The Chamber of Commerce has appointed Dr. John Fletcher and his team from Bournemouth University, to carry out a major study to examine the economic linkages that exist between Gibraltar and the Spanish hinterland, with particular emphasis on the Campo area. The idea of doing such a study has been mooted for many years now. The Chamber has once again taken the initiative by promoting the project.
Dr. Fletcher is well known in Gibraltar and, more importantly, knows Gibraltar very well, having served as a consultant since 1978 to all Gibraltar governments, including the Hassan, Bossano and Caruana administrations. The consultancy service has been almost exclusively involved in the construction of Input-Output models of the Gibraltar economy. We are very lucky indeed to have Dr. Fletcher on board for this study as he is one of the leading exponents worldwide on Input-Output methodology, having carried out studies all over the world over the last thirty years. We are therefore assured of a thorough, professional and accurate piece of work.
What is Input -Output Economics?
Very simply, it is one of those rare beasts, an economic model that really works! It basically measures linkages within an economy and the links between that economy and the rest of the world. Let’s say a tourist spends £100 in Gibraltar at a restaurant. This £100 will go to pay staff, purchase of foodstuffs, wines and spirits, the restaurateur’s and the like. In turn, staff will spend this money, the foodstuffs supplier will pay for his imports, as will the wines and spirits merchant. Thus, the initial £100 does more than one ‘round’ in the economy. This is what economists call the multiplier effect. Once all the data is taken, and multipliers worked out, the model can be used to determine what the economic impact will be of any change in tourist expenditure or in finance centre activity or, indeed, of any changes in any of the export earning elements of the economy.
Purpose of the Study
Gibraltar Inc. is often portrayed in the media as being some sort of pariah on the Spanish economy, somehow being conceived as sucking money out of our neighbours. We are all familiar with the frequent allegations to this effect made by Spanish politicians, whenever they are on this particular ‘high horse’.
The facts are that the opposite is the reality and that Gibraltar makes a very positive contribution to the Spanish economy. This contribution includes employment, purchase of raw materials, asset investment (real estate purchases), services (logistics, transport, and tourist coaches etc.), Gibraltar residents’ leisure and retail expenditure in Spain and the like. This is a significant level of economic activity that would simply not exist without Gibraltar.
The study will serve to de-bunk the myth about Gibraltar’s economy being a pariah and will quantify the very positive impact the Rock’s economic activity has on the hinterland. It will also show how the economies of Gibraltar and the Campo are intrinsically linked and interdependent, in that any economic changes on one side of the border will have an impact on the other. Apart from presenting Gibraltar in a realistic and positive light, which is good PR, the study should also help towards a more integrated approach to developments on both sides of the border, which is to everyone’s benefit. In the current climate, this is no bad thing.