With general elections three weeks away, claims and counter claims are being made about investment, employment and the performance of the economy in general. It has long been argued (and correctly I must say) that our economy ranks as one of the most open ones in the world because of the level exports of goods and services in relation to our gross domestic product. Moreover, the exports of goods are not of raw materials but of manufactured products, hence the need to compete in the international sphere.
This means that the performance of the world economy and especially of those countries that represent our major markets in terms of exports and source of foreign direct investment has a critical impact on our economy.
Without having to harp much about the fact, one needs to stress that the international economy has experienced a significant slowdown in the last 30 months. There should be no doubt that this slowdown did not allow the Maltese economy to perform at its full potential.
On the other hand, the international economy was performing quite well during the period 1996-1998, and even this had left its positive impact on our economy. Therefore, any comparison (no matter how odious it may be) between the performance of the two parties when in government has to be assessed in the light of international developments.
It is not my intention to draw these comparisons as, no matter which way you look at it, in the past couple of years the country has scored some interesting successes that prove that our industrial sector is still quite strong and, when faced with head on competition, it is capable of coming out tops, irrespective of what others may think.
The developments that we have had at Pharmamed, Dowty, De La Rue Currency, Baxter, Playmobil, Stainless Steel Products, Toly Products, VF, Consolidated Biscuits, ST Microelectronics, Marsovin, Emm Delicata & Sons, Magro Brothers, Methode (all developments announced by the companies themselves) prove that Malta is still an important manufacturing location.
This did not happen by chance. These developments occurred because Malta had a very clear strategy - becoming a member of the European Union.
In 2002, investment in manufacturing industry rose to over Lm41 million and exports increased to Lm905 million in spite of the international economic slowdown. The indications for the first months of this year show a continuation of this trend.
Given this situation, we should really do our utmost to maintain and improve it. We require a strategy that guarantees access to our markets for our goods and services and keeps open the investment lifeline. This is what the EU membership issue is mainly about.
EU membership would guarantee market access for all products manufactured in Malta and services provided through Malta, irrespective of what they are. We would not have to apply complicated rules of origin or have to overcome other barriers that may be put in our way (for example a tax imposed on British tourists by the UK government when visiting a non-EU member state).
We would also be guaranteed market access to those countries with whom the EU has concluded trade agreements. One practical example is the possibility of duty free entry for Malta made products into the Swiss market, which up to now is hampered by substantial tariffs.
In negotiations within the ambit of the World Trade Organisation, we would form part of an important economic bloc that is more likely to be successful in protecting our interests. Similarly, we would benefit from improved trade relations between the European Union and other countries like China, Russia and the United States.
We would be part of a market that is made up of 500 million persons and would therefore have strong bargaining powers. Our little country (and our country is small indeed) would greatly benefit from being part of a much larger economic grouping.
If one were to stay out of the EU, we would have to fight our battles on our own, conducting country by country negotiations offering a market of 400,000 persons. This is certainly not much; possibly as much as a village somewhere in China.
We would be seeking to attract the attention of our main markets when these would be more keen to spend their time with our competitors, because they are much larger in size and most of all because they would be members of the European Union.
Ireland maintained its attraction for many years because it was a member of the European Union. On the other hand, we would really be like a voice in the wilderness, hoping someone listens to us; but in effect no one would listen to us because we are cut off from where the decision-making is taking place.
This is why it would be really lonely if we were to remain alone. Someone might claim that so far we have managed quite well on our own, so why we start to feel the loneliness now.
The point is that up to now the European Union has been made up of 15 member states while in a year's time it would be made up of 24 member states, Malta being the 25th. With the strong competition that we shall be facing, it would really start to get very lonely if we decide to remain alone. And staying out of the European Union would really mean being alone, with no help from anywhere.