The Maltese Falcon

Set to enter the EU next May, the small Mediterranean island of Malta could well become the bridge between the Arab World and the West

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By  John Irish Published  October 9, 2003

|~||~||~|How many people in the Gulf have heard of Malta? Taking aside a few European expatriates, the truth is that the diminutive island in the heart of the Mediterranean is probably not the region’s dream location for tourism, trade or even as a political ally. Yet, that hasn’t always been the case.

By the ninth century, Arab armies had extended their influence from the Arabian Peninsula as far wide as Andalusia and Spain. In 870 AD, Malta was merely the latest catch for an ever growing and vigorous empire.

For over 200 years, predominantly North African troops set up camp in the country, giving it their language and thus cementing the Arabs’ place in Malta’s history. While on the surface, the Maltese do not appear to have kept those ties to the Arabs, appearing more European in outlook and mannerisms and avidly practicing Roman Catholicism, their language intrinsically links them back to their Arab history.

At almost every corner, there is a reminder. Whether a simple word like, merhaba (Arabic for welcome), a town name such as Medina or even the Semitic grammatical system, the Maltese, on a day to day basis, are perhaps more in tune with the Arab world than any other European nation.

“We can’t forget that part of our history, if it’s the language we speak, or the place names we live in. It’s part of our heritage and something we should be proud of because it makes us unique,” says Raymond, a taxi driver in Malta’s capital Valetta.

The cultural heritage exists, but it’s Malta’s accession to the European Union next May 01, that could well be the catalyst for a fruitful friendship with the GCC in the coming years. That will almost certainly become the case if the Maltese can become a bridge between the EU and the GCC at a time when relations between the Arab World and the west are already chilly as a result of the recent conflict in Iraq.

As part of that process, the Maltese are already attempting to develop their links with the region. In May, Malta opened its first consulate in the region in Dubai.
More significantly, however, a trade centre has followed, with a view to serving the island’s interest in the Gulf and becoming a one-stop shop for regional companies looking to do business with Malta, and ultimately the EU.

“I think membership of the EU will give us better access to markets within the European Union and to some extent more importantly for us markets outside Europe, but which the European Union has free trade agreements with,” says Stephen Sultana, general manager, Malta Enterprise.

“So, it will be relatively easy for us to take advantage of North Africa because most North African countries, Egypt and Tunisia for example, have free trade agreements with the European Union. That means Malta-made goods can enter these markets without any restrictions. This, obviously, is interesting,” he adds.
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The GCC ambassador to the European Union, Mohammed Ahmed Al ‘Amer, was keen to stress in September that the two organisations were close to signing a free trade agreement in the next year. Such a development will inevitably give Malta the opportunity to jump into the driving seat of any such accord, illustrating just how important it could be to the EU.

Though Europe will undoubtedly remain Malta’s largest export market, currently accounting for around 46% of the country’s exports, trade with the Gulf and particularly the UAE has been growing steadily. Exports to the Middle East and North Africa come to just 6% of Malta’s total exports.

Of that number, 35% goes to the UAE, while 31% heads for Saudi Arabia. Imports from the Middle East are even smaller at 2% of the country’s total.

That work needs to be done is clear. Nevertheless, as the country’s President, Professor Guido de Marco explained to a recent UAE press delegation, Malta is a small country that should not make the mistake of punching above its weight. “You have to be very careful in the choice of your shoes. You should not buy shoes that are too big, otherwise you’ll [end up] like Charlie Chaplain,” says de Marco. “Wear the shoes that fit your feet, but be relevant in the steps you take. That’s the message I can give you for what Malta will be doing in the EU.”

In 1999, exports from Malta to the UAE came to US $6.31 million, a figure that has now doubled to $12.36 million in 2002. While that may be an encouraging sign, imports to Malta appear a little more modest, rising only $263,000 since 1999. The breakdown of products exported to the Gulf is dominated by the food and beverages sector (70%), ranging from ketchup to fruit juices, and building and machinery (12%) products such as ceramics, paints and switchgears for crane control systems.

For Maltese companies to succeed in the region, there is a two pronged approach. Firstly, according to the Malta External Trade Cooperation (Metco), now known as Malta Enterprise, businesses are no longer looking at Dubai as a market where they can sell their products, but rather as a central point from where they can expand into the region. The second factor complements this. The consulate and Malta Enterprise office are in effect acting as a consultancy for Maltese companies, so that they can then target the specific market for their specific product.

Naturally, for these export and import figures to grow, a further challenge will be to persuade the rest of the Gulf that Malta is indeed the place to deal with. One such way will be a series of attendances at high profile regional events ranging from Gitex in Dubai to trade missions in Iran and Qatar.

“Two-way trade is on the rise and having our permanent presence in the region will only enhance our trade flows,” says Anthony Tabone, Malta’s Consul General in Dubai. “Over four trade missions are set for this year and we will be attending a number of trade fairs too, such as the Big Five show in Dubai during October,” he added.
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Ultimately, however, Malta is not relying on trade with the Gulf, as the volume is still too small and the work to develop it is still in its infancy.

“One reason for opening an office [in Dubai] is to diversify our product range and revenue base. It will take time,” explains Sultana.

Where Malta may be able to profit imminently from the Gulf is through its tourism. Bringing in around 25% of the country’s GDP, the tourist’s buck is crucial to the Maltese economy. Estimates from the Maltese Tourism Authority (MTA) place the number of visitors at approximately 1.2 million, in stark contrast to the 280,000 population.

Consider, however, that in 1960, there were only 20,000 tourists to the island. Despite all of that growth, Malta has managed to strike a balance between keeping the tourists happy and preserving what they came for in the first place. Be it a rich cultural heritage of temples, churches, medina-like villages or crusader architecture, Malta can claim the highest number of historical remains per square kilometre, putting it just behind Rome in the global pecking order.

“It’s not like Syria for example, where they have the heritage, but lack in the basic infrastructure,” explains Leslie Vella, chief executive of the MTA. “In our case, we offer the receptive capacity, the connections are here, the accommodation is here and the services are here; this is what appealed to distant markets such as Japan and North America and could appeal to Gulf visitors,” he adds.

Visitors from the Gulf scarcely feature in the 1.2 million figure. Although Emirates is now flying to Tripoli, Libya via Valetta, the vast number of travellers still do not stop over.

While Malta predominantly attracts a localised European market, the MTA has singled out the Gulf region as just one area that needs to be scrutinised carefully in the future. While not able to actively compete with the Gulf’s favoured European haunts such as London and Paris, what the MTA is hoping to do is raise its appeal in the region through its niche tourism sector.

On the one had, while 40% of Malta’s visitors come during the summer, its conservative tourism plan, which forecasts visitor growth of around 2-3% each year, is looking to bring visitors during the quieter off peak season. The more family oriented Gulf visitors could well appreciate the Arabian Mediterranean feel that Malta offers an ideal alternative to the hustle and bustle of London.

Likewise, other niches such as health tourism, golf and scuba diving are all activities that could also attract a range of travellers from the Gulf. Interestingly, behind the UK and Ireland, the Maltese are third in Europe in terms of visitors coming to learn English, currently around 70,000 per year.

All in all, Malta is slowly positioning itself so that in the next 12 months, it can feel European and act as Europe’s eyes for the East and West. Trade and tourism links between the Arab World and the Mediterranean island will need to be worked on, but time will tell.

As MTA’s Vella says: “We are Christians, but we call God Allah. The Arab side of things is very relevant to our character. I do see us as unique and as a bridge between the two cultures in the region.”
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