The armed stand-off in Libya is likely to hit Malta far more fiercely than I, for one, suspected. While there are no precise details of how many Maltese interests operate there, cries of business concern to Malta Enterprise and to the Malta Chamber of Commerce and Industry suggest that there may be close to four score enterprises that are already being affected.
None will be as big as the Corinthia Group, whose large investments in Libya are well detailed. But, large or small, other investors will also be negatively affected. There might or might not be danger to their physical capital assets, under the threat of bombing or looting, possibly both. But even when that threat does not exist, such enterprises have been brought to a standstill, with their important cash flow drying up completely.
What will happen in the future depends on what the future shall bring along and how long it will take to do so. The standstill will drag on as long as the fighting lasts. It could go on for quite longer, failing an early resolution to the conflict by the removal of the Gaddafi family.
That is unlikely to take place soon given the extensive military and aerial assets under the control of the Gaddafi regime. The rebels have right and spirit on their side. They have said enough is enough. As one Libyan who lives in the UK but is returning to his home country to become part of the uprising put it, if the uprising does not succeed a final or living death is likely to follow soon for the rebels. So might as well risk dying for the cause now.
The rebels have near worldwide support. Yet there is also a reluctance, articulated also by spokespersons for the rebels, against military intervention by foreign powers. That is not excluded, as indicated by the statement of the American Secretary of State that the US is preparing for “any eventuality”. More likely the rebels will be helped with provision of arms, openly or surreptitiously under cover of the provision of humanitarian aid.
The first attempt at establishing contact was botched by the British mixed unit, which ironically was taken by the rebels who captured them to be a bunch of mercenaries. Other attempts will be made, and they will be better planned. One should not exclude the long hand of Israel reaching out in a pre-emptive strike, though in that case it will be well covered up so as not to risk the anger of the Arab world.
Meanwhile, the attacks and counter-attacks between the unbalanced forces in the conflict will continue and such economic activity as is left in Libya will grind to a standstill as further oil fields are abandoned, the streets become more dangerous, and the killing continues.
On top of all that Malta, like Italy and some other countries, faces a threat in the form of the early action being taken in an effort to shorten the conflict. Both the United Nations and the European Union have already issued sanctions against the Gaddafi regime. Individual countries have also frozen financial assets. The United States, as it has done in the past, will probably come up with its own brand of more extensive sanctions.
The threat to Malta’s interests, though it holds no truck with the Gaddafi regime, lies in how such sanctions are interpreted. The sanctions should target the Gaddafi family, regarding whom allegations of riches stashed abroad on the model of the Ben Ali and Mubarak families are widespread. It is possible however, that sanctions will be interpreted to extend to the Libyan state, as has already happened in some instances.
In that case, Libya’s investment arms, operating both domestically and openly so in the rest of the world, including in Malta and Italy, will be targeted. That would be a mistake. State investments belong to the Libyan people, not to the Gaddafi family. To stop them in their tracks would be unfair and unnecessary punishment to the Libyan people, among whom those who are fighting for freedom will hope to find an economic basis upon which to build a future if they are successful in their revolution.
It would also be dangerous and unfair to those enterprises in Malta, Italy and elsewhere, including in Libya itself, who have economic entities which include Libyan state investment vehicles among their shareholders.
There can be no doubt that the government, with opposition backing, is on the lookout for such dangers, to be able to attempt to throw light upon dark efforts to interpret sanctions as being applicable to both the Gaddafi family and to state investment vehicles. Every backing should be given to such initiatives.
They are not meant for partisan advantage. They are the sort of consensual approaches which government and opposition are obliged to make as if they were one. They are, in fact, one in this regard of national interests which is crystal clear to be so. Malta’s economic wellbeing has already been hit – by the loss of business in Libya, by the withholding of payments due to Maltese interests, by the drop in arrivals of tourists from Libya.
Malta should do its utmost to avoid blows from allies through mistaken or over-zealous application of sanctions.