2013-2023, decade of economic stagnation for Spain

—Google translation—

The latest economic forecasts of the International Monetary Fund and OECD are very consistent. Both indicate that Spain started in 2013 a decade of economic stagnation. The first five years, Spain will see how the Gross Domestic Product (GDP) continues to decrease and the unemployment rate continues to rise.

Only in 2013 we expect a million more unemployed. The unemployment rate, as a percentage of the active population (Labour Force Survey data or EPA) raise two points. The source of the increase in unemployment will be twofold: EREs of the major Spanish companies and subsidiaries are from multinational direct presence in our country, due to increased taxation: being able to pay less in Ireland, it makes no sense to pay more in Spain .

The public deficit that so worries the Spanish government, will continue over the established and agreed with Brussels, in 2012 and 2013. A lack of new revenues increased activity, the Spanish government will choose to try to collect more taxes. And, inevitably, the Government will formally rescuing our economy from Brussels.

For ordinary people, the vast majority of the general population, economic recovery is synonymous with having a job, paying the mortgage and other debts, and power consumption to be expansive, if possible, also, save a little. This will not happen in Spain for another ten years: five, decay, and five of stabilization or flat growth. In this scenario agree all U.S. investment banks, the same as in the United States account for 56% of GDP.

Missing production model

Spain problems are structural and therefore not soluble in the short term absence of production models, with the exception of the construction and tourism very cheap. Without them, it is unthinkable to relocate six million people or 26% of the active population.

The percentage of public debt to GDP will reach in the next twelve months to 90%. According to economists Reinhart and Rogoff (“Growth during debt”) when an economy reaches such levels of public debt (sum of all deficits in Spain, are multiplied by the number of administrations, most household debt and business), in case you are growing, will doomed to a meager GDP growth of 2% and then stagnation coupled with inflation. In other words, a return to the worst-seventies was assuming the best, since the decade saw two recessions, both a result of increased oil prices in 1973 and 1979: a whole lost decade.

In countries like the U.S., France, Germany and even Italy, they do have their own production models and buoyant growth of 2% is very beneficial. In the American case, for example, the economy has grown by an average of 2.2% monthly arithmetic between June 2009 and December 2012. They have created six million jobs in the private sector. Exports will double in two years and, therefore, will create another five million American jobs. A similar, but smaller scale we see in Germany, France or Italy.

The case of the UK and the Anglo-Saxon countries the Common Wealth, the former British Empire, is different from the rest of the world: neither Canada nor Australia, nor New Zealand, and India …, have experienced the recession. United States suffered, and much, between August 2007 and June 2009. Since then, the U.S. has not stopped growing. Furthermore, in the American case, everything down to full employment (in the U.S., 4% unemployment) is a disaster.

Americans do not understand that Spain has an 8% structural unemployment in good times, which is two and a half million people. Fewer still 26% … Given that the population demographics in Spain varies little, except as a result of immigration, which incorporated seven million people in employment between 1999 and 2010, according to the INE, the labor market changes little. But the number of unemployed.

In Spain we have vibrant Silicon Valleys (information technology), Wall Street (financial institutions), New Mexico – Los Alamos (R & D), Boston and MIT (training, education, ICT, etc..).

Small Business

In Spain there are a handful of large companies, small-world standards, and a few subsidiaries of multinationals who invent and manufacture outside Spain: invent headquartered in (Western) and manufactured very cheaply in emerging countries. Indeed these latter companies care little if they have subsidiaries in Spain, its operations are sales and marketing, and this can be done from Ireland, London, Paris or Berlin.

Globalization is a phenomenon in itself positive. But in a time of economic downturn like this, countries like Spain are no longer productive and are highly non-competitive, in contrast to the BRIC countries, for example.
The information technology help at an early stage but, as Keynes wrote, automation level that raises many workers, leaving many more unemployed workers. The logic is overwhelming: how many jobs are at the top, where they ask or require or need very high professional qualifications? The answer is simple: very few. If Spain were thirty booming sectors, with our own production, as the strong countries of Europe, USA, India, China, Brazil and Russia, or the vast majority of English-speaking countries, the outlook would be more positive for Spain. This is not the case.

Fewer Spanish

Finally, demographics plays against Spain. We are becoming less Spanish. Immigrants begin to leave Spain and return to their countries of origin, in the absence of work and future prospects. In the last fourteen months, one million immigrants have left Spain.

Demographic change is as negative as worrisome. Each time, fewer people continue to work, to support a growing and aging society, which requires pensions and social care. In 2036 there will be an initial failure of the system, which will be saved temporarily patched (public sector downsizing, fewer benefits, higher taxes, etc..), Only to fall again in 2050, and hopeless.

In this, as “threatened” United Nations, in his report of January 1, 2000. We’ve had twelve years to remedy, but has not done anything. No matter the color of the ruling party: demography transcends ideologies and “national issue”: neither the right nor the left have done nothing to increase the demography in Spain.

What to do

Lack of own production models, globalization, technology, debt and demographic change are lethal to Spain. Conversely, it would be different: with own production models; immersed in globalization remain productive and competitive, the use of ICT-intensive and intelligent and not for playing video games; reducing debt and increasing demographics. .., would give a much more positive result for Spain.

But this can not be improvised; carries one … or two cycles, the get: four years to lay the foundations, four years of implementation of new production models, four years of creating products and services that can be sold, competitively in international markets, which are Andorra, Portugal and Gibraltar. And, all accompanied by a change of values and principles, a profound social change where hard work is rewarded, is conducive to generating wealth, and you look at her and with envy: not be penalized, thus , a country where, increasingly, young people want to be entrepreneurs rather than employees.

In the short term, do only two things:-libérrimamente-faire, the winning companies such as Telefónica, La Caixa, Santander, Abertis, Novartis, Ferrovial, HP, Microsoft, El Corte Ingles, Mapfre, Caser, Sanitas. .., also Iberia, which has a restructuring plan of its own sector, and that the same government which transforms itself (Bankia, Paradores, Renfe or SEPI), hinders him-that are not characteristic of an economy free market-the airline.

And at the same time, he has money, save it as implying God. Or the reverse. The world, the global economy will grow in the next five years between 3.5 and 4% in GDP. Spain, no. Hard times come and you have to tighten their belts.

Jorge Díaz-Cardiel. Previously published in ‘El Confidencial Digital‘.