The FOI and Chamber should merge

In most industrial democracies there is usually one major business organisation representing employers, industry and commerce in general. For example in the United States there is the US Chamber of Commerce, in Britain there is the Confederation of British Industry, in Italy there is the Confindustria and in Germany there is the Employers' Association. Business, therefore, tends to speak with one voice which gives this very important sector added weight.

In Malta we have three major business organisations, the Federation of Industry, the Chamber of Commerce and the Employers' Association. All three are equally important, they are given the same recognition by the government and usually have almost identical views in favour of European Union membership, privatisation and the liberalisation of the economy. Why is it then, that the three organisations do not merge? Surely if the business community speaks with one voice, which it should do, this would carry more weight?

When private enterprise was under attack by the Socialist government in the 1980s all the business associations formed an umbrella organisation called COPE (Confederation of Private Enterprise) and this did have an impact, however remote, on halting excessive government interference in the economy. What COPE used to preach in the 1980s, such as the introduction of a true market economy and the benefits of privatisation, is today taken for granted by both main political parties. It is indeed regrettable that COPE was dissolved soon after the change of government in 1987.

In an interview with The Malta Business Weekly last January, the newly elected President of the Chamber of Commerce, John Sullivan, was asked about the possibility of a merger between the Chamber and the FOI. He said: "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 realise this."

Mr Sullivan is absolutely right and the sooner a merger takes place the better it will be for the business community as a whole.

However, the newly elected President of the FOI, Joseph Zammit Tabona, was slightly more cautious about coming out in favour of a merger with the Chamber of Commerce. Interviewed by The Times this week he was asked whether such a merger was still on the agenda. He replied: "A merger, probably not, but we want to have closer relations not only with the Chamber but also with other employers' organisations." From the tone of that answer it would seem that it is the FOI which is less keen on a merger rather than the Chamber of Commerce. This would have been understandable a decade ago when local industry was protected and there was no clear sign of economic liberalisation. It was the Chamber which always insisted on local protection being removed, in contrast to the FOI, so a merger then would have been out of the question.

However, today, the FOI agrees with the removal of protective levies which is being spread over a three year period. Both business organisations are in favour of a liberalised economy, so why the reluctance to merge? Is it because one fears being dominated by the other? Surely a compromise can bee arrived at by which the post of President and Vice President of the newly merged organisation will rotate every two years between an industrialist and an importer?

Due to the fact that the Chamber and FOI are two separate organisations, they can sometimes give the impression that they are sending out different signals, and this is not in their best interest. For example, Chamber President John Sullivan told The Malta Business Weekly last January that confidence in the economy was gradually being restored. He said: "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."

FOI President Joseph Zammit Tabona, however, told The Times on Monday that the economy has not yet taken off. He said: "I think the economy is still suffering from a slowdown which has been a phenomenon of the past five years. Investors are being a bit more cautious to see how EU negotiations will proceed before committing themselves to new investment." He also emphasised that there is a serious cash flow problem in the country.

To a certain extent both gentlemen are correct, but their messages are not exactly the same. The question is: Does business believe that the economy has picked up or not? Having one voice would help.