The problems with Malta’s “multilateralism”

What you will see in government in the coming days, weeks and years will mostly be the decisions and thinking of Robert Abela. There is and has been no discussion within the Labour Party on important national issues such as foreign policy, energy policy, food security, inflation, economic growth and more. The Labour Party is bereft of any internal discussion and for everything ministers do permission has to be asked in advance from OPM. Robert Abela’s henchmen then delegate, approve and mostly say no until the boss thinks it over. The government is a very tight-knit organisation which revolves under the whims and preferences of one man in power.

The new Minister for Foreign Affairs, Ian Borg has announced this government’s foreign policy as “multilateral” and “non-aligned” which are basically the same ideas subscribed to by the previous government administration with Evarist Bartolo as foreign minister. It’s a delusional re-scripting of Malta’s 1970s foreign policy by political hacks which has no substance and no objectives. The government’s foreign policy and energy policy are literally drafted and directed by political hacks with a past career as pro-Labour propagandists, some with ONE background, and this is why our foreign policy lacks material substance. Here, Ian Borg is fulfilling his role as a dutiful Party servant and following the OPM’s line and script in his line of work. After being demoted to the foreign desk, Ian Borg may be less motivated to push forward his ideas and trigger a debate about Malta’s foreign policy, so for now, the OPM is taking the lead in ensuring to keep everything the same.

First of all, one needs to understand what was the purpose and aims of a multilateral and non-aligned foreign policy in the 1970s. Luckily, I studied Malta’s foreign policy of the 1970s by researching Labour Party and both Malta and UK government archives so I know a thing or two about the subject. Malta’s foreign policy in the 1970s was geared toward achieving the most lucrative outcome in terms of foreign direct investment from both sides of the Iron Curtain with a clear preference for first trading and negotiating with the West. Labour’s foreign policy was not purely idealistic.  A non-aligned policy gave the Maltese government significant leverage to sign a better deal with the British for Malta’s defence facilities while at the same time tapping into new trade deals with China over the development of the shipyards and Libya over oil. The USSR was never even considered a potentially significant trading partner and in fact, the Maltese government sought to avoid it, preferring to trade instead with countries from the Warsaw Pact. The main trading partners which replaced the UK were Germany and Italy with trade with France increasing too. Malta’s foreign currency basket was composed only of Western currencies.

Neutrality as a principle was also conceived first and foremost with a material objective rather than an abstract ideal: and it was simply based on the fact that Malta would never survive a nuclear war by then the world’s superpowers. Malta’s concept of neutrality as subscribed by Labour in the 1970s was common sense: small islands like Malta had to avoid a nuclear conflict in order to survive. This principle still applies today and this is why Malta should not accept hosting Western ships laden with nuclear weapons. The West doesn’t need Malta in a nuclear conflict anyway. Italy is a NATO member and we will still suffer the consequences of a nuclear war anyway. Neutrality only minimises the risk of war but doesn’t remove it altogether.

Today, Malta is a member of the European Union and the world has changed completely since the days of our policy of non-alignment. We have inevitably entered the European Union and enjoyed substantial economic growth because of this decision. Although we currently face serious challenges to our democracy and a collapse of rule of law,  we still remain a democracy despite the ever-growing illiberal characteristics of our government and our state. Basically, we are members of the Western world. And we trade in Euros. After the fall of the Berlin Wall and the collapse of the Soviet Union, globalisation entered a new phase of expansion. This was the time when even China was opening its doors to Western capital more aggressively. During this time we have seen practically most of Eastern Europe embracing liberal democracy and even joining the European Union. Very recently, beholden to a new young generation of youth, many African countries are moving towards liberal democracy, including Tunisia, Libya, Rwanda, Mali, and lately even Sudan where massive protests forced out years-long dictator Omar al-Bashir from power. But there was also the push-back by the autocrats in Turkey, Syria, Thailand and also Burma and the Philippines where autocracy and dictatorship pushed back against democratic forces. In the end, the balance tilted in favour of liberal democracy. Since the fall of the Berlin Wall and the collapse of the Soviet Union there was an ever-growing number of countries which turned to the West and adopted liberal democracy. Bombastic and click-baiting headlines by the Economist that Fukuyama’s “End of History” was dead upon Trump’s rise to the presidency were soon faded with Joe Biden’s presidential election and the stock market going to all-time highs soon after. Capital seemed to love some liberal assurances.

There was a very obvious reason why Stalin sat with Churchill and Roosevelt in 1945 at Yalta to discuss how Europe was to be sliced up. The Soviet Union had defeated Hitler and turned the tide of the Second World War in the Allies favour after the Battle of Stalingrad. Simultaneously, this was a historic opportunity for Stralin. Stalin had successfully done what any other Tsar before him had failed to do: win a total war in Europe and take over all of Eastern Europe. Stalin’s European stalemate was probably the last re-assertion of direct imperial power by the traditional empires, all of which were fading away, except for Russia.  Yet, even the Russian empire faded away eventually in the 1980s until it collapsed in 1991. It did not collapse completely. It kept deteriorating until Vladimir Putin came to power and bombed Chechnya halting the morass of the decaying Russian empire. Now, Putin’s intentions are very clear and he intends to re-assert what was previously Russian hegemony in Eastern Europe. China too intends to reassert its imperial power in its borders and after it has already occupied Hong Kong, it now intends to re-occupy Taiwan, having said so, clearly and explicitly many times over.

