Malta – Commonwealth Third Country Programme
Competitiveness Strategies for Small States
Malta 10- 14 June 2013
TRADE FACILITATION AS A DRIVER OF COMPETITIVENESS
ROSE MARIE AZZOPARDI
Summary of Lecture
Trade facilitation includes all processes, barriers and impediments which restrict trade
across borders. These can take various forms ranging from tariffs to bureaucratic
structures to move goods, services, labour and capital over national borders. Through
GATT and WTO, tariffs have over the past fifty years been lowered, however, other
forms of protectionism, sometimes very subtle in their form and shape, continue to
hamper the smooth operation of international trade. It was in July 2004 that the WTO
launched negotiations in the area of trade facilitation. Certain principles guide this agenda
such as non-discrimination, simplification and transparency.
Efficient trade border procedures directly impact the competitiveness of a country by
making its businesses strive for higher quality and standards in order to be competitive
with imported goods. In this manner it instigates businesses to engage in innovative ways
to participate in global trade, such actions having spillover effects across the entire
national economy.
________________________________________________________________________
Workshop Organised by the
Islands and Small States Institute of the University of Malta,
in collaboration with the Commonwealth Secretariat and the Ministry of Foreign Affairs, Malta
Malta – Commonwealth Third Country Programme
Competitiveness Strategies for Small States
Malta 10- 14 June 2013
COMPETITIVENESS STRATEGIES FOR SMALL STATES
LINO BRIGUGLIO
Summary of Lecture
This presentation is based on the notion that competitiveness has a significant role to play in
the economic development of small island states, in a globalised free trade context.
Competitiveness is the means for firms as well as for countries to survive and thrive. This is
because the alternative to competitiveness, namely protection from international competition,
has time and again proved to be futile, as it results in inefficiencies and poor returns. It is
only through enhanced competitiveness that living standards can be maintained and upgraded
overtime.
The presentation argues that competitiveness is a pre-requisite for the economic success of
small island states, more so than is the case of larger territories, given the high degree of
dependence of small island states on international trade.
An important point that emerges from the presentation is that competitiveness has social and
environmental dimensions and therefore the support of the social partners (employee unions,
employers, the government and civil society) in promoting competitiveness is an important
requisite.
It is also argued that competitiveness is to a large extent an enterprise issue, and it is the
individual company at the micro level that needs to be competitive, in order to enhance
national competitiveness. However the public sector has a major role to play, not least of
which by taking a lead in place competitive on top of the policy agenda, and taking the lead
in removing bottlenecks when these occur.
________________________________________________________________________
Workshop Organised by the
Islands and Small States Institute of the University of Malta,
in collaboration with the Commonwealth Secretariat and the Ministry of Foreign Affairs, Malta
Malta – Commonwealth Third Country Programme
Competitiveness Strategies for Small States
Malta 10- 14 June 2013
THE OPERATIONS OF SECURITIES EXCHANGES AND THEIR
RELATIONSHP WITH COMPETITIVENESS
SILVIO JOHN CAMILLERI
Summary of Lecture
The presentation focuses on six main aspects as outlined below:
1.
Why Are The Operations Of Securities Exchanges Relevant To Competitiveness?
It is in the general public interest that exchanges operate in such a way to reduce systemic risk, to protect investors and
to ensure that markets are fair, efficient and transparent. Efficient operations imply a lower cost of funds, and therefore
increased competitiveness.
2.
Current Trends Affecting the Operations of (Securities) Exchanges
The Financial Arrangements concerning securities exchanges should be viewed in the context of the current trends of
globalisation, competition, technological advances, the implementation of different trading systems, mergers and
demutualization of exchanges.
3.
Some Examples
Insider Trading: If such practices were permitted on exchanges, markets would be perceived as unfair, dissuading
investors from participating, and raising cost of funds.
Spoofing: The entry (and removal) of several orders usually with the intention of influencing prices in a particular
direction, rather than trading. Such practices make it more difficult to interpret market conditions, apart from
manipulating prices.
4.
Financial Arrangements concerning Exchanges
International efforts are being pursued in various areas such as clearing and settlement, dealing with market abuse,
implementing complaints mechanisms, and achieving a single passport for prospectuses in between countries. These
reflect the idea that countries and operators should be cooperating, apart from competing.
5.
Implementation of Financial Arrangements
The main difficulties in the implementation of such arrangements include the fact that some countries consider
“national” standards to be more appropriate for their particular stage of development. In addition the resources needed
in implementing such standards may be considerable.
6.
The Role of Smaller Exchanges within the Global Environment
The presentation ends with a reference to the role and operations of smaller exchanges within the international markets.
These players should provide “smaller” companies with a convenient financing outlet. In addition, they perform the
important task of providing information, which is needed in a global context.
