Important elements in the economic dynamics that affect our competitiveness are going berserk. Oil prices are hitting the USD100 ceiling and the euro has devastated the US dollar. Both these events are bad news as they increase our costs and our prices for export. Their cumulative effect can be extremely harmful

Oil
In the last few days we have been experiencing the relentless climb of oil prices. A few American cents from the one hundred dollar mark, oil is trading at prices that cannot be explained by any economic fundamentals. The price is being driven by speculators who are cleaning trillions on the ups and downs which they bring about in the market.
In the meantime, large imbalances are being created. Oil producers and oil companies are seeing extraordinary increases in their revenues and surpluses, while countries that are net importers of energy products have to grapple with the problems and burdens that the exorbitant costs which they have to swallow.
As one of the net importers of fuel, Malta must face this situation and must develop a strategy to minimise the effect that we are experiencing.
A strategy should not focus on how and when the added costs are to be reflected in the price for the consumer and for industry – as it must. The focus should be on how we can produce energy from cheaper alternatives or from alternative technologies. We cannot allow ourselves to continue to be locked in the traditional technologies and ways of producing energy.
Coal, properly managed and properly processed to filter all carbon dioxide emissions can be an alternative. The technology exists.
Nuclear power is also an alternative that should not be discarded but which should be analysed carefully in the light of new developments in the technology and the experience of countries that use this technology.
I have to be persuaded that wind energy is an alternative for us while we have to demonstrate a keen interest on solar energy and follow the developments that should be improving the coefficient of energy capture and reducing the capital costs. One hears, for example of new technologies that have been developed and which are being perfected of a solar sensitive film that can be embedded in glass used in window panes and that can generate all the energy that one uses in a house.
The moral is, let us be innovative.

The Euro
Will the Euro hit the one and one half dollar? It surely looks that way. The probability is that it will even go beyond that, especially if countries like China start to shift its ever increasing reserves from Dollar to Euro, as one of its officials has muted.
It is true that some dollar denominated goods and commodities (including oil) are translated at a cheaper value in Maltese Lira (or Euro). This has a positive effect on the cost of living and therefore on labour costs and on other costs of production purchased locally and in the Eurozone. However it is another headache for our exporters with markets in non-Euro counties as their local costs translate at a higher dollar value which needs to be reflected in the export price or which will have to be borne by them, and eventually will have the effect of dampening our job creating capacity.
The Euro will soon be our currency. Our politicians and officials are sitting around the table where monetary decisions are taken. I am sure that many other countries around that table are feeling the pinch. We must push for a realignment of these two major world currencies. The speculative trust in this regard must be curbed.

Pakistan
The ambition of one man has thrown a country into turmoil. Pervez Musharraf knew calculated the probability that the courts will declare Pervez the army chief not eligible for election as Pervez the President. He has to choose one or the other. He wanted both positions and the way to do it was to impose himself and try to eliminate the opposition.
This will backfire on the dictator. Remember that dog in Aesop’s fable that had a bone and saw a reflection of him and the bone in the water, tried to get the second bone and finished by losing the one he had. The likelihood is that the same will happen to Musharraf.
The thing that irked me most was his cheek of motivating this ego trip to action against terrorism. Over the past week no terrorists were arrested, but the chief justice and many other heads of institutions and political parties were rounded up and jailed.
This excuse of the fight of terrorism is going too far. It is being used to curb civil liberties that had been secured by our civilisations through centuries of development. And this is not happening only in Pakistan.

John Dalli is a Nationalist Party MP