Post-Covid, should tourism have less weight in the economy?

28-08-2017M. MIRO

In 1936, the year when the Civil War broke out, Spain's economy contracted by 23.5%. To put this in context, the recent World Economic Outlook from the International Monetary Fund predicted an eight per cent fall in GDP in 2020; a third, therefore, of the collapse 84 years ago. While the forecasts for Spain will vary and will be subject to revision, it would seem that the slump will not be getting close to that historic contraction. Moreover, so the forecasters reckon, there will be growth in 2021; the IMF has given a figure of 4.3%.

Nine years after the start of the Civil War, the effects of the Franco government's economic policy were truly being felt. In 1945, there was a further 7.7% contraction of the economy. The principal reason for this was the policy of autarky - the economic model based on the idea that a nation can be economically independent and self-sufficient.

It was a policy that was adopted after the Civil War ended. Inspired to no small extent by the regime's xenophobia, there was the belief that Spain had the resources and technologies to provide for the country's needs while at the same time achieving economic development. It was a disastrous policy. Spain didn't have the means. An economic basket case, the 1959 Stabilisation Plan finally ditched remnants of autarkic policy and paved the way for recovery, which was based to a large extent on tourism.

Autarky is enjoying a new lease of life, if only because certain politicians are coming out with statements or espousing policies which appear to be autarkic. Prior to the crisis, we had the Balearics agriculture minister, Mae de la Concha, advocating a policy of local production and consumption which had a distinct flavour of autarky. She denied that this was the case, but her allusions to some form of utopian self-sufficiency bore all the hallmarks.

More recently, as in this week, there has been the Spanish government's second deputy prime minister, Pablo Iglesias, firing a broadside at an economic system which depends on "speculative markets". He was saying this in reference to supplies of protective gear and ventilators during what was, as noted by one source, "an autarkic discourse".

Neither the Spanish nor the Balearic government is about to respond to the current economic shock by adopting a policy of autarky. Apart from anything else, neither could do because of trade and market regulations. But the mere fact of autarky having cropped up in discussion does draw something of a comparison with the post-Civil War scene. The war, as with all wars, was highly damaging to the economy. A response was required to that shock. In the case of Franco and the regime, they got it completely wrong. The current shock is of a very different order, but it is one that demands a response. War causes change, so does a pandemic; things aren't the same.

I don't for one moment believe that Pablo Iglesias was advocating autarky. He may be many things but he isn't stupid; far from it. No, in essence he was calling for a situation not so far removed from what has been observed in the UK. Spain, like the UK, doesn't have industrial strengths in certain areas. The comparison has, for instance, been made with Germany and the strength of its diagnostics industry. So, Iglesias's appeal, while it was one for self-sufficiency (greater self-sufficiency anyway), was essentially strategic. He can't really be faulted for this; can he?

Because he's from Podemos, anything that Iglesias comes out with is subject to close scrutiny; closer than that of most politicians. Accordingly, when he speaks about the post-Covid economy, his views are very much in the spotlight, especially if tourism is a factor. What he said was that tourism should have less weight in the economy, while there should be a commitment to the likes of renewable energies. He wasn't saying that there shouldn't be tourism and yet, rather as with Francina Armengol in the Balearics, who has said similar things, critics take this as "tourismphobia". Biel Company of the PP in the Balearics has suggested that "tourismphobia has found a perfect ally in coronavirus".

"La Vanguardia", one of Spain's most respected newspapers, has itself advanced opinion akin to that of Iglesias and Armengol (and there are plenty of others who have). This is not a radical paper; its editorial was basically common sense. Moreover, the calls for greater diversification away from tourism, especially in the Balearics, have been made for years. Everyone is aware that there is over-dependence on tourism, and the pandemic has most certainly made those who hadn't been aware fully conscious of the fact.

The shock is immense. It demands change. Not crackpot policies like autarky, but meaningful ones that address weakness. Tourism is a mighty strength, but it has been exposed as a mighty weakness too.

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