The economic and financial repercussions of the unfolding situation in Libya on Malta will take a long time to work through, for the simple reason that Libya will not return to some degree of normality, whichever way the civil confrontation goes. At the time (Monday evening) of writing the position is as follows. The military assets deployed by the Cobra allies have managed to knock out an important chunk of the weaponry available to the Gaddafi regime.
They appear to have done that at the cost of both military as well as civilian life and, furthermore, early rupture in the anti-Gaddafi front.
The Arab League was the first to break away, saying that they agreed to a no-fly zone to help protect civilians, not to hurt civilians. Russia and Germany hardened their scepticism about the Cobra venture. On their part the rebels were emboldened.
They obviously welcome the weakening of the regime’s armed forces and make it clear that this will embark on fresh hostilities, though not wanting the allies to assist them in that regard.
They are Libyans and remember the old colonialism in their country. They have no desire to risk a wave of neo-colonialism to be the fruit of their brave uprising.
On its part the regime, though weakened, has its strengths as well as its ruses. Strength lies in the continuing loyalty of hard core military personnel, especially those managed directly by the Gaddafi family.
They have an uncertain number of mercenaries at their disposal, guns which will remain for hire so long as the negotiated, hefty hard currency fees continue to flow into their pockets. In addition the regime has thousands upon thousands in Tripoli, whom they will continue to use to their best advantage.
With regime change not being a clear objective of the Cobra offensive, the Americans hinting at one thing – no intention to try to take Gaddafi out, the French and the British suggesting a broader brief, meaning they might target Gaddafi, the outlook is not certain.
Unless his military personnel split against him, Gaddafi might be able to hold out in Tripoli, despite losing again some key mid-western towns to the rebels. It is not beyond the bounds of imagination that Libya could still split into two. Whether that happens or if Gaddafi wins or loses the day completely, the activities of expatriate economic interests in Libya will remain unsettled for a long while.
Maltese ventures operating there, although some of them are partially braving the dangerous circumstance to continue to retain a foothold, will continue to suffer. Some of them have suggested that the Maltese government steps in to help them.
The government has made it clear that it will continue to do its utmost to bring normality back, short of bank-rolling Maltese ventures in difficulty. They will have to go on relying on their bankers. Feedback in this regard is mixed. Some say that the banks are already squeezing borrowers with cash-flow problems, taking a hard look at the security backing their borrowing. Others say that their bankers are being very understanding of the circumstances that assail them.
Loss of earnings and profits by the ventures will affect the government’s tax revenue, the employment situation and the contribution to the Gross Domestic Product. The danger extends beyond such effects from directly within Libya itself. At the Malta end, tourism will probably suffer. Hotels already report a slowdown in bookings.
In this regard parts of the British media have done Malta a very bad disservice in reporting – completely mistakenly – that Malta will be used as a base by the UK component of the Malta forces. The government took immediate steps to deny such reports, in the context of the Prime Minister’s commitment in that regard. But the damage was done.
Malta being in the troubled part of the Mediterranean region in itself creates perceptions of potential danger. False reports of military use of the island by Cobra forces add fuel to such perceptions. There is little that Malta – a broader term than the Maltese authorities by themselves – can do to counter this danger, other than to continue countering it with the truth and to intensify projection and visibility of Malta as a tourist attraction in selected media and other important outlets, especially in the UK.
At this end it is a welcome development that the opposition and the government very largely see eye to eye on what is going on. A high degree of consensus, an extensive degree of collaboration and political initiatives which, though separate, are directed in the same direction are essential.
It will not be easy, especially in the midst of a divorce-legislation referendum campaign that already promises to divide the country deeply down the middle. This is all the more reason why its importance has to recognised and acted upon.
Should the outcome be the opposite of that, if we start falling out also on how we handle the Libyan situation in so far as it is within our means to do so, a very difficult situation will be made worse. Sensible people will be entitled to shout out “a plague on both your houses” louder than they have ever done before.