The Schlock of Gibraltar

St Tropez? Not quite!

THERE are eyesores, there’s urban blight, and then there is Gibraltar, Britain’s last colony in Europe, a carbuncle of ocean-going ghastliness that’s in a class all of its own.

Next April, its 30,000 people will have been officially and determinedly British for 300 years. That’s the anniversary of the Treaty of Utrecht, when Gib’s 6.8 square kilometres were ceded “in perpetuity” from Spain to the UK, a pact-at-gunpoint that still stings Spanish machismo; the Spanish conveniently forget Madrid has two Gibraltars of its own in nearby Morocco — the exclaves of Ceuta and Melilla — and has held them longer than the Brits have occupied Gibraltar.

Gibraltar likes to think of itself as a historic Monaco when Merseyside-sur-Med is closer to the truth. British TV location scouts use Gibraltar’s main street to capture that quintessential 1950s dreariness, because actual English towns no longer look like that. This is the place where Marks and Spencer despatches the fashion lines they can’t move back home because modes have moved on.

It’s all so ordinary. And all the more so given where Gibraltar is, embedded like a stubborn haemorrhoid at the gate of the enchanting Mediterranean, twixt two of the world’s most culturally absorbing, aesthetically bewitching nations, vibrant Spain at its frontier and compelling Morocco just 14 kilometres across the water.

It’s as if Gib is determined to be dismal. Its neighbours are endlessly fascinating, with their superb cuisines, profound cultures and global consequence, so Gib seems to go out of its way to be dull as a point of separation.

Take, for example, the first weekend in April at Gibraltar’s Eliott Hotel, allegedly its best. A couple of kilometres from here across the border, Spanish breakfasters are feasting simply but gloriously on café con leche, freshly squeezed juices and pan con tomate — hearty farmers’ bread rubbed with oil, garlic and spritely garden tomatoes. No matter Spain is in deep economic crisis; these are standard but always lively repasts con familia that inevitably extend into livelier lunches of paella, fresh seafood and robust rioja. And they’re probably doing it con pasion, and al fresco too, because they’re Spaniards.

But in the death-warmed-over silence of the Eliott, blue-rinsed English guests are taking tea, The Times and, for the racier, some daring baked-beans-on-white-toast or kippers flown in from London, as famous-for-15-minutes contestants doubtless named Sharon and Darren grope each other on the latest reality TV show. Why travel? Gib is a stop of the cruise ship circuit; it’s just as well that Greece, Turkey and Italy et al, deeper along the Med, market themselves so alluringly to travellers -because if you arrived here in the belief that first impressions are important in European tourism, once you’d marvelled at the admittedly impressive rock that spikes colonially above the azure seas, you’d want your money back quick smart to head to the Caribbean.

Imagination doesn’t seem to be a Gibraltarian speciality (except when it’s devising byzantine corporate structures for wealthy clients in Russia, Scandinavia and the UK, which regard Gib as the City of London’s southern suburb). Gibraltar’s Moroccan restaurant is called Marrakech, the Indians Maharajah and Mumbai, the Chinese Kowloon. The smart eatery by the waterfront is called, well, The Waterfront. Gibraltar doesn’t have nightclubs. It has discos, 1980s ones, and none of them in irony. If Gib had a soundtrack, it would be Rick Astley’s Never Gonna Give You Up.

It’s relentlessly ordinary, but whoever named Gib’s old folks’ home Both Worlds was inspired. Overlooking the sea, what does the name nod to? Africa and Europe? Spain and Britain? Islam and Christianity? Or, mindful that Both Worlds is God’s waiting room for the decrepit, is it a spooky portent of what’s coming?

Gibraltar’s flaws are more profound than simply cosmetic. Let’s start with its economic raison d’etre, which Gibraltarians euphemistically like to market as “financial services”.

Tell it like is, Gib! Everyone knows you’re a tax haven, so just say it. It’s how you make your living. Some people create companies and build things — useful things, actual things. You create companies to disappear things, often other companies. You are where Big Business goes when it wants to vanish — from creditors, bankers, shareholders. You’re the taxwash deployed by Russian oligarchs, banks, insurers and slick-haired lawyers to set up circular and impenetrable corporate structures, in cahoots with your mates in Jersey and the British Virgin Islands (curious how all these places tend to be British). Not for nothing did Gib hire its corporate regulator after he’d done stints in the Cayman Islands and the Isle of Man.

With its millions of shelf companies in legal garrets that own billions in assets elsewhere, far from the prying eyes of the world’s regulators, Gibraltar is the wealthy’s discreet refuge for funny money. With homegrown values like these, I’m betting Gibraltarians don’t grow up wanting to be Mandela or Gandhi, Steve Jobs or even Lionel Messi — more like Madoff and Gekko.

If Gibraltar Inc were an actual company that included the assets it domiciles, it would be one of the world’s biggest. But if Gibraltar Inc were an actual company, it may have been shut down years ago by the world’s proper corporate policemen — conflicts of interest and a lack of transparency being just two of their reservations.

But no-one here with any money is saying Gib doesn’t have its advantages — including Spain, which also bases companies here, while complaining about others who do.

Select any one of the thousands of villas cascading down the cliffs of the adjacent Costa del Sol and chances are they’ll be owned by a Gibraltarian company, the deeds secreted in a lawyer’s office, whose partners will be directors and secretaries of thousands of purpose-created entities.

