Gibraltar: The Chief Minister's Story: Recent Border Skirmishes with Spain Have Highlighted the Tensions between the British Territory's History and Geography. However, Fabian Picardo Believes the Place Is a Sound Place to Invest

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Recent blockades on its border have thrown the news spotlight on to Gibraltar once more. The Spanish, to outsiders, seem to have an excellent argument; just look at the map and where the Rock is located--this is obviously Spanish territory. It's an understandable point of view.

History, however, can make a mockery of common sense. If the territory is obviously a part of Spain, then Spain, as it's part of the same land mass, is surely part of Portugal. Or the other way around. Or part of a single country called "Europe". And how come Europe isn't part of Asia, anyway? Countries and their boundaries have for a long time been defined by agreement and treaty following conflict, Gibraltar among them. This is why it is currently British and has been for 300 years--in other words, longer than America has been American. And the people are very pro-British--one way to ensure a population is fiercely proud of its nationality is to challenge it. If self-determinism means anything, the Rock is British.

It's important to understand this point of view even if you don't share it, to comprehend the backdrop against which the Hon Fabian Picardo became Chief Minister of Gibraltar in December 2011. Heading up a coalition between the Liberals and the Gibraltar Socialist Labour Party, which had been in opposition for 16 years, he has found himself in the middle of the latest in a long line of tense exchanges between Gibraltar and its immediate neighbour. Normally, however, the 30,000-strong population conducts its business as usual and connects not only with Spain and the UK, but with Africa, visible on a clear day from the top of the Rock.

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For such a small place it attracts a lot of interest, the chief minister agrees. "Gibraltar represents added value as a place to do business within the European Union," he explains. "It's a kind of stepping stone for people who are establishing themselves within the EU from outside, and it's a great place for headquarters if you are already within it. We apply all the standards you would expect to see within the City of London to, for example, the financial services that are provided here, and in respect of gaming we are undoubtedly the most highly regulated jurisdiction in the world." This might come as a surprise to people who have bought into the classic caricature of Gibraltar as some sort of tax haven. The facts are straightforward; tax is low (the jurisdiction's Finance Centre outlines them on page 10), but regulation of certain industries and the imposition of these taxes is strict. Contrary to the beliefs of some people in the UK and elsewhere, Gibraltar doesn't cost us anything. There are British military bases there, as there are in a number of countries, but in every other sense the Rock is financially self-sufficient.

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Picardo is in no doubt that as a combination it works. "It's why we have attracted the biggest names in online gaming. I like to describe Gibraltar as the Silicon Valley of online gaming and I believe all sectors here are striving for that same level of excellence." By this, he explains, he means an excellent environment in which to do business, "and, to boot, in southern Europe, so better weather!".

Gaming has certainly been an important facet of Gibraltarian business and it is instructive to consider the other industries it has brought through in its wake. "We're seeing a software industry develop around those who are established in gaming here," he says. The gaming companies needed website developers, then suddenly those companies found they needed apps for the various different devices on which their clients wished to play and the skills to accommodate these changes are migrating towards the Rock. "We can also see an industry building up throughout the financial services industry based around software," he adds. "We have a critical mass of people with the software skills. …