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Economy of Malta

During the second quarter of 2010, Malta’s economy grew at a slower pace, while first quarter growth was reported as 3.4%. Economic growth for 2011 is expected to reach a little over 2%. Possessing few indigenous raw materials and a very small domestic market, Malta's economic development since the beginning of the 1990s has been based on tourism, accounting for roughly 30% of GDP, and exports of manufactured goods, mainly semi-conductors, which account for some 78% of total exports. Tourist arrivals and foreign exchange earnings derived from tourism have steadily increased since the late 1970s. The introduction of low-cost flights in 2007 was the main contributor to the 10.6% increase in tourist arrivals over 2006. During 2009 the tourism industry faced a difficult external environment, as Malta’s major source markets were severely affected by the global recession. This was reflected in a substantial 8.4% fall in tourist arrivals to around 1.2 million. For 2010, the tourism industry indicates that it has picked up. As of September 2010, inbound tourists registered an increase of 13% when compared to the same period last year and outbound passengers went up by 7% when compared to the same period last year. The cruise liner sector, which experienced 26.6% growth in 2007, saw passenger arrivals decline by 20.9% in 2009. The relatively flexible labor market kept unemployment fairly steady at 6.9% for 2009. With its highly educated, English-speaking population, Malta has seen growth in high value-added manufacturing and in the services sector, away from the traditional low-cost manufacturing in textiles. The banking system remains highly concentrated, with two of the four local commercial banks accounting for about 90% of total loans and deposits. The Maltese Government has pursued a policy of gradual economic liberalization, taking some steps to shift the emphasis in trade and financial policies from reliance on direct government intervention and control to policy regimes that allow a greater role for market mechanisms. Malta's accession into the EU marked the total dismantling of protective import levies on industrial products, increasing the outward orientation of the economy. Malta joined the Exchange Rate Mechanism II (ERM-II) in 2005 to put itself on the path to enter the Eurozone, and in January 2008 it formally adopted the Euro as its official currency. Consolidation of public finances has improved over recent years. The budget deficit was brought down from 10.7% of GDP in 1998 to 2.5% of GDP in 2006, a figure that was below the 3% required by the Maastricht criteria. For this reason, in 2007 the European Commission had abrogated the excessive deficit procedure against Malta, only to reopen it in May 2009, as the country’s budget deficit for 2008 increased to 4.7%. The Government of Malta attributed the increase to one-off impacts in the 2008 budget. The budget deficit was revised for 2010, reaching 3.87% of GDP. GDP (2009 at market prices): $7.932 billion. Annual growth rate (2009 real terms): 0.4%. Per capita income (2009): $17,929. National resources: Limestone, salt, arable land. GDP composition by sector (value added gross, 2009): Services (60.69% of GDP). Industry (17.31% of GDP): Types --food, beverages and tobacco, raw materials, mineral fuels, lubricants and related materials, animal and vegetable oils and fats, chemicals, semi-manufactured goods, machinery and transport, electrical and optical equipment, miscellaneous manufactured articles, miscellaneous transactions and commodities. Agriculture and fisheries (1.94% of GDP): Products --fodder crops, potatoes, onions, Mediterranean fruits and vegetables. Public administration and defense, compulsory social security: 7.07% of GDP. Education: 6.07% of GDP. Health and social work: 6.91% of GDP. Trade (2009): Exports --$2.26 billion. Ty pes --machinery and transport equipment, miscellaneous manufactured articles, chemicals, semi-manufactured goods, food, mineral fuels, lubricants, and related materials, beverages and tobacco, raw materials. Major mar kets --European Union, Eurozone area, Asia, North and Central America. Impor ts --$3.84 billion. Ty pes --Machinery and transport equipment, miscellaneous manufactured articles, semi-manufactured goods, food, mineral fuels, lubricants and related materials, chemicals, beverages and tobacco, raw materials, miscellaneous transactions and commodities. Major supp liers-- European Union, Eurozone area, Asia, North and Central America. Trade balance (2009): -$1.58 billion. Budget (2011 estimates): Revenues $3.88 billion; recurrent expenditures $3.53 billion; capital expenditures $611.1 million. Average exchange rate (2009): $1=Euro 0.7200 (rate fluctuates).

