Malta provided “long-term stability” to businesses because there were no political controversies over major economic policy, Prime Minister Lawrence Gonzi told London-based investors yesterday.
The best oil well is the human brain
“Although political controversy is a hobby for us Maltese, there is no controversy over major economic policy. So even if there are political changes in the future, businesses can be assured of long-term stability, which is a good thing,” he said.
Dr Gonzi was addressing a business breakfast at the Corinthia Hotel in London, where about 50 members of the Malta Business Network were treated to a question-and-answer session with the Prime Minister.
They asked him about the opportunities emerging from North Africa, the lessons he learnt after the financial crisis, the impact of the Greek crisis and his views on energy and oil exploration.
Dr Gonzi said Malta was in a perfect strategic location to capitalise on the opportunities that will arise in the coming “years” as the transitions in Libya, Egypt and Tunisia come to fruition.
He warned not to expect a “rushed” transition in Libya and invited companies to use Malta as a platform with easy access to Libya but having a high quality of life and political stability.
Dr Gonzi said the financial crisis taught him to better appreciate the “conservative” values of the Maltese who always preferred fixed deposit over high-interest schemes.
“They were right,” he said.
Malta used its “nimbleness” during the 2008 financial crisis to assist struggling companies instead of spreading a stimulus package thinly.
“Small is beautiful. In Malta, if you have a problem, you can call up the Finance Minister and discuss,” he said, adding that Malta was able to respond to challenges quickly.
Dr Gonzi spoke about the importance of a diverse economy and said that, rather than capping the financial services sector, he insisted upon growth in other areas, such as, most recently, life sciences.
He said parents should encourage their young children to explore the world of science and maximise on the opportunities that would arise through the development of a life sciences park.
One day, he said, PhD holders would be in a position to explore their research projects in Malta rather than being forced to work abroad.
On the Greek crisis, Dr Gonzi said Malta’s exposure to Greece was “very minimal, if at all”.
He remained optimistic that the crisis would pass because Greece had “the fundamentals of a success story” but added that the crisis served to ensure politicians would in future be constrained to stick to fiscal consolidation.
“The right decision is not always the most popular,” he said, adding that politicians, who always had elections to win, were now more aware of this point.
Asked about energy, Dr Gonzi said Malta’s plan was to have an oil-fired power station extension that could be “easily” converted to gas. In future, the island also hoped to have a gas pipeline with Sicily, to complement the forthcoming interconnector cable that would compensate for the energy supply lost with the closing of the Marsa power station. Although renewable energy targets would be met, Dr Gonzi said solar and wind energy could not be relied on to provide volumes of energy.
When asked on oil exploration, he said that, while there had been interest in oil drilling, “the best oil well is the human brain”. He said oil wells could be emptied but investment in knowledge got the best results. So while exploration would continue, the govement would remain focused on investing in human resources.