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Gibraltar: a strong economy in choppy waters

The Gibraltarian Chamber of Commerce has taken stock of the Rock’s importance to the local economy – and it’s doing its bit to keep it afloat.

The Gibraltarian Chamber of Commerce has updated its study on the local economy’s effect on the Campo de Gibraltar, and it looks positive. Gib was largely insulated from the world’s economic downturn from 2008 onwards as its economy focused on areas that were not badly hit; the government’s moves to bring the territory completely in line with all of Europe’s directives (confirmed in our report on the new Gibraltar House) has helped perceptions.

Perceptions, however, are window dressing compared to the hard facts behind the economy – and they make positive reading. Gibraltar continues to be a major economic driver in the region, for example accounting for one in four new jobs in the area (compared to one in six in 2009).

Part of this effect will be due to the Spanish economy having been hampered particularly badly by the financial crisis. Prices in Spain have tumbled while unemployment has risen. The report makes use of a number of the ways in which the Spanish and Gibraltarian economies interact and takes account not only of government figures but also a survey of the Chamber of Commerce members.

Facts and figures

Gibraltar remains a strong economic player. In 2013 it imported almost £381m of goods from Spain, a figure that includes net petroleum imports. The exact figures behind the “one in four jobs” claim are that Gibraltar has 25,907 out of the 109,189 jobs recorded in the Campo region overall in that year. This doesn’t take any account of jobs supported by the Gibraltar economy but located elsewhere. Gibraltar accounts for around 11% of employment in the region overall.

Also relating to the Gib economy was the £102m earned by Spanish Frontier workers in 2013, £65m of which left the country and was spent in Andalucia. Other frontier workers earned a further £105m in Gibraltar, repatriating 20% and spending the remainder in Spain.

It’s not just the workers that spend money in the region, however; visitors also account for a lot of money. This accounted for some £207m spent in Gibraltar in 2013, £146m of which came from visitors from the Campo; residents of Gibraltar, meanwhile, visited other places in the region and spent £46m. Gibraltarians with second homes in the Campo de Gibraltar spent more than £62m in Spain, £40m of which was in the Campo region.

Overall the report concludes that Gibraltar increased the economic output of the Campo de Gibraltar by £554m in 2013, a considerable increase on the figures from the 2009 survey. Interestingly the 2009 report was based on data from 2007, meaning that the figures predated the crash; any increase between then and now has to take account of any potential dip due to the financial crisis.

Commentary

Chamber President, Christian Hernandez, commenting in the study’s official launch release said: “We have worked extremely hard to obtain this study and have expended significant financial resources to produce it. However, the result has been well worth it. These updated results clearly show the impact of the Gibraltar economy on the Campo de Gibraltar and evidence the very positive influence and impact which Gibraltar’s economy has on the Campo region and also to an extent which the Campo has on Gibraltar.”

“The first study used data from before the international financial crisis and before Spain entered a prolonged recession. In contrast, since then Gibraltar’s economy has continued to grow, create jobs and attract more inward investment. All of this has had very real benefits for Gibraltar and also for the Campo as a whole.”

The Campo de Gibraltar is an area accounting not only for the Rock but its locality as well. The study first came out in 2009 but has been completely updated to include data from 2013, which at the moment is the most recent information available. A six-page extract from the report is available at http://www.gibraltarchamberofcommerce.com/economic-impact-study-2015-summary/. Both the new version and its predecessor were researched independently by Prof. John Fletcher of Bournemouth University and a team of colleagues, commissioned by the Chamber.

Guy Clapperton is the freelance journalist who edits the New Statesman’s Gibraltar hub. You can also find him in the Guardian, Computer Business Review and Professional Outsourcing which he edits.

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Gibraltar and Europe: caught in the slipstream?

The British papers are full of who has the lead in the European in or out campaigns – Guy Clapperton considers the fallout for the smaller territories

Let’s start by acknowledging that there is no clear pattern emerging in the Europe debate, as long as we understand “Europe debate” to mean whether the UK should stay in or leave the European Union. This week alone we’ve seen Boris Johnson “warning Obama off” (as the BBC put it) getting involved in the debated, the same London Mayor and MP having a radio spat with Chuka Umunna involving telling each other to man up and various insults traded as either side accuses the other of scaremongering or making it up as they go along.

Divining who’s going to win is more difficult. The Daily Telegraph reports that “out” has it by a tiny margin but, crucially, the anti-Europe vote is likely to be more motivated so will actually show up on the day, expanding the margin by which it will win. Meanwhile the Times’ daily Red Box email points to Elections Etc. whose research suggests a 58% “remain” vote but with a plus or minus 14% error margin; so somewhere between 44% and 72% will go for staying in the EU. This, readers will note, tells us precisely nothing.

So the outcome, even if there weren’t 100 days in which Presidents and world leaders will offer counsel, claims and counterclaims will be made and the “leave” campaign will eventually decide who the official “leave” group actually is (there are two factions at the moment, doing the best impression of the Monty Python Judean People’s Front and the People’s Front of Judea that they can manage), we wouldn’t want to call a snap referendum even if it were to be called this afternoon.

What’s clear is that the outcome will ripple beyond the British mainland’s shores, and the ramifications of an “out” vote are already being felt on Gibraltar. Anyone doubting this should check today’s Times (subscription required), in which the Gibraltarian Chief Minister Fabian Picardo highlights recent Spanish statements about what would happen in the event of a Brexit.

Spain actually caused a few eyebrows to raise and some other people to panic just a little with its recent statements. Essentially the country’s foreign minister, José Manuel García-Margallo, suggested that there would be conversations on the sovereignty of Gibraltar the “day after” an announcement of a British exit, according to the Daily Mail and other reports. He also said (much, much further down the report) that he didn’t want Britain to leave: “God forbid” is the phrase he uses.

He raised the idea of joint sovereignty once again more recently, reports the Gibraltar Chronicle, this time suggesting that if Britain leaves Europe then Gib could do what it nearly did (he says) in 2002 and start transitioning towards Spain. This is an interesting definition of “nearly” when 98.48% of the electorate actually voted not to do so, but remaining British when this might exclude the Rock from Europe would inevitably raise different issues if not a different final outcome.

Outside Gibraltarian interests the effect could be more severe than that. SNP leader and Scottish First Minister Nicola Sturgeon has made no secret of her wish to make a fresh case for Scottish independence. The once-in-a-generation referendum on this was lost in 2014 but should Britain exit Europe with a majority of Scots clearly demonstrating that they want to stay in, the case becomes stronger (although the collapse of the oil price would blow the original blueprint out of the water).

So we could end up with Scotland as well as Gibraltar wanting to remain in Europe while Britain made its exit. Whether this would be legally possible if both stayed tied to Britain is untested as yet – and with Spain eager to enter talks the day after an exit is agreed but the Gibraltarians implacably opposed to becoming Spanish, the way forward would not be clear.

Guy Clapperton is the freelance journalist who edits the New Statesman’s Gibraltar hub. You can also find him in the Guardian, Computer Business Review and Professional Outsourcing which he edits.