Island ethos

At 316 sq km, Malta is often dwarfed in size by its island-nation cousins ­(Dominica, Kiribati and the Turks and Caicos are all over twice the size), but it’s more densely populated than them all. Because of its strategic location, the tiny Mediterranean country has been used as a military outpost for everyone from the Greeks to the British. But what has been a fortress to many is now a gateway to others. Today, Malta receives thousands of refugees a year escaping the autocrats and conflicts of North Africa.

Given its proximity to Libya, it is under pressure to act as a base of operations and an immigrant destination for those fleeing Gaddafi – but both give Malta a reputation the island is trying to shed. With growing trade flows to Europe, Malta is pushing to establish itself as a tourist destination and global services provider, from finance to gaming.

With English as one of its two official languages (along with Maltese), the ­predominantly Catholic island seems to have its gaze set north. But what responsibilities does Malta have to those at its back door? Monocle sits down with Prime Minister Lawrence Gonzi to talk economics and immigrants.

Monocle: As the smallest country in the European Union, what is your role and how do you get your voice heard?

Lawrence Gonzi: Well, to start from the very beginning, size in the European Union doesn’t matter very much, as far as population is concerned. And Malta’s role is as a regional voice. Malta is on the frontier of emerging markets and I am talking about the whole African continent. Therefore we can continue to do what we’ve done for thousands of years: act as a bridge of opportunities between two continents.

M: You’ve said Malta should not be a base of operations for air strikes into Libya. Why? Are the Maltese people in some ways weary of their strategic location?

LG: Let me start by saying that I was one of the first prime ministers to condemn the violent action by the Gaddafi regime. So the position of Malta has always been very clear; we are not neutral in the situation. However, we have one airport and I can’t offer a commercial airport to be used at the same time as the military. So under the circumstances, there is no reason whatsoever for us to sacrifice when no other country has. There are ­solutions that are quite close, such as Sicily [which has a military airport].

M: Do you support the revolutions that are sweeping North Africa?

LG: Tunisia, Egypt, Libya: we are on the side of the people of these countries. But it is they that should choose their own destiny and nobody should impose any particular decision on these people.

M: Some Italians have blamed Malta for the flood of immigrants to Lampedusa in Italy, saying Malta makes them unwelcome. What are your thoughts?

LG: That is absolutely incorrect. Lampedusa is much, much closer to Tunisia. And Lampedusa is part and parcel of Italian territory, which consists of over 60 million people. Malta has a population of only 400,000, and is one of the most densely populated countries in the world, which isn’t made to shoulder the responsibility of large arrivals – and I mean large by our standards. Eight hundred people landing in Malta in two days has a much larger impact than the immigrants that land at Lampedusa. At the same time, this is not just a problem for Malta or Italy – it is an international problem. These are immigrants that have come from terrible situations across the whole of Africa, who have no option but to escape. It is a humanitarian responsibility and countries could and should be doing more in solidarity with Malta, but perhaps more importantly in solidarity with these individuals.

M: Last year, Malta registered the biggest increase in exports among the 27 EU member states. To what is this attributed?

LG: Our stimulus package was proportionally one of the largest compared with other countries. And where other countries spread their stimulus packages like jam on toast, we could sit down with each major company and personalise it. As the crisis ended, these companies were first on the market because their employees were still there. They did not need to re-employ, or go through the training process again. This put them in a competitive position. In 2010 we registered a GDP growth of 3.7 per cent, which is one of the largest growth rates in the whole of Europe. In some cases, our small size is a real advantage.

M: Malta is making a push to grow its knowledge-based economy by 2015, with the help of major government investment. But how do you think you’ll be able to compete with other European countries such as the UK, France or Finland?

LG: This was a strategic decision. We have no resources and the cost of energy in Malta is much higher than other countries. So it is clear that the most important asset we have is human resources. It made us realise early on that investment in education was a key to success, and pushing into financial services, the IT sector, web design and the gaming ­industry – all of those industries that are based on technology suddenly became the biggest industries for us.

M: Religion shapes a lot of political debate in Malta, such as the forthcoming referendum on legalising divorce. Coming from a religious family, does this influence your ability to make compromises in parliament?

LG: No, I wouldn’t say so. Malta used to be a lot more religious than it is today, but tradition is very important. You have to remember that this is a small island. You don’t need to drive hours to see your mother or brother, you’re 10 or 15 minutes away. This explains why we retain a strong family unit and it’s something we should be proud of. We are, and I hope we will continue to be, a value-based country. With Libya, for example, we have no qualms being on the front line of helping the Libyan people. It is our responsibility to send medicines to the people of Misrata who have been bombed. These are innocent victims. This is a value-based decision, it’s not a pragmatic one.

M: Do you have any advice for the countries that are coming out of revolution in North Africa?

LG: My political experience has always taught me one thing: that what is good for Malta, because of culture or our values, cannot be transposed to any other country automatically. Every country has its priorities.Malta has been occupied so many times. But in our experience, it is the ability to gain the respect of and work closely with the countries that ­surround us that is the reason we have managed to move forward.

Maltese links with Libya

The crisis in Libya has shaken a trade relationship that has been built over decades. With an estimated €120m in annual exchanges, Malta and Libya have been key trade partners since the 1980s when Libya was under UN sanctions and needed a partner willing to help.

Several of Malta’s biggest firms, from oil and gas to aviation, have important links to Libya (either via investment or ownership). Malta’s shipping powerhouse Salvo Grima bases its business on keeping goods flowing to and from Libya. Quick to condemn the violence, the Maltese government has been slower to take economic action against Libya, objecting to EU sanctions put forward in March. And even as trade with Europe grows, “Malta has to work with North Africa,” says John Hamilton, a director of Cross-border Information. “It’s where it is most competitive.”