Spain’s Economic Shift: Stabilization, Growth, and Challenges (1950s-1970s)
Spain’s Economic Shift (1950s-1970s)
Stabilization Measures
The launch of the stabilization plan marked a shift from interventionist economic policies. Promoted by international agencies as a condition for loans, it aimed to address Spain’s dwindling gold reserves and finance imports. The government committed to reducing state intervention, lowering the deficit, and removing trade barriers. Despite liberalization efforts, dismantling public intervention proved slow, with many market areas remaining state-operated for years.
Development Plans
Economic and Social Development Plans exemplified the interventionist state’s continued influence. These plans prioritized industrial growth, aiming to improve business efficiency across sectors and regions, and create development poles to address imbalances. However, plan forecasts rarely materialized, and their impact remained limited.
Key Stabilization Measures:
- Increased bank interest rates to curb inflation.
- Tax reform to increase revenue and limit state spending.
- Price control deregulation.
- Removal of barriers to foreign products and capital investment.
- 50% devaluation of the peseta against the dollar.
Economic Growth in Catalonia
While economic growth affected all of Spain, some areas experienced delayed income increases. Catalonia maintained its dominance in Spanish industry, but its sectoral distribution underwent changes. The textile industry declined, while metal, graphic arts, and petrochemicals expanded. The service sector became the largest, concentrated around Barcelona. This regional imbalance fueled migration from other Spanish regions, primarily to the coastal strip. Barcelona’s urban area became Spain’s largest labor concentration. Migration, tourism, and rising incomes spurred the construction sector and urban infrastructure development.
Transformation of Agriculture
The economic transformation reduced agriculture’s importance, decreasing both its share of GDP and the active population engaged in it. The rural exodus stemmed from better employment opportunities in industry and services. Increased incomes led to reduced food consumption as a proportion of total spending. The decline in rural labor due to migration increased wages, encouraging farm mechanization. Improved incomes diversified food demand, increasing productivity and shifting agricultural output away from grains for human consumption.
A New Urban Social Structure
The process desruralització constituted the most important change in the structure of Spanish society. Experienced an extraordinary growth jova a working class that, mixing with the natives, he represented a third of the total workforce and half of the employees. It was so broad and diverse sector of skilled workers when the workers became the largest occupational category in Spain and even in Catalonia. At his side were not qualified assets proliferate in the tertiary sector. The transformation of the middle classes or the transportation and construction were to change the petty bourgeoisie. However, it increased the weight of a new middle class and tertiary activities linked to the “tecnocratització. As for the bourgeois classes, was a shift occur in traditional sectors to the benefit of industrial expansion. This new bourgeoisie was often linked to transnational corporations and foreign capital. LIMITATIONS OF PROCESS-industrialization Despite the depth of growth and transformation, the Spanish economy showed limitations. Firstly the per capita income in Spain was still very low and secondly, during all these years was a strong tendency to consolidate the rise in prices. Thus, low inflation and creation of new jobs were two of the main limitations of this phase. Among the reasons for explaining inflation, we must mention the increase in agricultural prices. Consequently the lack of competition because services were largely in the hands of oligopolies and finally, the big money creation by monetary authorities to address the crisis. We must emphasize the specialization of industry activities in technologically intensive shortly. Indeed, the industrial growth of these years were characterized by a very limited advance of technology industries for more great content. Finally, we mention the limited liberalization of a large number of economic sectors il’excessiva state regulation.