Loading summary
Transcript19 lines
- [00:00]
James Ker Lindsay
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.
- [01:56]
Prime Minister Lawrence Gonzi
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.
- [27:25]
Alex Britt
In.
- [27:25]
Prime Minister Lawrence Gonzi
Utilizing such a precious economic resource. Investment in education, particularly in vocational training and in reducing the skills mismatches is absolutely imperative. Marzouki made this point in one of his important interventions. He is crying out for help and support where education is concerned. They want us to help them to invest in vocational and academic educational opportunities for their young people. And this is where Malta is already playing an important role. We announced only two weeks ago our vocational college, which in Malta is a very is a success story. Relative recent, was set up only in the year 2000, but made enormous impact on our own economy, creating new economic industries in Malta, such as aircraft maintenance. Thanks to the fact that the vocational college has generated large numbers of qualified professional aircraft engineers and all of that. Well, anyway, we are starting. We are now agreed with the Libyan authorities in Misurata to open up a campus over there to train Libyan students in a number of vocational areas, which would make an enormous difference and stimulate hopefully their manufacturing sector and also the small and medium sized enterprises. Which brings me to the SME concept. I keep saying I come from an island which is a total population 400,000. Okay, so a small island, 400,000. Mind you, we do something that few other countries in the world do. We receive in mostly in the summer months, 1.2 million tourists, three times as much the Maltese population. If China were to do that, the rest of the world would empty and everybody would be in China. Well, we do it, you know, and the argument is small is beautiful and small is beautiful because it's fast, it's flexible, it operates quickly and adapts to changing circumstances. So we need to help these economies and to stimulate the economies in these countries to develop their small and medium sized enterprises. In the Mediterranean region, SMEs are the backbone of the economy, creating both wealth and employment. An opportunity is therefore to develop the creation and sustainability on the long term of SMEs. In these transitional countries, it doesn't take much and it doesn't take millions of euros to do so. It's just a matter of stimulus, of incentiveness, of incentivizing, of generating an area of creativity, of innovation, of entrepreneurship. Traditional barriers such as lack of access to capital need to be addressed, particularly through facilitating financing schemes that can be made available. In the absence of financial institutions that are geared towards the provision of capital. There are opportunities for both manufacturing and services and the development of economic zones to encourage investment. All of this can be an important vehicle for the development of the private sector. Then there is another point which should ring a very interesting bell in our own Renewable energy. What a fantastic opportunity. What a resource. And what an irony that these same countries that have such rich resources of oil and gas can also be rich in the provision of alternative energy. Why? Because they have the sun there. Because there is enormous space, land and deserts and desert space, which can be utilized for the generation of renewable energy. The Mediterranean, particularly the Maghreb countries, has great potential for the development of large scale renewable energy projects. Coupled with the long standing energy security challenge of Europe and the need to diversify its supply more towards renewable sources. This area can be a source of both investment and employment creation. And I'm not talking fairy tales here. I know that there's already enormous interest in investing into these large scale projects that eventually could supply Europe with a volume of renewable energy that can make a difference. A brief word quickly about the Mediterranean itself. Because throughout the ages, as I hinted at the beginning of this lecture, the Mediterranean was always a key hub of trade, of goods, of exchange between countries, cultures, different societies. The merchant is part of us, it's part of our DNA doing business as part of our DNA. How else could we have survived over these thousands of years? So the merchant part, doing trade, emerges as a central figure in the region's history, carrying not only food and goods, but also ideas and bridging the gaps between cultures and worlds. As countries continue in their transition towards democracy, the Mediterranean itself offers an immense economic opportunity. The geographical proximity to large European markets is a potential source of economic growth, of diversification and of private sector development. Of course, the region's destiny lies ultimately with the region itself. However, the international community, especially the European neighbors, also have a responsibility to help in this transition. Sharing history and a common fate around the Mediterranean Sea. All actors, European and Arab, need to address together the numerous challenges of the region. Please let us not be impressed or over impressed by this theory that the Islamic world is something that necessarily needs to be contradicting the Christian world, or that the south needs to be in constant conflict with the North. That is not true at all. People can live together as they have lived together for thousands of years, and cultures can mix and everybody can gain out of that. And we have lessons to learn. We live in a Europe that used to be at war consistently and constantly. And when there was the determination on the table that war got us nowhere, accept disasters and tragedies and loss of human life and instead sitting around the table and banging and shouting and then finally coming to an agreement, as happened in the European Union, and the change that. That brought to the history of Europe, the transformation that all of that brought to the history of Europe, the stability, the peace, even though we argue about the economies of it, of the euro and the dollar and the pound sterling, and we don't want to be part of the euro and I don't want. And I want to be part of the euro and he doesn't want to come and the other one doesn' to come. And we should spend more money and not