MONEY ISSUE 60

B US IN E SS

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L IFESTY L E

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D ESIGN

TH E N E W B EG I N N I N G S EDI T I ON

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COVER STO RY

Michael Bonello

THE BIRTH OF AN ALLIANCE

14 Sandro Demarco

THE PAST, THE PRESENT AND THE FUTURE

18 Celebrating Success

10 YEARS OF MONEY

32 Theo Dix

RE-THINKING MALTA’S FUTURE

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4 · MONEY

ISSUE 60

WELCOME

It’s our 10th anniversary! Sixty issues on MONEY magazine have been published tackling a myriad of topics ranging from politics to finance to interiors – a heady mix to ensure that you, our readers, are never bored.

COVER Michael Bonello The birth of an Alliance Read the full story on page 12

Throughout the years we’ve interviewed the people whose finger is on the button, those who are at the helm of a great business venture, the face of an authority, the spokesperson for various ministries, which have led to interesting questions and remarkable insights.

The publishing industry has been fluctuating for a fair number of years with the infiltration of technology into everyone’s pocket; however, we are proud to still be here, still making a difference and still considered to be a leading business magazine in the local market. And we plan to be around to celebrate more anniversaries in the future.

It would be ludicrous to speak about our successes and milestones without acknowledging the stress brought about by the pandemic, both on a global level, as well as a local one. At the time of writing this, there are close to 17 million Covid-19 cases worldwide, with over 660,000 deaths. Thankfully there have also been 10 million people who have recovered from the virus.

In Malta, we did a sterling job in safeguarding people with an effective educational campaign that highlighted the importance of washing one’s hands and social distancing. It worked as the number of cases remained low, and, although unfortunate, there were only nine deaths.

However, people got tired of being inside and waiting; they wanted to “go back to normal” (whatever that normal was). Therefore, businesses opened again, and people could venture out with more freedom, which is all well and good; however, the educational campaign wasn’t updated to reflect the second phase of the situation, so people simply went back to their old lifestyles, in a new world.

Photo by Chris Sant Fournier

CREDITS EDITOR

Anthony P. Bernard anthony@moneymag.me DESIGN

The airports opened, and the cases started climbing again. Mass events took place, and the cases climbed higher. And people forgot what they had learnt just two months ago. They went around as though the pandemic was over simply because the government allowed for certain restrictions to be lifted.

Of course, life must continue; however, we need to forget about what we did in 2019 and before. There is no “going back to normal”, there is only going forward and adapting to a new world and lifestyle that involves masks, sanitisation gel, and far, far higher levels of hygiene.

And we certainly hope that MONEY will be there to keep you informed!

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Thank you to all our loyal readers and advertisers for their support over the past ten years, and to the editorial and creative team without whom there wouldn’t be a magazine.

Here’s to the next ten years!

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6 · MONEY

08

ISSUE 60

CONTENTS

P O S T- C O V I D

MOVING FORWARD

The Covid-19 pandemic hit freelancers and the selfemployed particularly hard. Yet, these four have proved the adage necessity is the mother of invention true, even in such hard times, Veronica Stivala discovers.

26

BUSINESS

TURNING THE TIDE

JP Fabri analyses how businesses can continue to combat new challenges, the post-COVID-19 world, keeping in mind ‘recovery’ and ‘agility’ in a bid to cure the damage the pandemic has done to businesses.

38

POLITICS

INTO THE GREY LIST

Political analyst Emanuel Delia delves into Moneyval's assessment on Malta and gives a rundown of what led to all this.

40

MARKETING

GENERATION Z

While we were all busy trying to understand Millennials, they suddenly grew up, had kids and settled down, and became the generation that’s looking back to see what’s coming up behind them: Generation Z. Richard Muscat Azzopardi explains.

12

COVER STORY

THE BIRTH OF AN ALLIANCE

At age 41, Michael Bonello is one of the most prominent and highly respected trailblazers on Malta’s real estate scene. MONEY has asked him why he decided to move his entire team of 160 professional property advisors and management out of an established franchise structure to form his own independent Alliance brand.

14

ECONOMY

COVID-19: THE PAST, THE PRESENT AND THE FUTURE

As Malta takes its first steps back to normality after COVID-19, MONEY analyses the impact that it had on the economy and asked the Central Bank of Malta’s deputy governor Sandro Demarco that all-important question: when will things get better?

30

TIMELINE

CELEBRATING SUCCESS

This month, MONEY celebrates its 10th anniversary.

The magazine continues with the same vision as when launched, to deliver insightful, timely stories about the economies, capital markets, lifestyle, design, and the people leading these industries in Malta and beyond.

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C O V I D -1 9

GOING ONLINE

MONEY takes a closer look at local businesses who have adapted to online trends in the light of Covid-19 under the pretext: change, or fight a losing battle.

PARADOX OF THRIFT

Jordan Portelli gives an insight of the unavoidable implications that are to follow because of the invisible enemy the world is currently fighting: Covid-19.

32 18

C O V I D -1 9

REBUILDING

44

L AST WORD

THREE PIGGIES

The Bluesman writes a satirical piece on US politics and leaves it up to you to guess who the characters in the story are.

RE-THINKING MALTA'S FUTURE

Can Malta reset its agenda and rebuild a better future as we emerge from this pandemic, the type that focuses on sustainability, technology and a people-centric approach to society? Theo Dix believes it's possible.

54

FA S H I O N

SUMMER BRINGS MAGIC

It's the beautiful season, so it's only fair that MONEY gives beautiful things.

56

FA S H I O N

SUNGLASS-GRAM

During the peak of COVID, the closest to a ‘fashion moment’ one could get is probably a single selfie or a snazzy Zoom or Skype screenshot. Luckily, things are gradually getting back to normal. Here’s a collection of sunglasses which will come in handy this summer.

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8 · MONEY

ISSUE 60

P O S T- C O V I D

Veronica is a freelance writer and editor. She won the IGM Award for her work on Ethical and Positive Disability in 2016.

MOVING FORWARD The Covid-19 pandemic hit freelancers and the self-employed particularly hard. Yet, these four have proved the adage necessity is the mother of invention true, even in such hard times, Veronica Stivala discovers.

Ready for the never normal Annalisa Schembri — Creative Producer and Events Manager

Creative Producer and Events Manager Annalisa Schembri has radically overhauled her way of operating and thinking too. She has been applying this both to the events she is organising and is also offering consultation for companies on how to do this. A key term for freelancers and people in creative and industries is “pivoting”. By this, she means the individual can create events that can be pivoted in an agile way, for instance, virtually.

“Pivoting in a sustainable way to make sure that whatever happens, you can still keep going: that is the new understanding of the sustainability of future-proofing your events.”

Photo by Aldo Cauchi Savona

THE NE W BEGINNINGS EDITION

Another exciting idea is satellite events.

This concept applies to conferences or festivals that can be done in a hybrid manner – both live and virtually but also in a satellite manner. For instance, an event where the audience is split over different venues or cities. “Obviously,” she notes, “from a production perspective, this creates whole new lines in the budget, a whole new way of putting your production team together, headhunting for the most agile, adaptive talent, new logistics in place and new skills that the teams need in place.

PIVOTING IN A SUSTAINABLE WAY TO MAKE SURE THAT WHATEVER HAPPENS, YOU CAN STILL KEEP GOING

This I feel is the post-pandemic mind-set”.

This effort and exercise must be done not only for the now but to understand how even better events can be in the future.

A second point she has applied to her business is the notion of being liquid. We need to constantly think “How can we adapt and take different shapes and forms, as agile and as smoothly and as fast as possible to adapt to what others are calling the new normal?” Annalisa is adamant to call this “the never normal” because things are changing week after week. “We need to be flexible in the way we think, live and act because this allows us to unlearn things the way we always knew them and take on the shape and form of things anew – those that are happening around us, that are constantly changing.”

P O S T- C O V I D

MONEY · 9

Travels from my balcony Francesca Stivala — Wedding and Fine Arts Photographer

How does a wedding and fine arts photographer keep their business running when they cannot step outside their front door? They get creative. Wedding and Fine Arts Francesca Stivala has re-invented her photography business, giving it an imaginative twist.

When lockdown measures were introduced in Malta, Francesca found herself stuck at home – she could not go out because she lives with her parents who are in the vulnerable age group. Finding herself not only without work but without subjects she initially started to photograph herself, objects around the house and her parents. But with the latter averse to being

photographed and the former somewhat tight-lipped and static, she came up with the idea of shooting her subjects from the balcony.

A very safe three metres apart from one another, she asked her subjects to pose in the driveway.

From a ballerina to a basketball player, she has photographed 20 subjects to date.

She has entitled this series “A view from the top”.

Recalling how it first started, Francesca says: “A friend messaged me as she wanted a photograph taken and I first declined as I thought it was too risky.” After some contemplation, she ran to the closest stationery, bought some cardboard for the model to lay on and told her to come over for a shoot from a socially safe distance from the balcony. “I was super excited that I had managed to photograph both people and do it →

10 · MONE Y

P O S T- C O V I D

Learning opportunities Claire Rose — Education Consultant

from a socially safe distance. That’s where it all started,” she muses.

Although familiar with photo editing software, she taught herself new techniques by watching online tutorials and consulting experts as needed. The new technique allowed her to create innovative portfolios for her clients transporting them to the woods, the sea and a disco party. Now that measures have eased; she is photographing her clients in outdoor areas but still applying her creative editing techniques.

What started out as an inconvenience proved to be a push to creativity for Francesca: “A view from the top is a really different and cool angle for portraits and I will definitely be implementing them in any of my future shoots where the possibility arises.”

WHAT STARTED OUT AS AN INCONVENIENCE PROVED TO BE A PUSH TO CREATIVITY...

ISSUE 60

tutoring via video chat and managed to continue her university guidance virtually.

“I’m lucky regarding technology because I had experience working in a digital school so it didn’t really involve any new training,” she notes.

Claire also wanted to help parents who were at home, and helping their children learn during the lockdown, so she temporarily ran daily ‘live’ tasks on social media – incorporating different ages and national curriculum subjects. Over the summer, she now has several online summer workshops booked.

Claire Rose runs an Education Consultancy, based in Cambridge but with clients worldwide, and offers a range of educational services and products.

Before lockdown, Claire had face-to-face meetings, she regularly commuted around the UK and tutored in various locations. She would have been exceptionally busy in April and May with revision workshops before exams and she also had some bookings for in-school workshops too, including in Europe. When exams were cancelled, she not only lost all her tutees overnight, but it also meant her large workshop days were now a no-go.

Yet, she did see an increase in enquiries about other aspects of education from both parents and schools: how online learning systems could be created, what to do now exams were cancelled, how the assessment process (to replace exams) would work.

Realising there were new needs as well as needs that required attention in a different way in her field, she set about exploring how best to approach them.

Claire had a few online consultations, with head teachers and local and national assessment centres, to develop a virtual process for assessing external/private candidates. She also mentored some students who wanted to continue with

Moving forward, she is planning a free fiveday challenge for students applying to attend university in the coming year. Usually, she would offer one-to-one guidance on this but wanted to “support all the students whose academic lives have been completely turned upside down”. For those students who do not get the grades they need in August and therefore must sit for exams in the autumn term, Claire is planning to run intense onemonth revision workshops, again virtually.

She hopes that, in the future, mainstream education will manage to “catch up” with the progress that has been made in home learning and EduTech/digital education. Prior to the Covid-19 crisis, she had already seen an increase in enquiries from families looking for a more flexible approach to their children’s education, and believes that “the response to Covid-19 has increased awareness of the many educational opportunities already available for learners who do not fit the mainstream ‘mould’.”

Longer-term, she is now planning to continue to embrace this trend that has been further accelerated by the crisis, encouraging families to think more carefully about flexible learning, and to encourage people to use the technology that has existed for many years but, until recently, has been neglected in favour of traditional (i.e. in-person) methods.

In more concrete terms, Claire hopes to develop an education centre of excellence that not only focuses on and promotes academic opportunities but uses the lessons learned about education from the Covid-19 crisis in a positive way for the benefit of future generations.

