It may look as one big coincidence that Lufthansa Technik and Microsoft have both decided to announce their investment in Malta on the eve of a referendum where the Maltese electorate will be asked to express its opinion as to whether Malta should become a member of the European Union at the next enlargement due for May 2004. Some may even claim that the timing was all orchestrated by the government in an attempt to get the electorate to think that this investment is happening because of Malta's bid to join the EU. Others still would claim that such an investment had nothing to do with Malta's membership of the EU.
In effect, the government, through the minister for economic services (in the case of Lufthansa Technik) and the minister of justice and local government (in the case of Microsoft), has worked very hard over the last two to three years to attract this investment to our country. In the case of Lufthansa Technik, it was an idea that the minister for economic services had started to work on since the days of the Expo Fair held in Germany a couple of years back.
He backed it up by specifying the activity of the maintenance of aircraft as a target sector in the Business Promotion Act, thereby giving companies involved in this sector certain incentives. It was recognised that this sector had great potential for Malta because of its location and policies. This is confirmed by the fact that two other companies whose activity is also aircraft maintenance have announced their intention to expand their operations. Here we are not talking of coincidences but of seeking concrete opportunities that Malta offers, even if there are still some who never believed in the feasibility of aircraft maintenance in Malta.
In the case of Microsoft, we have a similar case. The minister for justice and local government was assigned the responsibility to make real the concept of e-government. The name of Microsoft had been bandied around for months, if not years. Again, even here, there were the doubters that a company such as Microsoft would ever be interested in investing in little Malta. No offence to Microsoft's senior management and its chairman Bill Gates, but I am certain that someone had to explain what Malta was all about when our country's name was first mentioned to them.
This confirms the view that if a corporation such as Microsoft was willing to put Lm20 million worth of investment in this country, there must be good reasons for it, and therefore this investment was not a mere coincidence but something that people worked hard for. The timing may be seen to have been orchestrated, but when companies like Lufthansa or Microsoft - with annual budgets and a labour force in their various operations around the world that are far greater than Malta's - decide to invest their money, it is hardly likely that they would be influenced by partisan political issues.
They would be influenced by the consideration as to whether their investment would be sustainable in the long term. This consideration would be made on the basis of the policies of the government of the day, the legislation of the country, the availability of skills and the state of the economy. It is also known that both Microsoft and Lufthansa Technik were considering other countries apart from Malta for the location of their investment, all countries that had applied to join the European Union and were therefore seen to offer an element of stability.
Malta managed to beat the competition because when the companies involved looked at the whole picture we were considered to be the best. This gets us to the link between these investments and membership of the EU. Although it may be claimed that these companies still decided to invest in Malta even if the result of the referendum is not yet known, these companies had recognised that the path that the government had chosen was giving a sense of stability to the country.
They were acting on the premise that Malta would be joining the EU, otherwise they would not have even considered locating in Malta. Malta's membership of the EU was not part of the equation because it is taken as given. It was taken as given because they, like a substantial majority of the Maltese (irrespective of their opinion on membership), believe that the referendum on membership would be won by the Yes vote. If there was any uncertainty in their minds (and we know investors hate uncertainty and the risks they take are always calculated risks) they would have withheld their investment.
They certainly could not rely on the partnership idea (which means staying out of the EU) because no one really knows what this would entail. This, in effect, is the key aspect of the whole issue. There is a great cost to be paid if Malta does not become a member of the EU. Today we are in a position to compete with the Czech Republic, Poland, the Baltic States, Hungary, Slovenia and Slovakia for foreign direct investment because we are an applicant country with a good chance of becoming members of the EU.
Once these countries join the EU and we do not, they would have a great advantage over us that we would never be able to match. They would be able to attract the better investments while we would be left with the crumbs. We have already lost out a lot because Ireland was an EU member and we were not, so investors preferred Ireland to Malta. We would be able to attract that investment that would be better off outside the EU because of health and safety issues, environment issues, working conditions issues, tax issues. Is this the type of investment that this country deserves - we take what other countries would rather not have?
It is easy to be cynical and seek to belittle the investment of Lufthansa Technik and Microsoft. It would give such cynics some short-term fun. However, there is a link between these investments, and others like them, and EU membership, and staying out of the EU would give us some long-term problems that would cause serious disruption to our economy.