Geography of Malta

Location: Southern Europe, islands in the Mediterranean Sea, south of Sicily (Italy) Geographic coordinates: 35 50 N, 14 35 E Map references: Europe Area: total area: 320 sq km land area: 320 sq km comparative area: less than twice the size of Washington, DC Land boundaries: 0 km Coastline: 140 km Maritime claims: contiguous zone: 24 nm continental shelf: 200-m depth or to the depth of exploitation exclusive fishing zone: 25 nm territorial sea: 12 nm International disputes: Malta and Tunisia are discussing the commercial exploitation of the continental shelf between their countries, particularly for oil exploration Climate: Mediterranean with mild, rainy winters and hot, dry summers Terrain: mostly low, rocky, flat to dissected plains; many coastal cliffs lowest point: Mediterranean Sea 0 m highest point: Dingli Cliffs 245 m Natural resources: limestone, salt Land use: arable land: 38% permanent crops: 3% meadows and pastures: 0% forest and woodland: 0% other: 59% Irrigated land: 10 sq km (1989) Environment: current issues: very limited natural fresh water resources; increasing reliance on desalination natural hazards: NA international agreements: party to - Climate Change, Endangered Species, Law of the Sea, Marine Dumping, Nuclear Test Ban, Ozone Layer Protection, Ship Pollution, Wetlands, Whaling; signed, but not ratified - Biodiversity, Desertification Geographic note: the country comprises an archipelago, with only the three largest islands (Malta, Gozo, and Comino) being inhabited; numerous bays provide good harbors.