THE NE W BEGINNINGS EDITION

P O S T- C O V I D

The social media push Andrew Borg Wirth — Architect and artist

The way social media reflected the politics of isolation triggered artist Andrew Borg Wirth to explore the subject more deeply. While his role and work as an artist did not change per se, this project remains pertinent as it could inspire the way we approach social media and even our social wellbeing from now onwards.

The artist used the pandemic scenario as a source of inspiration for his art: he explored the psychological repercussions social media had on us. He also developed several projects pertinent to a post-pandemic world.

During the lockdown, millions of people found themselves at home and more vulnerable to psychological attacks. Borg Wirth was struck by how “anonymous characters across social media contributed to further levels of misogyny, racism, xenophobia, misinformation and malice during this highly anxious period”. On being approached by a Netherlands-based shoe company Feraggio, he created a series of images that merge photography and social media comments.

The company had reached out to creatives

around the world who have been struck by COVID-19 and left with a lot of lost work.

For his project, he took photos of a shoe provided by Feraggio upon vast white Maltese clay slope faces, shot at different scales and from different distances. “Just like on endless social media feeds, it can be appreciated in detail at the greatest extent of zoom, or ignored like another fleeting moment we scroll past,” he explains. Then he juxtaposed these images with people’s racist and xenophobic comments.

Other than this, Andrew has also worked alongside local creatives to develop concepts and ideas that reinvestigate the way that we can interface with audiences within a post-COVID world. These are currently at application stage. These projects include taking yourself to the theatre in times of social distancing; disseminating opera

MONEY · 11

SOCIAL MEDIA CONTRIBUTED TO FURTHER LEVELS OF MISOGYNY, RACISM, XENOPHOBIA, MISINFORMATION AND MALICE DURING THIS HIGHLY ANXIOUS PERIOD

narratives and production (set design, costume, music and voice) without using a physical theatre; an art exhibition without access to art galleries/cultural venues and an analysis of the 'anxiety' of the present moment – which looks at how we use and abuse space within the current uncertain period. The creative industries were one of the hardest hit by the pandemic, but with projects such as this, they look set to come back certainly fresher and hopefully stronger than ever.

12 · MONEY

ISSUE 60

COVER STORY

Photos by Chris Sant Fournier

Alliance Partners: L to R back row—Francois Spagnol, Dylan Micallef, Michael Bonello, Fabien Debono, Angelo D’Arrigo; L to R front row—Paul Sammut, Gordon Valentino, Aidan Xuereb and Brian Magri; Jay Jay Micallef is not shown.

The birth of an Alliance At age 41, Michael Bonello is one of the most prominent and highly respected trailblazers on Malta’s real estate scene. MONEY has asked him why he decided to move his entire team of 160 professional property advisors and management out of an established franchise structure to form his own independent Alliance brand.

Michael, the question everyone is asking is what drove you to make this bold move?

“My experience working within a franchise framework has been a generally positive one; but like many things in life, everything that has a beginning also has an end to it.

Although I was the very first agent to join the international franchise* in 2006, for several business-related reasons, I felt the time had come to open a new chapter. Over the years, I contributed a great deal to the brand and saw it grow locally from very humble beginnings to what it is today. I will always look at this 14-year journey with pride and satisfaction.

For example, I am glad that throughout the years, my group operating out of eight offices delivered a significant portion of the company’s annual results.

is just one reason my business partners and I decided to move out of that framework and take control to manage our destiny.

Who forms part of the Alliance team?

While celebrating this success, I also realise that Malta’s property market is undergoing significant and rapid changes. To me, this means that for us to convert the challenges ahead into opportunities, we must realign our business strategies in line with these new realities. Corporate agility is now more imperative than it ever was before, and it’s hard to be agile in a multi-layered structure such as that of an international franchise. This

“We are building Alliance with a team comprising of about 200 people, our network of branches in several strategic locations and the professional experience and strong personal relationships we have as its founding partners. The network is managed by myself as founder and CEO, together with my founding partners, Paul Sammut, Gordon Valentino, Angelo D’ Arrigo and Mario

THE NE W BEGINNINGS EDITION

MONEY · 13

COVER STORY

Gauci, Aidan Xuereb, Fabien Debono, Jay Jay Micallef, Brian Magri, Dylan Micallef and Francois Spagnol.

Besides these partners and our experienced network management layer, our new corporate structure is supported by a team of professionals and the latest technology. This team includes Corporate Business Advisor Ivan Bartolo, Chief Operations Officer Gordon Attard, Chief Financial Officer Leslie Xerri, Chief People Officer Frank Borg and Chief Marketing Officer Pierre Mizzi.”

Executive Team: L to R—Leslie Xerri, Gordon Attard, Michael Bonello, Ivan Bartolo, Frank Borg and Pierre Mizzi.

How will this move affect how your team works?

“The most obvious difference is the fact that going forward Alliance will be far more agile, allowing it to respond to market demands, dynamics and realities swiftly. This will allow us to be able to offer a more personalised service to all our prospective customers who are both sellers and buyers, landlords and tenants. With direct access to our sails, the Alliance executive team will have the flexibility to take and implement effective business decisions. Now that so to speak, we are our own masters; we can set our own business vision, mission, objectives and rules. This business is all about people, so for example, if we decide to incentivise our workforce, make available specific business tools or train our team to deliver better service, we can go ahead. In the same way, we may decide to reward our customers with different schemes and benefits; we would be

able to implement. In this new decade, given the new post-COVID realities in our industry, we need to be fast without compromising on quality.”

Does it sound like we can expect some significant market impact from Alliance?

“Yes, now that we’ve had an opportunity to look at everything differently and from a new perspective, we aim to make a positive impact on the market. In this transition process, we have conducted a comprehensive ‘after-action review’, where we recognised ourselves for our achievements, we noted all the lessons learnt, and objectively criticised ourselves and identified what we could do better. It is from all this that we formulated our business change plan. We shall retain everything that has been working well and added value to our customers and workforce,

We are affirming everything we’ve been doing right in the past and ramping it up to a higher quality level for the benefit of our clients and our team and we will surely make all the necessary changes to ensure we create a business model that delivers win-win outcomes.

“We are mapping out our customer touchpoints and seeking to collect data from them to ensure we reengineer our processes in line with our customers’ needs and expectations. Alliance is committed to being a customer-centric real estate service provider.”

Thank you for your time, Michael. We wish you all the very best for Alliance.

Thank you.

Management Team: L to R back row—George Tabone, Nicky Sammut, Aidan Xuereb, Raphael De Gabriele, James Mallia, Fabien Debono, Jeremy Borg Grech; L to R front row—Gordon Valentino, Ana-Marija Zavirovska, Michael Bonello, Angelo D’Arrigo and Francois Spagnol.

*The international franchise brand name has been omitted to avoid contractual obligations linked to its usage.

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ECONOMY

COVID-19: The past, the present and the future As Malta takes its first steps back to normality after COVID-19, MONEY analyses the impact that it had on the economy and asked the Central Bank of Malta’s deputy governor Sandro Demarco that all-important question: when will things get better?

In April, the Malta Philharmonic Orchestra and Bank of Valletta released a haunting video of Valletta: performers played in eerily deserted streets and squares; the Triton Fountain played with no one around to appreciate its beauty. The shops along Republic Square were shuttered, and the chairs and tables in St George’s Square had all been packed away. In the future, will we use

that video to explain to our children what it was like to live through COVID-19?

The video is so significant because it captures so many of the factors that had an impact on the economy, from the loss of jobs relating to tourism, to the slowdown in retail sales.

But the video itself is also testimony to the resilience of the country, how technology was

used to find workarounds for life to continue despite the measures laid down by the health authorities.

Companies were forced to think about ways to enable their staff to telework, shops went online, restaurants started to deliver. When we look back on 2020, we will remember it as the year that “Could you all put your

THE NE W BEGINNINGS EDITION

microphones on mute?” and “flattening the curve” became catchphrases.

It was clear from the outset that the measures needed to prevent tens of thousands of cases would have an economic impact. But there were also many questions: how long would the measures be in place? How resilient would the economy be during that period? How long would it take to recover?

Deputy Governor Sandro Demarco explained some of the issues that the Bank had to tackle: “In the earlier part of 2020, before the COVID-19 outbreak, the Bank was continuing to see economic growth in Malta moderating gradually to our estimate of its long-term potential of around 3.5% by the end of 2022.

“The advent of the COVID-19 pandemic necessitated a thorough reassessment of our economic outlook to consider such a shock of historic proportions. This was no easy task for any forecaster worldwide because of the high degree of uncertainty surrounding the length of time that containment measures would be required to remain in place.

“Although most of those containment measures have been lifted since then, there is still considerable uncertainty as to whether there will be a second wave of the pandemic, and to what extent this would require renewed containment measures in the continued absence of a vaccine. For this reason, in line with other forecasters, in our update in June 2020 to the projections published in our Annual Report for 2019, we had to shift away from discussing risks surrounding our projections. We rather decided to publish a baseline projection and a severe scenario to account for such uncertainty.”

ECONOMY

“Even if we consider the baseline scenario, the contraction in GDP is expected to be almost double that experienced in 2009 during the Global Financial Crisis (GFC), which shows how far more severe is the current pandemic shock. Indeed, whereas world output had declined by 1.7% in 2009, the latest IMF forecasts project global growth to shrink by 5% in 2020. The latest projections of the IMF show that the euro area is to contract by a whopping 10.2% this year, which represents a steeper drop than that expected for Malta – even if one assumes the severe scenario. This indicates the higher degree of resilience of the Maltese economy, which – despite the pandemic – saw GDP still growing by 0.5% in the first quarter of this year. In comparison, that of the euro area sank by 3%,” Mr Demarco said.

As expected in these circumstances, external trade, together with investment, will be the hardest hit. The containment measures have severely affected tourism and the linkages this sector has with others. In contrast, the uncertainty created by the pandemic has inevitably led to the postponement of private investment decisions. Domestic private consumption was also severely impacted, particularly in March and April, as several retail businesses were ordered to shut down to contain the spread of the virus, with citizens forced to spend most of their time in their homes. Indeed, during this period, the Bank observed unusually high growth in household deposits. Since EU membership in 2004, household deposits between February and April usually grew by around 1.1%. In 2020, these increased by 3.4% or by around €145 million more than they usually did.

There is no doubt that the pandemic caused a significant disruption to economic activity worldwide that will result in a historic decline in economic activity across the globe in 2020.

Malta, of course, is no exception, especially since it is a highly open economy that relies to a significant extent on its wide variety of exports of goods and services.

And what about the forecast? Mr Demarco said: “Based on our baseline scenario, we expect the Maltese economy to return to its 2019 level of output only by the end of 2021, and even in the severe scenario we estimate that it would take another additional year. This is mostly because we see tourism recovering only very slowly, in both scenarios, as flight capacity has been diminished, reflecting subdued demand for international travel.”

For this year, the Bank sees economic activity shrinking by 4.8%, or by 8.3% in the event the severe scenario materialises.

At the end of January, the World Health Organisation declared that the outbreak was a Public Health Emergency of International

MONEY · 15

Concern. Less than eight months later, there were 17 million cases around the world, and over 660,000 reported dead, with BBC extrapolating (from the increase in the deaths in 27 countries compared to the average) that there are another 130,000 estimated fatalities linked to the virus.

What was the situation in Malta when it all started? Government finances were robust, with budget surpluses that had helped to keep overall government debt to €5.7 billion – more or less the same level it was in 2016.

The Labour Force Survey reported that, during the fourth quarter of 2019, total employment stood at 258,064, accounting for 60 per cent of the population aged 15 and over. This means that over 13,000 jobs had been created over 2018. The unemployment rate, per the National Statistics Office, was 3.4 per cent, the envy of many EU Member states.

The economy was still growing strongly.

The Malta Business Registry reported that 4,472 new commercial partnerships were registered, bringing the total to 98,090.

Tourism in 2019 had reached 2.8 million, an increase of 5.9 per cent over the previous year. A total of 359 cruise liners visited the island.

