Current Topics in Maltese Economics - Preliminary Research

The unique geographical features and positioning of Malta and a recent over-indulgence in NPR’s Planet Money has motivated me to select the Maltese economy as the focus for the non-technical portion of my ICEX experience. Of course the economy of any nation is a broad and complex subject, so as we arrive in the country I will be looking for opportunities to narrow the scope to a more specific story that I can explore in person. During my preliminary research I found a couple areas of interest to use as a jumping off point in the meantime.

Malta’s inherent limitations on space and natural resources makes complete subsistence unrealistic, so trade is critical to the Maltese economy. Malta satisfies about three quarters of their food and fresh water needs by import. Likewise, although they are in the process of updating their electrical grid and attempting to meet EU targets for renewable energy, they are still reliant almost entirely on imported oil. Conversely, their biggest sources of GDP are in retail, service, and administrative industries.

In recent years two of the most emphasized industries have been online gaming (primarily gambling) and Information Communication and Technology (ICT). Both industries are well suited for the nation as they more reliant on a skilled workforce than physical resources and real estate. ICT has become a major focus for Malta for these reasons, and they’ve made significant political and economic investments in an effort to make Malta a more digitally advanced nation. Meanwhile online gambling has become a boon for the Maltese economy, flourishing in recent years due to the overall low cost of operating out of Malta. However Malta’s success in this area is not uncontroversial, as they face accusations of having lax regulations allowing money laundering and tax evasion. Furthermore, proposed EU tax reforms threaten to increase taxation on all digital companies in the EU and introduce new rules and regulations that could jeopardize Malta’s position as the most appealing destination for online gaming companies.

I plan to try and learn more about both of these topics during my stay in Malta. In particular I curious to see how many of the locals perceive their own economy, and how they have personally felt the effects of these influences within their communities.

- Kolton Yager