Economic Convergence Gathers Pace in the Canaries
Step by step, policies implemented by the Autonomous Community, combined with the robust performance of tourism as the Archipelago’s economic engine, are successfully reducing the disparities between the richest and poorest islands. The gap has narrowed by up to 23%, according to the latest data published by the Canary Islands Institute of Statistics (Istac) on the evolution of Gross Domestic Product (GDP) per capita on each island.
The Historic Challenge of Double Insularity
The political debate throughout the Canary Islands’ autonomous history has been consistently shaped by the so-called double—and even triple—insularity suffered by the non-capital islands compared to Gran Canaria and Tenerife. This has spurred calls for specific compensatory policies. Recent demands have focused on introducing a convergence tax differential for double insularity in the future Economic and Fiscal Regime (REF) and securing a 60% exemption in the ‘Canary Islands decree’ to be negotiated with the Spanish government for the three ‘green islands’ (La Palma, La Gomera, El Hierro), not just La Palma, due to being the poorest in the Archipelago.
New Data Reveals a Changing Landscape
The latest Istac figures partly nuance some of the popular beliefs about the dominance of Tenerife and Gran Canaria over the rest. They confirm that slowly but inexorably, the differences are shrinking. Lanzarote and Fuerteventura are now the richest islands in the Archipelago, while La Gomera and El Hierro saw the strongest and most robust income growth. The two capital islands remain in the middle of the table, to the extent that Gran Canaria had the smallest increase in GDP per capita (6.1%).
In fact, La Gomera’s growth (19.4%) was nearly triple that of Lanzarote (6.7%)—the richest island at €28,280—and even exceeded the average increase for the Canaries (6.6%). This not only lifted it from the bottom position (now held by El Hierro) but also helped reduce the wealth gap between the Archipelago’s richest and poorest territories by almost a third in just one year. The difference between an El Hierro resident and a Lanzarote resident is now €5,550, compared to a ‘distance’ of €6,777 the previous year.
Productive Model Trumps Geography
The Istac data alone demonstrates that double insularity does not fully explain the differences between the islands; the productive model is what truly matters. According to a study presented to Parliament in October 2024 by the REF Commissioner, José Ramón Barrera, it is crucial to note that Gran Canaria and Tenerife balance their public and private sectors. In contrast, La Palma, La Gomera, and El Hierro have a greater concentration of agriculture and public sector activity—which generate less income—while Lanzarote and Fuerteventura benefit from the upward pull of tourism-linked hospitality on their economies and wealth production.
A New Fiscal Tool for Convergence
Consequently, Commissioner Barrera’s team is working to include a cross-cutting proposal in the future REF for a convergence differential based on double insularity. This would include Social Security exemptions, deductions for purchasing ‘zero-kilometre’ local products, a dedicated capitalisation reserve, and personal income tax (IRPF) deductions. The motivation behind the proposal—which must be negotiated with Spanish and European authorities over the next two years—is to further mitigate the gap in economic indicators between the non-capital islands and Gran Canaria and Tenerife.
This convergence differential would only apply to non-capital islands that demonstrate a standard of living below the Canary Islands average. Based on the report approved by Parliament, the commissioner’s idea is that compensatory measures to correct imbalances from double insularity should include a convergence differential. This could be positive or negative, depending on whether the measure acts as a fiscal incentive or a tax burden.
The mechanism would apply to non-capital islands that fall below the Canary Islands average in at least two of three socioeconomic indicators: GDP per capita, average net income per household, and long-term unemployment rate. As Barrera’s team argues, this proposal does not create a new principle but develops one already existing in the REF. It simply turns a generic declaration into a concrete instrument, equipped with objectives, measures, and evaluation criteria.
In this way, the convergence differential is designed as a stable mechanism within the REF to accelerate the closing of internal gaps in the Canaries. It would act on the structural causes preventing non-capital islands from reaching equivalent levels of prosperity, ensuring that social and territorial cohesion becomes a real, measurable objective rather than, as until now, a declaratory mandate.
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