Property was booming as office towers began to dominate the skyline, and investors rushed to purchase properties across Malta to cater for the burgeoning rental market, with demand being driven by the thousands of foreign workers coming to keep the wheels of the economy turning. The demand for new properties seemed insatiable. The Planning Authority approved nearly 12,500 permits for residences, roughly the same number as in 2018.

The situation now is quite different, as Mr Demarco explained: “The containment measures implemented in Malta and across the globe meant that many businesses had to simply shut down their operations and hence their revenue stream was choked off. This led to a liquidity crisis for many businesses to cover their wage costs and other expenses, such as repayments on loans and rents, among others. This triggered fiscal action to mitigate the adverse economic →

16 · MONE Y

impact of the containment measures to limit the spread of the virus. These have helped in no small way to limit the damage to both businesses and those in employment.

“Although after February, we observed a rise in the number of persons registering as unemployed, the overall number remains at historically low levels and less than that observed before 2016. More significantly, the rise in unemployment appears to have peaked around mid-April. Since then, the increase in unemployment steadily declined, thus ‘flattening the curve’ in line with the trendy pandemic jargon. Towards mid-June, we have also seen signs that the number of registered unemployed may have started to drop, albeit very marginally, which is somewhat encouraging. However, we nevertheless remain very cautious about the outlook.”

While it appears that the worst of the pandemic is over, this does not mean that economic activity has returned to its “normal” level. Still, after the end of most containment measures in May, the Bank has started to see some positive signs. Business and consumer sentiment indicators have improved, though they are still distant from their long-term average levels.

“There is no doubt that the economy still requires significant fiscal and monetary policy support and the road to recovery is still long and fraught with uncertainty,” he stressed.

“From a policy perspective, fiscal measures aimed at reviving domestic demand are a logical step in the start to begin restoring economic growth; but, given the limited size of the domestic market, this clearly can never

ECONOMY

Based on our baseline scenario, we expect the Maltese economy to return to its 2019 level of output only by the end of 2021

be enough to restore output and employment to 2019 levels. Fiscal and monetary policy support is needed. Malta is a highly open economy and relies to a significant extent on exports of goods and services. External demand remains a critical factor in the speed of recovery in economic activity, which is something that is not entirely within our control.

“While measures that would impact the competitiveness of Maltese products and services do impinge on external demand, economic conditions in trading partners depend on policy measures taken in those jurisdictions. Thus, the significant increases in unemployment in key markets, such as the US, UK and the several EU Member states, gives rise to uncertainty about how fast external demand will recover. This will be critical for both the manufacturing and tourism industries, as well as other sectors, and will have a significant bearing on their employment and investment plans. Given that external demand is expected to recover only very gradually, it will be key for domestic enterprises to remain competitive. Therefore, a review of their business model, in terms of the output they produce, on how it is produced, and the markets where it is sold becomes all the more necessary.”

During the pandemic, the Central Bank of Malta played multiple roles, in line with its mission. It issued two directives: one was designed to make it easier for people to deposit their benefits and pension cheques – which are issued by the Government – without having to go the Bank in person.

It allowed beneficiaries to sign over the cheque to a trusted third party who could deposit it on their behalf. One of the welcome

ISSUE 60

consequences of this was the campaign to encourage more people to sign up for direct credits, with around 10,000 having done so by the end of May. It also mandated, subject to specific eligibility criteria, that credit and financial institutions had to offer a moratorium of six months on loans and advances. Giving breathing space to the many people whose income dried up, either because their business had ground to a halt, or because they had lost their jobs.

To facilitate payments and to reduce contact in the few shops that remained open, the Bank also extended the limit for the use of contactless cards without authentication, up to €50, meaning they now covered the average spend in grocers and supermarkets.

The Bank carefully modelled the impact of the measures, Mr Demarco explained, to ensure that they would reach their aims without compromising on security and commercial activity. Unlike the 2008 global financial crisis (GFC), where the financial sector was at the epicentre, in the current pandemic the banking industry was a player that could reach out to support business enterprises and households. This, in part, reflects the lessons learnt during the GFC. Tighter regulation and more stringent supervisory practices in the aftermath of the GFC, especially in Europe with the creation of the – albeit still incomplete - Banking Union has led to a more robust and better-capitalised banking industry, even though this may have affected to some extent its profitability.

Clearly, during the pandemic, the role of banks has been crucial in providing support to the liquidity crisis faced by their borrowers.

As revenues of business firms dried up because of the containment measures, and workers experienced income losses due to shorter working weeks or outright job losses, many countries, including Malta, introduced legal moratoria on outstanding bank loans.

In the case of Malta, both households and business were eligible for such moratoria.

However, local banks themselves had already voluntarily responded to this need before the launch of Legal Notice 142 and CBM Directive 18 on 13 April 2020. Until the end of April, some €1.3 billion worth of loans, accounting for around 12% of resident loans, were

THE NE W BEGINNINGS EDITION

ECONOMY

granted a moratorium, benefitting almost 7,400 customers of which almost 5,700 were households.

Given the pervasive uncertainty surrounding the speed of the economic recovery, and the potentially lasting effects on output and employment that such uncertainty may generate, it is the CBM’s view that it would be appropriate to extend the length of the moratorium period, where needed, and the period for possible new applications. This would be particularly useful if the likelihood of the severe scenario increases. Indeed, the European Banking Authority very recently extended its deadline to 30 September 2020, whereby borrowers granted a moratorium up to that date would exempt banks from classifying them as non-performing loans during the moratorium period. This provides some relief to the profitability of banks, which in turn sacrificed their cash flow by suspending repayments of capital and interest by borrowers. Going forward, however, prudence in banking business models remains critical given the possible casualties among some businesses that the pandemic may leave in its trail, which is why bank dividend payments have been suspended for 2020.

During the pandemic, the CBM also sought to take measures to ensure that banks continue to provide essential banking services for withdrawal and deposit of cash, and deposit and encashment of cheques, to enable the public to continue financing their purchasing needs, while at the same time minimising risks of the spread of the virus, especially among vulnerable persons. While these measures have generally served the public well, at a national level, however, more significant effort from several stakeholders is still needed to further reduce reliance on paper-based instruments as means of payment.

“The Bank’s most recent payments habits survey already shows that there is a positive trend in this regard, and both the value and volume of online transactions in 2019 grew by almost 40%, reaching €1.3 billion, while card payments increased by about 12% to €1.6 billion. We are therefore optimistic in this regard as the pandemic provides the right opportunity to accelerate the pace

M O N E Y · 17

states, the EU has invoked the exceptional circumstances clause and temporarily suspended the Stability and Growth Pact rules.

“Like all EU countries, and indeed those around the globe for that matter, Malta will also have to run a large fiscal deficit in 2020 and another one in 2021, which means that public debt will be on an upward trajectory in the next couple of years or so. This will naturally require fiscal consolidation efforts in the future. of progress in the diffusion of electronic payments,” he explained.

In the meantime, the Government stepped in, delaying the collection of provisional tax, VAT and social security contributions for both self-employed and employers, and setting up a wage supplement scheme to encourage employers to retain their staff through the tough times, along with various other measures. Lower revenues and higher expenditures: no wonder the Consolidated Fund went from a deficit of €9.8 million in April 2019 to one of €295.4 million a year later.

The situation would have been considerably more difficult had the Government been saddled at the outset with high debt burdens, as many other euro area countries were, Mr Demarco explained: “There is no doubt that the magnitude of the economic impact created by COVID-19 required strong fiscal support. Fiscal measures aimed at positively impacting liquidity of firms through the wage supplement measure and postponement in the collection of tax revenues, as well as subsidies in energy costs and rent to firms, among other measures, will continue to help firms to remain afloat during the coming months.

“Such measures, of course, require significant funds, and given the higher expenditure needs, accompanied by hits in tax revenue as a result of shut down in activity in some sectors, inevitably implies fiscal deficits.

However, fiscal policy is meant to be countercyclical, running fiscal deficits in bad times, and compensating with surpluses in the good times. Indeed, given the severity of this symmetric shock across all EU Member

“However, unlike the several EU Member states, Malta had the advantage of having reduced public debt to more manageable levels in recent years from over 70% to around 43% of GDP, and therefore it started this pandemic with a good buffer from the 60% debt-to-GDP threshold required by EU rules.

Indeed, the pandemic has highlighted the importance of fiscal responsibility to ensure that during adverse periods, the Government would have the necessary fiscal space to temporarily support the economy when it is most needed.

“This, however, also means that the Government must ensure that support measures are indeed temporary and reversible, unwinding them promptly where these are no longer needed. Once the uncertainties of the pandemic are behind us, it will be crucial for fiscal policy to rebuild adequate buffers again to have sufficient fiscal space for future rainy days,” Mr Demarco said.

As the island opens, its airport and tourists start to trickle back into the island, with shops open again and bars and restaurants spilling out on the pavements, there are moments when things seem to have returned to normal, with only facemasks as a reminder of what happened in the spring of 2020.

And yet, with the race for a vaccine still far from its final lap, and fears of a second wave growing even while the first wave is continuing its tragic spread, the real impact on the economy of Malta will only be known in hindsight. It has added a whole new meaning to the expression “hindsight is 20-20 vision”.

This interview was conducted on 6 July 2020.

18 ¡ MONEY

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TIMELINE

CELEBRATING SUCCESS This month, MONEY celebrates its 10th anniversary. The magazine continues with the same vision as when launched, to deliver insightful, timely stories about the economies, capital markets, lifestyle, design, and the people leading these industries in Malta and beyond.

Here, we revisited many memorable, ground-breaking and celebrated cover stories. Given the milestone, it provides an appropriate occasion to reflect on the state of the field and the role that the publication plays to this day. Dayna Clarke caught up with managing director, Anthony Bernard, to discuss the magazine's evolution and its resounding success.

Photo by Lindsey Bahia

THE NE W BEGINNINGS EDITION

MONEY · 19

TIMELINE

Dayna is a senior speech therapist by day and feature writer by night.

When she’s not busy fixing words, she is travelling the world to add to her fridge magnet collection.

What inspired you to start up MONEY? I can't believe it is 10 years already! I was already involved in the publication sphere, and back then, I saw the market lacked a magazine that focused on the person, not the industry. I wanted to see exciting features and thought-provoking articles that not only focused on their business but also their personal needs and that included other topics such as design, fashion and culture. A magazine that touched on all aspects of the reader's work-play environment, spanning the genres.

How has the publication changed over the years?

I would have to say not much! Our signature paper is the first magazine on the islands to be printed on uncoated paper - and allows for themed editions. This formula has remained the same since 2010. What we do change every so often is the design which we occasionally tweak, so it remains stylish, crisp and ever relevant.

Has it been challenging to stay relevant in an ever-competing digital realm?

It sure has. Thankfully, we have a robust distribution platform with loyal readers who lookout for every edition. We have recently launched our new website, which includes

all of the magazine's content. This makes it easier for our readers to access an interview or feature they might have missed. The digital platform will make the magazine more accessible while the print edition will help increase the magazine's visibility and awareness. They truly go hand in hand and support one another.

We have also seen success with our other publications which have been both digital and print, such as Tech.mag powered by MONEY and in association with Tech.mt.

Last June, we launched the first edition of

this highly popular magazine promoting digital innovation and technology within the Maltese Islands.

Looking back over the last 10 years, are there any memorable interviews which come to mind?

Well looking back, I must say, all interviews are unique in their way - no two have ever been the same! Everyone featured had an interesting story to tell. However, one story touched home, was when I had done a tribute to my father-in-law, in issue 31 (2015); he was a well-known political figure.

It was soon after he passed away, and we had interviewed various friends and colleagues who knew him personally. I saw first-hand the respect and admiration that he enjoyed from all sides of the political sphere and the tourism industry he had worked so hard for.

