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We tend to first reach conclusions and then find the reasons to justify them and ignore any facts that disturb our conclusions. This kind of mindset impoverishes policy making and public debate. We prefer ideological trench warfare. We decide where to dig in from where to attack the other side that has already done the same. The rest of the population is expected to rally behind one side or the other, “not to wonder why, but to do and die”.
Typically there is no informed and rational public debate going on about the adoption of the euro. Government has decided that we must adopt the euro as soon as possible and we are all expected to support this decision uncritically and unquestioningly.
There is no attempt to study the effects of the euro on the Maltese tourism industry and prepare for any eventual negative repercussions. It is being assumed that adopting the euro is an act of faith and that the benefits will outweigh the costs, which are only referred to superficially and hastily.
When Malta adopts the euro, tourists coming from the eurozone will gain, as they will incur no costs involved in purchasing/reselling foreign currency. Tourists from the eurozone will have more money to spend in Malta and Gozo. Tour operators and hoteliers will benefit from lower interest rates, elimination of exchange rate premium and so their borrowing to finance their operations will cost less.
By adopting the euro, Malta will surrender its monetary policy interests to the greater policy interests of the European Union where tourism matters less. Malta will give up the option to devalue the lira to regain price competitiveness of tourist destination. All pressure to maintain price competitiveness will fall on domestic costs, wages and productivity gains.
The United Kingdom is still pivotal to Malta’s tourism and as long as the British government keeps the country out of the eurozone. Malta would have no control anymore on the relation between the pound and the euro. Although it is definitely not the only factor, the exchange rate variable also helps to determine the price of tourism.
A study carried out by Joe Kanada at Stanford University concludes that since Spain adopted the euro, tourism in the Spanish island of Tenerife has been affected negatively. In the last two years Tenerife has lost more than 125,000 tourists as it has become more expensive than its competitors. The study shows the euro having a positive effective on mainland Spain, where tourism constituted a small part of the national economy, and a negative effect on Tenerife where three-fourths of the economy depends on incoming tourists. The higher prices caused by the adoption of the euro outweighed the other beneficial effects of the euro. The same study concludes that the adoption of the euro will be detrimental for Malta, as it will become a more expensive and less competitive destination.
Is it already too late and too heretical to suggest the setting up of a task force to study the effects of the euro on the tourism industry of Malta and Gozo and prepare for any eventual negative repercussions?
Maria Arpa
We met through a Gozitan family a few Saturdays ago when it was still warm and had a barbeque in their back garden. She struck me immediately as a person full of warmth, openness and energy. Maria Arpa lives in London. “I am very proud of my Maltese heritage and I take every opportunity I can to talk about Malta and Gozo. I love inviting my friends to Gozo. I feel frustrated that I am a bit of a one-person advertisement in London and that apart from the Malta Tourism Authority ads which show Malta as a place in the sun not much is known about these beautiful islands.”
Born to Maltese parents in London, Maria has a 25-year career in marketing and advertising alongside which she successfully developed her talent for engaging people in healthy conversations through her experiences as a Samaritan volunteer, a counsellor, a Reiki master and a community mediator. Maria has run her own business for 15 years and even worked as a stand-up comic for five years. She has been recently elected the chair of Mediation UK. Maria is embarking on an ambitious project called the Centre for Peaceful Solutions (CPS) (www.mariaarpa.co.uk).
At home, Maria is happily married to native New Yorker Will, who is proud to be a Maltese citizen and has two teenage children Rosy and Sam.
Maria wants to recognise her Maltese heritage through the promotion of the Maltese islands. She says, “The Maltese people have a lot of humility and modesty which belies their strength and courage. However, modesty and humility will not put us on the world stage which is where we deserve to be.”
She likes coming to Gozo as much as she can and feels the need to spread her love for Gozo among as many people as she can. “I guess while Malta has become built up and faster moving, Gozo most reflects the Maltese Islands that my parents talked about. On a spiritual level Gozo has an energy of healing and peace, which is recognised by the site of Ta’ Pinu. On a practical level I have excellent experiences of Gozitan service being reliable, fair and friendly.”
What should we do to make Malta and Gozo known better in London, don’t Londoners know us enough already? Maria disagrees “To most Londoners, Malta is just another package holiday destination and sadly most of what is promoted on TV holiday shows is Paceville and Qawra. This puts Malta at a huge disadvantage because it brings in tourists who don’t have a high disposable income. Most people have no idea of Malta’s rich history and its links to Britain. Malta is losing out on high spending, discerning visitors because it is catering to the bottom end of the market that have no loyalty and will go to Spain if it is cheaper. If I were marketing Malta I would use footage from the blockbuster movies that have been made on the Maltese Islands. Some of the world’s greatest filmmakers have been captivated by Malta. Why are we selling English breakfast mentality?”
These are the improvements she would like to see in Gozo to enhance it as an attractive island: “A proper welcome at the points of entry, the ferry port is a disgrace. A regular, reliable, subsidised helicopter service (or seaplane) with a service that is linked to inbound flights especially at night. Gozo should have it’s own marketing budget so it can promote itself as distinctly different from Malta.”
Maria believes that there is a British market for Maltese and Gozitan products (olive oil, wine, furniture, handicrafts, furniture). But, I ask her: given how small local companies are how can they hope of ever penetrating such a market?
She thinks that the disadvantages of smallness can be overcome. “Since Malta is a small producer, it is important to export high end quality which will further promote Malta as a destination for discerning people. I would love to see a craftsman’s guild where buyers in the UK can find Maltese (or Gozitan) products and tradesmen maybe a fashion designer and business expert could be brought in to revitalise the lace making designs. Clearly the old styles have their place but I also fear that the whole craft will be lost. It requires a government initiative to research and invest in an export proposition to help small and medium enterprises develop their products for export. After all, what’s the point of joining Europe if you don’t take immediate advantage of the trading possibilities?”
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