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Malta (07/02)


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For the most current version of this Note, see Background Notes A-Z.

PROFILE

OFFICIAL NAME:
Malta

Geography
Area: 316 sq. km. (122 sq. mi.); about one-tenth the size of Rhode Island.
Major cities: Valletta (capital), Sliema.
Terrain: Low hills.
Climate: Subtropical summer; other seasons temperate. Mediterranean: hot dry summers, cool wet winters

People
Nationality: Noun and adjective--Maltese.
Population (2001 est): 394,583.
Annual growth rate (2001 est.): .74%
Ethnic divisions: Mixture of Arab, Sicilian, Norman, Spanish, Italian, English.
Religion (2002): Roman Catholic, 98%.
Languages: Maltese, English.
Education (2001): Years compulsory--until age 16.
Attendance--96%. Literacy--90%.
Health (2001): Infant mortality rate (per 1,000 live births): 6.1%. Life expectancy at birth--78 years.
Work force (146,912): public sector--32%; services--34%; manufacturing--20%; construction--4%; agriculture and fisheries--2%.

Government
Type: Republic.
Independence: September 1964.
Constitution: 1964; revised 1974; revised 1987.
Branches: Executive--president (chief of state), prime minister (head of government), cabinet. Legislative--unicameral House of Representatives. Judicial--Constitutional Court.
Administrative subdivisions: 13 electoral districts.
Political parties: Nationalist Party, Malta Labor Party, Alternattiva Demokratika (Green Party).
Suffrage: Universal at 18.

Flag: flag of Malta

Economy
GDP (2000 est.): $3.7 billion.
Annual growth rate (2000): 6.9%.
Per capita income: $9,990.
National resources: Limestone, salt.
GDP composition by sector (2001): Services 71.7% of GDP.
Industry (25.5% of GDP) Types--clothing, semiconductors, shipbuilding and repair, furniture, leather, rubber and plastic products, footwear, spectacle frames, toys, jewelry, food, beverages, tobacco products.
Agriculture (2.8% GDP): Products--fodder crops, potatoes, onions, Mediterranean fruits and vegetables.
Trade (f.o.b. 1999): Exports ($2 billion)--machinery and transport equipment, manufactures. Major markets--Italy, Germany, U.K. Imports--$2.6 billion: finished and semi-finished goods, food and beverages, industrial supplies, petroleum and related products. Major suppliers--Italy, U.K. Germany.
Trade balance (2000): -$387.61 million.
Budget (2000): revenues $1.6 billion; expenditures $1.73 billion, including capital expenditures of $265.4 million.

PEOPLE
Malta is one of the most densely populated countries in the world, with about 1,160 inhabitants per square kilometer (3,000 per sq. mi.). This compares with about 21 per square kilometer (55 per sq. mi.) for the United States. Inhabited since prehistoric times, Malta was first colonized by the Phoenicians. Subsequently, Arabs, Italians, and the British have influenced Maltese life and culture to varying degrees. Most of the foreign community in Malta, predominantly active or retired British nationals and their dependents, centers around Sliema and surrounding modern suburbs. There also is a growing North African Muslim community of about 2,250 (2001) married to Maltese nationals. Roman Catholicism is established by law as the religion of Malta; however, full liberty of conscience and freedom of worship is guaranteed, and a number of faiths have places of worship on the island. Malta has two official languages--Maltese (a Semitic language) and English. The literacy rate has reached 90%, compared to 63% in 1946. Schooling is compulsory until age 16.

HISTORY
Malta was an important cultic center for earth-mother worship in the 4th millennium B.C. Recent archeological work shows a developed religious center there long before those of Sumer and Egypt. Malta's written history began well before the Christian era. Originally the Phoenicians, and later the Carthaginians, established ports and trading settlements on the island. During the second Punic War (218 B.C.), Malta became part of the Roman Empire. During Roman rule, in A.D. 60, Saint Paul was shipwrecked on Malta at a place now called St. Paul's Bay. In 533 A.D. Malta became part of the Byzantine Empire and in 870 came under Arab control. Arab occupation and rule left a strong imprint on Maltese life, customs, and language. The Arabs were driven out in 1090 by a band of Norman adventurers under Count Roger of Normandy, who had established a kingdom in southern Italy and Sicily. Malta thus became an appendage of Sicily for 440 years. During this period, Malta was sold and resold to various feudal lords and barons and was dominated successively by the rulers of Swabia, Aquitaine, Aragon, Castile, and Spain.

