Andalusia, Ceuta and Melilla agree to strengthen their ties. To this end, the president Juanma Moreno has signed a collaboration protocol with the president of Melilla, Juan José Imbrodawhile the president of Ceuta, Juan Jesus Vivas, He was unable to attend the event as he was trapped in a farmers’ roadblock. De facto, the economic relationship between the two autonomous cities and Andalusia is already very close. In the case of Ceuta, practically the 80% of your purchases In other Spanish territories they come from Andalusia, while 3 out of every 100 euros of their sales to other regions are destined for Andalusia. In the case of Melilla, these ties are somewhat less intense and account for around 50% of its inter-autonomous trade, according to data from the study “Redefining the economy of the south: opportunities and challenges for the future in Ceuta and Melilla”, prepared by the economic analyst Diego Sánchez de la Cruzfor him Ceuta and Melilla Observatory.
The agreement signed between Juanma Moreno and the presidents of the autonomous cities includes 130 wide-ranging initiativesfrom collaboration in matters of climate change, in water, circular and blue economy, between the RTVA and the Radio Televisions of Ceuta and Melilla to promote better mutual knowledge. Andalusia makes its offices in Madrid, Catalonia and Brussels to facilitate them. In addition, interesting collaborations are established in the health field, such as in the neonatal screening program for certain diseases, and the doors of TRADE to companies in Ceuta and Melilla to make them visible in trade missions.
The ports of Ceuta and Melilla are one of the strategic axes in which synergies and collaboration can be generated. Both move around 1.8 million tons. The route that the Ceuta and Melilla Observatory identifies with the most possibilities to collaborate with Andalusia is that of passenger transport, and especially cruises. Regarding the number of passengers, Ceuta and Melilla show high figures compared to the size of their population, due to their geographical location. In total they are 2.5 million passengers, which, added to the ports of Andalusia, add up to a total of 8.1 million. Of which, approximately 10% are due to passenger cruises, with great importance from the ports of Bahía de Cádiz and Málaga.
However, both the ports of Ceuta and Melilla face a progressive loss of income and they deal with a progressive growth in their volume of expenses. That is to say, there has been a deterioration in the economic-financial conditions of both infrastructures. Given the delicate financial health of the ports, it is becoming increasingly necessary look for new lines of business to recover competitiveness and use both facilities as dynamic elements of the economic activity of the autonomous cities. That’s where cruises come into play.
The Observatory also includes opportunities such as the commitment to the smart city, which can help both Ceuta and Melilla grow intensively, instead of extensively, as response to your land and housing problems.
Idencity Consulting has developed a Smart City Index of the cities of Spain. This work measures the degree to which Public Administrations, companies and citizens have adopted, used and deployed new technologies to improve city management, resulting in better use of its resources and a higher quality of life. The global grade reflects the percentage of adoption or compliance with the reference standards and the indicators that allow measuring the approach of each city to the Smart city model. This rating is 40%, in the case of Ceuta, and 41%, in Melilla. Barcelona (79%), Madrid (74.1%), Valencia (67.8%) and Málaga (65.4%) lead the table.
Special Economic Zone
Another of the great opportunities identified by the Observatory is the creation of a Special Economic Zone (EEZ) with the objective of «increase foreign direct investment in the country by national and foreign investors and, thereby, boost trade, industrial development, the competitiveness of the local economy and levels of job creation.
There are more than five thousand Special Economic Zones in the world. Only in the European Union there are countries like Poland where there are more than fifty demarcations with this type of permits. Instead, In Spain there is only one, the Canary Islands. Ceuta and Melilla, given their geographical location and their need for economic development and potential, “would therefore be good candidates for the authorization of a second SEZ. Thus, the governments and parliaments of both autonomous cities should go to the Cortes to defend this initiative, in the form of a Bill or as a legislative initiative”.
This regime must be authorized by the European Commission. The main bet attached to the SEZs is to provide a series of tax advantages and benefits to companies and citizens who invest in these areas. In Corporate Tax, for example, the reference rate in the entire national territory amounts to 25%, while in the Canary Islands 4% is applied subject to different conditions, such as the creation of employment in the archipelago.
In the Canary Islands, approximately 10% of the companies that meet the requirements to be members of the ZEE are part of this differentiated framework. In total, we are talking about 270 active companies that, after joining the Special Economic Zone of the archipelago, have grown to generate a production value of 1,100 million euros annually, thus supporting more than 4,500 jobs. If the impact were similar in Ceuta and Melilla, the boost to economic activity would be close to 3% of the total and employment would increase by almost 2%. That is to say, More than 100 million additional euros of production could be generatedas well as more than 1,000 new jobs.
The Ceuta and Melilla Observatory also offers some keys to the main strengths of the two cities in terms of attracting companies and investors. And among them stands out, in addition to its strategic position, a advantageous tax regime with measures such as the deduction of between 50 and 60% of the corresponding share of income in the Personal Income Tax (IRPF); 50% bonus on the Inheritance and Donation Tax fee when the deceased is a resident of Ceuta or Melilla, raising the bonus percentage to 99% when the successors are the spouse, ascendants or descendants; bonus of 50% of the quota corresponding to the Corporate Tax on the results obtained in both cities.
The Value Added Tax is not applied either, but rather the so-called Tax on Production, Services and Imports (IPSI), application of special taxes on certain means of transport, manufacturing and electricity. Additionally, a complementary tax is applied to the IPSI on sales of fuel and fuel or tobacco (instead of a tax of its own, as in the rest of the autonomies).
The Observatory report does not hide weaknesses of both cities, such as rates of unemployment above 20%, at the head of the Spanish unemployment ranking, or a GDP per capita at the bottom of Spain, practically at the level of other southern areas such as Andalusia itself or Extremadura.
Due to their own idiosyncrasy, they suffer from a shortage of certain resources, such as lack of land and housing. While, at a national level, the proportion of main homes in relation to total homes is 70%, in Ceuta and Melilla this ratio is close to 90%. Furthermore, the autonomous cities have the lowest data in Spain in the housing indicator per 1,000 inhabitants, with almost 100 less than the national average. And, if in the average of the autonomous communities there is an average of 2.53 people per household, in Ceuta and Melilla this figure exceeds 3.
Weight of Administration
In both cases, explains the Observatory, the economic structure of the autonomous cities is highly dependent on public administrations. In total, the public sector generates half of the gross value added of the economies of these cities. This contrasts with the rest of Spain and is explained by the particularities of the case of Ceuta and Melilla.
In the case of Ceuta, the gross added value corresponding to the year 2021 amounts to 1,591 million euros. Of this figure, the Administration accounts for 792 million, while commerce contributes 299 million and real estate activities generate 159 million, to which the 71 million from construction can be added. Next are industry (96 million), professional, scientific and technical and administrative activities (66 million), artistic recreational and entertainment activities (53 million), financial activities (38 million) and ICT (16 million) and agriculture (1 million).
As for Melilla, its gross added value for 2021 was 1,455 million, of which 735 million correspond to the Administration. At a distance, there are commerce (257 million) and real estate activities (156 million), to which the 70 million of construction can be added. The economic structure is completed by professional, scientific, technical and administrative activities (71 million), industry (69 million), artistic, recreational and entertainment activities (52 million), financial activities (34 million), ICT (11 million) and agriculture (1 million).