Government of Malta

Under its 1964 constitution, Malta became a parliamentary democracy within the Commonwealth. Queen Elizabeth II was Malta's sovereign, and a governor general exercised executive authority on her behalf, while the actual direction and control of the government and the nation's affairs were in the hands of the cabinet under the leadership of a Maltese prime minister. On December 13, 1974, the constitution was revised, and Malta became a republic within the Commonwealth, with executive authority vested in a Maltese president. The president is appointed by parliament. In turn, he generally appoints as prime minister the leader of the party that wins a majority of seats in a general election for the unicameral House of Representatives. The president also nominally appoints, upon recommendation of the prime minister, the individual ministers to head each of the government departments. The cabinet is selected from among the members of the House of Representatives, the number of which may vary between 65 and 69 members elected on the basis of proportional representation. The constitution provides for general elections to be held at least every 5 years. Candidates are elected by the Single Transferable Vote system, where the surplus votes of an elected candidate are transferred to the candidate receiving the second preference votes. The process of vote transfers continues until all five candidates for a district are elected. Malta's judiciary is independent. The chief justice and 20 judges, one of whom is currently serving in an international court, are appointed by the president on the advice of the prime minister after consultation with the leader of the opposition. Their mandatory retirement age is 65. The highest court, the Constitutional Court, hears appeals in cases involving violations of human rights, interpretation of the constitution, and invalidity of laws. It also has jurisdiction in cases concerning disputed parliamentary elections and electoral corrupt practices. The court of appeal hears appeals from the civil court and various boards and tribunals, including the Industrial, Small Claims, and Consumers' Tribunal, a court of criminal appeal and a criminal court, where a presiding judge sits with a jury of nine. The court of criminal appeal hears appeals from those convicted by the criminal court. There is also a juvenile court. There are also inferior courts presided over by a magistrate. The Local Councils Act, 1993, which was drawn up on the European Charter of Local Self-Government, divided Malta into 67 (later 68) localities; 14 are in the smaller island of Gozo. Councilors are elected every 3 years by inhabitants who are registered as voters in the Electoral Register. Recent changes to the legislation will gradually increase the councils’ life span by 1 year with elections being held every 4 years. Provisions in the law were also made for communities, with elected representatives, to be established within localities and for an elected chairperson to sit in on council meetings. Local council elections are held by means of the system of proportional representation using the single transferable vote. The mayor is the head of the local council and the representative of the council for all effects under the act. The executive secretary, who is appointed by the council, is the executive, administrative, and financial head of the council. All decisions are taken collectively with the other members of the council. Local councils are responsible for the general upkeep and embellishment of the locality, local wardens, and refuse collection; they carry out general administrative duties for the central government, such as collection of government rents and funds and answering government-related public inquiries. The act also provides for councils to make, amend and revoke bye-laws as necessary for the better execution of the councils' functions and to improve the localities' environment. POLITICAL CONDITIONS Two parties dominate Malta's polarized and evenly divided politics--the Nationalist Party, led by Prime Minister Lawrence Gonzi, and the Malta Labor Party. In 2008 the Malta Labor Party renamed itself simply the Labor Party (Partit Laburista (PL)) and chose a new leader, former European Parliament member Joseph Muscat. Elections invariably generate a widespread voter turnout; in March 2008 the turnout was 93%. The margin between the two parties is so narrow that a 52% share of the votes is considered a "landslide" for the winning party. In the March 2008 elections, the Nationalist Party won reelection with 49.3% of the vote, earning it 35 seats, while the Labor Party received 48.8% of the vote (and 34 seats). While the two main parties dominate, two other parties were on the ballot in 2008, Alternative Demokratika (Green Party) and Azzjoni Nazzjonali (National Action--which since then has altered its role from a political party to an organization); neither managed to secure a seat in parliament. The second round of European Parliament elections, held in June 2009, resulted in the election of the two incumbent Nationalist Party members of parliament (MPs) and three candidates for the Labor Party, including two incumbent MPs, as well as the possibility of a fourth candidate, once Malta gets the sixth seat in the European Parliament. Principal Government Officials President--George Abela Prime Minister--Lawrence Gonzi Minister of Foreign Affairs--Tonio Borg Ambassador to the United States--Mark Miceli Farrugia Ambassador to the United Nations--Saviour Borg Malta maintains an embassy in the United States at 2017 Connecticut Avenue NW, Washington, DC 20008 (202-462-3611). Government Type: Republic. Independence: September 1964. Constitution: 1964; revised 1974; revised 1987. Branches: Executive--president (chief of state), prime minister (head of government), cabinet. Legislative--unicameral House of Representatives. Judicial--Constitutional Court. Administrative subdivisions: 13 electoral districts. Political parties: Nationalist Party, Malta Labor Party, Alternattiva Demokratika (Green Party). Suffrage: Universal at 18. 

