3 OCTOBER 2001
this week: Slowly but surely
The long-term impact of September 11 on local and world markets
For many companies, terrorists could not have chosen a worse moment to mount their suicide attacks on New York and Washington. The atrocities happened less than three weeks away from the close of the third quarter and in a year already marked by mass job cuts and earnings warnings in the US.
The September 11 attack on the US was bound to have immediate and devastating effects on life and property.;
Executives have taken the opportunity to be clearer about their soundings and this has led them to rearrange their priorities. There is also hope for the future with deep cuts in interest rates and a big economic debate in the US.
These, rather than the calls for patriotism, have driven the stock exchange up slightly.
For some companies, the attack was an imaginable catastrophe. Airline and insurances were the biggest losers.
Other giants such as NEC, Sony and Daimler Chrysler are warning about big losses.
Many targets outlined have been jeopardised by the September 11 actions.
It is true to say that many companies took advantage of the terrorist attack to file for bankruptcy. The slowdown in the economy was the real reason - this was just simply the last straw.
The decline in Stock markets is expected to fall by 22% and although there is already some talk of a revival, it is not clear when this revival will take place.
Analysts talk of little confidence in business.
Though far away, the tremors on the Maltese economy are there for all to see.
This is very much the effect of globalisation and the Maltese government has had a tough cookie to deal with here.
It was slowdown before September 11 and now with the terrorist attacks, confidence-building is as difficult as ever.
What is needed to instil this confidence?
Thankfully, the summer slump is over, but with tourist numbers at risk and investment at a standstill, the immediate future appears bleak.
The government must rally some confidence and to do this, words will not be enough.
It will certainly not be helped by the Labour opposition, but then no opposition worthy of their name will support a government on their economic policies.
The turning point may very well be the November budget. And there are certain expectations here that cannot be ignored.
Many middle of the road earners and small companies will be looking attentively at the indicators.
Of this we are sure.
We are also certain that the man who can carry out this job effectively
is John Dalli. Maltas Finance Minister. This is a thankless job
which requires stamina and a determination to move ahead irrespective
of the odds. We trust that he will fulfill his goals.