Spain’s Transformation: From Autarky to Economic Growth
Development Plans (1964-1975)
Between 1964 and 1975, following the Stabilization Plan that addressed the challenging post-war years, Spain implemented three economic development plans. These plans spurred strong economic growth, with average annual GDP increases exceeding 7%. This period is known as developmentalism. Much of the plans’ success was based on a structurally imbalanced trade balance, with the deficit offset by remittances from Spanish emigrants in Europe and revenue from tourism. Industrialization featured preferential industrial zones, such as Valladolid and Vigo (where Renault and Citroën established auto factories, respectively) and Puertollano (refinery).
Political Developments in the 1960s
Despite profound economic and social changes in the 1960s, the political landscape was characterized by immobility and a lack of major reforms. However, several new elements emerged that would later hold great significance:
- The renewal of the Catholic Church at Vatican II led to a distancing between the Church and the Franco regime, straining their previously close alliance.
- Resurgence of nationalist tensions and the emergence of ETA terrorism. In 1959, a group of youths left the PNV and formed ETA, a radical nationalist organization that adopted terrorist tactics.
- Increase in labor disputes. Workers’ demands and strikes gradually shifted from focusing on labor issues (wages, working hours) to advocating for political freedoms, including trade union rights.
The regime’s response to dissent remained purely repressive, implementing minor legislative changes that did not alter its dictatorial essence:
- The Press Law of 1966, introduced by Information Minister Manuel Fraga, eased censorship pressures but did not bring significant progress.
- The State Law of 1966, the last of the Fundamental Laws of the Movement, brought no substantial changes.
- In 1969, facing advanced age, Franco appointed Juan Carlos de Borbón, grandson of Alfonso XIII, as his successor “as a King.”
Social Change
Following the initial period of the Franco dictatorship (1939-1959), which saw a reversal of the Republican era, Spanish society underwent profound transformations from 1959 onwards. By the late 1960s, Spain had become largely urban, with a changed class structure, altered behavior patterns, and improvements in education and health. Spain entered the consumer society (television, tourism, Seat 600, etc.) and saw the emergence of a nascent welfare state (Basic Law of Social Security, 1963). This period also witnessed the progress of secularization and the decline of the Church’s ideological power.
This modernization process required a shift in mentality, driven by economic development and contact with European tourists. However, it was not without challenges, including rural-urban migration, emigration to Europe, demographic and economic imbalances between regions, low wages, poor public services, and a failed housing policy.
Consolidation of the Regime, Economic Transformation, and Social Change
Autarky (1939-1959)
Spain’s non-intervention in World War II distanced it from European recovery plans and left it isolated. Post-Civil War efforts focused on rebuilding infrastructure and implementing rationing policies to meet basic needs. Spain adopted an autarkic development model, closing its borders to foreign goods, services, and capital. This policy was influenced by Spain’s political alignment with the defeated Axis powers and the belief that Spain possessed sufficient resources for self-sufficiency and economic development.
This protectionist approach involved strong state intervention in price and interest rate setting, as well as industrial participation through the Instituto Nacional de Industria (INI), a public company responsible for industrial development (e.g., creating SEAT). This policy failed due to Spain’s lack of raw materials and technology, hindering the development of competitive businesses capable of exporting and generating capital for imports. Employers benefited from the regime’s ban on trade unions and strikes, while the working class faced reduced purchasing power due to rising prices. This resulted in general impoverishment and increased social inequality, leading to the formulation of the Stabilization Plan of 1959.
The Stabilization Plan of 1959
In 1958, after initial steps to address rising prices and deficits, Spain joined the IMF and World Bank, securing funding for economic reform. The Stabilization Plan, approved in 1959, aimed to liberalize the economy by removing bureaucratic obstacles, reducing wages and money supply, cutting public spending, and opening the Spanish economy to international investment. The objective was to lay the foundation for economic growth and industrialization within the global economy.
The plan’s results included an initial economic slowdown in 1959-1960 (falling prices, wages, consumption, immigration, deficit reduction, and capital accumulation). From 1969, the economy experienced high growth rates, particularly in the industrial and service sectors, leading to modernization and societal changes such as rural-urban migration, emigration to Europe, and agricultural mechanization. The influx of foreign investment and external dependence was offset by tourism, inward investment, and remittances from migrants.