Shared prosperity will require major paradigm shift for Gib and Campo

By Charles Gomez

The creation of a zone of shared prosperity between Gibraltar and the region around us is where obscure diplomatic machinations come into the cold light of day.

There is a similar ambition for the area of Ceuta and the neighbouring Moroccan districts which the governments of our two neighbouring kingdoms are discussing.

The creation and maintenance of prosperity, together with security are of course the primary duties of all democratic governments.

There is a quote attributed to President Bill Clinton: "It's the economy, stupid” meaning that the first concern of American voters is the economy, and how it affects their personal finances. The same applies among all other successful communities.

In Gibraltar and the Campo de Gibraltar the “zone of shared prosperity” has the added element of Spain’s desire to achieve fiscal “equilibrium” which is normally a laudable concept but jars somewhat with certain unavoidable historic realities. This is because since its declaration as a “free port” in 1705 in the reign of the English Queen Anne, Gibraltar has prospered on the back of fiscal differentials. The entire Gibraltarian population was at some time or another attracted to settle here on account of the opportunities that that differential offered from the early 18th century in terms of trading with the products of the British empire including, notably tobacco and woollen products and later coal, to digital assets in 2025.

In his “An Economic impact study and analysis of the economies of Gibraltar and the Campo de Gibraltar Update 2015” Bournemouth University’s Professor Fletcher found that Gibraltar supported approximately 25,907 jobs, or 24% of the total employment in the Campo de Gibraltar, an increase from 18% in 2007. He said that economic activities linked to Gibraltar augmented the Campo de Gibraltar's GDP by £846.6 million in 2013, in direct, indirect, and induced effects and that Spanish frontier workers earned £102.6 million in Gibraltar, with a substantial portion spent in the Campo de Gibraltar, stimulating local economic activity. Gibraltar's imports from Spain totalled £380.9 million, including goods and services and residents of Gibraltar expended £72.7 million in Spain, with £46.6 million spent, specifically in the Campo de Gibraltar. Gibraltarians owning second homes in the region contributed £62 million to the local economy.

That was the economic picture 10 years ago and it is likely that the situation is similar today although I have not come across more recent studies.

Fiscal convergence may reduce political friction and allow Schengen status for Gibraltar, potentially fostering more stable long-term conditions for investment and cross-border infrastructure.

However, the neutralisation of Gibraltar’s tax advantages will inevitably require an economic rebalancing in both Gibraltar and the Campo, which is likely to be problematic, at least in the short term and particularly at a time of global financial instability.

We must make sure that the quest for shared prosperity does not end up with shared poverty.

Of course, Gibraltar will continue to rely on the legal certainty of our English common law system set up in 1720 and an experienced financial services sector broadly based on the City of London and which dates from 1967 but still, it is essential to proceed with caution.

Some years ago, the University of Cadiz introduced our region to the European Groupings of Territorial Co-operation concept with examples from the “Eurodistrict Strasbourg-Ortenau” (France-Germany) and the “Basel trinational agglomeration” (France–Germany–Switzerland).

There is where we will find models and precedents to ensure our shared success.

A governing framework will clearly be required, which all parties must co-operate to set up and operate with the utmost good faith for the benefit of all our citizens, maybe with the EU as an observer or facilitator. Mandates, policies, and functions will have to be agreed on a non-partisan basis. A secretariat will have to be established and funded.

We are talking about a new regional corporation supported by the national governments in London and Madrid, the Gibraltar Government, the Junta de Andalucía and the Mancomunidad de Municipios.

I have no illusions but that this will require a major paradigm shift among our communities, but the gauntlet has been thrown down and we must pick it up so that we can look forward to synergy, prosperity, and security, because time waits for no man or, if you want to be more formal “tempus fugit”.

Charles Gomez is a barrister and honorary professor of the Faculty of International Law and International Relations of the University of Cadiz.