main theme was high-lighted throughout the conference and most prominently during the speech delivered by MBB Presi-dent George Vella who expressed that “through the eu lIFe+ Invest-ing in Water Project the MBB’s end goal is to empower businesses and hotels to manage their water as sustainably as possible.” He also encouraged enterprises to contact the MBB to find out how it can help them to best manage their water consumption.

The conference was organised by the MBB with project part-ners Malta Chamber and MHRA, and was sponsored mainly by the Island Hotels Group, Pantalesco and FM environmental. 120 par-ticipants including representatives from DG enterprise, the Ministry for Resources and Rural Affairs, Ministry for Tourism, Culture and

the environment, environmental Health Directorate, european Com-mission Representation, MeusAC, Malta enterprise, university of Malta and representatives from pri-vate industries attended.

The eu lIFe+ Investing in Water Project receives 50 per cent co-financing under the european Com-munity’s lIFe funding programme, with the Ministry for Tourism, Cul-ture and the environment as the main co-financier, and further co-financing and sponsorship from easydry Malta, APs Bank, Island Hotels Group and MsV lIFe.

Water audits results revealed by the Malta business bureau’s eu life+ investing in Water project show that there is significant potential for further water savings by businesses and hotels. project Manager geOffrey saliba delves into the details.

Ing. Marco Cremona, Water expert to the eu LIFe+ Investing in Water Project, revealed that 75 per cent of hotels and 85 per cent of businesses could reduce their water consumption

through simple interventions.


inTernaTiOnal business

in light of the recent upheavals that have characterised the political landscape of many arab countries, a new approach to how business is being conducted and a new economic reality are unfolding in the southern Mediterranean region. in turn, this is unveiling new business opportunities for Maltese and european enterprises. daniel debOnO takes a look at some key points that were discussed in an international conference recently organised by the bureau, with its main theme being the opportunities that exist for Maltese businesses.

International guests from libya, Tunisia and egypt addressed an international conference organised by the MBB and the Ministry for Fair Competition, small Business and Consumers, and discussed the current political scenario and the new economic developments occurring in these countries as well as in the entire North Afri-can region. A common element stressed throughout the panel debate which was moderated by Vanessa MacDonald, was that a lot of work is still required to rebuild the countries’ economies, as well as to strengthen the foundations of a new way of doing business with international partners and enter-prises. A new economic reality is unfolding in the southern Mediter-ranean region, which in turn pro-vides new business opportunities for Maltese and other european enterprises.

In the opening address, Minister Jason Azzopardi stated that “in the past and more so nowadays, Malta has served as a bridge between europe and North Africa due to its strategic position between the two continents and it should there-fore consider itself as a facilitator for closer integration between the eu and its Mediterranean neigh-bours.”

“europe and the Mediterranean countries share a common destiny and are intrinsically linked; and we should therefore seek to further this convergence and unite our countries and people,” he added.

MBB President George Vella noted that “Malta has already played an important role in euromed rela-tions. Not surprisingly, our busi-ness community has always been at the forefront in discerning and fast developing mutually-beneficial trade and investment relations with our neighbouring North African economies.”

“Malta can and should serve as a gateway for euromed investment opportunities, thus fuelling a sus-tainable Mediterranean business community based on a thriving net-work of commercial collaboration between europe and North Africa,” he concluded.

Parallel workshops for each of the countries analysed the particu-lar circumstances and markets of libya, Tunisia and egypt. Busi-ness entrepreneurs and executives were able to put forward the con-cerns and problems they encounter when doing business within these markets, and also learned about existent business opportunities for sMes.

Razak Grady, Director General for the National sMes Programme in libya, gave his views on the best way a company could gain a foot-hold in the libyan market. He stated that “in the past, all too often com-panies assigned libya to a regional manager, which meant that it did not get the undivided attention the government felt it deserved.” Given the level of activity expected, he stressed that the government would in the future, favour a much closer collaboration with libyan partners,” he continued. He did however stress that the libyan government would be a very pro-private sector and that the benchmarks defining sMes would probably be lowered, making it easier for investors to qualify as such.

Nouredine Taktak, Deputy Director General at the Agency for Promo-tion of Industry and Innovation in Tunisia, stated that the optimism of the post-revolution era has been replaced by a far more pragmatic realism.

He noted that “the opportunities in Tunisia are considered to be among the most promising in the region, as the markets are among the most

liberalised of the countries trading with the eu. There are some areas which require a further loosening of restrictions, such as the repatria-tion of profits for instance, which is an issue on the government’s agenda.” Mr Taktak also stated that although the liberalisation of the services sector was planned, it is not yet clear whether the legislation will actually ever make it through to enactment.

Hanaa el Hilely, Director General at the social Fund for Development in egypt, claimed that “one of the main sectors worthy of investment is the hospitality sector, insofar as egypt

has strong international brands coupled with low wages.” In this respect she noted that opportunities exist for vocational training provid-ers. Nevertheless, as a conference participant highlighted, potential investors in egypt face the obstacle of restrictive licensing laws relating to minimum investment levels.

