CONTINUING his review of Gibraltar, John Smith looks at the economy and the latest budget which has caused argument amongst the political parties there.
The position of Gibraltar which is in theory a self-governing British Overseas Territory has left it open to accusations of it being a tax haven, a home for ‘dodgy money’ and a smuggler’s paradise.
Some years ago, there was more strength in that argument than there is today and rumours abound that the Thatcher government was considering taking over complete control of what was then a colony as the British Government did years later with Turks and Caicos Islands.
Assuming this rumour – which comes from a reliable local source – is correct, then subsequent governments woke up to their obligations to protect the reputation of the Rock and took stringent measures to cut down the volume of smuggling of drugs and tobacco through Gibraltar waters and to regularise the handling of overseas funds.
Gibraltar now subscribes to a number of international agreements specifically aimed at halting money laundering but equally is adept at offering services which are legal but beneficial to companies and individuals who wish to invest their funds or set up business headquarters.
The growth of business in Gibraltar has been phenomenal with the newly built World Trade Center filling all of its offices, off-shore Turf Accountants flocking to the Rock and a plethora of well –educated local accounting and law firms offering their services.
This week has seen the announcement of the 2017/2018 budget together with a ‘State of the Nation’ review of the previous year.
The Chief Minister, Oxford graduate Fabian Picardo QC has ‘made no bones’ about the fact that he and his alliance government have invested a great deal of money into the infra-structure of Gibraltar, improving conditions for the elderly and poorer sections of society whilst increasing income and running the largest budget surplus in Gibraltar’s history.
He and his ministers are proud of the fact that all of this has been achieved against a background of uncertainty caused by Brexit and almost constant veiled threats from Spain.
His forecast for the next financial year is equally attractive and certain measures are being introduced to make investment in luxury goods, storage of wine and vintage vehicles and even purchase of gold bullion easier.
The opposition party however has accused the government of hiding the real financial position by allegedly mortgaging off public housing and taking loans through government owned companies without declaring these monies in the budget.
With a small population, which is less than the size of the town of Perth in Scotland, Gibraltar undoubtedly punches above its weight but many of its inhabitants suffer from a small town syndrome where everyone knows everyone else and different factors will squabble with each other.
At the moment however, bearing in mind that the British Government is still responsible for the affairs of the Rock and the Gibraltar government does recognise international and European regulations, anyone looking to invest funds or start a business in Gibraltar may consider that their money will be safe.
Provided that movement across the border remains fluid and knowing that all of the local Spanish councils want to see people have the continued opportunity to work in Gibraltar, it also seems a reasonable expectation that international business there will continue to grow.