MADRID, Jan. 16 (UPI) -- This is the first part of a two-part review of the economics of the Gibraltar, whose future is due to be discussed between the British and Spanish governments at the highest level this spring. In this first part, the island's history and economy are reviewed, and its place and reputation in the shadowy world of money laundering are examined. In the second part, to be published Thursday, we will look at how the EU regards Gibraltar's position, and the part already played by the island in Spanish business, which is to a large extent dependent on it as an offshore tax haven.

Gibraltar's gross domestic product is $500 million, but it has a GDP per capita of $16,960, slightly better than Spain's GDP per capita of $16,939, says the CIA World Factbook. In spite of its Lilliputian size, Gibraltar, a territory of 30,000 people, has 50,000 active corporations and a total of 80,000 corporations registered since 1985, according to Spain's El País newspaper. Around 8,000 of them do not record any income, and approximately 40,000 do not pay taxes.

Most of the 7 million people -- more than 233 times its population -- that travel every year to Gibraltar are considered "business tourists." Deposits in Gibraltarian banks are around $7,200 million (14.4 times its GDP), while the Rock's national budget was in 2000 roughly $201 million. Gibraltar is, along with El Salvador, Egypt or Ukraine, in the list of countries and jurisdictions "of concern" in the U.S. State Department's 2001 report, "Money Laundering and Financial Crimes."

A successful outcome of the currently impending talks between Britain and Spain could have a crucial impact in Gibraltar's position as a questionable money and tax haven.

There is nothing wrong with the numbers, says the Editor of OffshoreOn.com Ahmed ElAmin. Gibraltar has so many corporations "by offering a more competitive tax regime than other jurisdictions. With variations, it's a typical developed offshore jurisdiction economy (except for the 7 million tourist figure bit, which is highly inflated by transit passengers), much like the Channel Islands, the Isle of Man, and Bermuda for example."