The findings from this study gave the Maltese authorities a structured evidence base on how insularity imposes costs across the economy. Its recommendations support Malta’s sustainable development in line with the long-term ambitions set out in the Malta Economic Vision 2050.
The Economic Costs of Malta’s Insularity (M-INSULAR)
Commissioned by the ESPON and co-funded by the European Union, Cambridge Econometrics with partners E-Cubed Consultants, carried out a study to examine the economic impacts of Malta’s geographic insularity and the structural challenges faced by small island economies.
Key findings:
- The study found that the costs of insularity to Malta are identifiable and recurrent, but cannot meaningfully be reduced to a single monetary figure.
- Insularity is best understood as a combination of forces (smallness, remoteness and vulnerability), most of which have permanent structural effects.
- These costs show up most clearly in infrastructure, education, institutions and market size. Despite this, Malta outperforms in a number of key areas, including macroeconomic stability, health, labour-market efficiency, technological readiness and innovation.
- Because insularity is a structural condition, the study’s conclusions point towards recognising it within EU rules and funding frameworks that address structural disadvantage.
The research is already contributing to wider policy discussions about the challenges facing Malta and other insular regions. Together with our partners, we have presented the findings at the M-INSULAR conference on the Economic Costs of Insularity and EU Policy Responses, and at ESPON’s Mind the Gap conference, which explored the structural economic disadvantages faced by island regions such as Malta. These discussions are helping to strengthen the case for recognising the specific challenges faced by insular regions within EU policy and funding decisions.
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