________________________________________________________________________
Workshop Organised by the
Islands and Small States Institute of the University of Malta,
in collaboration with the Commonwealth Secretariat and the Ministry of Foreign Affairs, Malta
Malta – Commonwealth Third Country Programme
Competitiveness Strategies for Small States
Malta 10- 14 June 2013
INNOVATION POLICY AND SMALL STATES
JENNIFER CASSINGENA HARPER
Summary of Lecture
The presentation states with a discussion on definitions and rationales of innovation
policy, including the range of policy instruments available. It then explores emerging
trends in innovation policy relating to open innovation and social innovation and how this
is impacting on national innovation policy. The discussion then turns to the specific
challenges faced by small countries in designing effective research and innovation
policies drawing on the insights of the EU FP7 ERA-PRISM project. The presentation
will end with a focus on the impacts of different instruments of innovation policy
interventions.
________________________________________________________________________
Workshop Organised by the
Islands and Small States Institute of the University of Malta,
in collaboration with the Commonwealth Secretariat and the Ministry of Foreign Affairs, Malta
Malta – Commonwealth Third Country Programme
Competitiveness Strategies for Small States
Malta 10- 14 June 2013
INSTITUTIONAL SUPPORT FOR EXPORT MARKETING
MARK A PIZZUTO
Summary of Lecture
The Internationalisation Unit at Malta Enterprise (ME) provides local business and industry with
a number of initiatives to Incoming and Outgoing Business delegations, as well as towards local
Small and Medium sized enterprises (SME) participation in selected trade fair/exhibitions held
overseas.
A number of support measures are provided to local SMEs in the shape of ME providing for
information meetings as held for the participating companies before an overseas event,
preparation of market reports where possible and relevant contact lists when necessary, as well as
possible logistical and advisory services when required.
An annual programme is prepared to assist SMEs to focus themselves towards possible events
being supported by ME particularly in the areas of High value-added industry operations, as well
as in Higher Education, ICT, Tourism and Health services sector. We have recently finalised a
project on researching the potentiality of the franchising overseas of Maltese enterprises today.
This was actually jointly coordinated together with the Malta Chamber of Commerce, Enterprise
and Industry, where together we explored possibilities to further develop this opportunity and
potential for local brand names to operate both locally and abroad via the franchising formula.
Furthermore, we have this year re-launched the Gateway to Export Programme. This is actually a
programme structured to encourage and assist Micro & Small Enterprises with their exporting
efforts through an assessment and skills based programme, as well as assisting them further in
participating in the drawing up of a Preparation and Implementing a Business Development Plan
for Export.
It is an initiative aimed at encouraging such Enterprises to assess them through a SWOT & Gap
analysis whether or not they are ready to venture into new markets through their exports and by
giving them the required know-how and confidence to excel in the international marketplace. The
Internationalisation Unit is also responsible to coordinate the Enterprise Europe Network.
This is a large European network of over 500 organisations offering high quality services in
industry, technology and innovation, mainly to the benefit of SMEs, present in the EU27 of
today, the European Economic Area [i.e. Norway, Iceland], candidate countries such as Turkey &
Switzerland, as well as other third countries such as Israel and Armenia.
________________________________________________________________________
Workshop Organised by the
Islands and Small States Institute of the University of Malta,
in collaboration with the Commonwealth Secretariat and the Ministry of Foreign Affairs, Malta
Malta – Commonwealth Third Country Programme
Competitiveness Strategies for Small States
Malta 10- 14 June 2013
FINANCIAL SECTOR DEVELOPMENT AND COMPETITIVENESS
PETER SANT
Summary of Lecture
During his presentation, Mr Sant will be giving the delegates of the Commonwealth Workshop
some practical information and history of the development of the financial services industry in
Malta. Mr Sant will be highlighting the changes in Malta in this area and how this sector has
processed from a centralized Government run financial system to an emerging financial services
sector. Over the years, this sector has grown but faced a number of challenges and opportunities
from deregulation and privatization, to the removal of capital controls, intensification of
competition to membership in the euro area and the current euro area crisis particularly the
running paralleled or not with Cyprus.
During his presentation Mr Sant will be covering the following topics:
-
The importance of the financial services sector in small island economies;
The structure of Malta`s financial services industry and its development;
European Union financial market integration;
The economic impact of enlargement;
Malta and the European Union;
The present competitive challenges that the Maltese financial sector is facing within an
enlarged European Union and Economic and Monetary Union;
The Single Euro Payments Area Project
The Euro Area Crisis and Malta
And possible competitive niche markets where the financial services sector can further develop
within the European Single Market and beyond. With regard to the last topic, it is argued that
Malta needs to compare its cost structures, strategic factors, and infrastructure and business
environment with its competitors such as Ireland, Switzerland, the Channel Islands, Cyprus and
Gibraltar. Malta also needs to further invest in the level of expertise, support structures and
capacity building in order to improve our competitive advantage. The paper suggests that the
possible growth areas in the financial services industry in Malta are the following:
-
The provision of corporate services;
Back office operations;
Trusteeship and trust management;
Marketing of financial products including pension schemes;
Fund registration;
Captive insurance services; and
Arbitration services.
