Saturday, January 28, 2012

28/1/2012: Spin of 'great investment destinations' - Malta

For 'Malta is a great investment destination' crowd. Here is a quick stats summary based on IMF WEO:

So let’s summarize the above:
Malta is poor, has moderate inflation, which is of course consistent with low growth. Malta’s exports of goods and services are growing very slowly – if it is such a great trading location, can someone explain this? Malta performs well in unemployment terms, but this conceals the fact that Malta’s population is either too old or too young or too long unemployed to actually count as being in the workforce. Hence, Malta is second worst performer in the euro area in terms of actual employment rates.

Malta’s public finances are in line with majority of other Accession States, so it is doing decently well (though not spectacularly) in terms of Government deficit and structural balance. It is not exactly a stellar performer when it comes to Government debt, but it is extremely poor performer when it comes to external balance – current account. Which, of course, is the exact opposite of the evidence required to support the premise that Malta is a success in terms of attracting foreign investment, or being a great destination to trade from.

You can tell, I hate spin!

1 comment:

Anonymous said...

Hi Constantin,

I think you are being somewhat harsh on Malta.

For its size and population, it is doing extremely well in these turbulent times. It could easily have done an Ireland or Iceland on it had its Financial Regulator allowed the local banks go mad on the interbank markets, but that did not happen.

Maltese banking can be best described as conservative, which in these times is no bad trait to have.

Malta is a very small country doing its very best to survive with what little resources it has.

Having lived and worked in Malta for 2 years, I can tell you there is no poverty, begging on the street and economic meltdown. The people are warm, friendly and try to see the glass as half full always.

Malta is a up and coming financial jurisdiction, with Deutsche Bank recently establishing themselves there. It is looking to do what Ireland successfully achieved over the last 20 years.

Try not to be too forensic on a very small country trying its very best such as Malta. Maybe you should write about the positives, and there are many of them.

Kind Regards,