Foreign workers key for Spanish growth

By Andrew Hay MASSIVE immigration has driven half of Spain's economic expansion since 2000 and will stimulate further growth in coming years, according to a report by the Spanish prime minister's economic office. Spain is Europe's leading destination for immigrants and their number has quadrupled since 2000 to over four million, or around 11 percent of the country's population, the report said. That puts Spain's per capita immigrant population a fraction ahead of France's and just behind Germany with 12 percent -two countries Spain will overtake in per capita wealth by 2015, according to Spanish Prime Minister Jose Luis Rodriguez Zapatero. Arriving from Latin America, North Africa, Eastern Europe and Asia, Spain's immigrants have lifted income per capita by 623 euros in five years and raised the economic growth rate to a six-year high of 4 percent, according to the report. “The direct positive impact of immigration on economic growth will not reach its full potential until a few years' time,” according to the report. The economic benefit from immigrants could help Zapatero, who faces re-election in 2008. But foreigners also pose a political headache in Spain, a country where immigration only got going in the 1990s. Zapatero's critics say he gave the green light to illegal immigrants last year with an amnesty for around 600'000 foreigners working without permission. Spaniards have been shocked by the arrival in the Canary Islands this year of more than 26'000 illegal immigrants from Africa, packed into rickety wooden boats. An October poll by the CIS research group showed immigration was for the first time the top worry of Spaniards, rather than unemployment, which has long haunted the country. Immigrants have lowered Spain's unemployment by two percentage points in the last decade, the report said. Spanish joblessness fell to its lowest level in three decades last month thanks in part to the tendency of immigrants to depress wage levels, reduce inflation and boost investment by companies, the report concluded. Immigrants also contribute more to the nation's finances than they receive and were responsible for half of the government's budget surplus in 2005, the report said. Many Spaniards feel threatened by the arrival of immigrants prepared to work long hours for low wages. Spain's opposition Popular Party claims the immigrant boom could turn sour if the economy slows and unemployment rises. It has linked a rise in violent crime to immigrants. “The report continues to propagate the myth that this country has an infinite capacity to absorb people,” said an editorial in one Spanish newspaper, a government critic. In the Balearics the immigrant population is higher than the national average and as a direct result the Balearic government has created a special department to deal with their affairs. However, while the immigrant population is growing the number of mainland Spaniards living in the island has declined quite sharply. Effectively immigrants are doing jobs which until recenty were performed by seasonal mainland workers. It is estimated that the number of foreigners living legally in the island now stands at about 100'000 or 10 percent of the local population. Recent figures say the foreign population will continue to grow.