The rocket crashes – La Nueva España

The rocket crashes – La Nueva España
The rocket crashes – La Nueva España

The Spanish economy is going like a rocket and is crashing due to competitiveness. The Swiss Institute for Management Development (IMD), one of the most important business schools in the world, has just placed Spain, unfortunately, in 40th place among the 67 most important economies in the world; four places below where it was last year and more than twenty places behind where it was in the nineties of the last century (18th place in 1992). And is this bad? Very bad. It means that to generate one euro of wealth our country needs to invest in debt and six in taxes. Spanish competitiveness is in free fall and this is evident with foreign investment collapsing by 33%, with thousands of companies disappearing, with public debt growing and poverty leading in the euro zone according to Eurostat data. Investment and the attraction of capital is progressively falling, which is hampering the index of “deterioration of institutional quality” which has a significant influence on the relocation of businesses. The IMD has lowered our ranking of government transparency by ten points, placing us in 65th position, at the same level as Venezuela. Distressing.

The balance of prosperity is determined by the rise in average competitiveness transferred to the standard of living (wages, unemployment, standard of living, investment, taxation, savings, social protection, infrastructure, education, research and development) and we have been on a downward trend for years with bad effects for today and worse for tomorrow. Spain, the fourth largest economy in Europe, has fallen in per capita income to thirteenth place in the EU 27. Spain’s GDP per capita has grown seven times less than that of the US and has decreased by 6,600 euros compared to the European average, being surpassed by countries such as Slovenia, Poland and Lithuania according to the projection made by the IMF, and all this despite injecting truly immoral amounts of debt. There are millions of needs and you cannot create a right for each need paid for with debt, that is immoral. Productivity is evaluated as the national GDP divided by the number of hours worked. This means: producing a lot with less would be excellence. But today it is no longer enough to produce a lot and well, but to produce better and cheaper than the competition in order to capture market share. Competitiveness as a global factor for products and services to be efficient in the market requires good productivity, but other actors such as innovation and quality also intervene. Spain has one of the worst capacities to produce goods and services, with two decades coming out badly in the photo of the reports published by the IVIE and the BBVA Foundation, as it reveals that Spain has the greatest drop in production, by far, of all the countries analysed. Specifically, Spain has accumulated a decline of 7.3% in these last twenty years, a result that diverges –and a lot– from developed countries. Does this mean that Spaniards work less? No, we work more but worse, with worse performance. The countries with the highest GDP per hour worked are Luxembourg, Denmark and Germany (advanced by 11.8%). Below is Spain, jostling with the slow ones in production such as Slovenia, Cyprus, the Czech Republic and Romania. At a global level, we are light years away from the United States (more than 15.5%) or China. The main cause of low productivity is the deficit in innovation: while Spain invests a scant 1.3% in R&D&I, Germany spends 2.3% of its GDP, the US 3.5% and South Korea 5%. The IMD has given Spain homework to repair the serious breakdown of the rocket, including reducing the tax burden, generating a stable framework for companies, investing efficiently with European funds, reforming productivity, promoting digitalisation, improving training, improving investment in technology, raising the quality of management teams and modifying the small-scale business structure where there is a shortage of medium and large companies that are the ones that can invest the most in personnel and innovation. In short, Spain’s economic rocket is plummeting to the point of exploding: less competitiveness, more poor people and full of unemployed.

 
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