What's in store for MONEY? Hopefully, Money! (laughs). All jokes aside, we are looking at expanding our distribution to include a greater variety of companies and industries. Although I wish in the near distant future, we'll be able to expand our distribution overseas. I believe that Money, the brand, has the potential to do so, especially since its roaring success and omnipresence in the Maltese islands. →

20 · MONEY

ISSUE 60

TIMELINE

ON THE COVER BUSINESS | LIFESTYLE | DESIGN

THE LUXURY ISSUE

ISSUE 22 DECEMBER/JANUARY 2014

FINANCE | LIFESTYLE | DESIGN

THE NEW BEGINNINGS ISSUE ISSUE 01 MAY / JUNE 2010

SPARKLING NEW Pippa Toledo’s handbag & jewellery collection

STEFAN BORG MANDUCA MEANS BUSINESS

THE FINANCE MINISTER

Issue 12 April/May 2012

¤5 WHERE SOLD

In association with

THE LEARNING ISSUE ISSUE 06 MARCH/APRIL 2011

EDUCATION MINISTER EXAMINES OUR EDUCATION SYSTEM

THE DESIGN ISSUE

on life after the credit crunch

2011 | Issue 6 | The Learning Issue — Hons Dolores Cristina, then Minister for Education, discussed how Malta's educational system was changing, and the steps to build a better tomorrow, including wrapping up the National Curriculum Framework.

MALTA'S LEARNING CURVE

2010 | Issue 1 | The New Beginnings Issue — Stefan Borg Manduca, Food Industries Ltd Director, shared insights into the food import business, including the challenging feat of launching imported ice-cream locally. Did you know the Maltese consume one of the highest amounts of Algida ice-cream in Europe? No, neither did we!

TRAINING & MOTIVATION

JEFFREY PULLICINO ORLANDO ON SCIENCE

The architects of the future KTP President Vincent Cassar on good planning

Form or function?

Paco Rabanne – the architect of fashion

2012 | Issue 12 | The Design Issue — This issue focused on what makes a great design with a range of interviews from the president of the Kamratal-Periti, Vincent Cassar, to Senior architect Matthew James Mercieca discussing the importance of good design in planning, as well as a feature with top photographer David Pisani.

INTERVIEW WITH FRANCIS SULTANA EXCLUSIVE GIFTS

BRANDING LUXURY PRODUCTS LONDON LUXE

2013 | Issue 22 | The Luxury Issue — Francis Sultana features on the cover, one of the world's foremost interior and furniture designers, originally hailing from the island of Gozo. Still, a prominent designer based in the UK, Sultana now sits on the board of MICAS.

BUSINESS | LIFESTYLE | DESIGN

THE NEW RESOLUTIONS ISSUE ISSUE 28 DECEMBER 2014/JANUARY 2015

INTERVIEW:

GERARD BUTLER BUSINESS LEADERS SIMON AZZOPARDI ON START-UPS

THE GLOBAL ECONOMY IN 2015 DR SIMON BUSUTTIL ON REGAINING TRUST

2014 | Issue 28 | The New Resolutions Issue — Simon Azzopardi takes the cover, and his interview revealed plenty about the local start-up scene, as the industry began to pick up the immense pace. Still to this day, Azzopardi is known as the "Start-up Guy" in Malta. He has been responsible for managing incubators, supporting a network of start-ups, advising corporates on spin-off start-ups, mentoring early risers and working closely with investors to identify new and fresh opportunities.

THE NE W BEGINNINGS EDITION

MONEY · 21

TIMELINE

2010–2020

Missed an article or feature?

Visit bemags.com/magazines/money

BUSINESS | LIFESTYLE | DESIGN

THE BUSINESS ISSUE ISSUE 45

BUSINESS | LIFESTYLE | DESIGN

THE REAL ESTATE AND TOURISM ISSUE ISSUE 31

CHARLES BUHAGIAR:

MONITORING THE BUILDING INDUSTRY URBAN SPACES

REAL ESTATE IN MALTA TRIBUTE TO

MICHAEL REFALO

2015 | Issue 31 | The Real Estate and Tourism Issue — MONEY remembers. On the cover, this caricature depicts the late Minister of Tourism, Dr Michael Refalo, a family man, a politician and a true gentleman. He was involved in Malta’s campaign for independence and served as the high commissioner for Malta in the UK. Various politicians and local business leaders provide their tribute to Michael in this memorial feature.

INTERVIEW

ABIGAIL MAMO

ONLINE FRAUD

GRTU

VICTOR PAUL BORG

THE LEADEN FOOT OF POLITICS MANUEL DELIA

BUSINESS

|

LIFESTYLE

|

DESIGN

COVER STORY

INFINITE CONNECTIONS

INTERVIEW WITH EMAN PULIS

2017 | Issue 45 | The Business Issue — Renowned events guru Eman Pulis shared his incredible journey claiming to be "just a salesman that's been hustling since day 1", to the successful start-up of SIGMA.

2018 | Issue 47 | The Home Interiors Issue — "A new face for a new direction" Nicol La Ciura graced the front cover, in an in-depth interview she discussed her new appointment as Head of Wealth Products for MeDirect, Malta's third-largest banking group with over 50,000 customers and over 1 billion in assets management. Elsewhere the magazine focused on designers and construction.

THE HOME & INTERIORS ISSUE

ISSUE 47

COVER STORY

NICOL LA CIURA > PAGE 18

INTERVIEW

JOSE HERRERA & KAROL AQUILINA > PAGE 20

INTERVIEW

FRANCIS SULTANA > PAGE 14 OPINION

MANUEL DELIA > PAGE 34

BUSINESS | LIFESTYLE | DESIGN

THE NEW BEGINNINGS ISSUE ISSUE 36

START-UPS THE BREXIT EFFECT INTERVIEW:

MARLENE FARRUGIA

INTERVIEW:

DAVID DARMANIN REDUCING ADMINISTRATIVE BURDENS

1 - Money / Issue 36

2016 | Issue 36 | The New Beginnings Issue — They say all it takes is a good idea, and to have the determination to make it work.

Taking the coveted cover, founder of digitalfirst company Hotjar is Dr David Darmanin.

Before founding Hotjar, he spent a decade generating hundreds of millions of dollars in growth consulting some of the web's most sophisticated companies. David is still at the helm of the internationally successful startup to this day.

2019 | Issue 56 | The Design & Creativity Issue — Jeremy Cassar takes centre stage on the front page. As CEO of renowned winemakers Marsovin, he shares what it takes remain creative in an industry that is thousands of years old, and the secrets to the 100 years success of Marsovin.

22 · MONEY

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C O V I D -1 9

GOING ONLINE MONEY takes a closer look at local businesses who have adapted to online trends in the light of Covid-19 under the pretext: change, or fight a losing battle.

In the wake of COVID-19, thousands of consumers switched to online shopping across the Maltese islands. As the solid doors closed, we needed a way to get our items, some essential, and some you could say not quite so crucial! Thousands of entities stepped up their efforts, some making the digital switch for the very first time, while others who have endured long-standing online success became even stronger.

For household items Oxford House Appliances and electrical goods retailer Oxford House is a well-known name in the local market, and it seems they have

completely revamped their website.

Everything from washing machines to fridges and ergonomic home offices is just a few simple clicks away. On top of this, prices are clearly listed, something many local retailers omit all too often. The website is

easy to navigate, and categories are readily identifiable without being over cluttered.

The online campaign, ‘Stay safe, stay home, order online’, appears to have been a strong reaction to the COVID pandemic. oxfordhouse.com.mt

THE NE W BEGINNINGS EDITION

MONEY · 23

C O V I D -1 9

For the perfect gift MVintage

Food, food more food! myfood.mt

For jewellery lovers or the perfect gift while in the absence of our nearest and dearest, local jewellery brand MVintage have perfected the art of selling online and creating a digital presence. The website is easy to navigate and offers a slick modern look. What’s more, the Facebook page is regularly updated, posts are engaging and include giveaways such as nominating a COVID hero for a gift. I sent a necklace gift to a friend of mine and forgot to include a note at the point of order. I sent a Facebook message which was promptly answered and adhered to my request.

The order arrived at my friend’s door, beautifully packaged the very next day.

The whole experience from choosing a gift to ordering to amending an error and timely delivery make Mvintage a prime runner. mvintage.com

This site is a dedicated online-only supermarket, with a great selection of top local products. What’s positive is the company strive for next-day deliveries and pick the items you request from their dedicated warehouse. Any order placed before 6 pm will be delivered

For a sweet treat Manouche Craft Bakery & Bistro Since closing their physical doors, Manouche Bakery didn’t let that hamper their sensational baked items getting to their army of fans. COVID has most probably made the St Julian’s eatery even more loved. Manouche proclaims to celebrate the finesse of classical French cooking while retaining a flair and passion for local ingredients, something which they are still living up to despite the pressures and restrictions of a global pandemic. When we “needed” figolli over Easter, Manouche truly stepped up to the fore. Not just freshly baked goods, Manouche have also been out delivering frozen foods and hot meals such as roast chicken, gourmet burgers and even a breakfast box to go having teamed up with Bolt Food. One recent reviewer claimed their order arrived in just 20 minutes. Hats off to you Manouche! manouche.com.mt

the next day; delivery charge is €2.50 for deliveries between Mondays and Saturdays, and €5.00 for deliveries on Sundays. This comes as great news as many supermarkets are booked up week up in advance.

Entirely contactless, this is an exciting collaboration launched in the face of COVID, with the supermarket chain and taxi provider eCabs. Reviews are exceptionally positive, with users remarking it is a super convenient and straightforward service. myfood.mt →

24 · MONE Y

C O V I D -1 9

For beauty and perfumery FRANKS Franks had had a great website and bustling Facebook page long before COVID came about and their experience in living up to online promises has paid off. The Facebook page has 21K fans, and the feed is neat and well designed. Posts include offering the perfect Mother’s Day gift inspiration, as well

ISSUE 60

as a personalised gift-wrapping service. In such cases where items are not available on their website (such as Chanel), the Facebook page has listed a 9-5 pm number which you can call to request your preferred items. They have also promised promotions such as free eyeshadow palette with all online orders.

Reviews speak highly, with plenty of free samples thrown in for good measure. franks.com.mt

Not forgetting wine One-hour wines For winos, this comes as somewhat of a dream. Wine is promised to arrive at your doorstep, across several localities within one hour. Failure to do so means a 10% discount on your next order. There’s a great variety of wines on offer, not to mention snacks! For beer lovers, you’ll also find a vast assortment of craft beers. Perfect for the socially distanced alfresco rooftop evening. Open from 10 am to 10 pm Monday to Friday, and 11 am until 10.30 pm at the weekends, there’s no

THEIR EXPERIENCE IN LIVING UP TO ONLINE PROMISES HAS PAID OFF

excuse or need to run to the shop for a lastminute dash! onehourwines.com

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26 · MONEY

BUSINESS

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TURNING THE TIDE

JP Fabri analyses how businesses can continue to combat new challenges, the post-COVID-19 world, keeping in mind ‘recovery’ and ‘agility’ in a bid to cure the damage the pandemic has done to businesses.

THE NE W BEGINNINGS EDITION

BUSINESS

MONEY · 27

JP is a founding partner at Seed, a boutique advisory practise. An economist by profession, he is also a visiting assistant lecturer at the University of Malta.

COVID-19 is a stark reminder of the fragility of life. As the pandemic started to gain traction globally, an invisible threat began to take away the lives of thousands; young and old; healthy and not. Health authorities launched response mechanisms with massive deployments going to the health sector to prepare for the worst. Concurrently, economies started feeling the brunt too.

Companies stalled, savings coming to a standstill. It all soon became a question of survival for many firms, and layoffs became an inevitable reality. There is no doubt that no economy will remain unscathed, and many firms must adapt and transform to survive in the new normal. The effects of COVID-19 will be long-lasting and will span across different sectors.

However, crises mark transitions and turning points. It is precisely at these turning points that crises are productive. This is the moment when we can remove the aftertaste of catastrophe and use it as a “decisive turning point”, as per the meaning of the Greek word krisis. The COVID-19 reality has brought national governments but even more so business leaders with the necessity of contingency and business continuity planning.

