Transcript
James Ker Lindsay (0:00)
Prime Minister Gonzi, distinguished guests, students, members of the press and friends of lsc. My name is James Ker Lindsay and I'm a Senior Research Fellow in the European Institute. It's an honour to be here today to welcome you all to the LSC campus and to chair this lunchtime lecture. Today's event is part of LSC's European Institute and APCO Worldwide Perspectives on Europe lecture series. We're very grateful to APCO for their continued support of this series. It is a great pleasure to welcome Prime Minister Lawrence Gondsey to the LSC today. The schedule is very tight and so I'll keep my opening remarks brief. Lawrence Gonzi took office as Prime Minister of Malta in March 2004, including in his portfolio the Ministry of Finance. In 2008, he was re elected Prime Minister. Prior to serving as Prime Minister, he served as Deputy Prime Minister and Minister for Social Policy. The Prime Minister was born in Valletta, received his formal education at St. Joseph's School and later at St. Aloysius College and the Archbishop Seminary. He graduated from the University of Malta as a lawyer in 1975. He's been actively involved in the voluntary sector, particularly in the disability rights movement and mental health sector, and was appointed as the first Chairman of the National Commission for the Disabled, a role he retained until 1994. For those Twitter users in the audience, and invariably we have them these days, and Prime Minister, I believe you are also one of them. The hashtag for Today's event is LSEMalta. As usual, after the question, there will be the chance for you to put your questions to the Prime Minister. But now will you please join me in welcoming Lawrence Gonzi, Prime Minister of Malta, to LSE to deliver his lecture, which is entitled the Mediterranean An Opportunity.
Prime Minister Lawrence Gonzi (1:55)
Thank you very much, Dr. Kee Lense. Dear students, it's a pleasure for me to be here with you this afternoon to discuss or talk about a region which is so intimately connected with Malta, so intimately connected with Europe and with North Africa, and therefore so intimately connected with our history, with our present and also with our future. Before commencing my address, I know that there are students amongst us who are Muslim friends and therefore I wish you all the best this afternoon. This being the Eid Mubarak, I would like to thank the London School of Economics, European Institute for its invitation to me to give this lecture this afternoon. I accepted with pleasure the invitation to share some reflections about the Mediterranean region. Particularly, I will try to focus on the challenges, but more importantly on the opportunities. Please understand that we are talking about something that has gone through a tremendous change in the past 18 months, really tremendous change. And we're talking about a region in the world which is known as the cradle of civilization, where two continents come together and Malta happens to be sandwiched smack in the middle. We find ourselves in between this mixture of cultures. I once spoke to a world famous architect, Renzo Piano, and he describes the Mediterranean as a cosmic soup of cultures with Malta being the center of it. And sometimes it does sound like and taste like a soup. Not always tasty, but always exciting and always giving us something new. Just three weeks ago, barely three weeks ago, I had the unique privilege of hosting in Malta an event which had been planned year after year, but never took place for one reason or another. But this time it took place and happened. This is known as the five plus five meeting of West Mediterranean Forum. Heads of state coming from five countries from Europe and five countries from the North African shore on the western part of the Mediterranean. The last time a meeting of the sort was held was nine years ago. And year after year efforts had been made to have a second meeting of heads of government, but this never took place. Meetings of ministers of different areas did take place, but heads of government? No. Why? Because five plus five included Gaddafi, included Ben Ali, included the dictators on the north part of the shore, and the five from the European side included Italy, France, Portugal, Spain, Malta, and it was just impossible to get people to sit down around the table and to talk sense. Well, at long last, and after some negotiations, this meeting was held in Malta three weeks ago. The gathering of leaders from Malta, France, Italy, Spain and Portugal. We had the presidents there and the prime ministers. We had Hollande, we had Rajoy, we had Monti, we had Paulo Coelho from the European Union side. But then we had the president of Libya, El Magh, we had Marzouki, the president of Tunisia, and then Algeria, Morocco, Mauritania, top people sitting around the table. And I can assure you it was a fascinating experience for me, as I will try to explain to you in a few minutes time. So this was a historic moment which brought to the fore the transformation that has been taking place in the Mediterranean. A transformation that started way back in 2011 with the events that were triggered by the burning of the student in Tunisia and then all the rest that happened. Now, I had personal experience of this because I was perhaps one of the very last European leaders or heads of government to visit Libya. And I remember I visited Libya in February of 2011, which was immediately after the events that had taken place in Tunisia and Egypt. But a few days, literally a few days before, the events in Libya started moving things forward. And I remember the sense of loss that existed in the regime, in the Libya regime, in the Gaddafi regime in those days, and the events that started, that started a chain