Mrs el Hillely also stressed that “franchising opportunities are worth looking into. The government-run social Fund for Development pro-vides funding of up to $180,000 for joint-ventures, and these are not restricted to particular economic sectors.”

The second part of the confer-ence took a different dimension, whereby european counterparts from the european Commission and eurochambres discussed vari-ous aspects of eu policy, specifi-cally aimed at supporting sMes in contributing to job creation, in view of the eu-MeD Industrial Coopera-tion. The Commission’s strategy to support sMe internationalisa-tion through the enterprise europe Network and other support pro-grammes aiming to strengthen the euromed business-to-business cooperation were also discussed. The panel debate included the par-ticipation of Wojciech sopinski and Antonios Fysekidis – two eu offi-cials within the DG enterprise and Industry (european Commission) and Dirk Vantyghem – Director of International Affairs at eurocham-bres. This discussion was moder-ated by Joe Tanti, CeO of the Malta Business Bureau.

For more information on this event and to view all presentations visit www.mbb.org.mt

bridging business OppOrTuniTies fOr sMes in THe nOrTH african regiOn

“ europe and the Mediterranean countries share a common destiny and are intrinsically linked; and we should therefore seek to further this convergence and unite our countries and people.” – Jason Azzopardi

MBB CeO joe Tanti with international guests from eurochambres and the european Commission


enTerprise

eu gaTeWay prOgraMMe Helping cOMpanies Tap inTO Japanese and sOuTH kOrean MarkeTs

MalTa enTerprise takes a look at the potential that lies within the Japanese and south korean markets for Maltese business and the support that can be provided by the eu gateway programme to overcome the challenges encountered.

since the start of the eu Gateway Programme, the european Com-mission has helped many compa-nies reap the rewards of entry into the Japanese and south Korean markets, which are two of the lead-ing Asian economies and among the european union’s main eco-nomic partners. The eu and Japa-nese economies together account for 40 per cent of global GDP, nearly 30 per cent of world trade and pro-vide half of the world’s outflow of foreign direct investment. Japan is a major destination for european foreign direct investment, as is europe for Japanese investors.

south Korea is the eu's tenth larg-est trading partner and the eu has become south Korea's second largest export destination after China, with trade flows benefiting further from the introduction of a Free Trade Agreement.

In view of the huge potential for business with these markets, Mal-tese companies stand to benefit from strengthened ties. However,

like most of their european coun-terparts, local enterprises often find it difficult to target the Japa-nese and south Korean markets in view of issues such as cultural and language barriers, as well as differences in the manner in which business is carried out.

The eu Gateway Programme seeks to assist companies overcome these and other challenges in order to succeed in these markets by pro-viding support at the critical early stages of their market penetration strategy. Consequently, it can be an important tool which Maltese com-panies can avail themselves of as to open new doors into these ter-ritories.

Malta enterprise may guide Mal-tese companies to participate in the Programme, which organises and funds business missions to Japan and Korea in sectors such as envi-ronment and energy-related techo-nologies, healthcare and medical technologies. Additional sectors such as ICT, design and construc-

tion, and building technologies are solely offered in Japan.

Participating companies are offered financial and logistical support, together with strategic preparation and a tailored search for business contacts. With support provided at every step of the way, eu compa-nies are coached by a team of pro-fessionals in the business etiquette of these dynamic markets.

Through the business missions, eu companies are assisted to expand their market share in a cost-effec-tive and efficient way, make new contacts and strengthen existing relationships, identify potential suppliers, subcontractors, repre-sentatives, importers and distribu-tors, as well as to discover current and future trends in the Japanese and Korean markets.

In this manner, the eu Gateway missions have secured positive results and succeeded in increas-ing trade and developing business collaboration between european

companies and Japanese and Korean companies in their mar-kets. since its launch in 1994, more than 3,000 companies from eu member states have participated in a business mission organised within the eu Gateway Programme framework.

Forming part of a broader strat-egy to strengthen the commercial ties with two of the strongest Asian economies, the Programme com-plements another initiative through which the european Commission seeks to assist companies based in the european union tap into the Japanese and Korean markets, namely the executive Training Pro-gramme (eTP).

The latter Programme provides a training course of up to 45 weeks, including internships with com-panies in Japan or Korea, which enables companies to train their operators to a high standard to deal with these markets. The eTP, designed to help eu companies to understand the specifics of Japan

and Korea's economies, language and business cultures, is an inten-sive professional development training course that broadens the horizons of eu corporations and enhances their business prospects in the two markets.

It has been in operation in Japan for more than 30 years and was expanded to include Korea in 2002. To date, more than 1,000 european executives from over 20 different sectors have completed the Pro-gramme and now hold prominent leadership positions in eu compa-nies in Japan and Korea.

Further information about the two programmes may be obtained from www.eu-gateway.eu and www.euetp.eu, or by contacting Malta enterprise on 2542 0000 or [email protected] for additional guidance.

business agenda issue 11

Documents

business agenda

malta hotels

elements malta

business opportunities

tourism sector

maltas youth unemployment

record year

cent of youth unemployment