Globalisation, the EU and Malta

Opening the 45th International Trade Fair last week, Prime Minister Eddie Fenech Adami overviews today’s economic climate in the face of increasing globalisation and how EU membership can serve as a buffer against the perils of the global phenomenon

The challenge we face this year is unlike any other we have faced in all the years since 1987 during which I have been privileged to inaugurate the International Fair of Malta. For ahead of us lies a major challenge; crucial to our future and that of our children. It is the challenge of globalisation; of how we are to perform in a globalised world.

Globalisation has changed the world. It is an unstoppable tide that has created a single, global market, replacing the old divide of the two superpowers. And we Maltese are proud that this historic development started here in Malta with the Bush-Gorbachev summit.

On the one hand, this new world order has rid our country of the threat of getting caught in the crossfire of a superpower war. Some used to argue that it was possible to avert danger by staying neutral; refusing to take sides and going it alone.

On the other hand, globalisation has brought in new threats. In a single, global market, the economies of small countries may be overwhelmed by the greater efficiency of larger economies. And therein lies the challenge that our country must handle.

Frankly, I find it odd that some people may propose cold war solutions to come to terms with globalisation. Let us assume that military non-alignment made sense during the Cold War. In this age of globalisation, however, it does not follow that staying out of any economic bloc is a good idea. The two threats are manifestly different, as are the alliances created to counter them.

Looking closer at the task ahead, we find it is twofold. First of all, we must find the best way for our country to survive – and to thrive – in this globalised world. Secondly, we must do our part to ensure that small countries get a fair deal from globalisation.

Seen in this light, membership of the European Union emerges as the only solution to the problems we face. It is not so much a question of whether we should join Europe or not, but of whether there exists a plausible alternative that offers such bright prospects.

Experience tells us that we cannot walk alone in this globalised world. We cannot stay out of an economic bloc.

In the past few years, the world economy, and the electronics industry in particular, has not fared too well. Malta has suffered too, despite our best efforts. The tragedy of the 11th of September meant a further blow to a number of vital sectors, although the situation is improving. The lesson is clear: we need to operate within a solid structure; a structure that can only be provided by a strong economic bloc that is the European Union.

Over the past fifty years, the EU has built a strong framework that guarantees stability – the sort of stability that makes economic growth possible and does away with the uncertainties that drive away investors and dampen demand. Malta joining the European Union will mean taking full advantage of this framework for stability and success.

In this regard, there are three aspects to the EU that are of prime importance to us.

The first is the size of the internal market: 400 million people and growing.

The second is the wide array of agreements that the EU has struck with a multitude of countries and groups of countries. Malta will benefit from these treaties immediately upon accession; particularly those with Mediterranean and Middle Eastern countries. Here, the European Union recognises the special role that Malta may play in this area of communication between Europe and beyond.

Thirdly, there is little doubt that Malta’s voice will be strengthened at international fora, for example the World Trade Organisation, if it is associated with that of Europe.

It should be quite clear that the uncertainty surrounding the issue of our potential EU membership does not exactly help us attract foreign investment.

Europe is a zone of stability: take away the doubts on the prospect of full membership and we would have demolished our greatest obstacle to investment and growth.

Foreign investment will also help our businesses carry out changes in the way they work. We need change to thrive in a global market where competition is ever more free and fierce. And we need change to sustain economic development, irrespective of EU membership. Joining Europe, however, will mean help with our change programmes, with less pain and more gain. Some sectors have already benefited from help from Europe, for example through IPSE, even though Malta is still a candidate country.

Within and without Malta, we have yet to hear of a credible suggestion as to how a small country can thrive in a globalised world while staying out of systems of international economic co-operation, such as the European Union. And the European Union happens to be the most highly developed of these groupings and the one that offers the best deal to small countries.

In fact, all over the world, countries large and small are doing their best to form and to strengthen unions of regional economic co-operation. To this end, regions such as Latin America, South-East Asia and southern Africa are looking closely at the European Union model.

Many of these countries are unhappy about their progress in achieving their goal of ever-closer union. Europe has undoubtedly been far more successful. Unlike other regions, however, Europe was driven by two powerful thrusts for union. The first was the resolve never to wage another fratricidal war. The second was the collapse of the Iron Curtain, which was choking the coming together of the continent.

Europe today is widely admired for its success at overcoming hardship and sacrifice to forge unity among its nations; unity that gives it strength.

It is indeed astonishing to hear that some of us would like us to turn our backs on Europe. We are not aware of any country in the world, large or small, that would like to go it alone, or to dictate conditions for co-operation with other states.

In the real world, we can only succeed through concord with those who will embrace us as equal partners. We must strive to win the best deal in our negotiations for membership. The better the agreement, the greater the respect we will gain. We must do our best, bearing in mind that it is pointless to ponder the unattainable.

This historic juncture reminds me of the run-up to Malta’s independence. At the time, there were many who harboured doubts and fears: fears about the value of our currency; fears about our economic survival; fears about a threat to liberty, which seemed to derive from an authoritarian streak in some Maltese politicians of the time. Who are we to say that those fears were baseless? And yet, all of us today take it for granted that independence was the best thing for Malta. We all agree that independence was the first step down a path that lead to a better quality of life for us all. Now is the time to take another step down that same path. For we can clearly see that joining Europe is the fulfilment and celebration of our independence.