Yes, it is our business

Business with this man was bound to end up badly

I am glad to see that the Malta Chamber of Commerce, Enterprise and Industry yesterday afternoon called on the European Commission to start up a tough response to the Libyan crisis and the recent revolutions in Egypt and Tunisia.

Though they spoke mainly of business, which is what they are there for after all, and mentioned the humanitarian aspect in passing, their statement is an important one inasmuch as it addresses a Maltese audience and not just the intended recipient.

Over the last two or three weeks there has been too much of the ‘let’s stay out of it because it’s not our problem’ sentiment among people discussing the matter on the internet. This unwarranted sense of detachment from events unfolding 200 miles from Malta has unfortunately been given credence by the Opposition leader who first spoke about unleashing tourism campaigns (that worked out well with hindsight, didn’t it) and then clammed up, and by an EU commissioner who was filmed saying that Gaddafi should take his own decisions.

The Malta Chamber pointed out that what is happening across the water from us affects us indeed, but not only us – that its impact will be felt across the whole of the European Union.

“The situation requires a strong European response which has so far been lacking,” their statement said. “From the Malta Chamber’s point of view it is also a clear opportunity for the EU to show that it truly has the value of solidarity at its very core.”

In speaking about business, the Malta Chamber said that “businesses across Europe have specialised and developed their markets in North Africa to such an extent that they have become highly dependent on them.”

I have a tremendous amount of sympathy for those who now find themselves with a market that has vanished overnight, the total evaporation of demand and the reality of payroll and other running costs and overheads that must be met, stocks which must be paid for, and debts which must be honoured.

Mine is not a popular opinion, because the general theme is that those who go into business with an abusive regime get what they deserve.

That’s true, but it is also a fallacy to assume that everyone doing business in Libya was supping with the devil and what’s more, doing so without a long spoon. Many did so indeed, but others did not.

But regardless of the circumstances, the fact of economic fall-out remains. What surprises me is that the businesses which moved into North African markets to exploit the gains that were to be made there appear to have forgotten, in the atmosphere of false stability engendered by dictatorship, that high gains are almost invariably associated with high risk.

Setting up shop in a non-democratic environment where there is no rule of law is one of the highest risks of all. To claim that the changes came suddenly is a little bit disingenuous. It is pushing it already to have a totally oppressive regime like Libya’s go on for 42 years just 200 miles from Europe’s liberal democracy.

Even the inordinately powerful Soviet bloc didn’t survive more than 44 years, and that was at a time when there were no smart-phones, internet or Facebook to help bring down the regime.

While I am at one with the Malta Chamber’s request for a strong and immediate response to what is happening particularly in Libya, the Malta Chamber does have to bear in mind that changes which alter markets forever are part of life and there can be no special pleading.

Of course, I say this from the comfortable position of somebody who has nothing invested in Libya, but this is exactly why I am free to see the whole picture. Whether those changes are due to the shift from dictatorship to democracy, to war or to shifts in technology, they are going to happen.

Digital technology wiped out the multi-billion-dollar photographic film industry overnight. Shortly after the camera manufacturers shifted production from film to digital, smart phones came along and knocked them for six. Corporations built up over generations went bust. DVDs wiped out the video tape industry as quickly. CDs wiped out those who made records, and free music downloads decimated the recording studios.

We saw it happen again with the financial crisis two years ago, as industry giants and household names collapsed in a welter of mass unemployment. Now democracy is wiping out – at least we hope it will – the corrupt and abusive business practices in Libya.

The shift was inevitable, it had to come sometime and it was never going to be smooth or easy. But at least we know that, unlike with the financial crisis, when we eventually come out the other side the situation is going to be better because it couldn’t possibly be worse than it was before under Muammar Gaddafi and his hellish offspring.

That means that the potential for business in Libya will be much improved and that it’s all a matter of riding it out – yes, and of helping Libya get shot of the robber-baron family of Tripoli.

Those who made money because they were in with the Gaddafis will see their position of strength severely weakened, but they cannot seriously expect any support for their cause. The rest will have better prospects, and that can only be a good thing all round.

This article is published in The Malta Independent today.