Economic & Social Transformation in Spain: 1959-1973

Posted on Oct 18, 2024 in Geology

Development: (1959-1973)

During this period, Spain experienced a high-growth economy and underwent industrialization. This led to a developed urban phenomenon, an increase in the average standard of living, and significant social change, all while under the Franco dictatorship.

1. Economic Development:

In 1959, an economic stabilization plan was implemented to stimulate the economy. Key elements of this plan included:

  • Foreign investments, credits, and equity
  • Foreign exchange from Spaniards working in Europe
  • Tourism
  • Increased imports and exports

The stabilization plan was a condition for credits from international organizations like the IMF to avoid suspension of payments. In exchange for these credits, the Spanish government committed to reducing state interventionism, lowering the public deficit, and abolishing obstacles to the entry of foreign goods.

2 Stages:

  • Expansion (1961-1964)
  • Instability (1964-1972) – The government attempted to coordinate with private initiatives through development plans like the Quadrennial Social and Economic Development Plans (1964-1967, 1968-1971, 1971-1975).

Two main lines of action were undertaken:

  • Structural actions aimed at solving historical differences in industry.
  • Attempts to reduce regional imbalances by promoting industries in less developed areas. The new economic order moved away from autarky towards liberalization, although still under a controlled regime.

Aspects of the Economic Expansion:

Several factors contributed to the rapid economic growth:

  • Links with more developed economies: Technology, capital investments, and monetary transfers helped balance the trade deficit.
  • Investment: Foreign and national multinational investments allowed for the acquisition of industrial equipment and raw materials.
  • Trade opening: Imports of equipment, oil, and agricultural products increased in the 1960s. Although exports also grew, the trade balance remained in deficit.
  • Currency: The trade deficit was balanced by tourism revenue and remittances from Spanish emigrants.
  • Shift in the labor force: There was a general shift from agriculture towards industry and services.

Decline of Traditional Agriculture:

In 1960, the agricultural sector accounted for 39% of the active population and 23.5% of the GDP. By 1975, these figures were halved. This decline can be explained by two main factors:

  • Rural exodus: People migrated to urban areas for better job opportunities in industries and services.
  • Reduced importance of food in household income: As incomes rose, spending on food decreased.

These factors eroded traditional agriculture, leading to:

  • A drop in the rural labor force due to emigration, which in turn led to an increase in wages.
  • Productivity growth through mechanization, use of selected seeds, and improved distribution networks.
  • Promotion of livestock farming.
  • Land concentration.
  • Reduced consumption of cereals due to changes in diet.

Industry:

The industrial boom was favored by:

  • Low wages and unskilled labor.
  • Low labor unrest.
  • Cheap energy and oil prices.
  • Reduced fiscal pressure.
  • Fast growth expectations in traditional industrial areas, leading to financial congestion and the creation of demographic centers.

Economic development plans focused on underdeveloped areas. Three main industries drove development:

  • Metallurgical industry: Production of equipment goods.
  • Automobile industry.
  • Chemical industry: Refineries, pharmaceuticals, plastics, and textiles.

The energy sector also grew with oil imports and the construction of energy infrastructure. Construction boomed, particularly in coastal areas. A decline in textiles and a rise in footwear were observed across regions.

Tourism:

From the 1960s, Spain became the second most popular tourist destination in Europe after Italy. The tourism industry attracted English, French, and German tourists seeking the sun and beaches.

Migration:

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