Interview | Wednesday, 30 September 2009

New ambassador in town

In an extensive interview with Business Today, Charlot Zahra spoke to the recently appointed US Ambassador to Malta Douglas Kmiec, about the state of diplomatic relations between the two countries, the double-taxation agreement and how Malta can attract American students, among other things

What was your reaction when you learnt that you were going to be appointed US Ambassador to Malta?
Well, of course I knew the story of Saint Paul - I knew that he was treated with incredible kindness – and I always thought that was a wonderful phrase in the account of Saint Luke because it always allows you to contemplate a very special kind of person; of generous hospitality.
And in a hurried world, generous hospitality is a nice thing to contemplate because it puts you at ease in an unusual circumstance, a new circumstance. And the fact that Malta was described in that way made it very attractive. The second thing I thought about was suddenly how many new friends I suddenly had, because it seemed that almost everybody I mentioned it to wanted to come and visit me all of a sudden. They never wanted to visit me nearly as much when I was in California, and I thought Califonia was a pretty nice place to live in. I knew from their reaction that this was a very beautiful spot on the globe that was very desirable to come to.
And then the questions got to be a bit more serious on my side, that is, how was I going to accomplish the President’s foreign policy objectives in this place? That required a certain amount of conversation, both with the President and the President’s senior staff for us to fill that out.

What was the reaction of Mrs Kmiec when you told her that you were going to be appointed US Ambassador to Malta?
I think Carole’s reaction was a practical one. We’ve moved a few times in our lives, and I think she thinks very practically and she thought about the boxes. Her first concern was “Well, that’s all very lovely, but I’m going to be the one packing the boxes!”
And I mentioned to her that in fact, one of the special gifts that an ambassador receives from his Government is that they help pack the boxes. Once I said that, she said: “Perfect! Sign me up!” So the only impediment on her side was the fact that we had to put our personal things in storage, and ship them, and we had help doing that.

What is your first impression of Malta as soon as you arrived here to start your term as the new US Ambassador to Malta?
Well, it was much like I had imagined in my mind, namely that we were met by embassy personnel who immediately wanted to help us orient ourselves so that we can settle in our new home.
It was a very positive reaction, even after an extraordinarily long trip from California.

How do you describe the state of the diplomatic relations with Malta?
Well, they were stated by the President and by the State Department as being quite strong, and that the Secretary of State (Hillary Clinton) anticipated that they would be even stronger after my service.
So they set out a standard of one of the highest and closest possible relationships, and their expectation is that I would draw the interests of Malta and the interest of the United States together in harmony.

In which areas are diplomatic relations with Malta strongest? Why?
We’re living in a dangerous time. The danger can come to us in unexpected ways. One of those unexpected ways is in cargo or at port, or with people travelling without proper documentation.
As I have reflected to Brigadier Vassallo on a number of occasions, I am so delighted to see the very strong, compatible training environment between our Coastguard and the Armed Forces of Malta. This is a school where I was privileged to be a speaker at its graduation ceremony last week.
The impressive thing about the Maritime Safety and Security Centre is that people like Commander Masaschi, our Defence attachè, and Brigadier Vassallo, who have great experience, are participating directly.
The men and women who are acting as instructors are truly excellent and enthusiastic, and now the student body is not just from Malta. Therefore Malta has now become itself the teacher of the world on these maritime safety procedures.
We’ve been able to share some knowledge with the AFM, and in turn they are sharing it with a much wider audience.
One of the things that the United States counts on Malta to do is to undertake this search and rescue in a space that is not just the geographic space of your nation. Malta’s SAR area is 800 times the size of its land.
When look out at that amount of water to patrol, you get the sense of the difficulty of undertaking that responsibility. And that’s a difficulty that the Maltese have accomplished with splendid professionalism and it’s getting better all the time.
I also think there is a close relationship in economic matters. Actually in this area the Republic of Malta could teach the US a lesson or two.
Some of our corporate executives have lost a bit of the basics. And the basics are that when you offer equity, there has to be some real value at the bottom of the paper, and credit default swaps have turned out to be entirely meaningless.
There were promises stacked upon promises and the actual economic value of the good or service at the bottom was, frankly, not enough to sustain it.
And our lending practices in some respect lost sight of the fact that you should only lend money that you really expect to be paid back.
One of the things that has been good (and it has been a lesson to the world coming from Malta, maybe because you are an island and a republic) is that you managed to immunise yourself from some of this mischief.
Your banking and financial sectors kept largely to the traditional playbook.
And because that’s the case, I think the US, I believe, will increasingly find Malta to be a sound place to invest in.

