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Factba.se: Australia DFAT Country Briefs - Malta
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COUNTRY BRIEFS


INTRODUCTION

Malta is an archipelago comprising the islands of Malta, Gozo, Comino, Comminotto and Filfia, located in the central Mediterranean just south of Italy between Europe and North Africa. Malta's population was estimated to be 412,966 in 2010. With a land area of 316 square kilometres, this makes Malta the smallest and most densely populated member of the European Union (EU).

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BILATERAL RELATIONS

Australia and Malta enjoy a strong bilateral relationship. Australia established an immigration presence in Malta in the 1950s and opened its High Commission in 1967. Malta has a High Commission in Canberra (established in 1964) and 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 2006 Census recorded 153,805 Australians claiming Maltese ancestry and 43,708 Australian Malta-born residents – the largest Maltese community outside of Malta.

A May 1948 assisted-passage migration agreement between Australia and Malta subsidised travel costs for over 63,000 Maltese migrants. The peak period of migration to Australia occurred in the 1950s and 1960s and the number Australians born in Malta peaked in 1981. Since then, the Malta-born population in Australia has been declining and ageing. 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.

On 1 July 2007, it became possible for Malta-born Australians who had renounced Australian citizenship to retain Maltese citizenship to apply to resume Australian citizenship, thereby becoming dual nationals.

Defence Links

Maltese forces were involved in the 1915 Gallipoli campaign as part of the British armed forces. Some Australian servicemen wounded at Gallipoli were hospitalised in Malta, then known as 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.

Visits

Reflecting the relatively large Maltese community in Australia, there have been regular high level visits to Australia by Maltese leaders. In March 2011 HE Dr George Abela, President of Malta, visited Australia and met with the Governor-General. The Hon Dr Joseph Muscat, Leader of the Opposition and Leader of the Labour Party, visited Australia from 20-30 May 2010 and met with then Prime Minister Rudd and then Foreign Minister Smith. In February 2009, HE Edward Fenech Adami, then President of Malta, visited Australia as a Guest of Government accompanied by the Hon Dr Tonio Borg, Deputy Prime Minister and Minister for Foreign Affairs.

In July 2009, Stephen Smith, then Minister for Foreign Affairs, visited Malta and met with the President, Prime Minister and Foreign Minister. 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.

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 holidays (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 2010, two-way merchandise trade was A$122 million, with Australian exports to Malta totalling A$106 million and consisting of mainly aircraft parts, cheese, curd and margarine products.

Imports from Malta have been on an upward trend, though they dipped slightly to A$16 million in 2010. Major Australian imports include medical and veterinary instruments and medicaments as well as electrical machinery and their associated parts.

Opportunities for Australian exporters and investors exist in areas such as EU-funded infrastructure projects and joint ventures with Maltese partners accessing third country markets in the resources and services sectors. Malta also offers potential opportunities for Australian expertise in environmental and water resource management and related equipment for water and energy supply, reticulation and waste management.

In 2005, the Commonwealth Bank of Australia set up "Commbank Europe Limited" in Malta to facilitate investment, lending and business development into Europe.

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.

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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 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 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.

Recent political developments

In national elections held in March 2008, the Nationalist Party (PN) defeated the opposition Malta Labour Party (PL) by a narrow majority of the nation-wide vote. However, the PL 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 Minister of Foreign Affairs, a role he holds in addition to his previously held role as Deputy Prime Minister.

Malta's geographic position makes it a target for illegal immigration, recent high levels of which, from North Africa, have dominated the political agenda. Malta has received some assistance from the EU and the US in re-settling persons processed in Malta as refugees. Malta hosts the European Asylum Support Office established by the European Commission in 2010.

Foreign policy

Since accession to the EU in 2004 and the Eurozone in 2008, Malta has devoted considerable energy and resources to developing its relations with EU institutions and with EU member states. As a small island state in the Mediterranean, Malta's foreign policy also reflects its central geographic position through maintaining an active Mediterranean policy and supporting the Euro-Mediterranean process.

In February 2008, Malta hosted the first EU-Arab League Ministerial meeting and is now home to the EU-LAS Liaison Office. More recently, Malta has pursued enhanced engagement with India, China and the Middle East, with an emphasis on business and commercial relations. Malta has a long-standing, active commitment to multilateralism and supports international cooperation, notably through the United Nations, the Commonwealth, the Council of Europe and the Organisation for Security and Cooperation in Europe.

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ECONOMIC OVERVIEW

Malta produces only about 20% of its food needs, has limited fresh water supplies, and is dependent on imported fuel for energy. Further challenges are presented by an ageing population, pressing needs for improvements to infrastructure, and full implementation of EU environmental standards. Malta has some way to go in modernising its economy, especially in terms of addressing productivity and workforce participation.

In spite of this, Malta has traditionally enjoyed high employment, low inflation and consistent (if moderate) GDP growth. Spared the worst effects of global financial crisis, Malta's economy slid into negative growth in the first quarter of 2009, but very quickly recovered. The government's targeted fiscal stimulus measures supporting export-oriented enterprises mitigated the effects of reduced external demand for manufactures and tourism, while increased diversification towards higher value-added services and the resilience of the domestic banking system contributed to growth in 2010 at 3.7 per cent.

Major export destinations include Germany, Singapore and France while Italy, the UK and France provide most imports. Different sectors of Malta's manufacturing industry service both the export and domestic markets. 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.

Tax arrangements, favourable accommodation and operating costs, and a highly-educated, English-speaking, relatively low-cost workforce, offer incentives to foreign investors and make the services sector the prime driver of economic growth in Malta. Financial and ICT services have increased in importance as Malta's regulatory environment attracts offshore business and financial houses which use Malta as a base for operations in Europe and the Mediterranean.

The air services industry is a further growth area and an international free port operates successfully as a central Mediterranean transhipment hub, making Malta a leading centre for container and freight shipment.

A third of all employment in Malta is tourism-related. The main source countries for arrivals are the United Kingdom, Germany, Italy and France. Although adversely affected by the financial crisis, tourism began to recover in 2010.

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Last Updated: June 2011

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