of events that brought us to where we are today. The summit, the five plus five that I was mentioning, I'm mentioning because it touched on some important topics which I will mention to you. It embodied the spirit of the regional transformation with this time people sitting around the table who were democratically elected. I remember sitting at this longish table. On my left I had Marzouki, on my right I had Barroso, because the meeting was also attended not just by five heads of government from the European, five European countries I mentioned, but Barroso, the president of the Commission, also attended because he considered this to be an extremely important event. And then across the table I had Elmegariev, who is the president of the Libyan Congress. And you know, Libya is presently going through a transformation which again is tough, is difficult, faces enormous obstacles, but so far moving in the right direction and listening to them was truly fascinating. And whilst listening to Marzuki, for example, talk about fundamental human rights, talking about the opportunity for the Tunisian people to come out and speak out and come out with ideas and to transform the economy, and how important it was for Tunisia to interface with Europe and to learn how to move a democracy forward and to listen to the Libyan leaders doing the same. And just thinking that a year and a half ago the the leaders would have been dictators and you would never have heard that type of language or that type of arguments was something truly fascinating and in itself symbolic of the enormous change that has taken place. The crowds in the street of Benghazi, of Tripoli, of Misurata, of Tunis and Cairo have all fought and died. Remember, thousands of people have died to set in motion this transformation. We have seen the people of the region express their yearning for a better future, for democracy, for the respect of fundamental rights, and for more economic opportunities, both for themselves and for future generations. Their courage carries the hope and desire of a better life, greater respect for human rights, a thirst for pluralism, social justice and fundamental freedoms. And this was expressed in the streets of these countries during the Arab Spring. Now, I must place this within the context of the economic dimension, because we're here not just to talk about the revolution that has taken place and what triggered it, but we have to understand that the economics behind it triggered it. The economics behind it continue to fuel it. And if it fails, if the economics of this fails in the future, then this whole transformation will fail as well. Because at the end of the day, we're talking about bread and butter issues here. We are all aware that the process of democratization and transition is in itself a long process. It does not simply happen by toppling a dictator. That is just the first step in a long and difficult road which deserves our understanding and our respect and our support. I am certain that during this new phase, which we are all witnessing, we will also witness events that will register setbacks and frustrations. Just a few weeks ago, we heard in Libya the American ambassador being killed, and suddenly you're shocked after all that happened, and Libya sending these positive messages all over the world, and suddenly you have this event that puts you, you know, turns you back three steps, four steps, five steps back. Does that mean that the process of the Arab Spring in Libya is a disaster? No, it just means that they are still going through a tough process of change, trying to find the balance between fundamentalism and democracy, between a tribal community and a people that wants to work together, between somebody who's extremely proud of what they believe in, but. But who realize that they need to interface with the rest of the world. So, yes, we will continue to see setbacks and frustrations, but we will also experience what I personally have already experienced, a fresh way of doing things, a sense of urgency for economic growth, and a higher level of sensitivity for issues relating to human rights, freedom of expression, freedom of association, freedom of speech. All issues that will continue to come to the fore thanks to the use of a free medium. Especially, I must add, and this is fascinating, especially social media, the social media tools, the Facebook of this world, that were so obviously catalysts of this movement for change. Now, I had the opportunity to speak to one of the major players in Tunisia, and he was telling me that during an interview on one of the major international television stations, he was told that this was a Facebook revolution. And he started saying, no, this was not a Facebook revolution. This was the revolution of the Tunisian people using Facebook as a means of communication. So the point I am making is that today we have the people in Tunisia, the people in Egypt, the people in Libya, who have this fantastic modern tool of communication which no dictator can suppress or no dictator can influence. It's the free expression of opinions circulating around in a country notwithstanding the dictators of this world. And that is an important lesson for everyone, even not just for North Africa. It's a lesson for us all that today's reality is A reality that embraces the expression of free opinions without the fear of, of somebody trying to do something because you said something that somebody else doesn't like. Now, I repeat that we have to focus, yes, on the short term setbacks, but more importantly, I think we must never lose sight of what I describe as our long term goals and vision. When I say our, I mean not just Maltas, I mean Europe's and I mean the rest of the world. It is in the rest of the world's interest