Diversification is the key to success | Andy Ellul

Diversification of our trading partners ensures that we do not become dependent on particular countries or industries. And for this reason, we’re ecstatic to continue embarking on such a process

The last meeting of MCESD, which took place last week, was both interesting and informative. The Council was given presentations by three professionals concerning pertinent and current issues, these being inflation, the issues affecting the logistics sector, and security of supply in the food sector.

Although these issues are distinct, they are by all means connected. Problems in the logistics sector can lead to price hikes, which in turn contributes to inflationary pressures. On the other hand, a reduction in supply when it comes to food items can also cause an increase in the cost of living, and for this reason, it is essential to ascertain that Malta has a secure supply of necessities in case supply chains are restricted.

The inflation that we’re experiencing today results from the effects of the COVID-19 pandemic meeting the effects of the war in Ukraine. And given this unprecedented scenario, the Maltese Government took fast action to protect local industry and workers alike. In fact, we subsidised energy prices, and we also launched a scheme to cushion the impact on grain prices.

The effects of government aid are very evident in this regard. In April of this year, while inflation in the European Union stood at an average of 8.1%, reaching as high as 19.1% in some countries, Malta had the lowest level of inflation in the EU (5.4%). A low rate of inflation in such turbulent times is precisely what this Government wants to achieve. As was said at the last MCESD meeting, the world is not yet in a place where we have “stagflation”, which is a grand combination of inflation and unemployment. However, if other countries do not tackle external shocks and fast, the world can very much end up in a scenario where economic growth comes to a halt and employment levels dwindle.

As a social government, this is a scenario that we want to avoid at all costs. As an island, we know that we sit at a permanent geographical disadvantage, and within itself, this opens us up to more risks. However, not all is doom and gloom, for there are various opportunities which are waiting to be exploited.

And if there’s anything that we Maltese are good at, it is recognising opportunities. In fact, last month, the hovernment opened its first embassy in Latin America in Brasilia – Brazil’s capital. The opening of this embassy was done with two things in mind – firstly, increasing Maltese presence abroad, and secondly, ensuring that our diplomatic missions aid in matters of trade.

Taking food security of supply as an example, we ought to note that as of this year, Brazil has exported 2.2 tonnes of wheat, which is more than four times what it had exported last year. Importers of grain would do well to keep this in mind when they’re looking for new trading partners – given that the trade of Ukrainian wheat came to a halt as a result of the Russian invasion.

Diversification of our trading partners ensures that we do not become dependent on particular countries or industries. And for this reason, we’re ecstatic to continue embarking on such a process. That is also one of the reasons why the trade and foreign affairs were put under the responsibility of one minister in this legislature: so that moving forward, the two would be able to work hand in hand.

As an island of half a million people, we might be small. However, rest assured that we have a vision that goes beyond our region and looks toward the horizon for new collaborations which could benefit our people. Indeed, it will not be easy for industry players to look to other sides of the world for potential partners. However, what is sure is that the potential rewards for accomplishing such a daunting task are significant, to say the least. One thing is certain, and that is that the government stands ready to help the private sector reap such rewards in the coming months.

Andy Ellul is Parliamentary Secretary for social dialogue