spend more money, and we should have austerity and not have austerity and all these arguments. Yet when you put all things together, we've had peace, stability and progress over so many, many years. What a strong lesson to everyone around the world. What a strong lesson that we need to remind ourselves of because perhaps the experience we shared in these last, especially last four and a half years, the financial crisis, the recession, and one problem after another, has made us lose a little bit of the focus and we've started perhaps losing sight of the real fundamental advantages that we have together. And I mention this also within the context of the Mediterranean, because the challenges that I have outlined cannot be contained within any one nation's borders. Gone is the time when we could reason, you know, we are sovereign, we can go this do, do, walk this road along alone without. Without what? Without doing business with other countries? What, without exporting your. Your products, our services to some other place and receiving the products and services from some other place. I remember 10 years ago when we used to use the term of global village. Well, we were rather skeptical about this global village thing. Well, it's true, it's true. You know, young Maltese students graduating from university and becoming good professional lawyers, accountants, are today doing business in their office in the center of a town in Malta and competing with their peers in New York and in Beijing. And they're competing. And young authors of music scores are today writing music for. For films in Los Angeles. So it's true. It's a global village. It's true. And the advent of technology has removed barriers and has removed distance as major items of lack of competitiveness or giving advantage and now opened up new opportunities for all of us to be able to share ideas, creativity, entrepreneurship, etc. I can say that Malta is committed to participate in this. We are committed to help as much as we can in our region to achieve this vision and to see it take place. Of course, it will take years and years and we have to go through challenging times, but we are convinced that we're moving in the right direction. Throughout the years that we have developed our economy, especially after the Second World War, when Malta at the time was considered to be a military base, a very strong strategic location in the middle of the Mediterranean. Well, after that we remained strategically important, but this time as a hub for different industries, for services, for manufacturing, for a number of areas, including education, all of which attracted investment. And today I am proud to say that when faced with the economic crisis, our economy has managed to show resilience, flexibility and speed. So I'll come back and move slowly to the conclusion of this lecture. The basis of enhanced regional cooperation has been sealed in Malta during the recent 55 summit. The Malta Declaration, which was signed at the end of the meeting, agreed upon between all the heads of state, stated very clearly that the West Mediterranean Forum highlights the commitment to enhance political dialogue, increase regional security and work towards stability in the Mediterranean. It also seeks to introduce a more concerted effort that focuses on social and economic stability and development, including the items I've mentioned to you. Job creation, environmental protection, regional integration, reduction of social disparities across the region. The declaration that we signed together also pays particular attention to the importance of creating more educational opportunities for the region's youth. During the summit, it was evident that the countries undergoing transition are also inspired by the European Union as a bearer of free trade, as a symbol of democratic values and of strong institutions. We know all too well the importance of free trade as a precondition of growth and employment creation. It is therefore pertinent to ask whether one day, and we did ask this around the table, whether one day these countries will form a union of the Maghreb states which would be the mirror of the Union of the European States. What an exciting vision for that to take place. And it is possible for them to do so because there are so many common elements between the Maghreb states that could push them towards a union that would generate free trade in that region of the world. It is therefore evident that the time has come to focus more Euro Mediterranean political energy on delivering practical cooperation in areas where such measures are urgently required. Such forms of cooperation are essential if a future Euromed partnership is to be perceived as relevant to the people of the Euro Mediterranean area. So I would say that there are, and I conclude with this, there are two, however, two conditions which are important. First of all, in the Mediterranean, the worst mistake that we could do is think that there is a one size fits all. It doesn't happen that way. The realities continue to differ. So one solution for Tunisia would be a different one which would be required for Libya or for Egypt. So there is no one size fits all. And then there's the second major condition. We have to learn to respect the dignity of the peoples in this region. They are so proud of their culture and they do not want us or anyone else to teach or preach. They just want help, guidance, they want us to share experiences, they want us to guide them along and to learn even from the mistakes that other countries have made. And I'm quite sure that if we do this together, the opportunities in the Mediterranean will be enormous, will be beneficial to all the peoples in that region, and will be extremely beneficial to the rest of Europe and the rest of the world. So I trust that you, as students of this school, which has such a high reputation, eventually once you graduate and go, go back to your own countries, when you go back, you will look at the opportunities that the region will be offering and has offered and perhaps in one way or another, in a small way or in a large way, contribute towards seeing the region move forward. Keep in mind that a stable Mediterranean will eventually give us a stable Middle East. And that is perhaps one of the biggest challenges which our generation has faced and which requires the commitment of all of us to try and contribute and resolve this once and for all. So thank you very much and I'll take any questions you would like.
