Geography
Area: 316 sq. km. (122 sq. mi.); about twice the size of the District of Columbia.
Major cities: Valletta (capital), Sliema, Birkirkara.
Terrain: Low hills.
Climate: Mediterranean with hot, dry summers and cool, wet winters.

People
Nationality: Noun and adjective--Maltese.
Population (2007): 401,880.
Ethnic divisions: Caucasian Maltese.
Religion (2003): Roman Catholic, 98%.
Languages: Maltese, English.
Education (2003): Years compulsory--until age 16. Attendance--96%. Literacy--93%.
Health (2007): Infant mortality rate (per 1,000 live births)--3.82. Life expectancy at birth--males 76.95, females 81.47 (2007 est.)
Labor force (2007 est.): 145,768; public sector 29%, services 43%, manufacturing 17.6%, construction and quarrying 8.0%, agriculture and fisheries 2.4%.

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), Azzjoni Nazzjonali (National Action).
Suffrage: Universal at 18.

Economy
GDP (2006): $6.39 billion.
Annual growth rate: 5.5% (at 2006 market prices), 2.9% (2006 real terms).
Per capita income: $15,165.
National resources: Limestone, salt.
GDP composition by sector, 2006: Services (75% of GDP). Industry (22.5% of GDP): Types--, semiconductors, electronics, information and communications technology, shipbuilding and repair, rubber and plastic products, toys, jewelry, food, beverages. Agriculture (2.5% GDP): Products--fodder crops, potatoes, onions, Mediterranean fruits and vegetables.
Trade (2006): Exports--$2.79 billion: Types--machinery and transport equipment, miscellaneous manufactured articles, chemicals, semi-manufactured goods, food, mineral fuels, lubricants, and related materials, beverages and tobacco, crude materials. Major markets--Eurozone area, U.S., Singapore. Imports--$4.24 billion: Types--Machinery and transport equipment, miscellaneous manufactured articles, semi-manufactured goods, food, mineral fuels, lubricants and related materials, chemicals, beverages and tobacco, crude materials, miscellaneous transactions and commodities. Major suppliers--Eurozone area, U.K., Singapore, U.S.
Trade balance (2006): $1.48 billion.
Budget (2007 revised estimates): Revenues $2.86 billion; expenditures $3 billion; capital expenditures of $383 million.
Average exchange rate (2006): LM1=$2.930 (rate fluctuates)

PEOPLE
Malta is one of the most densely populated countries in the world, with about 3,000 inhabitants per square mile (1,160 per square kilometer). This compares with about 55 per square mile (21 per square kilometer) for the United States. Inhabited since prehistoric times, Malta was first colonized by the Phoenicians. Subsequently, Romans, Arabs, Normans, the Knights Hospitallers of St. John of Jerusalem, 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 suburbs. There is also a growing North African community of about 4,000 (2007). The Constitution establishes Roman Catholicism as the religion of Malta; however, it also guarantees full liberty of conscience and freedom of worship and a number of faiths have places of worship on the island. Malta has two official languages--Maltese (a Semitic language with much vocabulary borrowed from Sicilian Italian) and English. The literacy rate has reached 93%, 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. Archeological work shows a developed religious center there, including the world's oldest free-standing architecture, predating that of Sumer and Egypt. Malta's written history began well before the Christian era. 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.

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 (now part of Germany), Aquitaine (now part of France), Aragon (now part of Spain), Castile (now part of Spain), and Spain.

In 1522, Suleiman II drove the Knights of St. John out of Rhodes. They dispersed to their commanderies in Europe and after repeated requests for territory to Charles V, in 1530 the Knights were given sovereignty of Malta under the suzerainty of the Kings of Sicily. In 1523, a key date in Maltese history, the islands were ceded by Charles V of Spain 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 Knights and the Maltese population prevailed and the Turks withdrew. Over the years, the power of the Knights declined, however, and their rule of Malta ended with their peaceful surrender to Napoleon in 1798.

The people of Malta rose against French rule, which lasted two years, 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). A crucial moment in Maltese history was August 15, 1942, when five out of 14 vessels that formed part of "Operation Pedestal", and that included the American tanker SS Ohio, broke through the Nazi blockade of Malta to deliver fuel and food to the starving population. The arrival of the vessels was the turning point in the Maltese islands' fate and became known as the Santa Marija Convoy, for the August 15 Feast of the Assumption locally known as Santa Marija. 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--a beacon of hope for the clearer days which have come." In September 1943, the Italian fleet's surrender in Malta was signed by U.S. General Dwight Eisenhower and Italian Marshal Pietro Badoglio. Victory Day, celebrated on September 8, commemorates victory in the 1565 Great Siege, and the end of the WWII attacks in Malta. Malta obtained independence on September 21, 1964, became a Republic on December 13, 1974, and a member of the European Union on May 1, 2004. The last British forces left in March 1979.

GOVERNMENT
Under its 1964 constitution, Malta became a parliamentary democracy within the Commonwealth. Queen Elizabeth II was Malta's sovereign, 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 is appointed by parliament. In turn, he appoints as prime minister the leader of the party that wins a majority of seats in a general election for the unicameral 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 House of Representatives, the number of which may vary between 65 and 69 members elected on the basis of proportional representation. The Constitution provides for general elections to be held at least every five years. Candidates are elected by the Single Transferable Vote system, where the surplus votes of an elected candidate are transferred to the candidate receiving the second preference votes. The process of vote transfers continues until all five candidates for a district are elected.

