Why change matters
By Craig Sacarello
At an after-dinner speech, Fabian Picardo once likened Gibraltar to a cork bobbing in the ocean. No matter what you threw at it, it always resurfaced and never sank.
In our recent history, our resilience has frequently shone through. From our steadfastness during the Franco siege, to the adept handling of the joint sovereignty threat, to the strategic adjustments we implemented after the riots in the 1990s. We did bob up.
However, a cork is rudderless and, therefore, it lacks direction.
After the shock of Brexit, the people of Gibraltar were crying out for contingency planning. The best negotiating position is the position of strength. Unfortunately, nothing changed. They didn’t allow for gaming sector staff to be housed in Gibraltar, they did not upgrade our port and they did not strengthen our economic ties with other jurisdictions. The warnings from our local business community about the challenges of food and waste crossings were met with deaf ears. Instead, he arrogantly assumed that, he personally could out-negotiate much more powerful and well-resourced entities. The plain fact of the matter is that it has been seven years since Brexit, and there is no semblance of a deal in sight.
The GSLP economic plan was clear. Fund the GHA with import duties. Fund projects with the sale/mortgaging of assets and top up any income from the stamp duties gained from new build sales. If projects were mismanaged, they would just borrow more.
Then came the Covid-19 pandemic. Income from duties virtually dried up, their reckless spending had left us with no reserves, forcing us to borrow even more. As a microeconomy with no control over monetary policy, we are more akin to a medium-sized business than a traditional economy. The economic plan for construction was flawed, resulting in little fiscal stimulus. Low paid temporary workers living outside Gibraltar paid little local tax and none of their wages were spent locally, duty exemptions were given to large contractors and our infrastructure came under immense strain. The outcome is that our children have been burdened with a monstruous amount of debt whilst disposing of their inheritance (through asset stripping).
Adding insult to injury, we found ourselves on the FATF grey list, alongside the worlds worst financial offenders, choking our financial sector, and the repercussions are only beginning to be felt. Economic experts inform us that the countries receiving the most global investments are “Good Countries.” Our behaviour determines our rewards in terms of inward investment.
The health of the economy affects every one of us. The GSD have grand aspirations for a brighter future where everyone is looked after and where we create opportunities for all. Gibraltarians deserve a responsive healthcare system where patients receive prompt care, an education system that nurtures every talent, and a planning system that includes green and open spaces, places to walk dogs and proper infrastructure planning. We must help provide housing for our next generation, offer our elderly dignified living and genuinely care for those in need.
To enact this kind of social reform, we need a government committed to responsible fiscal spending, one that cares about the impact of borrowing on future generations and one that is determined to improve our international reputation. We need innovative leaders looking for new income opportunities in technology and the green economy. We are small and agile and so should eagerly seize these new opportunities and plan carefully for future ones.
While it may be entertaining to watch a cork bob to the surface, it cannot remain afloat if it is washed ashore by the tide. Gibraltar can no longer afford to be left to simply bob at the mercy of the waves; it needs to adapt and thrive.