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Gibraltar is located at the extreme southwest of Europe, bordering the Strait of Gibraltar, which links the Mediterranean Sea and the North Atlantic Ocean.

By Treaty of Utrecht in 1713, Gibraltar was ceded to Great Britain by Spain. Gibraltar, which was a British Garrison, due to its strategic importance, became a Colony in 1830.

A small land mass of only 6.5 square kilometers, Gibraltar has a border with Spain of 1.2 kilometers. The terrain consists of the Rock of Gibraltar which is 426 meters at its highest point and a narrow coastal lowland heading to the Spanish border. The climate is Mediterranean with mild winters and warm summers. There are no natural resources including water and arable land. Water is collected by way of concrete or natural rock water catchments which collect rainwater, and a desalination plant.

The population of Gibraltar is approximately 30,000, with ethnic groups of Spanish, Italian, English, Maltese and Portuguese origin. Persons from Gibraltar are known as Gibraltarians. The official language is English while Spanish, Italian and Portuguese are also spoken.

Despite pressure from Spain, Gibraltarians have overwhelmingly voted to remain a British dependency in referendums held in 1967 and 2002.

Government

Gibraltar is an overseas territory of the UK. The Chief of State is Queen Elizabeth II and is represented by a Governor and Commander-In-Chief.

There is a unicameral House of Assembly consisting of fifteen elected members by popular vote and three members appointed by the Governor who serve under contract of employment with the Gibraltar Government. These three appointed members are The Speaker of the House Of Assembly, the Attorney General and the Financial and Development Secretary.

The Speaker of the House is appointment by the Governor after consultation with the Chief Minister and the Leader of the Opposition. The speaker has no original or casting vote in the House Of Assembly.

Political system

There are three political parties in Gibraltar; the Gibraltar Liberal party (GLP), the Gibraltar Social Democrats (GSD) and the Gibraltar Socialist Labour Party (GSLP).

Customarily, because the voting system allows for each elector to have a maximum of eight (8) votes, there are usually eight (8) elected members on the Government side and seven (7) elected members on the Opposition.

The leader of the majority party or when there is no majority, the leader of the majority coalition is usually appointed Chief Minister by the Governor. The Chief Minister is the Head of Government.

The Cabinet or executive branch is appointed from among the fifteen (15) elected members by the governor in consultation with the Chief Minister.

The term of office is four years for both elected and appointed members and there is no limitation on the number of terms a member may serve.

The Chief Minister is also the Head of the House Of Assembly and he calls the meetings and sets the agenda.

The Constitution, adopted in 1969, is unique in the way it lays out the division of power. In most British Colonies, the Local Government is responsible for internal affairs and the responsibility of Britain is clearly defined and usually confined to defense, external affairs and the Judiciary. In Gibraltar, the Constitution provides for the Local Government's powers to be defined in a "list of defined domestic matters" for which it was to be responsible and excluded anything that might have a conceivable impact on the security of the Fortress.

Judiciary

The Judicial Branch of Government consists of the Supreme Court and Court of Appeal. The court of final jurisdiction is the Privy Council in the UK.

The legal system is based on English Law.

Infrastructure

The economic infrastructure of Gibraltar is highly developed, with all necessary support services for new business growth.

Gibraltar's geographic location provides access to a regional market in the Western Mediterranean of over 50 million people and 350 million in the European Union.

Transportation

The port has the facilities to handle and encourage scheduled marine cargo services and possesses the potential for the development of manufacturing and services which require marine support.

The Free-Port Zone at New Harbour has warehousing, industrial workshops and office space available for rental or purchase to exporting companies.

Existing highways provide easy access to Spain which links with railroads, which connects to major markets.

The single airport provides direct flights on a daily basis to Gatwick (London), Manchester and Luton in the UK and to Casablanca in Morocco.

A Cruise Liner Terminal has modern facilities for cruise passengers that visit Gibraltar in large numbers.

Telecommunication

Telecommunication needs are provided by two separate joint ventures to enhance the infrastructure of this sector.

GNC, a joint venture company between Bell Atlantic Corporation and the Government, provides local telephone service and international calls to and from Spain.

Gibraltar Telecommunications Limited (Gibtel), is a joint venture between the Government and British Telecom (BT), to provide international telecommunications service.

Both companies provide state of the art digital, mobile, satellite and internet services.

Electricity is produced by 100% fossil fuel generators of which the capacity is in excess of 100 million kwh. Consumption of electricity was 93 million kwh in 2001 and therefore leaves spare capacity in the electrical grid.

Economy

The economy of Gibraltar has a number of constraints to its development; its small size; lack of natural resources; its lack of capacity to support any type of agriculture and lack of population makes many types of domestic activity unviable due to market size. Due to these constraints, the economy is heavily dependent on imports for its food, consumer goods, building materials, construction equipment and fuel. Gibraltar is thus a service economy.

Prior to the reduction of the presence of British Defense personnel over the last fifteen years, Gibraltar provided services to this ministry which provided a boost to the economy which was augmented by retail and tourism. With this shift in its economic base, Gibraltar has had to rely more on the private sector for its economic survival.

Economic diversification has had to take place with a new and renewed emphasis on financial services, registration of Gibraltarian companies, tourism, retail activities, ship repair and conversion and port services. Also being pursued are light manufacturing, telecommunications and the import/export business.

Tourism has been given a boost by the construction of a new cruise ship berth and terminal to handle the growing number of cruise passengers who visit Gibraltar. Statistics available reveal close to five million visitors in 1998. Tourism contributes between 25 % to 30% of GDP.

The retail sector makes a meaningful contribution to the colony's revenue through employment, shipping services fees and duties on consumer goods.

Shipping

The strategic location of Gibraltar lends itself to shipping, transshipment and other marine services. The Free-Port Zone offers special benefits comprising warehousing, industrial workshops and office space available for rental or purchase to exporting companies. It is well suited to light manufacturing which will enjoy exemptions on taxes, duties on imported materials, components and equipment as well as exemption on taxes from profit or low tax rates.

The GDP of Gibraltar is $500 million, with a per capita income of $17,500 (1997 estimate).

The education system provides for tertiary education in England. There are many university graduates returning to Gibraltar, which ensures a strong professional population capable of supporting the financial services sector. The absence of VAT and the Beneficial Tax Regime offered to those involved in international trade has helped to develop Gibraltar's commercial base.