to see a stable Mediterranean, a North African shore that makes success, that stabilizes itself and hopefully leads eventually to stability in the Middle east process and in a region which is a volcano always ready to erupt. So what happens in the Mediterranean, what happened, what has happened and what is happening in this part of the Mediterranean is fundamental and extremely important for all of us. We know that forces of change that are taking place will not automatically result in a stable political system. It will take time. We must therefore weather these risks without losing sight of our long term common objective. A democratic, stable, prosperous and peaceful North Africa. Mind you, I'm talking about countries who have enormous oil reserves, enormous gas reserves. These are extremely rich countries and it's an asset that all the rest of the world is after. So stability there and progress in this region has an impact in so many different dimensions, which include the, the economic part of it. The opportunity for political reform in this region is unprecedented. However, structural political changes cannot be disassociated from further economic reforms. The interdependent structural challenges faced by many countries, such as chronic unemployment, low female participation rates and low levels of private sector development, amongst others, will necessarily need to be addressed. During this five plus five meeting. I listened carefully to what President Marzucki was saying in his numerous interventions during our, how should I say, open dialogue, which we had together. And these were the points he was making. He said, yes, having natural resources is a very, very big advantage. But if you don't translate that into jobs for your young people, you're heading for trouble. If you can't deliver at the end of the day a salary, a weekly salary or a wage to the family, then you're heading for trouble. And you could have the most precious oil wells in the world and gas fields in the world. But at the end of the day, if you have your unemployment soaring, your inflation out of control, and your, your wage is just simply not enough to cope, then all the oil and all the gas is simply nothing more and nothing less than a curse. So political reform cannot fully respond to citizens demands just on its own, unless it is accompanied by better living standards and reform and economic reforms. For the Arab Spring to be meaningful in the long term, it must also be accompanied by by an economic spring in the region. The events that we have witnessed provide us with a unique opportunity to develop a more transparent and effective governance system to overcome the region's economic challenges and unleash its economic potential. Once we are talking about the Mediterranean and the challenges and opportunities, it is this topic that must remain central for all of us. The Arab Spring has brought to light key economic challenges in the region that had already existed for some time, even during the Gaddafis of this world and the Ben Ali's of this world and the Mubaraks of this world. These challenges included high unemployment levels, particularly among young people. They included inflated public sectors that stifled private sector growth and weakness governance systems. Given that these challenges are both structural and they are also interconnected, one with each other, they can be addressed only through a coordinated and comprehensive strategy that involves government, the private sector, civil society and the international community. Before speaking about the opportunities and the way forward, in my opinion for the region, I would like to delve briefly into some specific challenges, economic challenges which were outlined and discussed in the Malta Summit in the five plus five meeting. The macroeconomic and financial stability remain essential fundamentals of any economy to date. Governments have always increased subsidies and wages to try and quell or smooth or calm down social pressures. Well, we know all of us all too well that these policies are not sustainable in the long run. And let's be honest with ourselves, this is not something that has to do only with North African countries. This is reality for all of us. There were good times when governments in Europe and the rest of the world had enough resources to be able to be generous in certain issues and to address and calm down political upheavals and try to achieve popularity by distributing the common good, but not in an intelligent and long term sustainable method. What has happened when the good times disappeared and the bad times came? We suddenly find ourselves in a situation where we realize that what we could afford in those days, we simply cannot afford today. This is a lesson that everybody has learned. This is a lesson that the North African countries and the Mediterranean part of it need to go through in very difficult circumstances. Across the region, governments need to focus more on sustainable fiscal policies as well as establish a functioning financial and banking framework which will allow access to credit and of course encourage the development of the private sector. So, a few points briefly. First, I already mentioned unemployment remains A major challenge. Long term structural unemployment represents a daunting challenge for the region. Ranging between 10 and 25% unemployment was one of the main triggers of the revolts which started in Tunisia and led to the sweeping change across the region. Unemployment is particularly acute among the youth with rates being significantly higher than OECD averages. The regions face losing a whole generation if governments, business and civil society do not develop the opportunities for employment creation. I would add to all of this