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Still ‘confident’ of strong economic growth, Brexit or not
An analysis of Gibraltar’s economic prospects should Britain leave the EU (Brexit) probably will be available to businesses “before the summer”, but the detail may well not be made public before voting in a planned UK plebiscite, which some predict could be as early as June
Whatever the outcome of the EU referendum, Gibraltar’s Chief Minister, Fabian Picardo, who won a second term of office for his GSLP- Liberal Alliance in November with an increased majority, remains “optimistic”, saying “we faced even harder challenges in the past and we have always survived [a reference to the Spanish 16 year blockade of Gibraltar until 1985].
In a January interview with Gibraltar International, on the government’s economic plan to grow Gross Domestic product (GDP) by at least a third to reach £2.4bn by March 2020, Picardo admitted: “Gibraltar would take a knock in my view if we didn’t have access to the [EU] single market.” (See also ‘£2.4bn GDP by 2020’, page 27)
He said: “It would mean a major economic shift.” However, having the UK outside of the EU didn’t necessarily mean leaving the single market. If The Rock continued to have access to the single market, “I think Gibraltar has a very bright future, whether the UK is in or out of the EU”, he asserted.
‘we have to be ready for the end of any EU withdrawal - not before
“It is very likely that the terms of the who pay in PAYE, a lot of Social Insurance UK leaving the EU could include the UK into our economy. I think that is a hugely
continuing to have access to the single market – EEA, EFTA, or whatever the model may be”, he insisted. Not knowing at this stage what that process would entail was a problem, he conceded, and whether UK would be allowed continued access to the single market or be prepared to continue
important sector that we need to ensure is paced in a way that sees growth spreading over the 4-5 year period”, he noted.
Sticking points
The £1.1bn planned BlueWater reclamation mixed-use project on The Rock’s east side is
paying into the EU at the same level. Gibraltar’s analysis to “understand the potential economic impact of leaving the EU and/or leaving the Single Market, as well as the potential benefits of acceding to the Schengen Area and/or the Common Customs Union” is a Manifesto commitment and when complete will first be shown to the Chamber of Commerce and Federation of
Small Business for member reaction. “I continue to think that Gibraltar would be able to do very well even if the UK were out of the EU single market, but it would be a tougher challenge,” he noted. Even a vote for Brexit, “will not be the date the UK would actually leave the EU: that would be a very long and drawn out process, so we would have to be ready for the end of that period – not before then”, he pointed
out.
The public sector in Gibraltar “has borne the brunt of a lot of the Gibraltar economic activity in the period when there has been an economic crisis in Europe and the rest of the world”. It was “picking up the slack”, but now “I am looking to the private sector to be the driver of economic growth”, he declared.
Huge project value
He pointed to the World Trade Centre being opened in late summer, residential projects at Ocean Village and MidTown’s office and residential development, and “new projects that have not yet been announced to the public” have “huge development value”.
Construction had been a major feature of GDP growth and “brings in a lot of people
one of the largest, but government approval to progress has been withheld, because four months after expected developer Camoren Holdings has still to pay a £87m premium.
“There are detailed areas which are sticking points,” Picardo explained, adding: “We need to ensure that agreement is something that we do not simply concede, because if that is not in the interests of the tax payers, we will continue to argue for the rights”.
However, the largest single State investment since building the new Gibraltar International airport terminal under the previous administration is a £70-80m power station “that will be operational by the first half of 2018, that’s for sure” and potentially requires further public borrowing at least during construction. With dual fired Liquefied Natural Gas (LNG) and oil generation, fuel storage plans have caused local controversy, but in addition the government plans LNG bunkering as a hedge to its present extensive oil ship refueling activity.
LNG adds to GDP
“If the fuel of choice for the marine industry is going to change from diesel to LNG then in order to maintain the part that bunkering contributes today to our GDP we need to be in that industry – it’s that simple”, he declared.
And with Gibraltar marketing itself abroad as financial services’ “gateway to Europe”, Picardo agrees jurisdiction promotion might need to change. In the meantime, the government is considering marketing Gibraltar’s tourist and financial services products in India, principally Delhi, Mumbai and Bangalore and pitching for investment from Morocco.
Greater use of Gibraltar House in London to promote the territory commercially is envisaged. Picardo seeks to increase its effectiveness even further, and to change the 15 years old Gibraltar Day event to portray “a different image of Gibraltar in London, not just the image of the military garrison and not just the image of the Gibraltar of yesterday, but also the Gibraltar of the future”.
Ray Spencer
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Gibraltar International
www.gibraltarinternational.com
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