The United States is now at the forefront against the re-assertion of Russian and Chinese imperial hegemony by using its most effective weapon: the Dollar. The Dollar is the most used currency in the world. There is an obvious ideological reason why the Dollar is so powerful in the world and why it is the preferred trading currency. The Dollar is indeed backed by guns and missiles, but this is not what gives it value: what gives it value is freedom and liberal democracy. The only reason why global capital always flies to Western destinations is that it is in the West where you are mostly guaranteed your property and civil rights and this is why the Dollar does not have any competition (the Euro is like the Dollar’s cousin). And this is also why Russia’s imperial cause against Dollar hegemony is a lost cause. As Russia tries to create a parallel trading sphere in which it becomes, supposedly, independent of the US Dollars and the US Dollar financial system, Russia’s imperial might will ring hollow with a huge disconnect to the reality of the present world. The Chinese may be smart enough to understand this and would not want to risk economic growth just to claim Taiwan like they claimed Hong Kong, but this also depends on how the US and the West will react to it.

Europe’s reaction to Russia’s war on Ukraine as led by Germany has been scandalous, to say the least, and was probably even worse than Europe’s appeasement to Hitler himself. The German political class, both left and right is so mired in corruption and incompetence when it comes to its energy policy that it has failed to find immediate solutions to its dependence on Russian gas. While Germans keep funding Russia’s massacres in Ukraine out of pure self-interest, they are not delusional enough to believe that diplomacy is going to end Russia’s war in Ukraine. The Germans are arming themselves and increasing their defence budgets for the first time in history after many years. There is an unequivocal awareness in Europe that we can no longer trade our strategic interests with traditional empires re-asserting their imperial might with wars and violence and as we slowly close the trading window with Russia while selfishly securing our self-interests at the expense of Ukrainians, we will eventually come to reckon with a bellicose Chinese war-machine which has an appetite for Taiwan and the South China Sea.

Clearly, therefore, there is much less scope and reason for “multilateralism” and “non-alignment” as it was understood in the 1970s. Even India which is at the crossroads of trading between East and West has serious difficulty in reconciling its traditional policy of “non-alignment” in the face of increasing threats from China over its border. The theory that crises can be managed by politics, trade and diplomacy and a global order can be sustained peacefully with such a balance of interests is clearly becoming ever more unsettled. And the West, having traded in goodwill its strategic interests with Russia and China is now facing the consequences. Today we know that energy and food security can not come from autocrats and traditional empires which threaten our collective security and that of our allies.

It should be therefore clear, at this point in history, that in fact, a multilateral foreign policy poses much more risks than having a pro-Western foreign policy. Not only, is a multilateral foreign policy illogical and out of context, but it is also against our opportunistic interests given that the historical tide is clearly on the other side. This doesn’t mean that one would abrogate a commitment to neutrality by taking a pro-Western stance, however, the pro-Western stance is inevitable in terms of food and energy security and the changing global trading spheres and networks. After all, Malta’s foreign trade is completely dominated by our Western partners and we have nothing to gain by trading energy and food with Russia or China (see below at the end of the article). Only in 2019 did we see a bizarre sharp rise in Russian imports to Malta (mostly fish and cereals) which seemed to have subsided in 2020. We are also seeing a sharp rise in imports from China with aircraft, electrical components organic chemicals and machinery topping the list. Russian imports seem to fluctuate and may not be critically important due to many import alternatives to cereals and grains available such as Argentina, India and Brazil and even in Europe if agricultural production increases.

Malta outsourced its energy dependence to China and Azerbaijan respectively by selling 49% of Enemalta and the heavy-fuel oil-powered power station to Shanghai Electric and buying gas from Azerbaijan’s energy state agency Socar for the Electrogas gas-powered power station. Until today, the Maltese government has kept secret its future energy plans and arrangements with these companies leaving the whole country in the dark about its energy security and future. Coupled with an illogical and scantly written foreign policy, Malta’s energy policy is practically lacking any conditions. We basically have a free for all multilateral trading approach without factoring in any risks.

In the end, there is also a principled approach to liberal democracy and its adherents that we should take, but the Maltese government will find this principle difficult to adhere to internationally as it corrodes rule of law at home. These are very different times from the 1970s and a rent-seeking regime is going to find it incredibly difficult to navigate through a changing world. We will be holding a poisoned chalice if China chooses to go to war and this is not in our interest. Neither is it in our interest to see a world where imperial powers rise again out of the ashes and threaten world war as they secure territory and colonise other countries directly. As a previously colonised country, we should come to terms with the changing tide of history yet remain consistent with historic values and place ourselves fully in the pro-Ukraine camp. In taking a complacent approach we not only risk being left out of the future changing dynamics of the global order, but we also risk material energy and security risks. Our government should become honest about the risks of our energy policy and seek to buy back China’s share of Enemalta and replace it with a Western partner. The government should seek a Western partner with regard to its gas-fired power station as well, but then again the government should have addressed the Electrogas contract for its corruption and murder first before arriving at this discussion.

Apart from the economic risks we face with unsustainable government expenditure and economic growth dependent on government expenditure, we also face energy challenges related to a fast-changing world. The Labour government doesn’t have answers to our most pressing challenges and problems. Our foreign policy is one of these challenges.

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  1. Getting neutrality and non-alignment right – Mark Camilleri

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