Pearce on the elections

Johnathan Pearce in London writes in Samizdata, a blog for 'people with a critically rational individual perspective':

A lot of elections at the moment. Besides the US elections, we have just had the Spanish elections and in my wife's small country, Malta, the ruling Nationalist Party, a vaguely right-of-centre party that supported Malta's entry into the EU and the euro, won by an incredibly slender margin (just over a thousand votes). As I have a vested interest in Malta remaining a broadly open country, I am glad that the party won, or at least relieved that Labour, the main opposition party with a vindictively regulatory streak, did not. But my views on Malta's election are tinged with a bitter-sweet taste as the Nationalists, for all their generally pro-enterprise views, have made serious errors.

The party took Malta into the EU. By staying out of the EU, Malta could have retained and expanded its status as an offshore tax haven, providing Monaco, the Swiss, Liechtenstein and Gibraltar with some useful competition as a friendly venue. Malta has quite a thriving IT and financial sector and English is widely spoken there, a priceless advantage. By keeping out of the EU, it could also have avoided becoming a conduit for tens of thousands of illegal immigrants who use the small island as an entry point for the EU.

Malta, an island the size of the Isle of Wight with half a million people, is not a country that can easily absorb a large influx. But as my better half points out, Malta, a Catholic country, has long feared the shadow of its Muslim neighbour, Libya, just a hundred miles or so to the south, and sees EU membership as somehow tying it ever more closely to a non-Muslim population. The Maltese are quite a tolerant bunch but they are fiercely pro-western. The Archbishop of Canterbury would be thrown into Valetta's Grand Harbour.

One reason for the closeness of the elections is that there is a lot of anger at the governing party, even among most moderate voters, at some of the crasser building developments in the densely populated island. Even the most ardent defender of free enterprise will sometimes struggle to defend the ugly high-rise developments in part of the island that have gone up next to the attractive, honey-coloured buildings along parts of the country (in the smaller neighbouring island of Gozo, such developments have been far fewer, thankfully).

Tourism is a crucial source of income for Malta; its historic buildings are part of its appeal, so long-term tourist entrepreneurs should hopefully follow their self-interest and avoid damaging the very thing that makes Malta a nice place to visit. This is an interesting subject for economists: ugly developments make money for investors in the short run and arguably, are better than no development at all, but the long run costs can be in the form of less tourism overall as would-be visitors go elsewhere for somewhere prettier...