As companies navigate the ongoing COVID-19 crisis, there are several vital issues corporate leaders should be thinking.

Since the lockdown started in March, companies entered unchartered territory where they had to and still juggle and plan

their strategic decision-making across three distinct phases; survival, stabilisation and success. Each phase will require different foci, analyses, data and mind-sets. However, companies need to keep them as one integrated process as the demarcation line between each phase remains blurred.

As the pandemic gained traction, business leaders were focused on surviving the economic shock, and the focus is on ensuring liquidity and business continuity. Currently, businesses are in the stabilisation phase given that the restrictions have been lifted and it is now within their discretion to restructure and transform present business models in preparation of the new normal. It is therefore critical that for the business to enter the third phase, success in the long-run, business leaders need to have made the right decisions during the previous two phases.

To navigate this process, Seed has identified six mutually reinforcing priorities that leaders should consider and should use as a framework for overcoming these challenges.

This framework is part of a research publication we launched entitled “Agile.

Perspectives on Malta’s economy postCOVID-19.”

A COVID-19 business survival framework Prioritise flexible working arrangements. Following lockdowns and restrictions; the concept of remote working has become ingrained and will be part of a new normal going forward. One of the

adjustments companies must make; is to initiate or expand flexible work arrangements and other policies that allow people to work remotely and safely. Therefore, investment in digital equipment is critical. Depending on the sector, companies will want to re-organise teams and reallocate resources and establish employee well-being programs and policies that support a safe working environment.

Identify support measures and grants.

Several supporting measures and initiatives have been launched to assist companies in this phase. There are also several other schemes that the government had started in the past, including grants and support measures that if used wisely, can support the business to undertake the required changes.

It is therefore critical for companies to identify such steps and grants both by banks and the government. →

28 · MONEY

Reshape strategy Ahead, businesses need to adapt to a new reality. Several companies have faced significant disruptions and depend on the opening of external markets too. Besides, consumer habits and behaviours are likely to change. Thus, business leaders need to reshape their strategy and pivot where necessary by identifying new service lines, product lines and even markets. It is also critical for business leaders to communicate changes in strategy to staff and to involve

BUSINESS

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them in the process. Strategic thinking will determine the long-run winners.

Adopt resilience-building This experience has shown the importance of contingency planning, risk management and building inherent business resilience.

Disruptions are typical in business and economies, meaning that companies need to develop a level of preparedness in dealing with such events. Capacity needs to build around crisis management and not

THE CRISIS HAS SHOWN THE IMPORTANCE OF DIGITAL TRANSFORMATION... management by crisis, and these elements of building resilience within organisations should be a leadership priority.

Transform business models The structural changes that will happen both in the economy and in firms will require companies to be agile and transform business models. Leadership needs the foresight to understand how to transform businesses that will deliver sustainable value and growth in a changing world.

Embrace digital transformation The crisis has shown the importance of digital transformation. Social distancing has evidenced the need for being connected digitally across the supply and value chain of service or product delivery. Businesses that had not started to invest in their digital transformation programmes scrambled to do so. However, going forward, companies

need to fully embrace digital transformation including shoring up against cybersecurity threats and more importantly delivering value through digital tools.

Although the COVID-19 crisis was impossible to predict and negatively impacted business, there are many lessons companies can learn and carry forward.

In the meantime, In the coming months, it will be clear which companies have the resilience and agility to reshape their business strategy and to thrive in the future.

The same applies on a national level, and that is why, as a country, we need to use this time strategically and reassess our economic vision. As a country, we need to rally behind one national vision which will focus on transforming Malta’s economy to one which is rooted in sustainability and a focus on long-run success. There is no room for complacency.

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30 · MONEY

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ISSUE 60

Jordan is an economist and a portfolio manager for a local asset management company.

PARADOX of THRIFT Jordan Portelli gives an insight of the unavoidable implications that are to follow because of the invisible enemy the world is currently fighting: Covid-19.

Undoubtedly, the global epidemic brought over by Covid-19 is a primary key consideration not solely from a health perspective, but also due to its economic implications. As many are aware, Covid-19 emerged in December 2019 in Wuhan China.

To date, it has spread over into several countries with Europe being the epicentre throughout the second quarter of the year. As expected, many have been concerned about their wellbeing with several governments taking tough decisions and imposed lockdowns, which ultimately will imply severe economic implications.

The global economy over the past years has experienced a wave of uncertainties, with lately the trade-war saga between the US and China imposing severe threats towards a sustainable path of growth. A saga which prevailed through 2018 and to which many economists highlighted the severe economic implications if not resolved.

Indeed, following a series of attempts to resolve the tit-for-tat between the two largest economies, in December 2019 a phase one deal was agreed, with financial markets reacting positively based on a better economic outlook. The positive sentiment was also experienced in the initial days of 2020, as many believed that the global economy is on a positive trajectory following years of depressed growth levels.

The emergence of Covid-19 has unexpectedly changed the pace of how the global economy will perform in 2020 and beyond. A certainty that can’t be unnoticed is the fact that regions are more fragile than others, case in point Europe. Since the financial crisis, Europe went through a series of economic shocks which have led, mainly monetary politicians, to play their role in combating price stability through a series of monetary decisions. Such as the implementation of a bond-buying programme, more known as quantitative easing, and a series of rates cuts,

moves which might have alleviated Europe from a recession. However, Covid-19 has posed a more serious threat on the economy which needs more than solely monetary intervention.

Covid-19 has attacked one of Europe’s most fragile economies, which coincidently is the third-largest economy in Europe, Italy. Thus, the negative economic implications brought about by the virus are undoubtedly impacting Italy’s economy harshly, while possibly amplifying the economic troubles Europe is facing due to the viral outbreak.

Bluntly put, the negative economic implications are widespread, namely on the basis that the decisions being taken by Governments are imperative to mitigate the possible further contagion effect. Case in point the lockdowns being imposed by several countries mean that economic activity has dwindled dramatically, pushing many businesses into a distressing situation.

As expected in such an extraordinary situation Governments are doing their bit by implementing a series of fiscal spending to try and mitigate the damage brought about by the virus. For instance, Germany which over the years had imposed stringent budgets for fiscal spending, despite the country was in a surplus position for a couple of years, has now back-off from its stringent spending and

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The emergence of Covid-19 has unexpectedly changed the pace of how the global economy will perform in 2020 and beyond

has pledged support to safeguard businesses and ultimately jobs. In fact, Germany will halt its debt brake rule – a law which initially had prohibited Germany from presenting structural deficits.

The extent of the damage could also be more significant in more vulnerable economies over the longer term, apart from the already noted Italy, which can threaten the Eurozone’s future. Indeed, many European peers have applauded the decision taken by the European Commission to suspend the EU’s rules on-budget deficits in the stability and growth pact to allow governments to combat the Covid-19 crisis. However, many believe that more needs to be done and are being very vocal in regard the triggering of the European Stability Mechanism, a source that provides financial assistance to Eurozone countries to maintain financial stability in times of a crisis.

In reality, despite the inevitable, the magnitude of the economic damage is still a shot in the dark, given the fact that despite in Europe the contagion argument is now plausible, a second wave remains a significant risk going forward. That said, one can’t ignore the fact that we are now all more knowledgeable on the virus per se and thus being responsible and abiding by the → health guidelines should help in mitigating the aggressiveness of a second wave.

Secondly, and the more important economic aspect to consider is the psychological barrier of consumers. Given the uncertainty, many might continue to defer consumption at this point based on future unpredictability.

Furthermore, over the longer term, rationally speaking, we should all know that the efforts being taken by governments in injecting capital to safeguard economies, would need to be addressed. Thus, one would also consider consumption deferral on the basis that disposable income in the future might be conditioned by governments tightening their policies to address the high deficits brought about by COVID-19.

Unfortunately, the dilemmas at this juncture are the possible spike in unemployment levels which might persist if economies fail to kick-start. The tourism industry has been impacted harshly, and to this extent, a high weighting in the unemployment figure will be attributed to the said sector. At the same time, other sectors might also feel the pinch of adjusting to this new reality. Being more rational in times of such uncertainties will lead many to increase their savings, as witnessed in the latest figures, which noted a remarkable spike. Such habitual moves are aligned to the economic theory known as the ‘Paradox of Thrift’. The crux of such economic theory is that despite savings is beneficial from an individual perspective; it is undoubtedly detrimental towards the

broader spectrum of the economy through lower aggregate demand. Straightforward reasoning, if people save more at all income levels, this will imply lower consumption, which in turn will impact revenues of companies and thus lower the income of both employers and employees. Ultimately, this might lead to the amplification of a more severe economic downturn triggered

by Covid-19 despite the recent monetary and fiscal efforts.

Undeniably, the said negative economic impact was inevitable. Covid-19 remains a threat to everyone’s wellbeing, and thus people would need primarily medical reassurances to surpass the psychological fear and get back to their normal daily habitudes.

Clearly, the measures taken were crucial to slow this epidemic phenomenon; however, it is imperative that health organisations also take a crucial role in instigating confidence amongst people once the epidemic wave is over while trying to ensure that if a second wave emerges, it can be addressed imminently. This will surely bring more serenity, economic visibility and stabilisation through also an increase in consumption.

Let’s all hope for the best, however, doing our bit is imperative - let's be responsible.

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REBUILDING

Theo is a manager at EY providing strategy consultancy and transaction advisory services.

RETHINKING MALTA’S FUTURE Can Malta reset its agenda and rebuild a better future as we emerge from this pandemic, the type that focuses on sustainability, technology and a people-centric approach to society?

Theo Dix believes it's possible.

The COVID-19 crisis fundamentally disrupted normal life, creating an extraordinary global health and economic crisis that no one was prepared for. While governments the world over have grappled with the trade-off between flattening the curve of infection versus the economic impact of lockdowns and forced business closures society and businesses learned to adjust to a dramatically

altered new normal where the way we work.

Learn, shop, save, spend and communicate changed overnight, together with many of life’s priorities.

Whereas many countries the world over are still grappling with the pandemic, life in Malta is slowly starting to return to normal after three months of restrictions. Yet do we want

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THE NE W BEGINNINGS EDITION

REBUILDING

to go back to what we had before, or should we take the opportunity to reflect and rethink Malta’s future for the next ten years and beyond?

Even before COVID-19, business and policy leaders were being called to think not only about now but what comes next. Companies faced pressure to act more responsibly, while the government was asked to give due focus to environmental, social and governance factors alongside economic growth.

As we start to emerge from the crisis, the next phase should not take us back to where we were before. The pandemic will drive permanent changes in the way individuals live. The way government serves its citizens, how businesses operate, and the way people travel. We need to take the opportunity to build on this for a better future.

This is a time for thought and an opportunity to rethink Malta’s future for the next ten years and beyond. Should profit and economic growth continue to be the core metrics on which companies and policymakers measure success, or should we use the opportunity to introduce a more extensive set of metrics that also consider the value brought about to society?

The focus on growth has brought a lot of wealth to society, but it has also brought its challenges. Is it not time to have a master plan for both Malta and Gozo? Considering the type of built environment we wish to have, public spaces and parks, designated business and commercial areas, the way people can get from A to B, the tourism product we wish to offer, with quality of life factors central to this vision? From an economic perspective, are we clear what sectors and jobs should drive forward the country for the years ahead?

Is there an opportunity to develop a plan for Gozo centred around sustainability – a green, eco-island, that gives due respect to its inherent beauty and charm, to further enhance its appeal as a tourist destination and a place to live? Why not position it as a place for local and international digital nomads, tapping the massive upsurge in people who will work remotely?

Technology can be a crucial driver for change.

MONEY · 33

Malta’s topology wasn’t made for cycling, but e-bikes mean that those problematic hills can now be conquered with zero effort.

E-scooters have become a favoured means of urban transport across many cities across the world, yet in Malta, there is no safe place to ride them. Shouldn’t we give due thought to prioritising these new forms of transport as a way of improving quality of life – fewer cars on the road, less pollution, less traffic? Across the world, cities have built pop-up bike lanes, reclaiming streets as citizens adapt to a new way of travel to counteract the pandemic.

