Malta is certainly in the gutter now, but Research and Innovation Minister Owen Bonnici is, apparently, looking at the stars, with apologies to Oscar Wilde for distorting his famous quip. At least, he’s certainly got his head in the clouds.

He announced yesterday that the government has set up a “group of experts” to develop “a strategy for space” and are seeking to attract space technology companies to come and set up business in Malta. Are you listening, Elon Musk?

While it may be commendable that Bonnici at least appears to be trying to live up to the grand expectations of his title, it’s becoming truly alarming to watch these people playing with our country’s economy and its future like a bunch of adolescents trying out a new board game.

The newspapers reported excitedly yesterday afternoon that Malta had launched its first “spacecraft” – a stratospheric balloon carrying a sophisticated camera that intended to take photos of marine life and vegetation in an exercise to document climate change.

It took two goes to get the balloon into the air, though the newspaper reports didn’t explain what the hitch was that scuppered the first try.

Space balloon 🎈 launch a success on the 2nd attempt marking the first time an object was sent into space from Malta.
This research project will not only procure new data and imaging but will ignite a local interest in the space sector.
We're building an ecosystem of innovation. pic.twitter.com/eA3GzYaTJV

— •Owen Bonnici (@OwenBonnici) August 13, 2021

The exercise itself, to map the effects of climate change, is doubtless an admirable initiative, and congratulations to the Institute of Space Sciences and Astronomy, who organised it.

But the idea that Malta, grey-listed, red-listed, murderous Malta, ruled by a Labour government that has demolished its reputation, hamstrung its industries and set the island on a path of destruction not seen since the 1980s, the very idea that this Malta, today, could swan around the world trying to attract “space technology” companies to invest in Malta, is beyond ludicrous.

It’s a ridiculous notion on so many levels, though the most obvious reason is probably the least of them.

Because it’s self-evident that you can’t simply decide overnight that a country that barely produces any scientists at all will suddenly become a centre for space technology development, just because someone whispered in the minister’s ear that “space is a resource and an opportunity,” as Bonnici was quoted as saying.

Bonnici might want to hark back to his government’s recent experiment with turning Malta into the “Blockchain Island” to work out why people might be sceptical of its ability to transform the country into a space technology hub.

Because that notion famously failed miserably after it emerged in 2020 that, having trumpeted around the world its supposedly crypto-friendly environment, ground-breaking regulation and business-oriented outlook, the MFSA, despite receiving more than 300 applications, hadn’t issued a single licence under its much-vaunted 2018 “Virtual Financial Assets Act” – and industry publications around the world reported that those crypto companies that had fallen for the hype and moved to Malta were leaving, frustrated with the lack of progress and absurdly slow bureaucracy.

Then there was the little matter of the poster boy for the Blockchain dream, Binance, the world’s biggest crypto exchange by volume. After the announcement of Binance’s move to Malta with much fanfare in 2018, things soured fast and in early 2020, the MFSA announced that the company did not have a licence to operate on the island. Indeed, the company is actually headquartered in the Cayman Islands.

Blockchain, is of course, much more than just cryptocurrencies. But, according to one of the people involved in creating the original concept, the Maltese government, then under disgraced former prime minister Joseph Muscat, got hugely excited about it… but in reality, they were interested solely in the crypto coin aspect.

The real reason for Muscat’s government’s headlong launch into the virtual currency world will become clearer at some point, there’s no doubt. However, already way back in 2017, the idea that Malta, with so little local expertise or experience, could suddenly turn itself into a world-leading crypto centre, seemed questionable to say the least.

Moneyval, the prospect of the FATF’s grey-listing and the all-round destruction of Malta’s name as a financial services jurisdiction will no doubt have helped give the Maltese government cold feet about actually issuing any licences: according to reports in online crypto media, the companies that tried to get a licence complained that the regulations were so stringent as to make meeting them almost impossible.

But in 2017, Malta was able to sell the idea of itself as the Blockchain Island because, up to then, it had been viewed as a trustworthy jurisdiction, one that had already had success with creating ground-breaking legislation in igaming and building an entire new industry sector on it.

Now, in 2021, Malta is a very different place. Internationally rebuked and punished for failing to respect international laws aimed at stopping financial crime, no self-respecting company, whether it’s in space technology, or car manufacturing, or zipper production, is going to take the risk of setting up operations in Malta.

Malta has been flagged as a money laundering and terrorist financing risk. I’m not sure whether Owen Bonnici or any of his colleagues have quite grasped the enormity of what grey and red-listing really is yet.

It means foreign banks won’t want to work with Maltese companies. They won’t want to process payments or any transactions that originate in Malta. Companies manufacturing or producing goods in Malta, such as the satellites and GPS that Owen Bonnici talked about Malta potentially developing, won’t be able to sell their goods or services to customers based in most countries in the world: the risks and added scrutiny costs are just too high.

That in turn means no foreign investor is going to want to be based in Malta, no matter how much “support” Bonnici is willing to offer them. And still less, any foreign investor working in space technology, an area in which, like crypto, Malta can offer no expertise, no qualified personnel and no official or widespread understanding of the sector.

As happened with the crypto debacle, investors will soon realise that even if they do somehow succeed in overcoming the difficulties caused by Malta’s grey list status, the island has lost most of the elements that made it so attractive to foreign investors, particularly in financial services, in the 2000s.

Malta’s selling points at the time were based on inexpensive rents, quality professional services at half the price of most European cities, and an eager cohort of young, cheap-to-hire graduates. The tax system played a big part, of course, but the rest is gone.

Malta is now an expensive place to live, utilities and other overheads have exploded and the young graduates have left in droves. The government has shredded the country’s reputation, and anyone with any sense is looking to leave, not move in.

Bonnici, the former justice minister who waged war on activists who created a memorial for assassinated journalist Daphne Caruana Galizia, and a member of the government condemned by the court as responsible for that murder, is living in cloud cuckoo land if he thinks that launching a balloon into the air and taking a few photos of the sea marks the beginning of a space technology industry in Malta.

It’ll take a lot more than a balloon full of hot air to fix the mess he and his inept colleagues have made.