ECONOMY

redline.gif (286 bytes)

From a historical standpoint, a rapid survey leads to the conclusion that from the end of the Nineteenth century and the beginning of the Twentieth, the Public Authorities have encouraged the economic growth of the Principality and provided the framework for the development of private enterprise.

The economic activity of the principality takes place along four main lines:

Industrial activity, often little known, but an area which has undergone considerable development in less than a century. From 1906, when the State financed the construction of the first platform in Fontvieille, industrial firms such as the Monaco Brewery and companies involved in flour-milling and the manufacture of chocolate began to settle there.

Over the course of the last twenty years, nearly 200,000 square meters of industrial floor-space has been built. The small area of Monaco's national territory leads to the siting of industrial premises in buildings which rise to thirteen floors.

The Government of the Principality has adopted an industrial policy which operates in favor the establishment of enterprises having a high capital gain factor but which do not create any pollution.

The "chemical-pharmaceutical-cosmetics" sector appears to be the most numerous but companies working in the areas of plastic material processing and the manufacture of electrical and electronic equipment are also present.

Other sectors, while they are not on the same scale as those described above, bring renown, originality and technical performance to the Principality; they are to be found in particular in the sectors concerned with mechanical engineering, packaging, printing and clothing.

Industrial activity occupies round about a quarter of the total work force but numbers are relatively stable at around 4,000 people or 13% of the working population. In 1993, they represented approximately 11.6% (excluding the construction and public works industry) of the total turnover generated in the Principality.

The Principality of Monaco today has a diversified industry and yet it is perfectly integrated into its setting and its environment.

A tourist activity which is essentially connected with private tourism or business tourism.

The hotel industry of the Principality has 2,500 hotel rooms, most of which are in the four star category. The average occupation rate is in the region of 48,3%, which worked out at around 601.111 nights' occupation in 1993.

For several years, the public authorities have been making considerable efforts in the area of catering for business tourists; this is planned to exist alongside the private tourist clientele, which is essentially seasonal, so as to maintain steady economic activity right through the year.

The third sector includes tertiary activities which have been greatly developed over the course of recent years in the areas of banking and financial activities, and the establishment of head offices and offices of non-financial companies of international size.

The sector which has undergone the most spectacular growth is that of services. It produced, in 1993, 49,1% of the turnover and its sphere of activity includes banks, insurance, consultancy agencies (technical, commercial, financial and the like), auxiliary services and middlemen.

The fourth sector is that of commerce which represents 21% of the total turnover in 1993.

Finally, real estate activity plays an important role in the economy, justifying research and determining the directions taken in the field of town planning.

The total turnover of the Principality rose from 3.25 thousand million francs in 1975 to 21.3 thousand million francs in 1988 and in 1989 to 25.4 million francs, in 1990 to 29 thousand million, in 1991 to 31 thousand million, in 1992 to 32.4 thousand million and in 1993 to 33,2 thousand million francs.

redline.gif (286 bytes)

PUBLIC FINANCES

The income of the budget of the Principality consists basically of income generated directly from economic activity in the various sectors of industry, commerce, hotels and restaurants and real estate.

The principal part of this income (51,1%) comes from taxes on turnover.

The second largest part is produced by the monopolies exploited by the State (16,8%); these include the Monégasque Telephone Service, the Postage-Stamp Issue Service, the Tobacco Administration and the Post Office.

Other income arises from receipts generated by the financial sector, taxes on the profits of companies and enterprises, customs dues, income from the real estate sector and monopolies which are exploited by other bodies (SBM, RMC, TMC, SMEG, PMU and the lottery).

On this last point, it should be noted that the fees paid by the Société des Bains de Mer to the State only account for 4,9% of the total income of this latter.

With regard to expenditure, this was divided into 48,7% for running expenses and 34,3% for expenditure on materials in the 1993 budget.

The portion allocated for expenditure on equipment takes into account the considerable investment in public works, undertaken by the Government of H.S.H. the Prince Sovereign, on large-scale works in town-planning in general and public building in particular.

Overheads are no different in nature from the overheads of other States (personnel, supplies, external services, maintenance work and grants in the educational and cultural fields).

