While we, as a country, have not been discussing Brexit to any great extent, the official received wisdom has been that Malta might benefit from the fall-out. I myself, through some of my writings, have contributed to this general impression.
We have had articles pointing out that the loss of passporting rights for the City of London after Brexit, may lead some to relocate to Malta and benefit, not just from our climate and general environment, but also from our EU membership.
This is true, but the most recent news is that the big names of the City intend to relocate to Paris or Frankfurt. Malta is being mentioned as the possible location for insurance companies, probably because of our legislative and administrative structures.
But now, perhaps rather late in the day, a cloud has appeared and we ask ourselves where have we been dreaming while all this has been happening.
A CNBC report last Wednesday said: “The Republic of Ireland, Cyprus, Malta and Luxembourg look set to be the biggest losers from a deterioration in relations between the UK and the European Union post-Brexit, according to new research from KPMG.
“In a departure from an Anglo-centric analysis of the economic implications of Brexit on Britain, KPMG’s chief economist Yael Selfin has said that these smaller economies – countries with which the UK has a large trade surplus – will have the greatest interest in securing a good deal when negotiations are scheduled to get underway at the end of this month.
“Ireland, Cyprus and Malta are major net importers of UK goods, but are almost insignificant in UK imports, according to the Centre for Economic Policy Research.”
That means that Maltese imports from the UK will face increased tariffs and duties, significantly affecting the Maltese quality of life – at least until substitutes are found.
Moreover, Malta is a small, open, economy and easily affected by any trade winds. I was listening on Friday to the Prime Minister of Singapore, the son of Lee Kwan Yew, on the BBC’s Hardtalk on Friday.
The Singapore economy started off at around independence on a par with Malta’s, but shrewd and far-sighted economic planning over the years, (plus no nonsense about free elections and the like) has resulted in its people enjoying a standard of living far superior to that of Malta.
On Friday, the Singapore PM explained that the economy of that former colony is a small and open one, easily susceptible to the trade winds. His main preoccupation now is not Brexit, but the new Trump administration and the protectionist bent it intends to bring to the world’s greatest economy bar China.
He said that, unlike Britain, Singapore believes very much in the validity of regional bodies, in its case the Association of Southeast Asian Nations (Asean), which he admitted is not as solid and profound as the European Union. But it is far better to be part of this grouping than to be on your own.
Transferring this to the case of Malta, it is far better for Malta to face the coming adverse trade winds as a member of a regional grouping than to face it on its own.
I realised that here in Malta we have not been hearing so much about this problem. We have been hearing about the Maltese presidency of the European Council, and we have had and continue to have high-level meetings at the Grand Masters’ Palace, but we have not heard anything about these dark clouds suddenly appearing on our horizon.
We do have a Minister of the Economy, but he is otherwise engaged. He has been facing allegations of serious impropriety while on government business in Germany and it was only right that he defended himself.
But as the Minister responsible for the economy, he and his Ministry should have been more open about this threat to the Maltese economy as a result of Brexit and we should be preparing for what will happen, instead of getting to know about it from a foreign body.
The government should have been focusing on this and huddling together with the Chamber of Commerce and other constituted bodies but instead, last week, their bone of contention was the good name of Malta faced with the allegations of corruption and scandal – an important subject, no doubt, but not a word about trade.
As I said, it is a blessing that Malta is facing this not on its own but as part of the EU, but the EU too is leaving the Brexit negotiations in the hands of the Brexit team, led by Barnier, but perhaps not consulting enough those who are likely to be affected by this decision. The countries mentioned in the KPMG paper, must get together to see what can be done.
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