Background
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Falklands
In 1975, the Falkland Islands economy was in serious decline and the then British Foreign Secretary, James Callaghan, asked Lord Shackleton to assemble a team to conduct an economic survey and make recommendations. The result was the ‘Economic Survey of the Falkland Islands’ (The Shackleton Report), published in 1976, which provided a comprehensive blueprint for the Islands economic development. However, implementation did not occur in earnest until after the War in 1982, when Lord Shackleton was asked to update his report.
He recommended that Her Majesty's Government (HMG) should:
- Set up a development agency;
- Transfer farm ownership to local owner-occupiers;
- Progress development in agriculture, fisheries, tourism, infrastructure;
- Change government structure to provide local impetus to change;
- Allocate development funds amounting to £35m.
- These points were taken up and developed together with several other recommendations, such as the appointment of a Chief Executive to the Falkland Islands Government.
Two aid packages were provided by HMG to help drive economic expansion:
- Allocation of aid funds (£15m) for the reconstruction of infrastructure.
- Allocation of funds (£31m) for development.
An international airport and military installations were built at Mount Pleasant using contractors, materials and labour from the UK. The development grant included funding to set up the Falkland Islands Development Corporation (FIDC), and for the farm subdivision (land reform) process, working towards the Islands’ longer term economic benefit. In 1986, with the declaration of a 150-nautical mile radius Fisheries Conservation & Management Zone, a fisheries licensing system was established by FIG. This heralded new financial independence, and moved the economy of the Islands away from its reliance on wool. The Falkland Islands are economically self-sufficient in all areas except defence – the cost of which amounts to some 0.5% of the total UK defence budget.
Figures
GDP rose from about £5 million in 1980 to approximately £104 million in 2007. Revenue from the fishery remains the main income source for the Government (making up circa 35% of income and 60% of GDP).
Below is an extract of the estimated revenue and expenditure for the 2009/2010 financial year:
Revenue 2009/2010 | (£m) | Expenditure 2009/2010 | (£m) |
Sales and Services | 9.7 | Public Works | 8.5 |
Fisheries | 14.5 | Fisheries | 5.2 |
Customs Duties & Charges | 3.5 | Health Care & Social Services | 7.5 |
Investments | 4.5 | Education & Training | 5.3 |
Taxes | 10.2 | Aviation | 2.5 |
Police & Justice | 1.5 | ||
Agriculture | 1.0 | ||
Central Administration | 3.5 | ||
Other Operating Expenditure | 3.9 | ||
Fund Transfers & Transfer Payments | 8.7 | ||
Total Revenue | 42.4 | Total Expenditure | 47.6 |