EU expert advocates Maltese economic model to overcome global crisis
Professor Rudy Aernoudt, former Head of the Ministry for Economy and Research in Brussels, conducted a workshop on the importance of creative enterprise for local business leaders, senior civil servants and senior academics at the Grand Hotel Excelsior Executive Lounge as a guest of the de Bono Foundation and Grand Hotel Excelsior Malta.
Professor Aernoudt described the technical features of the current economic crisis highlighting the regulatory failures in Europe based on Basel II and outlining how the European banking system’s credit to risk calculations took place inside “a black box”. Thinking outside this box, said Professor Aernoudt, and applying new thinking, will create the business of tomorrow.
Despite 30,000 pages of banking regulations designed to protect all stakeholders Professor Aernoudt asserted that there was a collapse of the banking system in Europe due to over-regulation paralysing the key institutions, over reliance on rating agencies who carry no financial responsibility for their ratings and a centralisation of credit decisions which removes the human factor from lending. This illusion of a solid banking system helped to undermine Europe’s economy and with 22 million people being unemployed in Europe, there is a great need for creative entrepreneurship to help create employment and a pathway to growth.
In Professor Aernoudt’s assessment Malta has the right mix of conditions to take advantage of the SME platform that underpins the country’s economy and leverage it further for dynamic growth. Using local entrepreneurial activity as the starting point, the Professor described a virtuous cycle which would drive growth through the addition of innovation & financing, local development, internationalisation by Malta’s entrepreneurs, all leading to wealth creation. Central to this economic model is quality of life, which Professor Aernoudt stated existed in abundance already in Malta. “Small is beautiful” he said, “particularly when twinned with a value-driven economic model which Malta is very close to developing”.
Summing up, Professor Aernoudt interpreted Malta as an economy which could become what he called one of the world’s “new leaders”; an economy with a strong degree of lateral thinking and action that embraces internationalisation based on manageable and ethical structures. This would be the model that places Malta on the highest scales of wealth creation per capita. The techniques of lateral thinking invented by Dr. Edward Debono are designed to enable change said Professor Aernoudt, and are part of Malta’s advantage in putting together a longterm approach to value creation.