At the height of the global shipping industry in the mid-19th century, Malta could scarcely have been better positioned. The opening of the Suez Canal, booming business between Europe and the Near, Middle, and Far East, and the tiny island’s location at the centre of the “world highway of trade”, made it a major port of call.
In today’s international business, the information highway has become arguably more relevant than the seven seas – but Malta has found a way to adapt. Their Ministry of Foreign Affairs and Trade Promotion, through its flagship TradeMalta brand, has positioned itself as an experienced partner of choice, scouring the world in search of opportunities to help Maltese businesses go global.
Numbers show that TradeMalta’s efforts have been successful. In 2018, the World Integrated Trade Solution (WITS) detailed Malta’s growth standing at 4.18 percent, compared to the global rate of -1.59 percent.
Trade with Germany, Italy, and France accounted for 40 percent of revenue last year, with Singapore and Japan following closely behind and ranking as some of Malta’s largest trading partners. Total trade with the United States was tallied at 194 million dollars by June 2019 – a 47.82 percent rise from the same period just a year earlier.
Undoubtedly, some of Malta’s success in trade can be attributed to their policy of exploration first.
“There’s always an element of risk”, says TradeMalta CEO Anton Buttigieg. “Whenever we come to a new market we always project these visits as exploratory business missions, but it gives the opportunity for companies to join a government and chamber-led delegation into a new market.”
North Africa and Beyond
As Malta’s diplomatic representation in North America, Asia, and Africa advances, trade relations and opportunities also continue to grow. Foreign Minister, Carmelo Abela, recently announced a new mission in South America with the opening of Malta’s first embassy on the continent. Meanwhile, plans to open a Maltese embassy in Tokyo are well under way, with ongoing work in New York.
One example of Malta’s determination to move beyond their comfort zone lies in Ghana. The two nations established diplomatic relations in 1974 and signed a Memorandum of Understanding in order to foster bilateral commercial ties in 2014. The opening of the Ghanaian High Commission – the first sub-Saharan nation to make the move – occurred in 2014. Malta then reciprocated by setting up its first official High Commission in Accra in 2018.
“We’ll also have a non-designate embassy there to Ethiopia and the African Union, and we have a non-resident Ambassador to South Africa”, says Mr. Buttigieg. “All this happened in a very short timeframe, so I think that also sends a political message that we’re interested in looking at these regions of the world, because we feel that there is an opportunity; and I don’t think we’re the only ones.”
Bolstering Malta’s ability to establish trade relations is their willingness to dialogue with countries that employ strict protectionism protocols. “I do see protectionism being a threat, but I don’t think that should stop Malta-based companies from exporting”, says Anton Guttigieg.
Bolstering Malta’s ability to establish trade relations is their willingness to dialogue with countries that employ strict protectionism protocols – seeing opportunity where others might not. Although the island has a proven track record of doing business under such conditions, Mr. Buttigieg does sound a note of caution, albeit one painted with optimism:
“I do see protectionism being a threat, but I don’t think that should stop Malta-based companies from exporting. This has always been an open economy and the internal market is too small. So, unless we seek business outside of our shores we’re not going to thrive.”
“A case in point is Algeria. It’s only one hour by plane from here, and very protectionist from that perspective. But we still have Maltese companies who have managed to penetrate the market and become successful there. So, if there’s a will there’s a way”, Mr. Buttigieg has said.
South East Asia Meets Malta in Blockchain Explosion
South East Asia is among the fastest growing economic blocs in the world and possesses a huge demand for advanced Distributed Ledger Technology (DLT), a field in which Malta is held as a world leader.
This past April, a delegation of 60 representatives from Malta-based companies travelled to Singapore, which resulted in the signing of an MOU between the two countries in the field of emerging technologies and cyber-security.
A month earlier, a similar delegation visited the global powerhouse that is China. Malta Chamber President Frank Farrugia shared that he believes the Asian country has shifted from a stage of high-speed growth to that of high quality development, adding that the future of the world economy depends directly on what China does or does not do.
While there, the Malta Chamber signed an agreement with the China Council for the Promotion of International Trade that will be further enhanced when a number of Maltese companies attend the China International Import Expo 2019 in Shanghai this November.
“South East Asia is fast becoming one of the largest economic zones in the world.”, says Mr. Buttigieg. “This is not something [only] I’m saying. You could open any business magazine and the focus is around China, Vietnam, and the rest of South East Asia. We cannot ignore these markets. We have a trump card up our sleeve, as we are the first country to legislate on blockchain and distributed ledger technology. That has attracted a lot of attention in these markets, where technology is big, and we’ve seen a lot of interest from local players to take that forward.”
Meanwhile, the EU-Japan Trade Deal that launched fruitful discussions beginning in 2013, will also directly benefit Malta in terms of financial services. The deal will account for 12 percent of Malta’s GDP and trade will bring in more than 1 billion euros to the economy, according to US Department of Commerce analytics website export.gov. That figure is expected to rise to 15 percent by 2022.
In today’s international business, Malta has positioned itself as an experienced partner of choice; however, TradeMalta is not just tasked with pursuing opportunities overseas, and seeks to tap into niche national markets.
TradeMalta and the (Deceptively) Smaller Picture
TradeMalta is not just tasked with pursuing opportunities overseas. On the ground at home, the organisation seeks to tap into niche national markets such as the food and beverage sector, which accounts for 1.6 percent of the workforce and 1.1 percent of GDP.
The sector is dominated by companies that are 100 per cent Maltese owned and mainly SMEs, adding value to the production of high-quality local produce and wine in particular – for which there is an insatiable demand in the Far East.
Locally, TradeMalta has set up online resources for Malta-based companies interested in exporting to international markets. Entities selling goods and services abroad will now be able to access knowledge resources including market reports, eLearning content, and information on burgeoning opportunities online.
“We were lucky enough to qualify as a government agency to apply for an EU-funded project”, says Mr. Buttigieg. “Our project got shortlisted under the ERDF programme, and we were awarded almost 1 million euros worth of funds to build a digital platform. That in itself consists of a number of silos, including building an internal CRM system to handle all the data communication flow more efficiently, but also gave us funds to create content, [and] corporate videos for exporters who are doing well; we’ve created an exporter’s directory, an eLearning platform and we give information on how best to do export promotion.”
As the saying goes, the bigger they are, the harder they fall. But TradeMalta is leading the way by turning that old adage on its head – small can be beautiful, and Malta’s approach to tapping global opportunities is clearly reaping positive growth.