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CIAO DATE: 06/06
European Affairs
Leader in Focus
Malta Is Expanding the EU's Mediterranean Dimension
By Lawrence Gonzi
When Malta was negotiating to join the European Union, so-called Euro-realists sometimes asked what an island mini-state could contribute to the Union. European Commission officials who favored Maltese membership always gave the same reply: Malta would enhance Europe's engagement in the Mediterranean, including its Southern shore, not least in the economic sphere.
This prediction was based on Malta's long-standing participation in Mediterranean and maritime affairs. The European Union emerged from the coal and steel-based industrial economy of the continental heartland in the 1950s. Since then, however, the continent's coastal areas have become much more important. Not only is the sea still vital for communication and trade, but the previously impoverished, peripheral coastal areas have become the most densely populated, as a result of the remarkable growth of mass tourism, particularly in the Mediterranean. At the same time, the extraordinary potential of underwater resources has become more apparent. Fishing has been transformed from an activity akin to hunting to one more like farming; and the seabed has become increasingly important economically, for example through the extraction of oil and other mineral resources.
Malta, in the middle of the Mediterranean, understands that these developments have political as well as economic ramifications. Since Malta obtained its independence from the United Kingdom in 1964, successive Maltese governments have transformed the basis of the economy. The island no longer relies on rents from military bases, but earns its living from tourism, entrepôt trade, financial services, and the supply of a highly skilled workforce to international manufacturers of items such as semi-conductors and pharmaceutical products. The security of the sea in its widest sense – in ecological as well as military terms – is vital for all these economic activities. In 1967, Malta proposed to the United Nations that the seabed should be reserved exclusively for peaceful uses and be declared part of the “Common Heritage of Humanity.” This initiative ultimately led to the UN Law of the Sea Treaty of 1982.
In short, our exposed international economy makes us particularly sensitive and alert to developments in maritime affairs, and the prediction that Maltese membership would raise the European Union's maritime profile was quickly fulfilled. One of the immediate consequences of Malta's entry in May, 2004, was that the European Union became the world's largest shipping registry. The simultaneous entry of Cyprus, another major shipping registry, contributed to this development. The addition of Malta's registry alone, however, would have sufficed: it is the eighth largest in the world and subject to controls designed to make the Maltese flag much more than a flag of convenience. For the first time, the European Union now has a Commissioner whose responsibilities include maritime affairs – and needless, perhaps, to say, that Commissioner is Maltese.
Why, one might ask, is there such a striking consensus among European leaders that Malta has something special to contribute to Mediterranean development? In other words, what extra value does Malta add to the contribution made by Spain, France, Italy, Greece, Cyprus and Portugal – even if, strictly speaking, Portugal does not have a Mediterranean coastline?
The answer has much to do with the role that culture and tradition play in globalized, knowledge-based economies. Malta's cultural relationship with the Arab world is unique. Malta's language, Maltese, is the only native European language that belongs to the same linguistic family as Arabic. Maltese is derived from the dialect used by the Arabs who ruled Malta a thousand years ago, although since then it has absorbed elements of Sicilian and Tuscan Italian, French and English. The language is written in Latin script and is today distinct from Arabic, but its basic grammatical structure remains similar.
“For the first time the EU has a Commissioner whose responsibilities include maritime affairs”
This linguistic link fosters an important degree of cultural intimacy between Arabs and Maltese. When they talk to Maltese people, Arabs often delight in discovering and pouncing on linguistic commonalities. Maltese is now one of the European Union's 20 official languages. This is necessary to ensure that EU rules can be interpreted and enforced in Maltese courts. But Brussels officials also recognize that this language of a state with only 400,000 inhabitants can act as a cultural bridge between the Union and the Arab world.
The significance of such a bridge is evident in globalized, knowledge-based economies, where the “hard knowledge” of technical know-how often needs to be combined with the “soft knowledge” of cultural familiarity with different markets. The usefulness of such a combination can best be exemplified by Malta's special relationship with Libya, which dates from Malta's independence 41 years ago. In those days, Libya was still a monarchy and in the early stages of absorbing its massive oil revenues. The relationship continued after 1969, when Muammar Gaddafi took over the government, and oil revenues were increasingly used to finance large-scale infrastructure projects and provide services for the rapidly growing and urbanizing Libyan population. The special relationship exists because it makes good sense. Tripoli is only 45 minutes away from Malta by air, and the two countries complement each other nicely in the opportunities they offer to business. Although Malta rigorously abided by the UN sanctions on Libya in the 1990s, the special relationship was modified rather than terminated during this period.
“The Mediterranean is one of the world's least integrated regions and its share of global trade is falling”
Malta is an excellent base for companies that want to operate in Libya. For Europeans and Americans, the island offers an attractive mixture of closeness to Libya and a familiar cultural, organizational and legal environment. Many foreign workers in Libya have located their families in Malta. Businesses can be registered in Malta, allowing them to operate under Malta's highly regarded commercial laws, make use of the country's flourishing financial services and use the well-trained, English-speaking workforce for important back-office work. And the Maltese have by now accumulated much useful experience in dealing with Libya: both the senior-level managerial and administrative experience needed to deal with institutions and the ground-level experience of ordinary Maltese workers. Many Maltese, with a standard European education, but with a greater cultural intimacy with Libyans than comes naturally to most other Europeans, have worked for long years in Libya, in the semi-arid and desert zones of the country as well as in the cities.