Malta's judiciary is independent. The chief justice and 18 judges, one of whom is currently serving in an international court, are appointed by the president on the advice of the prime minister after consultation with the leader of the opposition. Their mandatory retirement age is 65. 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 is a civil court, a family 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 various boards and tribunals, including the Industrial, Small Claims, and Consumers' Tribunal. The court of criminal appeal hears appeals from judgments of conviction by the criminal court. There are also inferior courts presided over by a magistrate.

The Local Councils Act, 1993 divided Malta into 68 localities, 14 of them in the smaller island of Gozo. Councilors are elected every three years by inhabitants who are registered as voters in the 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; they carry out general administrative duties for the Central Government, such as collection of Government rents and funds and answering Government-related public inquiries. The Act also provides for Councils to make, amend and revoke by-laws as necessary for the better execution of the Councils' functions and to improve the localities' environment.

Principal Government Officials
President--Eddie Fenech Adami
Prime Minister--Lawrence Gonzi
Minister of Foreign Affairs--Michael Frendo
Ambassador to the United States--Mark Miceli Farrugia
Ambassador to the United Nations--Saviour Borg

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 Lawrence Gonzi, 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 is considered a "landslide" for the winning party. Alternattiva Demokratika (Green Party) is the smallest political party. It has not managed to secure a parliamentary seat since its inception in 1989. A new independent political party, Azzjoni Nazzjonali (National Action), is expected to make its debut in the upcoming elections that must take place by August 2008.

A 2003 referendum resulted in a 54% majority popular vote in favor of membership in the European Union. The Prime Minister called an early election in April 2003 for a definite mandate from the electorate. The Nationalists returned to power with 51.8% and 35 seats for a second term, and EU membership was confirmed. The Labor party earned 47.5% and 30 seats, Alternattiva Demokratika had 0.7%, and independent candidates were negligible. Voter turnout was 96%.

In 2004, the prime minister and long-time leader of the Nationalist Party, Eddie Fenech Adami, resigned. Following his election as Nationalist Party leader, Lawrence Gonzi officially became the Prime Minister of Malta on March 22, 2004. Eddie Fenech Adami assumed the Presidency of Malta on April 4, 2004. .The first elections of European Parliament MPs were held on June 12, 2004 and resulted in the election of two candidates from the governing Nationalist Party and three from the Opposition Malta Labor Party. In 1987, 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. Other amendments made at that time stipulate Malta's neutrality status and policy of nonalignment and prohibit foreign interference in Malta's elections.

ECONOMY
During the first eight months of 2007, economic growth increased by 3.6%. Possessing few indigenous raw materials and a very small domestic market, Malta has based its economic development on the promotion of tourism, accounting for roughly 30% of GDP, and exports of manufactured goods, mainly semi-conductors, which account for some 75% of total Maltese exports. Since the beginning of the 1990s, expansion in these activities has been the principal engine for strong growth in the Maltese economy.

Tourist arrivals and foreign exchange earnings derived from tourism have steadily increased since the late 1970s. The introduction of low-cost flights in 2007 was the main contributor to the 7.6% increase in tourist arrivals since January 2007. Many cruise lines have also added Malta as a destination in 2007, and the sector has seen a 26.6% increase since January 2007. The relatively flexible labor markets kept unemployment fairly steady at 3.9% between January-June 2007. With its highly educated, English-speaking population, Malta has seen growth in high value-added manufacturing and in the services sector, away from the traditional low-cost manufacturing in textiles. The banking system remains highly concentrated with two of the four local commercial banks accounting for about 90% of total loans and deposits.

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. Malta's accession into the EU marked the total dismantling of protective import levies on industrial products, increasing the outward orientation of the economy. Malta joined the Exchange Rate Mechanism II (ERM-II) in 2005 to put itself on the path to enter the Eurozone in January 2008; under the ERM-II, the Maltese Lira has maintained a hard peg to the Euro. In July 2007, the European Economic and Financial Council voted to approve Malta's entry to the Eurozone for January 1, 2008.

The fiscal situation in consolidating public finances has improved over recent years. The budget deficit was brought down from 10.7% of GDP in 1998 to 2.5% of GDP in 2006, a figure that was below the 3% required by the Maastricht criteria. For this reason the European Commission abrogated the excessive deficit procedure for Malta earlier in 2007. The budget deficit for 2007 is estimated to be 1.6% of GDP.

FOREIGN RELATIONS
Malta's diplomatic and consular representation includes accreditation to 152 foreign countries and international organizations. Malta is host to 20 resident diplomatic missions, and 112 countries have non-resident diplomatic representation.

With its central location in the Mediterranean, Malta has long portrayed itself as a bridge between Europe and North Africa, particularly Libya, with whom it has enjoyed positive diplomatic and commercial ties. Malta is one of the southernmost points of the European Union. Malta continues to be an active participant in the United Nations, the Commonwealth, the Council of Europe, OSCE, 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, with an emphasis on increased trade and private investment. U.S. Navy ships resumed liberty calls in 1992 and currently visit on a regular basis.

U.S.-MALTESE RELATIONS
Malta and the United States established full diplomatic relations upon Malta's independence in 1964; overall relations are currently 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, manufacturing and repair facilities, and some offices servicing local and regional operations.

Principal U.S. Embassy Officials