In 1522 Suleiman II drove the Knight Hospitalliers of St. John out of Rhodes. They dispersed to their commanderies in Europe, and after repeated requests for territory to Charles V, in 1530, a key date in Maltese history, Charles V of Spain ceded the islands to the Order of the Knights of St. John of Jerusalem. For the next 275 years, these famous "Knights of Malta" made the island their domain. They built towns, palaces, churches, gardens, and fortifications and embellished the island with numerous works of art and enhanced cultural heritage. In 1565 Suleiman the Magnificent laid siege to Malta. After several months the strength of the Knights and the Maltese population prevailed, and the Turks were defeated. Over the years, the power of the Knights declined, however, and their rule of Malta ended with their surrender to Napoleon in 1798.

The people of Malta rose against French rule in 1798 and with the help of the British evicted them in 1800. In 1814, Malta voluntarily became part of the British Empire. Under the United Kingdom, the island became a military and naval fortress, the headquarters of the British Mediterranean fleet. During World War II, Malta survived relentless raids from German and Italian military forces (1940-43). In recognition, King George VI in 1942 awarded the George Cross "to the island fortress of Malta--its people and defenders." President Franklin Roosevelt, describing the wartime period, called Malta "one tiny bright flame in the darkness." Malta obtained independence on September 21, 1964.

GOVERNMENT
Under its 1964 constitution, Malta became a parliamentary democracy within the Commonwealth. Queen Elizabeth II was sovereign of Malta, and a governor general exercised executive authority on her behalf, while the actual direction and control of the government and the nation's affairs were in the hands of the cabinet under the leadership of a Maltese prime minister.

On December 13, 1974, the constitution was revised, and Malta became a republic within the Commonwealth, with executive authority vested in a Maltese president. The president appoints as Prime Minister the leader of the party with a majority of seats in the House of Representatives. The president also nominally appoints, upon recommendation of the prime minister, the individual ministers to head each of the government departments. The cabinet is selected from among the members of the unicameral House of Representatives. This body consists of between 65 and 69 members elected on the basis of proportional representation. Elections must be held at least every 5 years. Candidates for any vacancies are determined by the majority of votes obtained by a candidate during the previous elections.

Malta's judiciary is independent. The president on the advice of the prime minister appoints the chief justice and 16 judges. Their mandatory retirement age is 65. There is a civil court, a commercial court, and a criminal court. In the latter, the presiding judge sits with a jury of nine. The court of appeal hears appeals from decisions of the civil court and of the commercial court. The court of criminal appeal hears appeals from judgments of conviction by the criminal court. The highest court, the Constitutional Court, hears appeals in cases involving violations of human rights, interpretation of the constitution, and invalidity of laws. It also has jurisdiction in cases concerning disputed parliamentary elections and electoral corrupt practices. There also are inferior courts presided over by a magistrate.

The Local Councils Act, 1993 (Act XV of 1993) was published on June 30, 1993, subdividing Malta into 54 local councils in Malta and 14 in Gozo. The inhabitants who are registered elect the Council every 3 years, as voters in the Local Councils' Electoral Register. Elections are held by means of the system of proportional representation using the single transferable vote. The mayor is the head of the Local Council and the representative of the Council for all effects under the Act. The Executive Secretary, who is appointed by the Council, is the executive, administrative, and financial head of the Council. All decisions are taken collectively with the other members of the Council. Local councils are responsible for the general upkeep and embellishment of the locality, local wardens, and refuse collection, and carry out general administrative duties for the central government such as collection of government rents and funds, and answering government-related public inquiries.

Principal Government Officials
President--Guido De Marco
Prime Minister--Eddie Fenech Adami
Minister of Foreign Affairs Joe Borg
Ambassador to the United States--George Saliba
Ambassador to the United Nations--Walter Balzan

Malta maintains an embassy in the United States at 2017 Connecticut Avenue NW, Washington, DC 20008 (202-462-3611).

POLITICAL CONDITIONS
Two parties dominate Malta's polarized and evenly divided politics--the Nationalist Party, led by Prime Minister Eddie Fenech Adami, and the Malta Labor Party, led by Alfred Sant. Elections invariably generate a widespread voter turnout exceeding 96%. The margin between the two parties is so narrow that a 52% share of the votes can still be considered a "landslide" for the winning party. Prior to the May 1987 election, the Maltese constitution was amended to ensure that the party that obtained more than 50% of the popular vote would have a majority of seats in parliament and would thereby form the government. The then-Labor Party government proposed this constitutional amendment in exchange for Nationalist Party (in opposition at the time) agreement to two other amendments to the constitution: The first stipulates Malta's neutrality status and policy of nonalignment, and the second prohibits foreign interference in Malta's elections.

