Business is about taking calculated risks. If business risks are managed successfully, entrepreneurs are likely to see their profits soar. But if things go wrong it is not just the entrepreneurs that suffer. Employees and their families often bear the brunt of a failed business.

Doing business in Libya was never easy. Today it is practically impossible unless one has immense financial resources, an insatiable risk appetite and the courage to face the chaos that often prevails in a country that is already ungovernable.

Maltese businesses have always seen the Libyan market as difficult but one that could give them good returns if only they were prepared to cope with the often unorthodox way of doing business. Getting paid on time by Libyan buyers of goods and services was always challenging. But the political risk may often have been underestimated. While many local entrepreneurs publicly express the hope that they still want to do business with their Libyan clients, the evolving political situation in Libya does not augur well for a quick return to normality. In the meantime these local businesses are asking for help so that they can survive and continue to employ the hundreds of Maltese who up to recently worked for them in Libya.

Nationalist economy spokesman Claudio Grech made a number of suggestion on how the government could help Maltese businesses who trade with Libya. One suggestion was that “Malta Enterprise should immediately set up a restructuring fund aimed at helping Maltese businesses in Libya adapt to the new situation”. Whether this is a viable suggestion or not depends on what this fund is expected to finance.

The restructuring of private businesses is the responsibility of thepeople who own that business. Themanagement of political risk should be a high priority for entrepreneurs who decide to do business in countries that are intrinsically politically unstable. Some economists argue that taxpayers should not finance the losses incurred by private business that encounter serious difficulties because political risks have turned against them.

But government can still supportin other ways those businesses thatare affected by the Libyan politicalcrisis. Some steps have already been taken. For instance, the tax authorities have eased regulatory pressure on those businesses that are facingcash flow problems because of their Libya connections.

Malta Enterprise can also help by trying to assist viable businesses to diversify their marketing efforts to fill the gap left in their order book as a result of the disruption in Libya.

The Ministry of Foreign Affairs can help through diplomatic contacts to ensure that the property of Maltese businesses in Libya is protected as much as possible. This is no easy task as no one really knows who today has the clout in Libya to guarantee this.

For the workers who lost jobs as a result of the Libya crisis, the most pressing need is to find alternative employment. In the past the government has successfully intervened in the labour market to identify and encourage local employers to take on displaced workers. One important caveat in this context is that employing redundant private sector workers in the public service will not be justified unless this is done to fill genuine vacancies.

The political debate on how tosupport businesses and their employees who have been negatively affected by the Libyan crisis should bestripped of partisan motivations and focused on bringing back normality in people’s lives.

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