Study Spanish in Spain

Spanish economic development in the 20th century

In the last twenty years, democratic Spain has experienced an accelerated process similar to Europe, especially economically. At the same time, Europe has intensified its integrative impetus in this period, giving way to effective participation of Spain in the formation of the Monetary Union.

These accomplishments, which closed out the 20th century, mark a milestone in Spain’s economic history that, in contrast to other periods, has meant that Spain has not been left out of modernization and economic integration processes.

In effect, the 19th century was characterized by slow growth and clear delays in respect to European norms. It was during this period that Spain became a colonial metropolis in crisis, combined with the failed industrial revolution which triumphed in other European countries.

The turbulent 19th century both opened and closed with colonial defeats which, although very traumatic in the short term, represented the liberation of a painful burden in the long term. Wars fought to neutralize rebellions against the Spanish Empire created a series of military expenses which, combined with commercial losses, caused a major state debt on the long term that considerably affected the possibilities for economic development in the 19th century.

Spain’s chronic debt weakened the country both politically and economically, and forced successive governments to desperately seek funds, in some cases selling assets at a loss (land, mines. . .) and in others granting concessions in exchange for credit or increasing tax pressure on citizens.

In the 20th century and until approximately 1950, it is appropriate to generalize about a certain economic stagnancy as, after growth during the first part of the 20th century through 1930, a fairly critical period began due to the convergence of the worldwide Great Depression, the Civil War, and an exceptionally long post-war depression due to the disastrous economic policy of Franco’s regime. The opening begun at the end of the 50s, with new industrialization, mass tourism and funds sent by Spanish emigrants, resulted in a process of economic growth that was rapid, both in comparison to Spanish taxes of the past and to international ones.

Nevertheless, the role of the Franco regime in Spanish history has parallels in other countries: Cromwell’s protectorate in 17th century England, Bonapartism in France in the 19th century, Mussolini’s fascism in Italy, Nazism in Germany. . . all of these regimes share the characteristic of being authoritarian solutions to discipline and frustrating modernization channels. In the Spanish case what is surprising is how long the dictatorship lasted.

The 1976 transition to democracy was done amidst an economic crisis. The need for an unavoidable economic transition in midst of a worldwide economic crisis was added to the problems of the political change. This transition involved the continuation of economic liberalization, undertaken in a doubtful way towards the end of Franco’s regime.
To synthesize, we can say that there were four principle changes operating at the end of the 20th century which are in tune with the desired European guidelines:

• Deagriculturisation, changing from an agricultural and rural economy to an urban and industrial one.

• The opening process, both internal (flexibilization and liberalization) and external (going from a autocratic model to another modern one of European integration.)

• Creation of a Welfare State, both in attention to the public and infrastructure and features of public services

• The economy becoming tertiary, as a preponderance of the general service sector and specifically of the tourism sector dominating the structure of the Spanish economy.

An economy that, although having undoubtable advances, demands new and constant pressure to reach true complete convergence with the average European levels, that is, equivalent levels of prosperity within the community of nations to which Spain belongs. This is the task for the 21st century.

If you are interested to learn more about today’s Spanish economy in relation to other EU countries, USA or Japan, we invite you to visit the Spanish Central Bank’s reports on the gross national product, unemployment rates in the EU area and consumer prices, as well as other relevant economic indicators so that you can have a better understanding of the current Spanish economy: http://www.bde.es/infoest/indecoe.htm