Nevertheless, it is of interest to note the amount of the expenditure on the national educational service; the staff of this sector account for 22% of the civil servants and other employees of the State.

The public works program includes:

  • The siting underground of the railway line and station
  • The Cultural and Exhibition Center
  • The breakwater and enlargement of the harbor
  • The renovation of the market in the Condamine
  • The construction of underground vehicle parks and public lifts.

redline.gif (286 bytes)

INDUSTRIAL ACTIVITY

Large-scale industrial activity has developed in the Principality since the 50s.

Industrialization has taken place, however, without any adverse effect on traditional activities based on tourism and has done no harm at all to the environment of Monaco.

The area covered by industry plays a major role in the Monégasque economy; it is light industry, does not create pollution and has a high capital gain value.

It has grown from the small industrial area which existed at the beginning of the century (a brewery, a flour-mill, a chocolate factory) to the ultra-rapid extension of the quarter of Fontvieille which houses a large number of enterprises on a working surface area of 200,000 square meters, 62,000 square meters of which belong to the State.

Industrial activity - basically sited in the area of Fontvieille - is a source of job creation which also benefits the neighboring communes of the French department of the Alpes-Maritimes and the towns of the Italian border which each day provide workers for more than two thirds of the 30,000 jobs existing in the Principality.

It was after the Second World War that Monaco launched itself, at first timidly and then more boldly, into the adventure of industry which was, in addition, encouraged with determination by H.S.H. Prince Rainier III whose reign began in 1949.

A large number of firms were established in various sectors and some of them have risen to the first rank of European industry.

The pilot sector is that which includes the chemical, pharmaceutical, para-pharmaceutical and cosmetic industries. It consists of 23 enterprises, has 1000 employees and generates about 45,4% of the total industrial turnover.

Some Monégasque laboratories have achieved international fame. Among these are, for example, the Asepta, Biotherm and Theramex Laboratories.

Then come:

- The plastic material processing sector: 13 firms, about 1000 employees; one of the best known is "Mecaplast" which specializes in sub-contract work on vehicle accessories.

- The electrical and electronic industries and the mechanical and precision engineering industries; these include 22 companies and 1000 employees; among these "EATON" should be noted.

- The printing, edition, cardboard industries: 21 firms and 360 employees.

- The textile and clothing sector: 8 companies and 200 employees.

The building industry which consists of 200 firms employees around 2200 workers.

redline.gif (286 bytes)

THE BANKING SECTOR

The Monégasque economy is characterized by the energetic nature of the economic policy of the Public Authorities combined with the dynamism of private enterprises. These distinctive signs are to be found perfectly in the development of the banking system which occupies an important place in the development aims of the Principality.

During the last ten years, banking activity has considerably increased under the supervision of the French banking authorities in accordance with the Franco-Monégasque Conventions.

The number of credit establishments has increased to 45 : 13 Monégasque banks, 3 branches of foreign banks not established in France, 13 branches of French banks, 9 branches of foreign or French banks under foreign control, 7 agencies and 6 foreign exchange agents. The Monégasque financial sector employs nearly 1500 people.

The banking sector is characterized by very great diversification, diversification of products and internationalization of the establishments.

Finally, the Principality occupies a special place in international relations, either owing to the siting here of the head offices of international companies or the commercial and financial relations between Europe and the United States or between Europe and the countries of the South.

The banks have set up highly developed services for the management of portfolios which have found their best justification during the rapid growth of the financial markets of recent years, services concerned with trading in currency and bonds, international commercial credit services and the like.

In the most recent period, the Monégasque banks have been studying the possibility of participating in loans launched by international organisms while the Public Authorities have established legislation appropriate for Monégasque common investment funds.

redline.gif (286 bytes)

CONCLUSION

In an uncertain and complex international environment, with the ever-enlightened encouragement of its Sovereign, the Principality of Monaco preserves its originality: without any natural resources and a tiny territory, it is developing and modernizing itself. A city of 30,000 inhabitants, it provides work for about 30,000 people and makes efforts to manage its advantages in the best possible way with the constant aim of improving the quality of life so as to bring work and leisure together in a harmonious fashion.

redline.gif (286 bytes)

Published by GALE FORCE of Monaco