6 - 12 January 2000

"Europe is our main priority"

Anthony Manduca interviewed

JOHN SULLIVAN, the new President of the Chamber of Commerce

For John Sullivan, the newly elected President of the Chamber of Commerce, the most important priority during his term of office is the question of Malta's bid to enter the European Union. He said the Chamber was the first organisation to call for Malta's entry into Europe, and this was done over 30 years ago, even before the Nationalist Party had decided that Malta's destiny should be tied to Europe.

Mr Sullivan said that the Chamber would be fighting for the best possible conditions to be given to Malta as it joins the EU. "The decision to join the European Union has been taken. The government knows what it wants.

"The EU has given the green light for negotiations to begin with Malta. The question now is not whether we should join or not but how we are going to join and under what conditions. This is definitely the most important issue over the next 12 months," he said.

Mr Sullivan said that it was important for the Chamber's different trade sections to advise the council of the Chamber how to best persuade the government to obtain the best possible conditions in entering the EU. "We must ensure that the Malta-EU membership issue is won by the 'yes' lobby and so it is important for a good package to be obtained by Malta," he said.

Asked to give a few examples of what "a good package" meant as far as the Chamber was concerned, Mr Sullivan said it would be too early to give examples but such details would have to come from the Chamber's grass-roots.

"They must come forward and tell us exactly what they want to get out of Malta's accession into the EU and what conditions would be suitable for their business interests," he said.

Mr Sullivan said that although the Chamber had always been in favour of joining Europe it had cooperated with the previous Labour government when it wanted to enter into a free trade zone with the EU. "Although we always preferred the EU membership option we cooperated with the then Labour government because we viewed the free trade zone as a stepping stone to EU membership. In fact in 1998 both the Chamber and the FOI had issued a statement clearly stating that full EU membership was the best alternative for Malta," he said.

Mr Sullivan said that it was very important for the government and the Chamber of Commerce to have an ongoing dialogue as the EU membership talks begin. "We have had a dialogue with the government during the screening process but now that the actual negotiations are about to begin, the importance of a continuous dialogue cannot be over-emphasised. We must have a say in the areas that affect our interests," he said.

Asked whether the Chamber of Commerce should take part in a public relations campaign to convince the electorate to vote in favour of EU membership, Mr Sullivan said that was not the role of the Chamber. "However, within the MCED (Malta Council for Economic Development) we believe it our duty to convince all the social partners about the benefits of EU membership," he said.

On the question of a possible merger between the Chamber of Commerce and the Federation of Industry, Mr Sullivan said that discussions between the two sides were held in the past and it was difficult to say whether there would be a merger in the near future. "Over the past two years we have had very good relations with the FOI and there exists an ongoing dialogue between us. I am personally in favour of a merger as I believe that it is very important for all employers to speak with one voice: The time has come for all of us to realize this," he said.

Mr Sullivan said that another priority of his presidency would be to strengthen the role of the Chamber's different sections. "The time has come for the trade sections to have their own individual voice and to speak on their own behalf but they will naturally all have to take responsibility for their actions and comments," he said.

The new Chamber President said he was certain that once the protective industrial levies started to be removed, prices of imported items would begin to decrease, "all other things being equal".

Mr Sullivan said that he believed that the services sector would play a vital role in Malta's future: "I mean all services, whether financial, shipping, exports and many others. Malta could well become an exporting hub for the whole region."

Asked whether he felt the local manufacturing industry had a future once Malta joined the EU, Mr Sullivan replied: "Yes, definitely. Malta could become an industrial base for the European Union. For example far eastern countries could well look at Malta as a country from which to enter the EU."

Mr Sullivan said it was important that the government make a great effort at restructuring the public sector. "I do not believe that the answer is to sack public sector employees, because the social consequences for a country the size of Malta would be far too great. However, all public sector employees must give a full day's work and be more productive. The government must ensure that the public sector becomes more cost-effective while reducing the size of the workforce through natural wastage," he said.

Regarding privatisation, Mr Sullivan said that he was fully in favour of this and he greatly welcomed the government's recent Whiter Paper on privatisation.

"I can understand the unions' fear of privatisation because of the perception regarding job losses. In this regard, we must convince them that this is not the case and that privatis- ation under the right conditions is beneficial to everyone," he said.

Mr Sullivan said the Chamber was very pleased that the government took up its recommendation to issue the White Paper on privatisation, as the Chamber had expressed some apprehension at the methodology used in the sale of Mid-Med to HSBC, although the sale itself was a good move. Mr Sullivan said that certain natural monopolies need not be fully privatised. "For example, some of the services offered by Enemalta could easily be privatised," he said.

The Chamber President said that confidence was gradually being restored in the Maltese economy. "Levies are being removed. We have a time-frame for membership negotiations with the EU. Uncertainty is decreasing. We have set a target date for the reduction of the deficit. I believe that confidence is being restored," he said.

Mr Sullivan said that while government-backed large projects will help the economy it would be wrong to depend on such projects to kick-start the economy. "The private sector will have to achieve that," he said.

Mr Sullivan also said that while he understood the government's commitment to reduce the deficit, which meant that taxes could sometimes be increased, he would have preferred the emphasis in the last budget to have been on indirect taxes instead of direct taxes.

Regarding the problem of the welfare gap, Mr Sullivan said that this could not be ignored and had to be tackled soon. "First of all I believe that social security contributions should be used for work related payments such as pensions and sickness benefits and should not be used for healthcare, for example.

"I also believe that incentives should be given for private pension schemes and that there should be a two-tier system in which people who have quite recently joined the labour market should be obliged to have a private pension scheme.

"However, it is also important for a national safety net to remain in place so everyone is given some sort of cover," he said.