- [42:37]
James Ker Lindsay
Thank you very much indeed. Prime Minister, we now have a few minutes for questions. If you could identify yourself and wait for the roving mic and make yourselves just known. I'll be keeping an eye out. A gentleman here.
- [42:54]
Adel Hamasia
Adel Hamasia, thank you very much for a very insightful lecture. Prime Minister, you mentioned the potential and potential revival of an Arab Maghreb union. Was there any indication at the five plus five summit from the Algerian and Moroccan side for maybe room to put political differences aside, that is the Western Sahara, etc. In order to cooperate economically. Thank you.
- [43:19]
Prime Minister Lawrence Gonzi
Yes, the area relating to the Western Sahara and, well, the whole area actually has enormous problems and the political challenges there are enormous. And I must add, I must emphasize that there is political realism. There was, as is continues to be, a lot of political realism around the table. So nobody is minimizing at all the challenges that exist and that still need a lot of work to be able to address that. But at least, you know, there is no dramatic reluctance to explore the possibility of opening up markets between the Maghreb countries. And honestly, I personally believe that unless they take this step quickly, the chances of having economic growth that creates jobs. Especially, I would say, with respect to Egypt. You see, Tunisia and Libya are relatively, compared to Egypt, relatively small countries. Egypt is enormous, with millions there. And the only way that the economy can really start to generate the number of jobs that are required to address the. The unemployment numbers that they have, which are tremendous, is if they decide to open up their markets and compete. And they're giving rise to the opportunity for small enterprises, small and medium enterprises to move forward. So the answer to your question is yes, there is recognition of the fact that there are some major political challenges still to be addressed and resolved. But. But that has not stopped them around the table from speaking in a way which, I repeat, fascinated me. You know, I kept imagining that across the table, this type of discussion would have been impossible 18 months ago. I remember in, I think it was in October of 2010 when a EU Africa summit was held in Tripoli and I was present there. This was EU Africa, okay? And there was Gaddafi there stating that he was the king of Africa, you know, and telling Europe, you want to solve your immigration problem, then you have to give me, I don't know, 5 billion, I think he mentioned at the time, and I will solve the immigration problem for you. You know, that type of discourse, that type of political approach which was insulting to everyone, has disappeared completely and substituted by people who are highly sensitive to human rights. Marzuki, for example, around the table mentioned that he wants to take an initiative to set up a task force quickly in Tunisia to address the immigration problem. And what was beautiful about it was his argument. He was saying, because this is not fair, it is not right to see hundreds of lives drowning in the Mediterranean. You see the argument. He was pushing the button of human dignity, of human rights, of the dignity of the human person. He wasn't saying because this is an economic problem and this is because they are poor. And this. No, he was saying, we have a responsibility to address this problem from this point of view. So I'm optimistic about the future. I still think that there are enormous challenges, but I'm quite sure that notwithstanding the political challenges in that area of the world, if the leadership continues to move in this direction and their democratic experience continues to be a positive one, eventually we will start to get Some major changes there.
- [47:07]
James Ker Lindsay
Thank you, gentleman. Just there? No, just behind there. Thank you.
- [47:14]
Alex Britt
Thank you, Prime Minister. My name is Alex Britt and I'm a journalist at Dow Jones. Do you think that some of your southern European neighbours who are struggling to generate growth and escape the debt crisis, do you think they'd benefit by shifting some of their focus away from the European single market and seek to generate partnerships with North African countries?