The 1996 elections resulted in the election of the Labour Party by 8,000 votes to replace the Nationalists who had won in 1987 and 1992. Voter turnout was characteristically high at 96% with the Labour Party receiving 50.72%, the Nationalist part 47.8%, the Alternativa Demokratika (associated with the Greens) 1.46% and independent parties .02%. In 1998 the Labour Party lost a parliamentary vote, leading the Prime Minister to call early elections. The Nationalist Party was returned to office in September 1998 by a majority of 13,000 votes and holds a five-seat majority in Parliament. Voter turnout was 95%. The Nationalist Party won 51.81%, the Labour Party won 46.97%, Alternativa Demokratika 1.21% and independent parties .01%. The next general elections must be held before January 2004.

ECONOMY
Possessing few indigenous raw materials and a very small domestic market, Malta has based its economic development on the promotion of tourism and labor-intensive exports. Since the mid-1980s, expansion in these activities has been the principal engine for strong growth in the Maltese economy. Investment in infrastructure since 1987 has stimulated an upswing in Malta's tourism economic fortunes.

Tourist arrivals and foreign exchange earnings derived from tourism have steadily increased since the 1987 watershed, in which there was growth from the previous year of, respectively, 30% and 63% (increase in terms of U.S. dollars). Following September 11 attacks, the tourist industry has suffered some setbacks.

With the help of a favorable international economic climate, the availability of domestic resources, and industrial policies that support foreign export-oriented investment, the economy has been able to sustain a period of rapid growth. During the 1990s, Malta's economic growth has generally continued this brisk pace. Both domestic demand (mainly consumption) boosted by large increases in government spending, and exports of goods and services contributed to this favorable performance.

Buoyed by continued rapid growth, the economy has maintained a relatively low rate of unemployment. Labor market pressures have increased as skilled labor shortages have become more widespread, despite illegal immigration, and real earnings growth has accelerated.

Growing public and private sector demand for credit has led--in the context of interest rate controls--to credit rationing to the private sector and the introduction of noninterest charges by banks. Despite these pressures, consumer price inflation has remained low, reflecting the impact of a fixed exchange rate policy and lingering price controls.

The Maltese Government has pursued a policy of gradual economic liberalization, taking some steps to shift the emphasis in trade and financial policies from reliance on direct government intervention and control to policy regimes that allow a greater role for market mechanisms. However, by international standards, the economy remains highly regulated and continues to be hampered by some longstanding structural weaknesses.

There is a strong manufacturing base for high value-added products like electronics and pharmaceuticals, and the manufacturing sector has more than 250 foreign-owned, export-oriented enterprises. Tourism generates 35% of GDP, with Malta attracting more than 1.2 million visitors in 2000.

In 2000 the economy grew by 7% in nominal terms and 4.3% in real terms. Unemployment is down to 4.4%, its lowest level in 3 years. Many formerly state-owned companies are being privatized--and the market liberalized.

Fiscal policy is now directed toward bringing down the budget deficit. Public debt grew from 24% of GDP in 1990 to 56% in 1999. The target is a deficit-to-GDP ratio of around 3% in 3 years. In 2000 deficit-to-GDP ratio was 6.6% of GDP, down from 11% last year.

FOREIGN RELATIONS
For the first several years of independence, Malta followed a policy of close cooperation with the United Kingdom and other NATO countries. This relationship changed with the election of the Mintoff Labor Party government in June 1971. The NATO subheadquarters in Malta was closed at the request of the Labor Party government, and the U.S. 6th Fleet discontinued recreational visits to the country. After substantially increased financial contributions from several NATO countries (including the United States), British forces remained in Malta until 1979. Following their departure, the Labor government charted a new course of neutrality and became an active member of the Non-Aligned Movement. Malta is an active participant in the United Nations, the Commonwealth, and the Council of Europe, OSCE, the Non-Aligned Movement, and various other international organizations. In these fora, Malta has frequently expressed its concern for the peace and economic development of the Mediterranean region. The Nationalist Party government is continuing a policy of neutrality and nonalignment but in a Western context. The government desires close relations with the United States and western Europe, with an emphasis on increased trade and private investment. In 1992, U.S. Navy ships started paying liberty calls again and currently do so a regular basis.

Malta has been actively negotiating membership with the European Union. Negotiations should be concluded by the first quarter of 2003 when it is expected that the government will hold a referendum on Malta's membership.

U.S.-MALTESE RELATIONS
Malta and the United States established full diplomatic relations upon Malta's independence in 1964; overall relations currently are active and cordial. The United States has been sympathetic to Malta's campaign to attract private investment, and some firms operating in Malta have U.S. ownership or investment. These include major hotels and manufacturing and repair facilities and some offices servicing local and regional operations.

Principal U.S. Embassy Officials
Ambassador--Anthony H. Gioia
Deputy Chief of Mission--Thomas M. Murphy

The U.S. Embassy in Malta is located in Development House, St. Anne Street, Floriana; tel: (356) 21 235-960; fax: (356) 21 243-229; web page: http://usembassy.state.gov/malta/

 

 



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