Every one in three buildings here seems to be a real estate agency, a bank or a trust agency of some sort. Hotel rooms don’t have just the room service menu — specialty frozen cod and chips — but brochures touting those trademark “financial services”.

With its surfeit of lawyers, beaks and moneymen, Gib is known as a “barristocracy”. As it positions itself as a new Monaco, with an expanding super-yacht marina and new airport — catering to just four flights a day, all to and from the UK — the impression it desires is of a smoothly running money machine. And rich too: Gibraltar ranks alongside Singapore, around 20th place, among the world’s richest per capita economies.

Gibraltarians are at pains to convince they are perfectly capable of looking after their own affairs, fiercely independent and answering neither to Whitehall nor to a Spain that’s perennially rejected as an unreliable neighbour, known euphemistically here as “that other place”. Anyone Spanish looking for Hong Kong-style resolutions to its sovereignty question should look elsewhere. To llanitos, as Gibraltarians are known, there is no question. Not for nothing is Gib’s motto nulli expugnabilis hosti — conquerable by no enemy.

Gibraltar is also the place where you’re likely to be separated from your hard-earned if you dabble in online casinos, and pornography too, say many. Gib may be the world’s only legal jurisdiction where its state corporate regulatory agency shares an office block with companies called Party Gaming and Lucky Nugget Online Casino, virtual enterprises which deeply annoy US authorities trying to protect its homegrown casino industry.

Maybe the Both Worlds retirement home is owned by the people who set up the Reincarnation Bank in Gibraltar. It had a business model that was novel, to say the least: Clients could deposit assets while they were alive, then die and avail of their accounts in the hereafter.

When I spoke a year or so back to Marcus Killick, the Gibraltarian corporate regulator — a designation that almost seems a contradiction in terms in this haven of smugglers and tax avoiders — about Reincarnation Bank, he was adamant he’d shut the scam down, at the behest of US authorities. The Financial Services Commission finally succeeded in shutting the down the dodgy “bank”.

Killick told me that he “philosophically” takes a light touch to corporate regulation in Gibraltar: “I along with the vast majority of my regulatory colleagues are opposed to greater scrutiny in Gibraltar because of the potential over-regulation and strangulation — otherwise you end up not having an industry to regulate.”

Officials here are pumped up with self-importance. They talk about “national” this and “global” that, citing UN human development index measures and pompously comparing Gib’s statistics to other sovereign nations as if they are equals. They solemnly intone about Gibraltar’s “heft”, as if this is the US and as if it talks in Europe at the same table as the Merkozys.

Gentlemen — and they are always men — enough please! You live in a town of 30,000 people, as few as Dubbo. Yes, you jealously keep a few financial secrets, but Dubbo’s not a UN member and neither are you.

But Gib does have national symbols. Apart from the actual rock, there are the Barbary Apes who fling and forage around its upper reaches, often fossicking inside houses and hotel rooms. There are about 250 of them and for many years they had their own military supervisor, the most famous being Sergeant Alfred Holmes, a mainstay of the Royal Gibraltar Regiment whose career high point was to be appointed “Officer-in-Charge of the Apes”.

But Gib also has a national smell, an unmistakable tang of fried food and servicemen who’ve relieved themselves while lurching back to barracks after another big night on the sauce.

Indeed, it was this overt British military presence in the anchorage here that reveals one of the many stories Gibraltarians like to tell to underline how important and strategic they are.

It was in this bay, 30 years ago this April, where the ill-fated Operation Algeciras almost happened. This was an Argentinian plan to sink British warships, lest they sail south to join the taskforce taking back the Malvinas/Falklands. Crack commandos were despatched by the junta in Buenos Aires and, by all reports, they had quite a nice springtime holiday waiting for the Admiralty’s ships-of-the-line to sail in.

In the end, the plot was rumbled not by the Brits but by Spain, thanks to a vigilant car rental operator suspicious at the Argentines’ constant re-renting of vehicles, which they’d settle from fat wads of US dollars. The Spanish gathered up the Argies, told them they were very naughty boys and discreetly returned them home.

The Argies also had a plan to torch the fuel dump in Gib, and there are a good many Spanish who wish the frogmen had completed their mission, an opportunity lost to rebuild the miserable, anachronistic Gibraltar.

Letters to the Editor (1)

Great article – Gib is an interesting but ultimately claustrophobic & rather dispiriting place. Couple of points: the Brits broke several conditions of the Treaty of Utrecht within a short time of gaining the Rock (including allowing Jews to live there, for example) so it could be argued that the Treaty is no longer valid. Franco used Gib to drive his nationalist agenda, and to attempt to unify the peoples of Spain after the civil war. His closure of the border in the 60’s (and turning off of the water supply) gave the Gibraltarians enormous political leverage in London which the masterful Sir Joshua Hassan used astutely to gain a cast-iron constitutional guarantee that they would not be handed back to Spain against their wishes. So although the Rock is now an embarrassment to both Spanish & British governments any change in status must come about through seduction rather than force, a concept politicians of both countries have struggled to come to terms with. But the real scandal, in Gib and so many other remaining or ex-British colonies, is how the international tax evasion industry is publicly criticised by British politicians but privately allowed to flourish providing it continues to provide vast amounts of cheap capital for the City of London despite the enormous cost to Britain’s allies and EU partners. If the public finances of western countries are to be rebuilt that whole tax avoidance/evasion industry should be closed down. If that happens (a big if) my hunch would be on the people of Gibraltar adapting and continuing to prosper…

From Paul

12 April 2012