- [47:34]
Prime Minister Lawrence Gonzi
Yes. Yes. And in all fairness, it is being done because the European Union has a number of instruments which are designed specifically to look at that, look at the European neighborhood policy, for example, and so many other initiatives taken from the European dimension, addressed precisely to incentivize the markets, open up the markets, do business and exchange and exploring different opportunities. I am disappointed, perhaps because I had high hopes. I continue to have high hopes in the Union for the Mediterranean. This was launched, what, three, four years ago by Sarkozy, and it was launched with a lot of optimism. We believed strongly that the Union for the Mediterranean would bring change because the charter was designed and written in a way to focus on concrete projects. Okay, so water, water is a problem. You know, it's even a problem in Malta. I keep telling everybody that in Malta, our challenges. Is water one of the challenges. And you know how we generate water? By transforming seawater into drinking water. Yes, but that requires reverse osmosis plants, which absorb enormous amounts of energy. And with the price of oil hitting sky high, we're suddenly placed in such a disadvantaged position. You know, some countries in Europe and the rest of the world are so lucky because they have rivers flowing and water flowing all over the place, and it's provided by nature and provided free, whereas we have to spend millions to drink water. And mind you, in the case of Malta, with the added complications that I mentioned, if you have a population of 400,000 that suddenly has to welcome 1.2 million in the heat of summer and provide water for all of those, then a little miracle needs to be carried out. And we need to absorb the impact of the cost of electricity, of oil, to generate all of that. Now, that's Malta. Imagine the North African and African countries as well, with the problem of water, how to generate water. And perhaps it is one of the biggest challenges that allows us to team up with them. Malta has what, a 20 year experience in reverse osmosis. We are considered one of the best performers in reverse osmosis technology. So we generate a liter of water in the most productive and competitive cost. So we can that technology pass on to countries that are facing this this problem, but I'm giving this as an example of what the Union for the Mediterranean was, was invited to focus upon and the number of other projects. Unfortunately, what happened was it got clogged up with institutional issues. Who's going to be Secretary General, who's going to be there, where's going to be this office, where's going to be that. So it's, it sort of got bogged down, but I'm hoping that it will kick start the process now that there have been these changes that have taken place. So again, the answer to your question is yes, Europe needs to, well, needs to strengthen the initiatives it has taken in order to be able to realize even more than ever before that there are fantastic opportunities for business lying just beneath our noses are down there and all it takes is for us to take the initiative, go there. But with the two caveats I mentioned. These are very proud people and they don't want anyone to preach or teach, but they want advice and advice on the areas which they themselves consider to be of major importance to them. If, if that is in place, I'm quite sure that we will have some wonderful experiences in the future.
- [51:40]
James Ker Lindsay
Unfortunately, we're rapidly running out of time. So what I will do is I'll take a group of questions together. If you could keep the questions as short as possible, be very grateful. Lady just there first.
- [51:56]
Melanie
Hi there, my name is Melanie, I'm a Maltese student here at lse. My question was we touched upon some of the problems of the EU at the moment. And firstly, first part of my question would be do you think that if the Euro was to break down, which is being tossed around a bit at the moment, do you think that Malta will gain or lose from this? And secondly, if that does happen, if the Euro does fail or Europe ends up breaking, do you think that the countries that are now involved in the five plus five summit will still manage to help the Maghreb states in the future?
- [52:30]
James Ker Lindsay
Take lady at the back and then gentleman over. So lady just there. Right, right at the back actually, I noticed. Sorry.
- [52:42]
Taram Khael
Hi, I'm Taram Khael, I'm a Lebanese graduate student at lse. I believe I come from a country that has been facing very similar challenges and opportunities to Malta. We have this young generation which is highly educated and who's excelling in their careers, but not in Lebanon. They've been developing other countries like Europe and usa. We have the source for renewable energy like land, water, the one that is scarce in Malta, the sun and everything. I want to ask what Is your advice for a young population who is strongly willing to, to move their country to a high level of development. However, there's this corrupted public institutions and this group of political leaders who has been dragging the country to the bottom instead of moving it up. Thank you.
- [53:33]
James Ker Lindsay
And sadly, finally, the gentleman just at the back there on the right hand side.
- [53:43]
LSE Student (Environmental Economics)
Thank you. It was a very informative lecture. I'm a LSE student here. Environmental economics. Do you think that as long as we do not take away the profitable business of North African countries selling their fossil fuel resources to Europe, that they will not step back from doing so? That they will not shy away from investing in, well, investing in renewable energy, for instance? Is it the most important thing for Europe to create a credible commitment to that we can step away from buying their fossil fuels? Is that maybe the way to go?