Isn’t it time to break this Maltese dependence on the car? Shouldn’t we consider the development of a network of walking and cycling lanes together with the introduction of measures such as metered parking to disincentives private car usage?

The development of a metro system in Malta has been a hot topic for several years. But with driverless cars becoming mainstream, should we consider instead investing in 50 or 100,000 self-driving pod-style taxis? The timeframe it would take to implement such a system would probably be similar. Each ride would probably be cheaper. At the same time, travellers would have door-to-door service across the whole country somewhat limited metro coverage. Such an initiative could provide several advantages. Firstly, it would mean that we don’t have a decadeplus of disruption while the metro is being developed. Secondly, it could position Malta as a true technology leader. And lastly, a self-driving car producer may subsidise the investment and become a long-term partner for the country as it looks to showcase to the world what is possible. While this might all sound slightly crazy, we do need to take the opportunity to think out-of-the-box if we are to break the status quo.

One sector where COVID-19 has rapidly altered the pace of change is healthcare. Most non-emergency in-person appointments and elective surgeries were postponed, and the volume of accident and emergency admissions drastically declined. Yet while elective surgeries still require in-person treatment, many other non-emergency type services could potentially be provided virtually. An elderly relative of mine, who has spent the last years regularly visiting the hospital for various appointments, learned →

34 · MONEY

to use video chat and started to get remote care. While initially daunting, he now sees significant benefits in not having to travel and then wait for his appointment, and then return home. He is no longer able to drive, and this new form of check-up is, therefore, something he can do on his own. Malta’s ageing population demands that telecare should be a priority for years ahead as part of a digital healthcare revolution. But it also needs to be coupled with essential digital skills training, communication infrastructure and devices for all segments of society so that nobody gets left behind.

We are likely to see several countries revisiting investment priorities, and health is likely to move up the list. Health is an area where Malta, with its talent pool of health professionals and the experience during the pandemic, should focus on as it plans and diversifies. But any investment here and other R&D related areas should also be accompanied by a thorough review of our education system and curricula from the ground up – particularly if we want to become an innovation hotspot. We need an education system that prioritises problemsolving. Where students are encouraged to think rather than memorise. We need to start to develop new technical skills for the digital economy from a very young age so that pupils are fluent in designing, developing

REBUILDING

and using technology. Concurrently, we also need to focus on better developing social skills to cultivate creativity, analyse problems from different perspectives, become strong communicators and drive critical thinking to build a future-proofed workforce as more jobs become automated by machines.

The next few years will come with challenges not only in Malta but across the globe.

There are still mixed views on the depth and extent of the fall-out from the pandemic, the tax landscape may well change, the

WHEREAS MANY COUNTRIES ARE STILL GRAPPLING WITH THE PANDEMIC, LIFE IN MALTA IS SLOWLY STARTING TO RETURN TO NORMAL AFTER THREE MONTHS OF RESTRICTIONS

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medium-term impact on several sectors still must be ascertained, and this includes retail, commercial real estate as well as tourism.

But as the famous saying goes, with challenges often come new opportunities.

Companies are looking to nearshore operations out of Asia and move them closer to home. Unprecedented amounts of investment are expected in the technology and high-tech manufacturing sectors, where Malta already has a strong base and can expand its ecosystem into developing new, adjacent sectors. Malta can find its place as a centre of excellence in niche areas, tapping our strong financial and legal skills. And our country’s rich culture, history, natural beauty and Mediterranean location will continue to draw large numbers of tourists and foreign workers.

The world is transforming at a breakneck pace, and we need to think ahead, focussing on how we can create long-term value to excel in the years to come.

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THE NE W BEGINNINGS EDITION

MONEY · 37

PROMO

INVEST IN THE NEXT BIG THING E-Stream Energy GmbH & Co. KG, a German limited liability company, is the new kid on the block in the renewable energy market. It is a pioneer in the development of versatile and high-performance mobile and longterm, stable, stationary as well as portable and transportable applications. Thomas Kraemer and Dirk Koester, both successful entrepreneurs in the German financial services industry, and visionaries have

believed in the E-Stream project. They are now at the helm of this enterprise. Their skill, experience and intuition, garnered through years of interlocution between the buy and sell side, has culminated in the launch of the E-Stream Energy Green Bond.

Through its dedicated team, E-Stream Energy focuses on the research, development, production and distribution of battery cells, battery energy storages and applications.

Lithium batteries provide massive energy storage with a longer lifespan. They can be applied in different electronic devices and even in electric cars. The auto industry is looking for alternatives to the internal combustion engine, and E-Stream has embarked on this opportunity by developing a lithium battery with German technology which is being applied in an electric vehicle.

The car is currently in development and is awaiting homologation for the European launch.

The E-Streamer One is expected to be launched in 2021.

Those who are interested in this environmentally friendly technology developed by the E-Stream brand can invest in a bond issued by E-Stream Energy GmbH & Co KG. This note is being termed a ‘Green Bond’ since the finance raised from the issue of such bond will finance the E-Stream Energy project, namely the development of energy storage solutions which encourage environmental sustainability.

E-Stream Energy GmbH & Co KG is the issuer of an unsubordinated bond issued in terms of a Base Prospectus dated 19 November 2019 approved by Liechtenstein Financial regulator in terms of the Prospectus Regulation and the relevant Final Terms (hereinafter together the “Prospectus”). The appointed distributor of the

4.5% E- Stream Energy Green Bond in Malta is Timberland Invest Ltd with a business office at Aragon Business Centre, Dragonara Road, St Julian’s, STJ 3140 and can be reached on 20908100. Timberland Invest Ltd is a regulated entity authorised by the MFSA under the Investment Services Act, 1994. The E-Stream Energy Green Bond is also available through the tied agent of Timberland Invest Ltd, John Degiorgio. The latter has been appointed as a tied agent by the applicable regulations.

John Degiorgio is registered in the list of Tied Agents held by the MFSA under registration No: 60291/0.

Prospective investors should note that the bond is not redeemable before maturity.

If you invest in this bond, you will not have access to your money before the maturity date. However, you may transfer or sell your bond by the terms of the Prospectus, dated 19 November 2019. The value of your investment may go up as well as down, and you may lose some or all the amount that you invested. Past performance is not necessarily indicative of future performance. Prospective investors are urged to seek appropriate advice before investing and to read the Prospectus, mainly the ‘Risk Factors’ contained therein. A copy of the Prospectus is available free of charge during regular business hours from the offices of Timberland Invest Ltd or through www. estream-bonds.com. Timberland Invest Ltd approves this advert.

38 · MONEY

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POLITICS

Manuel is a political blogger who writes for The Sunday Times and manueldelia.com.

INTO the GREY LIST Political analyst Emanuel Delia delves into Moneyval's assessment on Malta and gives a rundown of what led to all this.

Although it is by no means an inevitable fate, we are now seriously flirting with the prospect of being dumped into Moneyval’s grey list of countries with dubious credentials of financial propriety. For a country that is economically dependent on international banking, financial services, pension fund administration and online gambling that is not a happy place. It is a miserable place of mistrust, suspicion and diverted business.

The risks to other businesses should not be underestimated either. There is the ripple effect on construction and real estate that have been made the cement heart around which the security of all credit in this country revolves. Deflate that bubble, and we’ll be on our knees. Burst it, and we’ll be prostrate.

There used to be the mantra that we must be positive. That critics who are negative are treasonous and envious. We were fed the idea that optimism alone could make up for mismanagement, greed and the wilful burning of bridges we need to move beyond the limits of our small island.

Of course, this positive-at-all-costs philosophy is a recipe for disaster. It’s like

prescribing an opium addiction to address a festering leg wound. And misguided and unjustified optimism has the effect of absorbing the real positivity one needs to drive oneself out of trouble. It’s not to forget the troubles that we need right now. We need the courage and the strength to fight and overcome them.

Politicians allow voters to over-estimate the ability of people in political power to steer the economy. That ability is limited. Economic initiative depends on several factors that are not attached to knobs on a control board on a prime minister’s desk. Consumer confidence, global supply chains, appetite for investment, technological innovation, resource accessibility: all these are factors that depend on the private initiative or even, sometimes, mysterious collective forces that seem to have a life of their own.

Governments can create incentives to try to stimulate economic activity. They can draw up policies that give the economy some preference for direction. They can impose limits or use fiscal policy to punish growth → in unwanted areas and squeeze investment in

THE NE W BEGINNINGS EDITION

areas they would rather it went to. But as any politician facing the ire of workers suffering mass redundancies knows, there’s a limit to how much a government can constructively achieve.

The other limitation is that good economic policies yield delayed benefits. Fixing the economy today will achieve good results tomorrow. Tomorrow is too late for most politicians. Their successors will claim credit for the good times, but there can be no good times without the hard work that comes before.

In the years leading up to 2013, Malta went through a tough patch together with the entire world. Local political leaders could mitigate the impact of the 2008 financial crisis, but the realities of the world cannot be cancelled altogether. But the years leading up to 2013 were also the times when the country got all its fundamentals in place.

EU membership opened the country’s borders for easy export to its most important markets. EU structural funds boosted public expenditure on infrastructure. The process of compliance with Eurozone rules ensured fiscal discipline and straightened out the risks of accumulated deficits. The currency change ensured trading certainty and stability.

The government divested inefficient economic ventures such as shipbuilding or cargo ferrying, opening to the more private initiative and reducing the tax burden. The economy was restructured to germinate new activities like aviation, online gaming, individual low-cost travel and so on.

It took years to bring us to the point in 2013 when our economy could thrive. It took years to squander all that.

To think about how we’re going to get out of the reputational disaster we’ve been flung into, we must remember how we got here.

Rewind to 2013 when Labour came to power.

Government ministers and senior officers resorted to offshore banking in secretive jurisdictions. They showed mistrust of our bankers, openly declaring they fully expected local banks to give their political opponents information about their affairs. They dodged

POLITICS

tax, they hid illicit money, and they laundered it before they brought it back.

When they were caught, they weren’t punished. On the contrary, this country became famous all over the world for killing the journalist that denounced all this.

The fact is that four years and three months after the Panama Papers leaked, two years and nine months after Daphne Caruana Galizia was killed, one year and nine months after we learnt of the corrupt relationship between big business and politics, no one has been charged with corruption and financial crime in Malta.

The Labour Party had brought us to this juncture in a destructive programme launched in 2013 while the Nationalist Party stood idly by when it abandoned its mission to oppose it in 2017

No one. Not even Konrad Mizzi on whom evidence compiled by the Financial Intelligence Analysis Unit is blinding. Not even Keith Schembri on whom criminal inquiries have been pending for over three years.

That has not happened because they were protected by their colleagues in government who sheltered them from police and judicial action. The responsibilities here are direct and explicit.

There’s Edward Scicluna, finance minister, who signed off on deals based on a logic that can only be explained by corruption. There are Manwel Mallia, Michael Farrugia, Carmelo

MONEY · 39

Abela and Byron Camilleri: a row of ministers responsible for the police who ensured our law enforcement agency is unable or unwilling to do anything about corruption.

There’s Owen Bonnici who froze judicial reform to complete the partisan capture of our judicial branch.

Then there are the internal critics who remained silent and made sure the rest of the country never got the real picture of corruption on the inside: Edward Scicluna again, but more famously Chris Fearne and Evarist Bartolo.

Then you get Joseph Muscat whose refusal to dismiss Konrad Mizzi and Keith Schembri, and the inebriated and priapic Chris Cardona made him an implied suspect in their crimes.

Then you get Robert Abela who replaced Joseph Muscat after advising him for several years projecting an image of change on the same filthy screen of the movie we’re so tired of seeing.

Ministers are in power and are, therefore, a magnet for corruption. But the rot does not stop on one side of the parliamentary aisle.

Adrian Delia was circumspect in his criticism, as drugged as anyone by the ‘need to be positive’, for years attempting to push out criticism of corruption from the discourse of his party, and then seeking to push out those who voice that criticism. Perhaps the most symbolic of this infection was when he sought to dismiss his predecessor Simon Busuttil, something Robert Abela has not done for his predecessor Joseph Muscat. Despite all the rot.

