Malta promoted as gateway to EU

Malta signed a double taxation agreement with Bahrain yesterday, paving the way for more trade with a Gulf state that has a booming financial services sector.

Despite being rich in oil, Bahrain has diversified its economy in past decades much on the same lines as Malta, focusing more on the service industry but especially on the financial sector, which represents 25 per cent of its €21 billion GDP.

Finance Minister Tonio Fenech hailed the agreement, saying it should smoothen the way for more business from Bahrain-based companies seeking a platform from which to access the EU market.

He was speaking in the Bahraini capital Manama, where the agreement was signed with his counterpart Seikh Ahmad bin Hamad Abdallah Al Khalifa. The minister forms part of a high-powered trade delegation to the Gulf led by Prime Minister Lawrence Gonzi.

The strategy is being pursued throughout the region and similar agreements should soon follow with the United Arab Emirates, but meetings in Bahrain were described as particularly positive by the businessmen on the delegation.

Chamber of Commerce vice president Stefano Mallia said their counterpart organisation might send over its own trade mission.

The mantra of the trade mission centred on promoting Malta as a gateway for Gulf states into the EU. Asked if this was still a relevant strategy, given the direct link with the Western world, that most of the countries in this region enjoyed, Mr Fenech stressed there was still huge potential for Malta in this area.

"We can provide an attractive platform into the EU, partly because we are members and we have the infrastructure to make us attractive but also in part because of the cultural similarities," he said.

Surprisingly, Mr Mallia said there were even requests for joint ventures to tap the north-African markets.

The Bahraini island shares a lot with Malta, including a relatively modest population of 700,000 even though its economy is roughly three times larger than Malta's.

Relations between the two countries started in 1974 but did not materialise to much, even though the Bahraini leader clearly remembered former Prime Minister Dom Mintoff and heaped praise on him.

However, Dr Gonzi's meeting with his counterpart Seikh Khalifa Bin Salman went better than expected given that a brief courtesy call turned into a meeting that ended with a brief discussion on a pending issue with visas that Malta was having with the UAE.

After Malta joined the EU, it had to introduce visas for Gulf states, which in turn started imposing visas on Maltese visitors. The government has, ever since, been trying to get a fast-tracked treatment, which the UAE affords to the old EU member states, without much success.

Yesterday, Seikh Khalifa joked about it: "There will be no problem between us, it's our friends (in Europe) who we have to convince. This terrorism business is all rubbish, we never gave them any trouble."

The subject was at the centre of talks between Foreign Affairs Minister Tonio Borg and his counterpart Nizar bin Sadeq Al Baharna. Unlike the UAE, Bahrain seems to be more inclined to reach some sort of deal with Malta on the subject.

The Bahraini leader also accepted an invitation to visit Malta, possibly with a Cabinet delegation.