- [54:26]
Prime Minister Lawrence Gonzi
Thank you. Thank you. Okay, first question was about the euro and, and the experiences we are going through and have been going through for the past four years. But I remain optimistic. You know, sometimes it's the best thing to do. I think. I think the euro has and continues to weather the storm and the euro as a currency remains a strong currency. You know, the problem with the euro is not the euro, it's some countries that have delayed the reforms that were necessary. Look, you know what has happened? We all lived seven years of plenty and we did never, we never thought that after the seven years of plenty, there will be seven years of disasters, you know, and the seven years of plenty of those who are intelligent enough had built their warehouses and they had stocked their wheat. And then when there was the misery, they had enough to go through the difficult times. Well, we've lived seven years of plenty and we overdid it. And those who overdid it then had to pay a very high price. And they need to be get their house in order now. Now getting your house in order when the sun is shining is one thing, but trying to get your house in order when it's raining and pouring is a disaster. In the case of Malta, we were in a sense, a little bit lucky because one of the very first decisions that we took was to join the euro as quickly as possible. So we entered European Union. We joined the European Union in 2004 and the target was to join the euro in 2008. But to do that, we knew we had to carry out some very tough reforms. Unpopular, you know, losing votes. And for a politician to lose votes, oh my goodness. I remember this yes, prime minister thing, you know, and this, the civil servant top Civil servant, when his political master used to come up with some bright idea, the civil servant used to tell him, well, that is extremely courageous of you. Why? Because it will lose you vote. Well, we had to take those decisions, but we took them when the sun was shining. Let me put it this way. So in essence we could cushion the negative impact of the difficult decisions. Had we delayed that, had we delayed those decisions, we would have had to take them in the midst of all this turmoil, which would have made matters much, much worse. So those countries that have reformed, I think will be strong enough to weather the storm. Those countries that have not reformed are having to reform, but in the meantime they are facing the social upheaval that we're seeing on television every day, protests in the roads and streets, etc. So I still think that when all things, all things in place, I still believe that the euro will remain a strong currency and that there is genuine commitment by all concerned to continue to make the best of this. And I do believe that the fundamental elements for a successful currency are there. Okay, so I remain, I remain, I remain optimistic. I do not believe that the situation will lead to a breakup. Greece is a bit of a challenge, but I think that the first, how shall I say, positive signals have started to appear now with the initiatives that the European Central bank has taken recently. I think that some solutions now are starting to give results. If that happens, will this have an impact on the five plus five? Well, yes, because at the end of the day, the economies of the whole region are interlinked in one way or another. So any bad news in Europe will have negative effects all over the world, including on the area, the region that I was talking about. The second question was about what advice would I give to young people in different political scenario. I stand back and I'm scared to give advice. I do. I am fully conversant with the realities of my country, but not fully conversant with the realities of other countries. But I can tell you one thing. It is the energy, the vision, the ability of the young generation to absorb technology that is the spark that has brought enormous change all over the world and in our region. So I'm quite confident and sure that the young generation, not just in Lebanon, but in that part of the world, all of it will be themselves the key that will bring change. You mentioned corruption and you mentioned the need for governance and the need for institutions that need to be put in place. Place. Well, with the generation that is forward looking and with the generation that has seen what has happened around US and the changes that have come, I'm sure that at the end of the day, they will bring the change that will be necessary also in different parts of the world. But I keep one step back from giving advice. I'm sure you are more experts than I am on what would be best for you in your country. And finally, the last question is the issue regarding, well, Europe, depending on the fossil fuel availability, resources that the North African and the whole African continent has, and whether Europe should stand two steps back and send the message that, look, we're not after your oil and we're not after your gas, but we can do good business with each other. Yes, I think the argument would be highly credible there and would make an enormous difference. I'll tell you one thing and conclude with this. These leaders of today, and by the way, the transformation, the transition, the revolution that has taken place has meant that large numbers of Tunisians, Egyptians and Libyans who were living in the Western world, exiled by the dictators, lived 20 years, 15 years, even more in the United States, in Canada, in the United Kingdom and the rest of Europe because they were exiled. As soon as the revolution was over, a lot of them went back to Tunisia, to Egypt, to Libya. There are a lot of Westernized Libyans in Libya who have experienced success stories and who come there knowing that the potential in Libya and Tunisia and Egypt is not just the oil, but it is about services, it's about technology, it's about tourism, it's about, you know, creativity. And therefore, there is a new generation there that has returned to their motherland with a totally different point of view. Now, will this be given enough space and opportunity to grow, or will the situation go from bad to worse and they will give up and go back to where they used to live before? I believe that is the most important question and hope that the answer to that question will be that the future in their countries will keep them contributing in the economy of their countries, giving success where it is deserved and where there is, I repeat, enormous potential for all of them. So the answer to your question again is yes, I agree with you. And we, all of us can do, should do our best to help the different economies to move forward and to approach and go for the opportunities that a modern economy offers, even to North African countries. Thank you very much.
- [63:01]
James Ker Lindsay
Ladies and gentlemen. Before I officially thank the Prime Minister, I'd just like to ask that if you could remain in your seats when we leave the room so I can escort the Prime Minister out. Also, I've been asked that any Maltese students here who would like to meet the Prime Minister if they could gather at the back of the room, and then they'll be escorted downstairs to meet him afterwards. So on that note, it's been a great pleasure, Prime Minister, to have the opportunity for us all to listen to what you've had to say this afternoon. It's actually been fantastic and relatively rare to hear such a holistic view of the Mediterranean that tries to link the two elements together. So thank you you very much. We're extremely grateful for that. And as a note of thank you, we'd like to present you with an official LSE certificate marking the event today.
- [63:50]
Alex Britt
Thank you.