Travel

Malta Country Brief

Introduction

Malta includes the islands of Malta, Gozo, Comino, Comminotto and Filfia, which are located just south of Italy between Europe and North Africa. Malta’s population in 2008 was recorded as 413,609. With a land area of 316 square kilometres, this makes Malta the smallest and most densely populated member of the European Union (EU).

Political Overview

Malta became independent in September 1964, having been under British rule since 1800. The Constitution of 1964 established Malta as a liberal parliamentary democracy, guaranteeing separation between the executive, judicial and legislative powers, with regular elections based on universal suffrage. Legislative power is held by the unicameral House of Representatives (69 members excluding the Speaker). Members are directly elected for five years (subject to dissolution) on the basis of a single transferable vote system of proportional representation. The Cabinet exercises executive power and is responsible to the Parliament.

In 1974 the Constitution was modified to make Malta a Republic. The Head of State is the President, whose duties are largely ceremonial - the change of Malta's status did not create a presidential style of government. The President is elected for a five-year term by the House of Representatives and appoints the Prime Minister and, on the latter's recommendation, other Ministers. Dr George Abela succeeded HE Edward Fenech Adami as the ninth President of Malta on 4 April 2009. Malta remains a member of the Commonwealth.

Maltese domestic politics are dominated by the two main parties - the Nationalist Party (PN) and the Malta Labour Party (MLP). In the national elections held in March 2008, the Nationalist Party defeated the opposition Malta Labour Party by a narrow majority of the nation-wide vote. However, the MLP won a majority of the 65 seats contested. Malta’s constitution provides for extra seats to be allocated to the party which wins the nation-wide vote to ensure it has a one seat majority in Parliament. Prime Minister Dr Lawrence Gonzi retained his position and Dr Tonio Borg was appointed the new Minister of Foreign Affairs, a role he holds in addition to his previously held role as Deputy Prime Minister.

Malta joined the EU on 1 May 2004.

Recent political developments

Unprecedented levels of illegal immigration from North Africa have dominated the political agenda in recent times. Malta has received some assistance from the EU and the US in re-settling persons processed in Malta as refugees.

Foreign policy

Since EU accession Malta has devoted considerable energy and resources to developing its relations with EU institutions and developing good relations with EU member states. As a small island state in the Mediterranean, Malta's foreign policy also reflects its central geographic position. Malta is expected to maintain an active Mediterranean policy and to continue providing support for the Euro-Mediterranean process, in which it will seek to play a facilitating role where it can, and consolidate relations with North African countries. Additionally, in February 2008, Malta hosted the first EU-Arab League Ministerial meeting. Malta supports institutions that promote multilateral co-operation, notably the United Nations, the Commonwealth, the Council of Europe and the Organisation for Security and Co-operation in Europe.

Economic overview

Malta produces only about 20% of its food needs, has limited fresh water supplies, and has few domestic energy sources. The financial services industry has grown in recent years. Malta's economy is dependent on foreign trade, manufacturing - especially electronics and pharmaceuticals - and tourism all of which have been negatively affected by global economic downturn. Malta adopted the euro on 1 January 2008.

Since 2005, Malta’s economic growth rate has averaged around 3.2 per cent of GDP. A slight decline to 2.8 per cent of GDP was recorded in 2008. Unemployment stood at 7.1 per cent in May 2009, 1.1 percentage points up from the year-ago level. Recent economic indicators show that inflation has dropped from 4.7 per cent in 2008 to 1.8 per cent for the year to date. The current account deficit is 5.1 per cent of GDP, down from 6.3 per cent in 2008.

The EU countries as a group are Malta's principal trading partners. In 2008, Singapore and Germany were the most important destination for Maltese exports followed by France. Italy was by far the most important source country of imports followed by the UK and then France.

A third of all employment in Malta is tourism-related. Malta saw significant growth within its tourism industry following the government’s decision in 2006 to allow Ryanair and other low- cost carriers to fly to Malta. Main source countries of arrivals are the United Kingdom, Germany, Italy and France. However, with the fall out from the global economic crisis Malta has been hard hit. The first quarter of 2009 saw a sharp downturn of 17.8 per cent on a year earlier, after having declined by 10.3 per cent in the previous quarter. The performance of the tourism industry remained weak in the second quarter with declines of 3.1 per cent and 17.6 per cent recorded in April and May.

Malta's manufacturing industry is characterised by some 400 medium-to-large sized export-oriented firms, mostly foreign-owned and a large number of micro and small enterprises geared to the domestic market. The pharmaceutical sector is growing, with a sizeable number of new firms choosing Malta to develop generic drugs for export to the EU once existing drug patents expire.

The services sector remains the prime driver of economic growth in Malta. Financial, telecommunications and IT services have increased in importance as incentives have been introduced in recent years to attract foreign investment and to encourage offshore business and financial houses to use Malta as a base for operations in Europe and the Mediterranean.

An international free port operates successfully as a central Mediterranean transhipment hub making Malta a leading centre for container and freight shipment. Malta’s tax system, accommodation costs, and well-educated English-speaking workforce also are a draw for foreign investors.

Malta has been largely spared the extent to which other countries have been affected by the global financial crisis. Its banks are reasonably prudent and well regulated. Unemployment remained low throughout 2008, and growth began to slow only in recent months. However, since the small Maltese economy is highly dependent upon overseas trade, adverse global developments are now having a serious impact. In terms of fiscal stimulus, government policy is leaning towards infrastructure spending rather than tax cuts. Given the small size of its economy, Malta plays a minor role in international efforts to address the crisis, while maintaining a focus on EU fora.

