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Editorial Comment
Quick wins to help economy
Two new independently run State enterprises, the retail Gibraltar International Bank (GIB) and Gibraltar University (UniGib), have between them £35m of pump priming, but it is a pity not more time was given before launch.
GIB opened in May, encountering start-up problems with suppliers for Debit cards and cheque books and three weeks rather than three months to test systems; UniGib, had a similarly short gestation period and opens in September without any on-site accommodation, and unable to capitalise for the coming year on potentially profitable overseas students, and new full-time degree courses.
But this is an election year and the Gibraltar Socialist Liberal Party (GSLP) government clearly felt it necessary to ensure major manifesto commitments are achieved before voting occurs towards end-2015. The establishment of the bank and university are undoubtedly big achievements. Emphasis now will be on ensuring both institutions deliver quality results, whilst not tapping further into State coffers. GIB estimates it will be profitable within three years; UniGib’s government grant covers two years’ setting up and running costs.
Ensuring both enterprises present a good deal, encourage business opportunities, and add to Gibraltar’s reputation will be critical. Both organisations have a sound and experienced management board to help steer development, and UniGib in addition has an enviable Academic Board, with 12 education luminaries from across Europe (and Australia), assisting vice-chancellor, Prof. Daniella Tilbury.
How GIB and UniGib both engage with the community will be key –
it is not just a case of making money. Yet that is just what Gibraltar seems able to do with comparative ease! The
GSLP set out to increase the economy by 50% over four years, but the original estimate of £1.64bn Gross Domestic Product (GDP) by December has already been met, Chief Minister Fabian Picardo revealed in his June Budget.
He suggested £1.65bn could well be the final outcome for 2014/15 in which case he feels, it is not unreasonable to expect that the current year will produce £1.8bn nominal GDP.
But as Minister for Employment, Joe Bossano, a long-standing parliamen- tary economic guru, noted: “For the future, to manage the same rate of growth would require that our GDP should then go from £1.8bn in 2015/16 to £2.7bn in 2019/20.” However, ahead of this year’s election, no one is yet making such a prediction.
Construction and related income forms a significant part of that growth, for example the near £89m upfront licence fee payment due in September for the Blue Water £1.1bn development – Gibraltar’s largest projected inward invest- ment - and the big rise in associated PAYE income from the 900 people to work on realising the project by 2021.
The worry is that temporary construction projects are fuelling much of the growth: ministers this year did not trumpet shares of economy held by financial services (previously 20%) and gaming (25%), the feeling being that sectors such as the port and tourism, are not producing any significant growth rate. Information based on ageing input-output studies has been extrapolated by government statisticians.
Ray Spencer
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Contents
News p6
Private sector setting the pace for growth
Budget p8
Budget 2015 – Tax Measures
Education p10
New university aiming to be self-funding in two years
Insurance p12
The changing face of insurance in Gibraltar
Funds p14
AIFMD – Two years on
Profile p16
Sunborn looks to float and relocate
Aug/Sept/Oct 2015
Volume 21/ Number 3
Overseas mission p20
Gibraltar as the Gateway to Europe for Singapore and Hong Kong
Aviation p22
More UK air services being targeted – but Europe remains elusive
Development p25
Land reclamation project fills State coffers
Business p26
Gibraltar: Where innovation begins
Taxation p28
Income Tax (Amendment) Bill 2015
Business round up p30