It looks like the recession in Spain is ending. About time. It has lasted five years and has been harsh. The economy grew a few tenths of a percent this quarter. It is a weak sign but a good one. Unemployment remains sky-high (26.6 percent of the potential work force), but the only rational way to reduce that scourge is with growth and investments that will produce profits that will sustain the cycle.
The road taken by Spain, beginning in the second term of José Luis Rodríguez Zapatero, the Socialist prime minister who froze the pensions, and later by Mariano Rajoy, has been one of austerity. That means cutbacks in public spending and a reduction of the national debt.
The country couldn’t go on creating infrastructures that sometimes were unnecessary — airports without customers, speed trains that made no profit, extraordinary highways for few vehicles. From these crises you emerge by generating wealth, and wealth is produced only by businesses.
The figures are relatively simple. Spain has a few more than 47 million people in its territory. From that number, almost 23 million could work, but only 16.5 million do so. A little more than 6 million are jobless.
Roughly speaking, out of the 16.5 million who work, 13.5 million do so in private activities, while 3 million earn their salaries in the public sector. The percentage of government workers — national, regional or local — is very close to the average of the European Union, but the relation between those who work in private enterprise and the whole of the population is very low.
The result: 13.5 million workers must provide for 47 million Spaniards and pay the wages of 3 million public employees. Among the Spaniards who must be provided for are 15.5 million of so-called inactive persons: pensioners (more than 7 million), students (2.5 million), permanently disabled persons (1.5 million), homemakers (4 million) and other citizens.
It is much too arduous a task, which can only be alleviated by creating the conditions for more people to work. How many? Theoretically, the universe of possible workers contains 23 million, almost 10 million more than those who do work. But it’s useless for them to work in activities that produce little, as some Keynesians think. Activities that are not lucrative eat up capital and bankrupt societies.
That said, Spain is far from being a poor country. The per-capita GNP is more than $30,000 and slightly exceeds the median in the European Union. Some autonomous communities are outright rich, with a per-capita GNP of almost $40,000: Madrid, the Basque Country, Navarra, Cataluña.
The poor communities are not all that poor. Extremadura, the worst, has a richer indicator than Chile, Latin America’s most prosperous country. Murcia, another poor community, has the per-capita GNP of South Korea.
There are other indicators that place Spain among the first 25 countries in the world: schooling, longevity, access to drinking water, food, medical services, safety, police protection, legal institutions, freedoms, communications.
The country, amid an unemployment crisis, is one of the spaces with the best quality of life in the world. It continues to be a great place to live in.
Everybody knows the unfinished task: Spain must develop an entrepreneurial fabric that’s broader, more competitive and more productive. Until that happens, if it ever happens, Spaniards will continue to pack their suitcases and emigrate. On one hand, the country loses a large number of workers, but on the other, they are people who will acquire knowledge, experience and savings that they can later utilize in their own country.
In that sense, it is a blessing that those who have no work can find it in Germany, Holland or Switzerland. The European Union should be seen as a great workplace, and the émigrés need to lose their fear of different languages or inhospitable weather. That, too, is what globalization is about.