MercoPress. South Atlantic News Agency

Gibraltar/Spain open border policy explains economic surge in the region

Professor John Fletcher was responsible for the report on the economic benefits of open borders

Gibraltar makes an extensive contribution to the economy of neighbouring Campo de Gibraltar while it also benefits significantly from Spanish expenditure on the Rock, according to the main conclusions of an economic study published this week.

The report by Professor John Fletcher of Bournemouth University, commissioned by the Gibraltar Chamber of Commerce to study the impact of cross-border economic interaction in 2007, reveals that local businesses imported £174million of goods and services from Spain, Spanish frontier workers spent £27million of their local earnings in the economy of Andalucia, while the figure for spending by other frontier workers there exceeded £36 million.

Additionally Gibraltarians spent £30million in Spain, while Gibraltarians with a second home spent over £33 million. Meanwhile in the period of time studied by the report, Spanish visitors spent £134 million in Gibraltar. This represents a direct net output effect of the Gibraltar economy on that of the Campo of £167.9 million (£301m minus £134m).

Furthermore, the indirect and induced effects of this net output on the economy of the Campo de Gibraltar created by Gibraltar spending and interaction by the two economies, reveal even higher levels of economic activity calculated at over £420m, a figure which does not include petroleum products that would duplicate the final result.

The Gibraltar economy is therefore responsible for 12.2% of the total ‘GDP’ of the Campo according to the report. Gibraltar is also shown as a significant generator of sustainable employment and wealth, accounting for one out of every six jobs in the Campo in 2007.

However with the sharp increase of unemployment in Spain generally and specifically in the hinterland over the past two years with Algeciras reaching a 69% increase, San Roque 78% and La Linea almost 50%, now Gibraltar is nearer to generating one in four jobs in the Campo.

Lawyer Andrew Haynes a former local politician and member of the Gibraltar Chamber board, who dissected the impact study and explained its key themes during yesterday’s press conference.

Mr Haynes said the idea for commissioning such a report had originated in direct response to the visit to Gibraltar, at the Chamber’s invitation in February 2007, of the previous Spanish Director General for Foreign Affairs, Jose Pons, one of the architects on the Spanish side of the Tripartite Forum.

Pons had given a talk at a Chamber annual meeting with a positive message and supportive of the improved cross-border relations achieved under the Cordoba Agreement. However he had expressed reservations and doubts as regards the beneficial impact of the finance centre to the economy of the area.

“We took this as a challenge, and commissioned the study as an opportunity to shed light on the matter.”

Mr Haynes said that Gibraltar’s prosperity since the frontier opened has increased substantially and progressively, and has been to the mutual benefit of both sides. Elaborating on the mutual dependence between Gibraltar and the Campo, Haynes said that the Rock could not prosper without all the facilities, services, skills and expertise that is available in Spain.