There is little politicians can do to fix the economy today. But there’s much they can do to continue breaking it. To turn this ship around and re-establish the foundations that can see our recovery some years into the future, this entire generation of politicians must give way. And they cannot be replaced by the acolytes who have been propping them up.

The Labour Party had brought us to this juncture in a destructive programme launched in 2013 while the Nationalist Party stood idly by when it abandoned its mission to oppose it in 2017. They caused this mess.

They can’t be the ones to fix this.

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MARKETING

Richard is the CEO of Switch — Digital & Brand, a marketing agency that forms part of ICOM, the world's largest network of independent agencies. [richard@switch.com.mt]

GENERATION Z While we were all busy trying to understand Millennials, they suddenly grew up, had kids and settled down, and became the generation that’s looking back to see what’s coming up behind them: Generation Z. Richard Muscat Azzopardi explains.

People make the mistake of referring to young people as Millennials, but realistically speaking, the people they’re referring to as Millennials are now Gen Zers. This is a new beginning for all of us in marketing. We’re looking at a generation that is, once again, utterly different to the ones that preceded it.

But before we talk about Gen Z, let’s talk about the generations that today’s marketers deal with. While it’s difficult to shrink a group of people with wide-ranging experiences into a single generation, when we talk about boomers, Millennials, and Gen Z, we’re talking about a general mind-set that reaches across age-groups.

We’re talking about the ‘okay, boomer’ mentality of the Millennials; about the ‘lazy, entitled Millennials’ attitude of baby boomers, about the ‘stupid teenagers’ idea obfuscating Gen Z.

For brands, audiences are typically made up of one or more generations, and understanding what drives them is the key to tailoring content that’s relevant to what they want to know about. We’re always talking about the three critical components to growing a successful brand, and they’re relevant here as well: − Talk with purpose; − Know your audience; − Only deliver high-quality content.

Your audience is not going to care about the same things, and that’s fine. Some of your messaging might distance your audience away from you, and that’s fine too. You might not be able to address different generations.

Still, by understanding who your audience is, you can avoid alienating your target audience and communicate about things that interest that niche.

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Here’s an easy guide to audiences to start with: Baby Boomers Born 1940—1959 Context: Baby Boomers were born and raised with the frugality and rationing of World War II and post-war economic booms, particularly for the boomers that were born in America. Following the victory of the Second World War, there was a brief period where jobs were plentiful and goods easy to get. As they aged up and out into this time of prosperity, Boomers expect the world they’re in to remain unchanged and have a sense of ‘I’ve suffered to get this far, and therefore I deserve this’.

Movement: Consider Brexit the baby boomer experience - eager to bring back the England of their youth, their idealism typically leads to constraining their worldview to what’s ‘right’ in their eyes. This can be anything from having a person on the other end of the line when they call a shop to demanding a service that is no longer offered and getting annoyed when it isn’t provided.

Consumption: Typically, boomers will spend their money on material goods only when they have some relevant link to their experiences, such as movies and vinyl records. They are careful about what they spend their money on and will look for the best or cheapest bargain, however, strike at something that they’re interested in, and they can pay good money for it. Similarly, they will also donate for something they believe in religion, political parties, ideologies.

Gen X Born 1960—1979 Context: The feverish pitch of the 1960s would have affected their youth: think doomsday preparations, the Cold War, and the revolutionary wars going on in the Eastern Bloc, Vietnam, and the Middle East. Watching the effects of the war on their friends and families, they’re the peace-loving generation who grew up watching countries pour their wealth into armaments and economics, with the first explosion of capitalism, and with the creation of a wealth-based meritocracy.

They also saw the rise of the ‘self’ movement:

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MARKETING

increasing divorce rates and changing ideas of society meant that this generation saw less adult supervision than in previous years.

Movement: The rise of grunge, heavy metal and the first start-up wave, including the founding of Google, YouTube, Amazon, and Wikipedia. It’s the music that’s particularly indicative of the Gen X outlook of cynicism and disaffected youth. Growing up being told they would never amount to their baby boomer parents and having that childcentred focus of the ages circumvented into significant economic programmes for the elderly.

Purchases: Gen X will opt for materials that have a visible wealth to them, particularly for cars and name brands such as Chanel, Dior, and Apple. While they are materialistic, Gen X also strives for a sense of individualism and will pay a lot of money to reflect their social status while also maintaining their individualism, such as brightly-coloured or limited edition phones and cars.

Gen Y (Millennials) Born 1980­—1994 Context: The creation of the internet in this period means that they’ve grown up in a world that’s changing faster than previous generations had to contend with. Most of the Millennials grew up in the between-period of internet development - most remember dialup internet and getting off the phone for a better connection. While they’re often touted in marketing as the ‘young’ generation, this is no longer appropriate. Comfortable around technology and social media, Millennials have seen technology develop and grow up with them. They have also seen the after-effects of it: facial recognition, artificial intelligence, and the bombardment of advertising messages in all mediums.

Movement: The Women’s March and #BlackLivesMatter movements are critical features of the millennial generation; their mobilisation and championing of political rights and human rights makes them a formidable force. Similarly, over the last few years, the rise of #Me-too, and online shaming has also been paved with millennial intentions. Their goal is a better, fairer world for all, now that globalisation and economic

stability have been attained for most of the first world.

Behaviour: Millennials are global villagers who aren’t content with what they’re told.

They seek their own understanding of their position in the world, and don’t want to be a generation; they want to be individuals.

Purchases: Millennials are all about the experiences - they value festivals, travel, and memories more than other purchases.

Generation Z Born 1995—2010 Context: born in an internet era, there’s no society that Gen Z knows that isn’t hyperlinked, hyper-realistic, and digital.

They’re the children who grew up watching their friends and family put up YouTube videos, in the era of on-demand services like Netflix and Uber, and with the pervasive connectivity that is social media. They are also continuously bombarded with the idea that their society is slowly eroding.

Climate change, declining wages, job scarcity, and the rapid escalation of war efforts and fake news have created a world that’s moving forwards at costs which seem extraordinarily high.

Movement: The School Strike for Climate movement captures the energy of Gen Z well: angry, scared, and incredibly agile, these teenagers know how to make content go massively, massively viral, and how to use it to their advantage.

Behaviour: Generation Z is a frightened generation; their social media is continuously barraged with bad news, and their hyper connectivity makes it difficult for them to getaway. That said, they don’t want reality to be glossed over, but they do want to talk about it, and talk about everything online, from latest fashion trends to institutionalised classism, with equal zeal.

Purchases: Whatever Gen Z is going to purchase, it’s going to be unique to them and be in line with their morals, whether their morals are to go green for the good of the environment or to refuse to use online retailers with a history of mistreating their workers. →

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Why is this relevant?

It’s relevant because, now, there’s a chaotic intersection of all four generations of consumers and the workforce present at the same time, and presenting opposing views in equal strength. Just looking at the ages, there is about 3-6 years’ worth of Gen Z operational in the workforce, and about 5-10 years’ worth of Baby Boomers still working their jobs. If you’re considering the presence of generations online, the overlap is even more significant - baby boomers account for ⅓ of global internet usage.

The problem for marketers now is to figure out how to communicate with all four generations active without alienating one or more of them. However, typically what Baby boomers support is anathema to what Gen Z is willing to think about and vice versa, so finding a balance of communicating with all of them can be complicated.

This has happened before with the rise of the Millennial; suddenly, brand strategy and marketing stopped working as Millennials became the most significant consumer sector. Now, as Gen Z is poised to account for over 32% of the global market by 2020, it’s happening again.

So, what is Gen Z all about?

Digital Natives Gen Z grew up after the founding of the Internet of Things, and don’t remember a period before it was there. Even things such as dial-up and floppy disks are unfamiliar to

For Gen Z, consumption has grown to mean more than the physical possession of things

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MARKETING

them; their reality is all connected, all the time, which means that digital isn’t optional, it’s the norm for them.

Uniqueness Millennials spend their money on experiences; Gen Z spends its money on finding things that make them unique and allows them to express themselves and speak about their experiences meaningfully.

Consumption as access One of the key differences between Millennials and Gen Z is their attitude to ownership. Gen Z doesn’t want the hassle of buying a car just to get themselves from one place to another; it also doesn’t tie in with their environmentally friendly morals. They prefer paying money to access a service such as Netflix and Spotify rather than to have a collection of movies and CDs. Multiple channels, multiple personalities “To grow up with technology, as my generation has, is to constantly question the self, split into multiplicities, to try and contain our contradictions.” - Taylor Fang, in her essay for the MIT Technology Review.

75%

95%

laptop

74%

of Gen Z use a smartphone over a computer or a tablet

Fashionable design is essential for

67%

of Gen Z shoppers

66%

of Gen Z says that the high quality of a product matters most to them when making a purchase

More than The always-on generation has had to deal with social media, or feature on social media, since before they were conscious of what it was. Children of mummy bloggers and life YouTubers are growing up already plugged into the digital mainframe, and unlike previous generations where the creation of the internet delineated the course of history, they don’t see technology as something good or bad; they see it as a tool.

Mental wellbeing and habits Growing up in the shadow of 9/11 and watching a global recession come and go, plus the rise of online-specific tragedies such as school shootings, Instagrammed murders, and the constant and increasing concern of climate change. Gen Z is at the heart of a mental health crisis that seems to have been exacerbated by the prevalence of social media and online communities.

Thus, Gen Z’s higher affinity for tech has also made them more likely to monitor and use the internet as a platform to build awareness of the damaging effects of

71%

of Gen Z stream videos on their smartphones and other mobile devices

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62% of users on Facebook are Gen Z users

56%

of Gen Z uses social media apps as a form of creative communication

of Gen Z use another device while watching TV, most commonly to talk to friends

of Gen Z choose to spend their free time online

58%

of Gen Z will pay more for products and services that highlight their personalities

Star 76%

of Gen Z state that they watch YouTube weekly (compared to 61% of Millennials)

71%

of consumers have a Netflix subscription

73%

of Gen Z users use Instagram primarily

wifi

THE NE W BEGINNINGS EDITION

43%

feel pressured to only post content that shows them in a positive light

61%

of Gen Z is taking a break from social media

certificate 80%

refuse to buy goods from companies involved in scandals

overusing social media.

hand-peace 48%

of Gen Z say that social media makes them feel anxious, sad, or depressed

65%

will try to learn the origins of anything they buy

65%

of Gen Z consume information online and prefer knowing what is going on around them

71%

of Gen Z would like to see more diversity in advertising

82%

of Gen Z students are more likely to buy a product if it’s environmentally friendly

bullhorn 54%

of Gen Z cites social media influence as higher than any other marketing channel

MONEY · 43

MARKETING

Tags 68%

of Gen Z expects brands to contribute to society

60%

of Gen Z states that it is essential for brands to value their opinions

66%

of Gen Z will show brand loyalty once they find a brand they like

Well-read, well-informed With Wikipedia and Google at their fingertips, Gen Z has been described as a ‘hyper cognitive generation’ who is ‘very comfortable with collecting and crossreferencing many sources of information’.

It is not an exaggeration to say that this generation is used to being able to find any amount of information, which poses a unique challenge for marketers whose companies have been involved in scandals or have problematic opinions.

Ethical consumption While there is a mounting insistence that brands ‘take a stand’ and back consumer ideals, Gen Z is among the generational mindsets that will actively pull back from brands that don’t support their worldview.

While they are not unique in this belief, the sheer amount of Gen Z consumers make this a threat for brands who post ideologies they do not support within their ranks (such as diversity, but without having diversity within the company itself).

Brands and Gen Z So, where does this leave brands with Gen Z? Fortunately, Gen Z forgives brands who make mistakes, if the brand apologises sincerely and makes up for the mistake.

However, before they become brand ambassadors, they will conduct research of your brand and will not convert if they don’t like what they like.

