23 - 29 December 1999

Consistency on EU membership, liberalisation and privatisation

Louis Farrugia's term of office as President of the Chamber of Commerce has come to an end. Mr Farrugia spoke to David Kelleher on what the Chamber achieved while he was President and what future lies ahead for the business community

Your two-year term as President has come to an end. What have you managed to achieve in this period? And what changes has the Chamber undergone?

I believe that the main achievement has been our clear and structured view about the European Union and membership. The Chamber and the FOI released a document in which we stated that we were all in favour of EU membership rather than any other arrangement.

When I took over, Dr Alfred Sant was in government and the Chamber stated that it was not in favour of a Free Trade Area. We have proved to be very credible on why we believe that full EU membership is good for Malta. Therefore, our main achievement has been consistency on the issue of membership as well as on privatisation and liberalisation. We have spoken out against monopolies and their creation. What the Chamber wants is a more competitive economy. We have to continue along this road even if it is a difficult one: it is necessary to create new jobs.

I feel that the Chamber has also been an important voice in the country.

Has the chamber taken a clear stand on the issue of EU membership, privatisation and liberalisation?

Yes, I would say that the Chamber's position has been made very clear.

Despite attempts in the past to discuss a possible merger between the Chamber and the Federation of Industry nothing has happened. Why is such a merger so important? Why is there stiff opposition to such a move? Do you think it will occur in the near future?

No formal talks were held to discuss a merger, however the issue was discussed informally on whether such a merger could be possible. Formal talks will only start when we will be able to thrash out a few differences and the idea gets more backing from certain bodies.

In the long term I feel that, yes, such a merger is possible. There are other areas that require further discussion, such as protection and the removal of levies. I believe that employer bodies will pull their resources together. Time will dictate matters, and I envisage in the future such a merger.

What will the role of the private sector be during negotiations with the EU on membership?

The private sector has a very important role to play. We must now make sure that roles are coordinated. This is occurring locally through MEUSAC and in Brussels through the Malta Business Bureau, headed by Dr Leonard Mizzi. Next year will be very important for the private sector and we should come out with a common view on membership and to make sure, along with the government, that the negotiations mechanism works. A number of people are already working on this.

Is the government involving the private sector as much as it should?

The private sector has to be involved in all areas of the economy and must play an important role. The private sector is already involved, however one of the main problems is a lack of resources. The government is also facing the same problem. We are constantly fighting against a lack of resources. You don't find individuals who give all their time to a particular issue but the private sector is learning to cope with all these meetings.

In you opinion, in what direction is the private sector heading?

The private sector has been informed and knows where the country is heading following numerous meetings organised by the Chamber and the FOI. We believe in a market economy, the need to reduce the public sector, to control the budget and to keep taxation at a minimum.

We have to have an economy that is efficient and serves as a hut in this part of the world, especially in sectors that are of importance to Malta: tourism, trade and financial services. What will be required though are more human resources and training. The private sector also has to change its way of thinking. There is no economy in the world that can survive if it is run centrally and its business are protected and subsidised. There is no other route for the country, even more so with globalisation.

Can Malta overcome its structural economic problems?

It can but it will require a lot of effort on everyone's part as well as understanding and pain. Those who do not realise the need for change or are protecting their interests will have to adapt. It can be done.

Does the government have the political will to bring about changes that may be unpopular with the electorate but of benefit to Malta in the long term?

The last Budget was not very popular. Yet, the people will understand if everything is explained in clear terms. The government must speak the truth and act accordingly as it speaks.

Is the private sector doing enough to convince the public that EU membership is beneficial to the island?

It is not the private sector's role to organise its own campaigns. We are not a political party. However, the business community actively takes part in seminars and meetings. It is not our role to have a national voice.