Land and People

Gibraltar (jĭbrôl'tər) , British crown colony (2005 est. pop. 27,900), 2.5 sq mi (6.5 sq km), on a narrow, rocky peninsula extending into the Mediterranean Sea from SW Spain. Most of the peninsula is occupied by the Rock of Gibraltar (Lat. Calpe), one of the Pillars of Hercules, which guards the northeastern end of the Strait of Gibraltar, linking the Mediterranean with the Atlantic. The town of Gibraltar lies at the northwest end of the Rock of Gibraltar. The peninsula is connected with the mainland by a low sandy area of neutral ground. West of the peninsula is the Bay of Gibraltar, an inlet of the strait. There is a safe enclosed harbor of 440 acres (178 hectares). The rock, of Jurassic limestone, contains caves in which valuable archaeological finds have been made. It is honeycombed by defense works and arsenals, which are largely concealed. A tunnel bisects the rock from east to west.
The town is a free port, with some transit trade; financial services and duty-free shopping are economically important. The climate is mild and pleasant, and tourism has become an important industry. During the many years that Gibraltar was a British fortress, most of the area was taken up by military installations, and the civilian population was kept small. Many of the laborers lived in the Spanish border town of La Línea. The population is mostly of English, Spanish, Italian, Portuguese, or Maltese descent. Nearly three quarters of the population is Roman Catholic, and there are Protestant, Muslim, and Jewish minorities. English is the official language.

Economy

The British military traditionally dominated the economy of Gibraltar, with the naval dockyard providing the bulk of economic activity. This has however diminished in the last twenty years, and it is estimated to account for only 7% of the local economy, compared to over 60% in 1984.Today, Gibraltar has an extensive service-based economy, dominated by financial services and tourism. Referred as an International Finance Centre [2], Gibraltar was among 35 jurisdictions identified by the OECD as a Tax haven in June 2000 [3]. As a result of having made a commitment in accordance with the OECD's 2001 Progress Report on the OECD's Project on Harmful Tax Practices, Gibraltar will not be included in the next OECD's list of unco-operative tax havens [3]. It has also never been listed on the FATF Blacklist of unco-operative countries in the fight against money laundering. It may also be referred to as an Offshore Financial Centre, by international institutions such as the IMF [4].
Fiscal advantages, including no tax on capital income, are offered to the over 8.000 offshore qualified companies registered in Gibraltar [5]. After an agreement with the European Union in 2005, this tax-exempt regime is due to disappear on the 31st of December 2010 [5].
Financial services and persons involved in the industry are regulated by the Financial Services Commission, which operates in a similar manner to the United Kingdom Financial Services Authority.
A number of British and international banks have operations based Gibraltar. Recently, a number of large bookmakers and online gaming operators have relocated to Gibraltar, to benefit from operating in a well regulated jurisdiction with a favourable tax regime.
Tourism is also a significant industry. Gibraltar is a popular stop for cruise ships and attracts day visitors from resorts in Spain. The Rock is a popular tourist attraction, particularly among British tourists and residents in the southern coast of Spain. It is also a popular shopping destination, and all goods and services are VAT free. Many of the large British high street chains have branches in Gibraltar, including Marks and Spencer, BHS, Dorothy Perkins, and the supermarket Morrisons.
Other areas of activity are services related to shipping, like bunkering, and ship repair and construction. The economy is considered to be strong and diversified.[6]
Figures from the CIA World Factbook show that Gibraltar has a GDP of over £432 million ($769 million) with a per capita figure of £15,700 ($28,000). The main export markets in 2004 were France (19.4%), Spain (14.1%), Turkmenistan (12.1%), Switzerland (11.7%), Germany (10.1%), the United Kingdom (9.1%), and Greece (6.8%).
The unit of currency in use is the Pound Sterling with notes issued by the Government of Gibraltar although there is an ISO code of GIP for the Gibraltar Pound.

History

The name Gibraltar derives from the Arabic Jabal-al-Tarik [mount of Tarik], dating from the capture (711) of the peninsula by the Moorish leader Tarik. The Spanish Held the peninsula (1309–33) but did not definitively recover it from the Moors until 1462. The English have maintained possession since 1704 despite continual Spanish claims. The British post was besieged unsuccessfully by the Spanish and French (1704), by the Spanish (1726), and again by the Spanish and French (1779–83).
In World War I, Gibraltar served as a naval station. Many refugees fled there in the Spanish civil war (1936–39). In World War II its fortifications were strengthened, and most of the civilian population was evacuated. It was frequently bombed in 1940–41, but not seriously damaged.
After the war Spain renewed claims to Gibraltar, which, as a British strategic air and naval base, continued to be a major source of friction between Britain and Spain. The residents affirmed (1967) their ties with Britain in a UN-supervised referendum, and in 1981 all residents were granted full British citizenship. From 1969 to 1985, Spain closed its border with Gibraltar, although pedestrian traffic was again permitted across beginning in 1982.
In 1991, Britain removed its military forces from Gibraltar, while retaining it as a dependency. Tensions between Spain and Gibraltar continued through the 1990s, however, as Spain accused Gibraltar of being a hotbed of drug trafficking, tobacco smuggling, money laundering, and tax evasion. A 1997 Spanish proposal for joint British-Spanish sovereignty was rejected by the Gibraltarian government, and a referendum in 2002 on shared British-Spanish sovereignty almost unanimously approved of that rejection.