Core Values Gen Z’s core-values are not too dissimilar to Millennials, and it isn’t a stretch to say that attracting one cohort will help to attract the other.

The core idea to keep in mind is that Gen Z is adamantly, ferociously authentic, and trying to convince them of brand ideals that the brand does not support will alienate this group. If brands are authentic, however, their loyalty is practically a given, and less likely to wander in the event of a crisis.

Their zeal for truth also highlights their core behaviours: − Gen Z opts for individual expression over

−

−

−

name-brand labels; Gen Z will mobilise themselves for causes they feel strongly about, such as climate change, Black Lives Matter, or the Women’s Marches; Gen Z believes in dialogue and communication as critical methods to improve society; Gen Z will research and make decisions based on that research and analysis.

What does this mean for brands?

Brands who want to tailor their messaging and offers to Gen Z need to reconsider their idea of consumption. For Gen Z, consumption has grown to mean more than the physical possession of things. It’s become an entrenched part of their identity, a way of accessing sources in the most natural way possible, and a way of championing ethics and communicating to businesses which can do something about global issues.

In conclusion, Gen Z wants to experiment with the brands that they support and to build their individualities slowly. The sheer amount of information at their disposal, and their habit of googling answers they don’t know or haven’t learned about, make them challenging to get through to. Still, once marketers find the balance between authenticity and on-brand messaging, Gen Z is an easier generation to maintain loyalty from.

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L AST WORD

ISSUE 60

THREE PIGGIES The Bluesman writes a satirical piece on US politics and leaves it up to you to guess who the characters in the story are.

CAST OF CHARACTERS: • Grey Piggy (GP) — a senior lawyer, the Vizier • Wiley Old Piggy (WOP) — a busybody lawyer, a State Minister • Golden Piggy (GoP) — an ambitious loudmouth, the Emperor pro temp • Turtle — a devious country lawyer, Prime Minister • Lackey — a charming lawyer, Chief Scribe • Bee Stinger — a pugilist, four years dead

THE NE W BEGINNINGS EDITION

L AST WORD

MONEY · 45

The Bluesman is a Maltese sound engineer working in New York.

A late afternoon outside a white barn.

‘What we need’ said Grey Piggy ‘is a fresh start’. Grey Piggy was the brainy one among the three Piggies. He had spent some time reading a book and everybody assumed he knew all he needed to know. ’Yes’ said his friend Wiley Old Piggy. Not that he was older than the others, but after a heavy night at the trough many years ago the other two had forgotten the name he had given them and Golden Piggy. The third member of this triumvirate, who thought he came up with the best nicknames, started calling him that one night, during one of their lengthy discourses about taking over the world. GP would watch Pinky and the Brain on his fave channel, Ferret TV, and decided he would do just that.

He liked picking up ideas from TV shows.

This had two lovable lab mice who would stay up nights planning to ‘take over the WORLD,’ as Brain would rumble in his Orson Wellesian tones. GP had thought of giving himself Ahbrain as his nickname, but he didn’t believe Grey Piggy would agree and he knew he couldn’t out-argue GP. Besides, gold was his favourite colour. He’d think a lot as he lay digesting his swill.

He turned to the other two. ’How so?’ He asked because he couldn’t think despite synapses sparking away in his brain, which made him think he was thinking.

‘Well,’ intoned GP, ‘we need to make the people who want our bacon believe we’re not pigs.’ Wiley Old Piggy’s ears pricked up. He was always looking for ways to the successful future he dreamed of once he ditched his two companions. Not for him the swill they currently enjoyed plentifully. No, he was after a future of acorns. He had already had quiet conversations with Turtle about this.

Turtle was slow-moving, but his devious mind raced like a rabbit. It was he who advised WOP to look genial and smile a lot, especially as Lackey had stopped being the smiling charmer he used to be and therefore became unsuitable for the role. One couldn’t blame Lackey, of course, he needed somebody to fawn over and currently he was fawning over Golden Piggy, even though he didn’t care for him, and fawning took it out of him, and on top of that, he was afraid to be too generally affable in case he was thought to be lessthan-fawning enough. But even now he came up with a thought he was sure would please his fawnee. He’d suggest that they’d shorten Golden Piggie to Go Piggie, then it hit him GoP! He nearly swooned.

‘Brilliant’ said Turtle when Lackey had shared his idea, he knew that Golden Piggie liked nothing better than being thought of as the greatest. Turtle felt a twinge of guilt as he recalled that he had pretty much eulogized the one originally called ‘the Greatest’ in front of everybody just four years ago. Well, everybody, he thought counted anyway.

Meanwhile, in a grave in Louisville, Kentucky, Bee Stinger’s remains twitched.

After swill GoP turned towards the TV while WOP and GP huddled. ‘Do you think this GoP thing is wise?’ asked WOP. ‘Sure it is,’ GP responded unhesitatingly ‘it’s just the thing to distract the jibber jabberers and give them a symbol to kowtow to while we pillage the village. Besides,’ he continued, ‘ I wasn’t sure about the ‘golden’ thing. You never know when some clever dick might start making cracks about Fool’s Gold. You know he doesn’t like being made fun of.’ That settled they discussed how best to go about the fresh start they had been considering. WOP was hoping to smoothen a path towards a glory

time for himself. He knew he needed GP’s deviousness and knowledge. Surely there was something useful in that book he had read.

He had a natural smile, and although it didn’t always reach his eyes standing next to GP’s dour look, he looked jovial.

Two hours later, they hadn’t come up with any fresh ideas. The best they could think of was to let GoP stumble and clatter on his predestined path. He seemed to create more new havoc every day, and it seemed to them that it would make their fresh start more comfortable to be perceived as a fresh start just by getting out of the way of his downward trajectory. Once he was out of the way, they would announce the beginning of a new and prosperous era [no, we mean it] under WOP’s guidance and handing out another swill with many promises of more to come. ‘Simples’ thought WOP, ‘isn’t that what the Ferret would say?’, but he wasn’t sure. Anyway, he was quite confident that he had come to the right decision. Had he done any reading he might have been tempted to file away by way of justification for posterity, a snippet from Charles Lamb’s ‘A Dissertation Upon Roast Pig’, a comment on a pig as an adult: “he would have proved a glutton, a sloven, an obstinate, disagreeable animal—wallowing in all manner of filthy conversation.”

Had he the literacy to make the connection, it would have been him verging on passing out, like Lackey, from the deliciousness of the perfect fit of the description.

Having settled in his mind what seemed like a course to achieve his ambition and take over the world, he wandered towards where he thought he had seen a mud patch for a wallow. He felt confident he could hide the fact he was a pig.

Swim shorts by Adidas €32.95 / eurosport.com.mt

PHOTOGRAPHER Marvin Grech

STYLIST Peter Carbonaro

LIFE'S A BEACH MODEL Mikey @ Models M

Swim briefs by Adidas €24.95 / eurosport.com.mt

Swim shorts by Adidas €32.95 / eurosport.com.mt

Dior Homme swim briefs models’ own

Swim shorts models’ own

54 · MONEY

ISSUE 60

FA S H I O N

SUMMER BRINGS Lacoste trainer This trainer has references to the classic tennis court shoe but has been updated with the contrasting gum sole, giving the shoe a modern twist. €90 / asos.com

Allsaints shirt Taking inspiration from the West Coast-Latino skate style, this statement red shirt from Allsaints will be a conversation starter. €95 / allsaints.com

Tombolo polo shirt Effortless summer style has never looked better. €115 / tombolocompany.com

Feng Chen Wang jumper Only eight of these pullovers have been made and in true ethos to the brand, all clothing is ethical and environmentally friendly. €210 / fengchenwang.com

MAGIC It's the beautiful season, so it's only fair that MONEY gives beautiful things.

THE NE W BEGINNINGS EDITION

MONEY · 55

FA S H I O N

New Balance 327 The brand-new 327, inspired by the iconic running shoes of the 1970s, is a nod to the progressive fashion, architecture, furniture and graphics of that era. €110 / newbalance.co.uk

GH Bass loafers This loafer has been hand-stitched in waxed thread and is unlined for ultimate comfort. €150 / ghbass-eu.com

Frescobol Carioca swimming shorts Taking inspiration from Brazilian designer Claudia Moreira Salles’ light designs, taking apart the shapes she uses and rearranging them into a bold geometric print. €185 / frescobolcarioca.eu

Stüssy & Sun Buddies When Stüssy does anything it’s bound to be fly, so their latest set of eyewear in collaboration with Sweden’s own Sun Buddies is something we can get our corneas behind. €140 / sunbuddieseyewear.com

Ralph Lauren jumper What makes this one so special is that 100 per cent of sale proceeds go to the Wimbledon Foundation, which supports a range of projects that create opportunities for young people. €249 / ralphlauren.it

Eastpak x AAPE Tranverz bag This bag has been made in collaboration with AAPE by A Bathing Ape, and comes in the latter's signature camo. €269 / endclothing.com

56 · MONEY

ISSUE 60

FA S H I O N

Conrad is an economist by profession but has over a decade of experience in the men’s clothing trade. He now splits his energies between his two passions: tech and fashion.

CAT EYES

SUNGLASSGRAM

1.

Isabella by Illesteva €213 / illesteva.com

2.

L96 by Kenzo €220 / kenzo.com

3.

Jerry by Yves Saint Laurent €325 / ysl.com

EXTRAWIDE 4.

Rettangolo Striped by Gucci €291 / farfetch.com

5.

Blake by Burberry €260 / burberry.com

6.

Les Lunettes Soleil by Jacquemus €433 / farfetch.com

MEGA SHIELDS 7.

Oversized Jagged by Philipp Plein €415 / farfetch.com

8.

Hyperfit 10/s by Carrera €152 / carrera.it

9.

Medusa Halo Neri by Versace €290 / versace.com

SUNSET SHADES

During the peak of COVID, the closest to a ‘fashion moment’ one could get is probably a single selfie or a snazzy Zoom or Skype screenshot. Luckily, things are gradually getting back to normal. Here’s a collection of sunglasses which will come in handy this summer.

10. Rainbow Guru by Peter & May €301 / farfetch.com 11. Panots by Dior €320 / dior.com 12. Forrest by Tens €103 / tens.co

Back in 2016, Conrad started working on a new concept that uses AI (artificial intelligence) and human creativity to help people make better clothing and fashion choices. Fast forward to 2020—co-founder Dylan Seychell is on board, and the first version of the APP (android) launches in Q3 2020. www.vestis.ai/download

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58 · MONEY

ISSUE 60

NEWS

Unequal pay: How can employers address it?

The principle of equal pay for equal work or work of equal value is an integral part of the employment legal framework.

However, unequal pay between women and men remains a reality. For this reason, NCPE, in the framework of the EU-funded Project Prepare the Ground for Economic Independence (PGEI), is re-launching an enhanced Equality Mark. The NCPE Equality Mark is a certification awarded to companies that make gender equality one of their values and whose management is based on the recognition and promotion of the potential of all employees irrespective of their gender and caring responsibilities.

Contact NCPE for more information on 2295 7850 or equality@gov.mt.

Trust Payments Ltd acquires mobile loyalty platform Mobilize Systems Trust Payments, the global unified payments group for global pay-in, pay-out and customer journey technologies with offices in the UK, USA and Malta, has announced it has acquired Mobilize Systems, a UK based engagement and mobile loyalty platform serving the retail and hospitality sectors.

Mobilize provides seamless, data-rich services to merchants looking to capture and expand customer engagement and loyalty programmes, primarily in the mobile space. The acquisition will enable Trust Payments to combine behavioural analytics with transactional data to offer enhanced product journeys for customers, improved payment options, and better insight for businesses.

Daniel Holden, chief executive officer of Trust Payments, said: “Trust Payments’ vision is to help businesses optimise their sales and customer experience. To do this,

merchants need real-time transactional data analysis combined with proper insight and help with understanding how customers engage and pay for products and services.

That means a single source of truth and simplified data visualisation.” trustpayments.com

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FOCUSING ON TRADITIONAL INVESTMENTS, BOTH ON THE LOCAL AND INTERNATIONAL MARKETS