As it had been widely, and logically, expected, Malta is set to get its share of the harmful economic effects of the Libyan crisis. Larger countries may well take the knocks in their stride but to Malta, whose economy is tiny, the impact will be harder to take, although the resilience the economy displayed in the recession that followed the credit crunch indicates it can well fight back and recover in time.
The latest worry, over and above so many the crisis has triggered, is the decision by the European Union to expand the sanctions against the Libyan regime. The EU is freezing the assets held by the Libyan Investment Authority, regarded as one of Libya’s main overseas investment vehicles for Tripoli’s oil and gas revenues, and other investment institutions, such as the Central Bank and the Libyan Arab Foreign Investment Company (Lafico).
The EU had already frozen the assets of Muammar Gaddafi, his family and the government but, with the imposition of the new sanctions, the situation takes a new dimension. However, in the mood Col Gaddafi is in right now, he is unlikely to pay much attention to the sanctions. His first immediate goal is to annihilate his opponents, who have followed other freedom fighters in Tunisia and Egypt and are intent on removing him from power. Col Gaddafi is showing he is prepared to go to any length to wipe out opposition to his regime and has even pounded his country’s own nationals from the air.
The atrocities his regime is committing are not unlike those resorted to by other dictators in Africa and elsewhere. It is well for the International Criminal Court to declare an intention to open an investigation against Col Gaddafi, his family and their circle of political colleagues for crimes against humanity but what the freedom fighters urgently need is protection from the air.
Meanwhile, as many in Malta continue to debate the political significance of neutrality, more and more people are getting killed in the struggle to remove Col Gaddafi. This is not a plea for direct military participation but, ideologically speaking, how can a country be neutral in the face of genocide?
This, and so many other implications and ramifications of what is happening not only in Libya but also in the rest of North Africa and the Middle East, are generating new political tensions that are likely to take long to ease, let alone to settle as interim governments grapple with completely new political scenarios.
Malta has been playing a key role in the repatriation of people wanting to flee the country ahead of an intensification of the fighting. However, it has also faced, and is still facing, dangers following the defection of two Libyan pilots whose jets are still impounded here.
The new EU sanctions against Libya will not prevent the companies in which Libya has a shareholding from continuing to operate but, clearly, the crisis could still have a direct effect on their operations, depending, for instance, on where they export their goods or services to. Refinancing, or planned capital injections for expansion by the Libyan side of the operations, would have to be put on hold until, at least, the situation is resolved.
It will take time to see how all this is going to affect the economy as a whole. The major preoccupation right now is over the killing of people by a regime whose only interest is to remain in power at all costs.