________________________________________________________________________
Workshop Organised by the
Islands and Small States Institute of the University of Malta,
in collaboration with the Commonwealth Secretariat and the Ministry of Foreign Affairs, Malta
Malta – Commonwealth Third Country Programme
Competitiveness Strategies for Small States
Malta 10- 14 June 2013
MANAGING EXPORT RISK
JAMES SPITERI
Summary of Lecture
Developing, expanding and modernising the export capabilities of a country is of
paramount importance. Many national trade promotion organizations appreciate the need
to educate their indigenous traders (both manufacturers and service providers) of the need
to go beyond their national borders and explore their export potential.
Venturing into the export trade is definitely a rewarding experience however it is fraught
with difficulties if the trader is not professionally prepared to familarize himself with new
surroundings, language, trade practices and culture amongst other things. The export
scenario requires dedication and significant preparation and research.
The export risks of trade are many and a few are being listed hereunder:
*
*Political/ Country risks e.g. unstable foreign governments and volatile trade policies,
expropriation by foreign governments, cancellation of import/export licences
*Transit Risks e.g. marine
*Buyer Risks
*
rs risks
There are many ways to avoid or at least mitigate such risks through the use of insurance
policies, banking instruments, sound legal advice and common sense. Many times,
exporters would be swept off their feet by sweet talking salesman and purchasing officers
and do not stop and take the necessary precautions in order to avoid financial disaster.
This one-hour lecture will take a practical approach to these issues by enacting a „real
life‟ situation with the participation of the participants themselves together with a
discussion on the trade negotiating process, eventual take up and manufacturing of an
export order, delivery, payment and finance issues. A significant amount of emphasis will
be made on the use of export credit insurance mechanisms as a way of mitigating such
risks.
________________________________________________________________________
Workshop Organised by the
Islands and Small States Institute of the University of Malta,
in collaboration with the Commonwealth Secretariat and the Ministry of Foreign Affairs, Malta
Malta – Commonwealth Third Country Programme
Competitiveness Strategies for Small States
Malta 10- 14 June 2013
SECTORAL COMPETITIVENESS
AND INDUSTRIAL CLUSTERING
JOSEPH VELLA BONNICI
Summary of Lecture
Economists such as Paul Krugman argue that competitiveness at the national level is just
a poetic way of talking about productivity. And yet, competitiveness has become a key
term in the jargon of political leaders and public policymakers. Why is this so?
Competitiveness at the sectoral and enterprise level is much better defined. In today‟s
business world, practically no enterprise (except perhaps for a few global corporations)
can afford to operate as stand-alone units. Following Porter‟s work in the 1990s the focus
has shifted to value-chains, networks and clusters. And yet the concept of externalities is
not new to economics. Specialised industrial districts (such as Detroit for the car
industry) have existed for many years.
The World Economic Forum which is a leading authority on competitiveness owes much
to Porter‟s work, especially his Diamond of National Advantage model. Porter‟s
approach is grounded in industrial economics, with its emphasis on the structure of an
industry in determining the distribution of market power and hence its profitability.
The fundamental question is whether such an approach is appropriate to developing and
small countries which have no or little market power on global (or even regional)
markets? If this is the case, what are the implications of industrial clustering in such
countries? Is there an alternative approach to Porter‟s work?
________________________________________________________________________
Workshop Organised by the
Islands and Small States Institute of the University of Malta,
in collaboration with the Commonwealth Secretariat and the Ministry of Foreign Affairs, Malta
Malta – Commonwealth Third Country Programme
Competitiveness Strategies for Small States
Malta 10- 14 June 2013
SMES, DEVELOPMENT AND COMPETITIVENESS
STEPHANIE VELLA
Summary of Lecture
This lecture seeks to highlight the importance of private sector development particularly
in building the economic resilience of small states. It refers to small-sized enterprises
stressing that such firms can enhance economic flexibility, an important element in
economic resilience, defined as the ability to withstand and rebound from exogenous
shocks. The private sector, compared to the public sector, is generally more exposed and
therefore more responsive to market realities. As a result, a strong private sector is vital
for resilience building, and this is especially so in small states, which tend to be highly
exposed to external shocks. The development of the private sector is also an important
cornerstone which can drive the competitiveness of the economy. The lecture contends
that the development of this sector should be accompanied by appropriate policies to
encourage competitiveness and efficiency.
________________________________________________________________________
Workshop Organised by the
Islands and Small States Institute of the University of Malta,
in collaboration with the Commonwealth Secretariat and the Ministry of Foreign Affairs, Malta
Malta – Commonwealth Third Country Programme
Competitiveness Strategies for Small States
Malta: 10 – 14 June 2013
PUBLIC SECTOR EFFECTIVENESS AND EFFICIENCY
EDWARD WARRINGTON
Summary of Lecture
This session outlines the prescriptions currently advocated to promote efficiency and
effectiveness in the public sector, and examines them critically in the light of the
deficiencies revealed by the banking and debt crises in small states such as Iceland and
Ireland.
It focuses on Malta‟s recent experiences, and considers what lessons may be drawn from
the country‟s robust banking sector, steady economic performance and stable institutions.
Workshop Organised by the
Islands and Small States Institute of the University of Malta,
In collaboration with the Commonwealth Secretariat and the Ministry of Foreign Affairs, Malta