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History of Malta

Malta was an important cultic center for earth-mother worship in the 4th millennium B.C. Archeological work shows a developed religious center there, including the world's oldest free-standing architecture, predating that of Sumer and Egypt. Malta's written history began well before the Christian era. The Phoenicians, and later the Carthaginians, established ports and trading settlements on the island. During the second Punic War (218 B.C.), Malta became part of the Roman Empire. During Roman rule, in A.D. 60, Saint Paul was shipwrecked on Malta. In 533 A.D. Malta became part of the Byzantine Empire and in 870 came under Arab control. Arab occupation and rule left a strong imprint on Maltese life, customs, and language. The Arabs were driven out in 1090 by a band of Norman adventurers under Count Roger of Normandy, who had established a kingdom in southern Italy and Sicily. Malta thus became an appendage of Sicily for 440 years. During this period, Malta was sold and resold to various feudal lords and barons and was dominated successively by the rulers of Swabia (now part of Germany), Aquitaine (now part of France), Aragon (now part of Spain), Castile (now part of Spain), and Spain. In 1522 Suleiman II drove the Knight Hospitalliers of St. John out of Rhodes. They dispersed to their commanderies in Europe, and after repeated requests for territory to Charles V, in 1530, a key date in Maltese history, Charles V of Spain ceded the islands to the Order of the Knights of St. John of Jerusalem. For the next 275 years, these famous "Knights of Malta" made the island their domain. They built towns, palaces, churches, gardens, and fortifications and embellished the island with numerous works of art and enhanced cultural heritage. In 1565 Suleiman the Magnificent laid siege to Malta. After several months the strength of the Knights and the Maltese population prevailed, and the Turks were defeated. Over the years, the power of the Knights declined, however, and their rule of Malta ended with their surrender to Napoleon in 1798. The people of Malta rose against French rule, which lasted two years, and with the help of the British evicted them in 1800. In 1814, Malta voluntarily became part of the British Empire. Under the United Kingdom, the island became a military and naval fortress, the headquarters of the British Mediterranean fleet. During World War II, Malta survived relentless raids from German and Italian military forces (1940-43). A crucial moment in Maltese history was August 15, 1942, when five out of 14 vessels that formed part of "Operation Pedestal", and that included the American tanker SS Ohio, broke through the Nazi blockade of Malta to deliver fuel and food to the starving population. The arrival of the vessels was the turning point in the Maltese islands' fate and became known as the Santa Marija Convoy, for the August 15 Feast of the Assumption locally known as Santa Marija. In recognition, King George VI in 1942 awarded the George Cross "to the island fortress of Malta--its people and defenders." President Franklin Roosevelt, describing the wartime period, called Malta "one tiny bright flame in the darkness--a beacon of hope for the clearer days which have come." In September 1943, the Italian fleet's surrender in Malta was signed by U.S. General Dwight Eisenhower and Italian Marshal Pietro Badoglio. Victory Day, celebrated on September 8, commemorates victory in the 1565 Great Siege, and the end of the WWII attacks in Malta. Malta obtained independence on September 21, 1964, became a Republic on December 13, 1974, and a member of the European Union on May 1, 2004. The last British forces left in March 1979.

People of Malta

Malta is one of the most densely populated countries in the world, with about 3,400 inhabitants per square mile (1,307 per square kilometer). This compares with about 55 per square mile (21 per square kilometer) for the United States. Inhabited since prehistoric times, Malta was first colonized by the Phoenicians. Subsequently, Romans, Arabs, Normans, the Knights Hospitallers of St. John of Jerusalem of Rhodes and of Malta, and the British have influenced Maltese life and culture to varying degrees. There are over 16,000 foreigners residing in Malta. In the last decade, there has been an influx of Europe-bound migrants from sub-Saharan Africa, some 4,000 of whom are currently in the country. There is also a growing North African community of about 4,000 (2007). The constitution establishes Roman Catholicism as the religion of Malta; however, it also guarantees full liberty of conscience and freedom of worship and a number of faiths have places of worship on the island. Malta has two official languages--Maltese (a Semitic language with much vocabulary borrowed from Sicilian Italian) and English. The literacy rate has reached 93%, compared to 63% in 1946. Schooling is compulsory until age 16. Nationality: Noun and adjective --Maltese. Population (2009): 412,970. Ethnic groups: Over 96% of Maltese citizens are ethnic Maltese. Religion (2008): Roman Catholic 98%. Languages: Maltese, English. Education (2006): Years compulsory --until age 16. Attendance --92.7%. Literacy --93%. Health (2009): Infant mortality rate (per 1,000 live births)--5.3%. Life expectancy at birth (2009 est.)--males 77.7, females 82.2 Labor force (2009): 161,850. Agriculture, hunting, and forestry 1.3%; manufacturing 15.1%; electricity, gas, and water supply 2.2; construction 7.2%; wholesale and retail trade, repairs 15.5%; hotels and restaurants 8.2%; transport, storage, and communication 8.4%; financial intermediation 3.7%; real estate, renting, and business activities 7.5%; public administration and defense, compulsory social security 9.0%; education 8.4%; health and social work 7.7%; other community, social, and personal service activities 4.8%.