being the culture that is typical of that part of the world, that that unemployment is also very high, extremely high among women. And unfortunately what is happening now, it is also high among those who have a high level of education. So you've got students just coming out of university in these North African countries, mind you, an event that is also happening in some parts of Europe as well, where you have young people graduating from university and then not finding jobs. Failure to involve women in the workforce is in fact a lost opportunity for growth and development for all of these countries. While skill mismatches can be attributed as one of the main reasons of high unemployment rates of youth and the educated, prevailing cultural attitudes, gender laws and weak support services for women can be regarded as main contributors to the prevailing gender gap that exists in that area of the Mediterranean. As a result of the lack of economic opportunities that exist in the region. The human tragedy of irregular migration is expected to increase. And countries like Malta and Italy are already experiencing the increase in migratory flows towards Europe. Mind you, I'm mentioning an issue here which is not just a Malta problem or an Italy problem. Even here in the United Kingdom or elsewhere in the rest of Europe, in Germany, in Brussels, the flow of migratory and illegal or irregular migration coming most of them from the Horn of Africa, right up, crossing Libya, Tunisia or Egypt and then crossing the Mediterranean is a problem that all of us face. All of us, including here in the United Kingdom. And that's a problem that if events get out of hand and unemployment continues to soar and problems continue to grow rather than be addressed, then let us all expect things to get worse for all of us, which means that we have a vested interest. We, I mean we, we the rest of the world, have a vested interest in doing our best to help this region achieve stability and economic growth as quickly as possible. Another point is lack of private sector development. Throughout the years in these regimes, corruption, weak accountability and the lack of enabling environment have fueled the growth of public sectors in the region, crowding out the private sector. And those of us who have done business in some of these countries during the regimes know exactly what I'm talking about. We Maltese have done a lot of business. These are neighboring countries. We are the closest country to Libya, just a short distance away from Tunisia and then Egypt. So we know very well what the experience is all about. And we know how corruption was a reality of the economies within these countries. So unless this is addressed strongly and immediately, there will be a problem for the private sector to start moving forward and generating the growth that is required in these countries. But apart from endemic corruption, traditional barriers to the growth of the private sector include lack of access to capital and poor infrastructure. As a result, the level of entrepreneurship in the region is weak. Foreign direct investment in the region is concentrated in resource rich countries and is more focused on exploiting the existing resources. Oil, gas, wherever you go, whatever you speak, in these countries, it's always oil and gas. It's never about it, it's never about financial services, it's never about tourism. Whereas these are countries that should be amongst the best performers in these areas, especially tourism, with the history that they have over there. So they need to push this and we need to help them, if possible, to go down this route for the private sector to start a thriving operation and to go for the opportunities that exist. And these are important also for, for those who are interested in exploring the potential of investment in these areas. So as a result of this lack of private sector development, economic diversification is low as well as the intra regional trade is low. Subsidized industries based on import substitution and protectionist policies are still unfortunately prevalent to this very day in some countries, therefore reducing the forces of competition to facilitate the development of a thriving and diversified private sector. Okay, so now we come straight to the opportunities for the Mediterranean. Notwithstanding the huge challenges that the region faces, the historic changes that are taking place offer unprecedented opportunities for all of us. As countries continue to embark on the process of political transition, they must also in parallel embark on structural economic reforms based on a number of opportunities that the region itself offers. First, they have a young population that is yearning to go. The energy that there is is something incredible. With an average age much lower than that of developed countries, particularly of its European neighbors, the North African young population represents a great opportunity, both as a labor force and as a domestic market. This also has important ramifications on future dependency and Social Security systems which will further liberate economic resources. You see, we here in this part of the world are faced with an aging population. How do we manage to have a pension system that is sustainable over a long period of Time our population growth rates is going down, but in North Africa the numbers are the other way around and therefore the opportunities there are therefore the picking if the fundamentals are put in place. However, the availability of such a resource, that is the young, the youth opportunity, is not an automatic guarantee of economic development. The investment in education, in creating an enabling environment and the creation of well functioning institutions will be vital catalysts.