Dr Lawrence Gonzi, Malta’s prime minister, says the transformation in the country since EU membership in 2004 has been significant, and it’s not over yet

A change is as good as a rest, so they say. The Maltese people, their government and economy have been doing little resting and lots of changing in recent years. Between EU membership, preparing for the euro, upgrading the economy and traditional sectors, and redefining the national brand, Malta’s been busy.

“The transformation has been tremendous and the most exciting thing about it is that it is ongoing,” says Dr Lawrence Gonzi, Prime Minister of this Mediterranean country of just over 400,000 people. “We are actually managing change. Change is currently the biggest challenge the whole of Europe is facing. In our case we had to go through a substantial process of change.”

2004 entry into the European Union brought Malta a new range of opportunities, including a previously unheard political voice. “We bring to the European Union the dimension of a small island state,” says Dr Gonzi. “As Prime Minister I have had situations where Malta’s voice was not only heard but actually made a difference to the final decision that was taken.”

EU membership has also allowed Malta to channel its growth towards value added services, rather than traditional manufacturing characterised by low costs and little skill. Financial services, high-end tourism, and now the manufacturing of pharmaceutical products and high-tech components have provided Malta with a breath of fresh air.

The Maltese people have also seen benefits from Brussels. EU funding has spurred infrastructure development, especially in water treatment and waste disposal. “We’re spending large amounts in this sector, which is important for the quality of life of our people and future generations,” says Prime Minister Gonzi.

These changes, in turn, draw the attention of foreign investors. Situated between North Africa and Europe, Malta provides ample opportunity for international business. Since 2000, inflows of foreign investment have grown, topping over $560 million at UNCTAD’s last count in 2005, and the future looks bright according to Prime Minister Gonzi: “Last year we managed to achieve a three per cent growth in GDP, and we had a record amount of FDI. This year appears to be just as good, if not better.”

UK goods worth over £300 million were imported to Malta in 2005. The countries’ common history lingers through Malta’s language and legal system but the relationship is changing. While British tourists are still the largest single group to visit each year, Malta means more than leisure. “In the cutting edge sectors of ICT, e-government, communications, and banking and financial services,” says Prime Minister Gonzi, “Britons are finding that Malta offers a unique package that cannot be compared to other countries.”