More than 500 Maltese people could lose their jobs if the conflict in Libya drags on but the president of the Chamber of Commerce, Enterprise and Industry, Tancred Tabone is hopeful this will not be the case and that the losses would be “recoverable”.

Although he acknowledges some companies have already had to sack workers, he says most of them were the ones that took “massive risks”. The more established companies are unlikely to shed any jobs for now and are simply playing a careful “waiting game” as they try to weather the uncertainty.

“The situation is very fluid. I don’t want to be the one to ring any alarm bells when in fact there is no real fire. At the moment, the impact is limited. The worst case scenario is if it becomes a Somalia and it goes on forever. Then, yes, it starts to be a really big problem,” Mr Tabone said.

Although many companies have been harshly hit by the crisis, business people have been reluctant to share their woes publicly. However, sources say at least 500 jobs are in the balance.

The main problem such companies face is that their stock is in limbo: either held up in Libya or waiting to be shipped there from Malta or other places. This leaves them in an “uncomfortable” position with banks.

“But I wouldn’t say they’ve lost their stock. It’s there, in warehouses or ships. I don’t think anybody has actually been looted.”

Losing the earnings of a few months was different from losing both the earnings and the stock, Mr Tabone said.

It was not in the interest of any business to sack people now because they could end up in a situation where things would return to normal and their best people would have been taken on by competitors.

Mr Tabone explains that even Malta-based workers of companies with large operations in Libya are at risk because companies might have to trim the fat to remain afloat.

The Chamber of Small and Medium Enterprise – GRTU recently called on the government to guarantee loans of businesses hit by the crisis.

Although Mr Tabone believes the government should strive to make things easier for businesses, he does not think taxpayers’ money should finance their operations.

He said the situation was very different from that experienced during the financial crisis where Malta Enterprise – of which he is a director – stepped in. The government had offered aid to a number of big businesses, which had threatened to downsize. That aid ensured the necessary investments could take place to bring the companies back on their feet and “reinvest every penny”.

“But if you have €1 million (worth of stock) in the Tripoli port what can the government do? I wouldn’t advise the government to supply the money because if I’m a competitor I’d say it is not fair for the taxpayer to pay just because someone took a crazy risk.”

Instead, the government has offered to reschedule certain payments, such as tax, and it has also been asked to speed up the process in the case of companies being due money from the Exchequer.

Mr Tabone added that businesses that ventured into Libya knew there was always a risk the 42-year dictatorship will come to an end, shaking things up economically. But some took the risk and made a lot of money.

Maltese businessmen have long projected themselves as being the best way into Libya, which is known to be a difficult market to penetrate.

Once the crisis is over, there will also be new opportunities but Maltese businessmen will have to prepare for the risk of becoming less invaluable to business in Libya.

“(But) if you then come to a situation where our contacts become superfluous, we might not have that option. How many people need to go through Malta to deal with Sicily? None. If you have an absolute normal trading country, why bring in a Maltese partner?”

However, he said, the Maltese should still strive to compete because they had experience dealing with the Libyan people and had certain advantages such as the similarities in the language.

According to the Finance Minister – who has said the economic impact is “limited” – 53 people who were working in Libya lost their jobs and began registering for unemployment benefits but 12 of them have already found alternative employment.

The government has so far not supplied any figures of how much Maltese investment in Libya is exposed, except to say that 70 businesses had been in contact with Malta Enterprise.

The Labour Party has presented a motion in Parliament calling for a debate on the situation of Maltese investment in Libya and urging the government to help investors, without placing new burdens on Maltese taxpayers.