Australia's relationship with Malta

Australia and Malta have a strong relationship. Australia has had an immigration presence in Malta since the 1950s and full diplomatic relations since 1967. Malta has a High Commission in Canberra (established in 1964) and has Consulates-General in Sydney and Melbourne. Honorary Consulates have also been established in Melbourne, Adelaide, Perth, Cairns and Mackay, as well as a vice-consulate in the Latrobe Valley in Victoria. Most recently a further Honorary Consul has been appointed for Brisbane and the Gold Coast. At the international level, Australia and Malta have a number of common interests, particularly relating to their membership of the Commonwealth.

Community presence in Australia

The Australian Bureau of Statistics found that in 2006, 153,805 Australians claimed Maltese ancestry and 43,708 Australian residents were born in Malta. The Maltese migrant community in Australia represents the largest Maltese community outside of Malta.

In May 1948, Australia and Malta signed an assisted-migrant-passage agreement, which extended the benefit of subsidised travel costs to over 63,000 Maltese. The peak period of migration to Australia occurred in the mid-fifties and sixties and the number of people in Australia who were born in Malta peaked in 1981. Since then the Malta-born population in Australia has been declining. It has also been ageing, such that there are now few Malta-born persons in the 0 to 24 age bracket. Most of the Malta-born population has lived in Australia for more than 15 years and over 70 per cent have taken up Australian citizenship. Victoria and New South Wales have attracted, by far, the largest numbers of Malta-born persons.

Changes to Australian citizenship legislation came into effect on 1 July 2007, allowing people who had renounced their Australian citizenship in order to retain their Maltese citizenship to apply to resume Australian citizenship, as dual nationals.
Defence Links

Maltese forces were involved in the Gallipoli campaign as part of the British armed forces. Some Australian servicemen wounded at Gallipoli were hospitalised in Malta (the "nurse of the Mediterranean"). Australian servicemen were involved in the defence of Malta during World War II, for the most part as members of the British armed forces, although there was also direct participation by Australian units in transit in Malta. There are Australian war graves in Malta, and ANZAC Day is a well-recognised occasion.

Bilateral Visits

The Minister for Foreign Affairs, Stephen Smith, visited Malta on 13 and 14 July 2009. He met with the Prime Minister Dr Lawrence Gonzi, President George Abela, and the Deputy Prime Minister and Foreign Minister Dr Tonio Borg.

Their Excellencies Ms Quentin Bryce AC and Mr Michael Bryce AM AE visited Malta from 13-15 November 2008. This was the first ever State Visit to Malta by an Australian Governor-General.

An Australian Parliamentary Delegation led by the Former President of the Senate, Senator Calvert, visited Malta from 14 to 18 April 2007. Then Prime Minister John Howard attended the Commonwealth Heads of Government Meeting (CHOGM) in Malta in November 2005.

Reflecting the relatively large Maltese community in Australia, there have been regular high level visits to Australia by Maltese leaders. In February 2009, Maltese President, His Excellency Edward Fenech Adami visited Australia as a Guest of Government. President Fenech Adami was accompanied by Maltese Deputy Prime Minster and Minister for Foreign Affairs, Dr Tonio Borg. During the visit they met Prime Minister Rudd, and Dr Borg met separately Foreign Minister Smith in Canberra. Dr Borg previously visited Australia in March 2007. Other visitors have included Prime Minister Dr Lawrence Gonzi who visited Australia in August 2007, and the then Foreign Minister Dr Michael Frendo, who attended the 2006 Commonwealth Games in Melbourne.

Bilateral Agreements

Bilateral agreements between Australia and Malta are in place covering immigration (1970), double taxation (1985), health services (1988), social security (1991 and revised in 2004), working holiday maker scheme (1996) and air services (1996).

Bilateral economic and trade relationship

Trade with Malta is modest, largely due to a combination of distance, the small size of the Maltese market, and Malta’s accession to the EU in 2004. In 2008, two-way merchandise trade was $A29 million, with Australian exports to Malta totalling $A14 million, and consisting of mainly aircraft parts, cheese, curd and margarine products.

Imports from Malta have been steadily increasing and in 2008 were $A15 million, increasing slightly on previous year totals. Major Australian imports were electrical machinery, medicaments and medical instruments.

A welcome boost to the commercial relationship has been Western Australia-based shipbuilding company Austal’s recent successes in winning multi-million dollar contracts to supply four in-shore patrol boats for the Armed Forces of Malta, and the supply of a high-speed catamaran ferry to Virtu Ferries for the Malta-Sicily route.

Market opportunities for Australian exporters include areas such as EU-funded infrastructure projects; telecommunications equipment and solar energy equipment. Other potential opportunities are in waste management including Australian environmental and water resources expertise and related equipment for water and energy supply, energy reticulation and waste management.

In recent years there has been a rapid expansion in Malta’s financial services sector. In October 2005, the Commonwealth Bank of Australia set up “Commbank Europe Limited” in Malta to facilitate investment, lending and business development into Europe. The bank is regulated by the Malta Financial Services Authority and has the right to operate in EU member states and make loans to EU residents. The Bank’s operation has reportedly become one of the biggest financial institutions in Malta.

There are also opportunities for Australian companies to collaborate with Maltese based companies in joint ventures to access third country markets in Europe and North Africa.

Recent examples include:

Business Links

The Sydney-based Australian-Maltese Chamber of Commerce (AMCC) and the Melbourne-based Maltese-Australian Business and Professional Association of Victoria (MABPAV), in collaboration with the Australian High Commission in Malta and the Maltese High Commission in Canberra, help to facilitate and promote greater trade and business partnerships between Australia and Malta. In May 2009 the AMCC sent a trade delegation to Malta.

 

Last updated 10 September 2009