Malta has a civilized past that goes back over 5,000 years and a tradition of serving as a center of enterprise. Today, the Malta Freeport is a regional hub servicing intercontinental trade. Many global businesses transfer cargo by feeder-line from large ships to smaller vessels in Malta. Even so, there is considerable potential for further growth. Intra-Mediterranean trade remains very low. A much larger volume of trade can be achieved with the right commercial strategies, and such strategies can be developed more easily if the base of operations is politically and legally stable.
The Mediterranean is one of the least integrated regions of the global economy, and its share of world trade is falling. It accounts for less than 10 percent of private capital flows to developing countries, whereas more than 40 percent goes to the emerging markets of Asia and almost 30 percent to Latin America. The general outlook for the countries on the southern shore of the Mediterranean is particularly precarious. Their average per capita income is 10 percent of that of Europe. Their prospects of even halving this income gap with normal growth rates are bleak, especially given unemployment rates, particularly among young men, that in many countries run as high as 20 to 25 percent.
At the same time, these countries are experiencing significant demographic growth and high rates of urbanization that are placing considerable pressure on municipal services. Such economic insecurity is indubitably a cause of political tensions in the region. We should not be surprised if some young people, crippled by a sense of having no future, respond to the destructive, false promises of terrorism with sympathy or even with direct support.
This is one reason why we are cooperating so closely with the United States on security. We have received substantial financial and technical help from the United States to upgrade equipment used to check containers passing through the Malta Freeport. We have not yet caught any terrorists this way, but we have been successful in a number of cases against people engaged in organized crime, the theft of intellectual property and counterfeiting. We are also working with other Mediterranean countries to share information and enhance our resources in the fight against terror.
Our biggest problem at the moment, however, is a crisis caused by illegal immigration, which is often accidental. Immigrants trying to reach Italy, mostly from Somalia and Eritrea, are often forced to land in Malta because of bad weather or problems with their boats. Close to half of them are entitled to official refugee status, allowing them to live and work in Malta and receive free medical service and social welfare. Malta's population density is 12 times the EU average, and the exceptionally high numbers of irregular arrivals are creating enormous pressures. We are trying hard to convince the other EU countries that we need to share the burden.
An important part of the answer is that we must help the countries from which the immigrants come. These people live in extreme poverty and think they can find their future in a new world, which, in their eyes, is Europe. It is not enough just to cancel the debt of the poorest countries; it is also vital to ensure that the financial aid we give them goes to education, health and social welfare.
“Europe must not try to impose its own ways on North Africa”
In many of these countries today, the social safety net is provided by extremist organizations. We must prove to the citizens of those countries that they do not need to look to these extremist organizations for social welfare, but to secular state authorities. This is the kind of investment we need to make to succeed in the War on Terror.
The situation is not entirely bleak. North African countries such as Libya are beginning to open up, in much the same way that the former communist countries of Central and Eastern Europe previously started moving toward democracy, the rule of law, participation in the global economy and ultimately EU membership. But Europe has to be sensitive to Arab culture and must not try to impose its own ways on the North African countries. The Arab world must undergo a process of change and needs time to assess different systems of national government. So Europe must focus on these countries, but also have patience.
Terrorists and religious extremists would like us to forget that the Arab countries of the Mediterranean region were historically at their best when they were in full communication with Europe and the rest of the world. Arab-Islamic civilization has enriched European cuisine, literature, architecture, philosophy, science and much else. The Mediterranean Arab world would in turn doubtless acknowledge a cultural debt to Europe. And beyond the mutual indebtedness, there is the shared heritage of Roman civilization and early Christianity. The south and north of the Mediterranean have always been most authentically themselves when engaged in cross-cultural exchange. Our era of enhanced communication and the emergence of the knowledge-based society present a wonderful opportunity to develop – or perhaps one should say redevelop – the economic, political and cultural links with North Africa and the Near East that can give the region a future commensurate with its golden past. Economic investments in the region are political investments, too. The best and most robust response to terrorism is surely to give people faith in their future, faith in the creativity of work and life, faith in civilization. Malta, a crossroads of Mediterranean civilization for thousands of years, wants to work with the rest of Europe and the United States to renew that faith in the 21st century.
Lawrence Gonzi is Prime Minister of the Republic of Malta. He was formerly Deputy Prime Minister, and previously served as Secretary General and then Deputy Leader of the Nationalist Party, as well as Minister for Social Policy, and Leader and Speaker of the House of Representatives. He has been actively involved in the voluntary and NGO sectors since 1976, and was General President of the Malta branch of the international religious group Catholic Action from 1976 to 1986