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Spain back on growth path
Q: How has the Spanish economy evolved and developed over the past few years?
A: Recession has been left behind. Spain has emerged from the 2009 crisis as a renewed country, achieving its pre-crisis GNP level last year. The Spanish economy is growing for the fourth consecutive year and is creating jobs. IMF's projected growth of 3.1 per cent for the Spanish economy in 2017 has been attained and its forecast for this year is that Spain will continue to be among the best performing advanced economies.
Our economic policy has corrected the major economic imbalances and set a new economic model, driven not only by domestic demand, but more substantially by exports of goods and services and international competitiveness. The Spanish economy is highly internationalised today, with exports accounting for 34 per cent of the GDP, a figure that sets us just behind Germany. As a result, our current account balance has posted an unprecedented consecutive surplus in the past five years.
This export-driven economic growth has fuelled job creation, reducing our high level of unemployment by 2.28 million compared to 2013. Tourism has been an important driver as well for job creation, reaching a record figure of 82 million visitors last year, a more than 8 per cent increase compared with the previous year, making Spain the second most visited country in the world.
Q: How is the Catalonia crisis affecting the Spanish economy overall and what are the prospects of a return to normalcy?
A: The rationale for the Catalonian crisis is difficult to understand in Spain as well as in the rest of the democratic world, especially among our European partners. Spain is a consolidated full-fledged democracy and a highly decentralised state. Catalonia's degree of autonomy is second to no other region in Europe. Even Scotland found in Catalonia's decentralised system of self-government an inspirational model some years ago.
As a result of the act of rebellion declaring independence last year in contempt of the Constitutional Court rulings following the violation of the Spanish Constitution and their own Statute of Autonomy by the former Catalan Government, an estimated 3,000 businesses, including many of their largest corporations, moved their corporate headquarters from Catalonia to other Spanish cities. Despite this unprecedented crisis, however, the European Commission has not revised the growth estimates for the Spanish economy as its effects were contained by the Spanish Government's intervention of the Catalan Government after being authorised by the Senate under Article 155 of the Constitution.
A great majority of our public opinion hopes that the new Catalan Government will exercise the necessary guidance to restore the respect of the Constitution in order to facilitate a political dialogue which might lead to surpass the present state of affairs and restore the necessary conditions for a return to full institutional normalcy and for Catalonia to continue its economic growth as one of our leading regions.
Q: What is your opinion of the overall relations between Singapore and Spain over the years and going forward?
A: This year, we are celebrating our 50th anniversary of diplomatic relations. Spain opened its embassy in Singapore only 15 years ago. During this period, our political relations have been excellent with frequent high-level visits by both countries. This year, we had the privilege of receiving Deputy Prime Minister Teo Chee Hean for a working visit in Madrid. His meetings with His Majesty King Felipe, the Vice-President of the Government and the Foreign Minister showed the many areas in which we shared similar views and common interests, from geopolitics to free trade in all its different aspects.
Spain, for instance, has been a strong supporter of the FTA and PCA between the European Union and Singapore and we are doing our best to ensure that it finally enters into force before the next European Parliamentary elections.
Our Spanish community in Singapore, although still small - around 2,300 - compared to other countries, has been growing strongly, from barely 300, in just a few years. This shows how Singapore has become a beacon especially for our young professionals and possibly their preferred choice in Asia. Spain is also increasingly a destination of choice for Singaporeans, with almost 70,000
visitors last year. These people-to-people contacts contribute strongly to cement our bilateral relations as well.
Q: What is the overall situation and what are the prospects for further development of economic relations?
A: I mentioned before how foreign trade has paved the way for our economic recovery and how our economy has become internationalised. After all, Spain is the fifth largest EU economy and 14th biggest in the world. It has a privileged geostrategic location, a powerful infrastructure network, shares the second most spoken language in the world and counts with multinational companies, which are leaders in different strategic sectors with high added-value and technology, such as transport infrastructure, banking, energy (including renewable energy such as solar and wind) telecommunications, water treatment and management.
Q: Which areas do you see as having the most potential for cooperation and what are plans to develop this further?
A: Asia is still largely a new territory for us, accounting for less than 10 per cent of our total foreign trade and investment but we are increasingly focusing in this region, beyond our traditional markets in Europe (65.7 per cent of our total exports go to the EU), Latin America (Spain is its second largest world investor after USA), and North Africa.
Asia is a continent of opportunities and as Asean countries will continue expanding their economies and infrastructure at an amazing pace in the next two decades, Spain's opportunities will also be increasing, despite tough competition. Among other areas where our companies feel there are greater chances for cooperation are: transport infrastructure, health, food, environmental and urban solutions.
Plans are needed to channel these prospects and opportunities, though. Besides political and economic visits, a need for setting up structured dialogues, new embassies and consulates, greater cooperation in public diplomacy, education and cultural activities, is obvious. In the case of Singapore, currently a priority country for Spanish trade policy in recognition of its strategic role as leading regional hub, I see a clear potential for bilateral cooperation in some cutting edge fields of common interest for both of us such as infrastructure and applied technologies, selected environmental solutions (water, renewable energy) and health, among other important areas, as well as exploring considerable opportunities for expanding bilateral investments.