Which are those areas of the diplomatic relations with Malta where you would like to improve?
As I said, it’s a question of improving on an already strong relationship. Obviously there are some things from my predecessor, who was very well liked, and indeed was very helpful with our orientation in taking up our assignment, Ambassador Bordonaro helped secure a visa waiver programme which is now fully implemented in our consular offices in the Embassy.
She helped oversee the negotiation of the agreement to avoid double taxation. In the case of Malta, the tax on corporate profits is already favourable in terms of the rate, but to add the agreement on the avoidance of double taxation is even better, because it means that the favourable tax rate would not be lost with more than one sovereign piling and taxing the same income.
Now that agreement is finished in terms of its substance, but it needs to be ratified by the Senate of the United States. One of the things that could be improved upon actually is this transaction, and the ball is in our court.
It’s not really Malta that has really been holding up, it’s two other countries that were negotiating the same agreement with Malta. The Senate of the United States likes to multi-task, and it is waiting for these agreements to be considered together.

So when do you think that the agreement will be ratified by the US Senate?
My relationship with the members of the Senate’s Foreign Relations Committee is quite good. Actually it’s bilateral in terms of bipartisanship, because both Senator Kerry and Senator Lugor have been very encouraging of our work here.
Senator Lugor is a long-time personal friend, so I’ve been calling the staff of the Committee and the assurance that I get this ready – it’s just a question of timetable, probably this autumn, from what has been described to me.

What are those aspects of the diplomatic relationship with Malta on which you would like to focus at the beginning of your term here?
I probably have three main areas where I’m focusing upon. Firstly is what we’ve already talked about, that is, being of assistance to the Armed Forces of Malta on the high seas. This includes providing additional resources as we can work them into the budget for training.
That also includes completing some contracts that were underway under previous administrations for purposes of equipment, and that includes putting in our budgets a wish list of what kind of equipment can make the operations of that SAR even more effective than they already are.
No question, that’s a very good investment, because we’ve seen how well the AFM have trained and we’ve seen how well they’ve taken care of the equipment.
Secondly, I want to do everything I can to facilitate American investment in the Maltese economy.
Part of that is ratifying the avoidance of double-taxation Treaty agreement. Part of that is making more accessible and understandable the services we offer at the American Embassy for American companies that are newly coming to this market. We help a number of companies do the due diligence, what the regulatory requirements to do business here are, what the labour requirements are, and so forth.
To make that package more accessible – you can of course do it on the internet and on websites, which we couldn’t do so easily before, and we have to keep it updated.
We all know that tourism is an important part of the GDP of the Maltese economy.
And people have talked in abstract terms about American tourism to Malta, and getting direct flights from America. All this is wonderful but the economics of it don’t usually add up.
You have to go in smaller increments where you focus on a niche market that might expand the American understanding of Malta, the cultural significance of what one finds here, the wonderful waters that one can find here for purposes of swimming and snorkelling and the like, and the friendliness of people here.
Now what niche market might that be? Well, I know by virtue of my long-time service in the University world that every major college in the United States has international programmes. Now most of those international programmes focus on the United Kingdom. The next thing students think about when they can get out of class, is about spending a spring break, or a long weekend in a place that’s enjoyable, a place where it’s not too expensive to go to, a place where they can indeed build up their own education and cultural experience.
Now Malta fits that bill very nicely, so one of the things that, for example, I’ve been in conversation with members of the Maltese Government about is utilising the International Associations that deal with these exchange programmes to pull together a package for students, where if you’re studying in the UK, in Rome, or in France, think about Malta as the place you would go for a break, both because the airfares are low, and also because the opportunities to learn and enjoy are quite strong here.
Of course the President is keen on green initiatives, about environmentally sound and sustainable investment. Now I’ve already made it well known that the American Embassy that is under construction is going to be a leader in meeting these environmental standards by the incorporation of, we hope, pretty large-scale use of photovoltaic cells. I’m also encouraging contractors to contemplate using the new forms of wind turbines or to at least see how the two forms of energy can be melted into one project successfully.



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30 September 2009


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