The Basque Country: Strategy for Economic Development - Coggle Diagram
The Basque Country: Strategy for Economic Development
1950, civil way and national economic mismanagement, bankruptcy.
1975 dead of the spanish dictator Franco.
Autonomous Community of the Basque Country in 1979
With its new powers of self-rule, the young Basque government faced daunting challenges.
Its major industries were on the verge of collapse, and the new leaders lacked an economic development strategy for the region.
Basque Country Profile
7,233 square kilometers and located in the north of the nation, bordering France and the Bay of Biscay
2.1 million, Basques represented just over 5% of Spain’s overall population
Euskera and Spanish were the official languages of the Basque Country.
The predominant religion was Catholicism, flavored with traces of pre-Christian Basque paganism, once a target of Spanish repression.
The Statute of Autonomy of 1979 between the Basque Country and Spain and the Concierto Economico, transferred a broad set of “competencies” or rights to the Basques, including the right to elect their own parliament; control taxation, education, and the police; and supervise broadcasting
The executive branch of the Basque government was led by the president and his appointed team of ministers
The president was elected to a four-year term by the Parliament whenever parliamentary elections were held, usually every four years
Early History of the Basque Economy
fueros established the noble status of all inhabitants born in Basque territory, eliminating class differences and giving Basque women legal status independent from men.
Basques had organized themselves into seven jurisdictions, or foral territories
The Basques had their own armies and currency and maintained links with the various monarchies that ruled the peninsula
In order to develop commerce with South America, in 1784 the queen of Spain authorized the founding of the first Spanish company, La Compañía Guipúzcoana de Caracas, headquartered in San Sebastian
From the late 1870s Basque entrepreneurs reinvested profits from the iron ore trade to create a modern, large-scale iron and steel industry
In 1901, a record 146 new companies were listed on the Bilbao Stock Exchange.
The Bank of Vizcaya, which became one of the “Big Five” Spanish banks, was founded in 1901
the depression beginning in the early 1920s hit the Basque Country hard, crippling the large steel and shipping sectors
economic issues were overtaken by national political conflict
The Franco Years
The Spanish monarchy had formally abolished the fueros system during the political turmoil of the 1870s
1936 - start of the Civil War
Franco’s troops, supported by the German Nazis.
1937 Nazi warplanes bombed Gernika, the Basque Country’s most symbolic town.
In June 1937, Bilbao fell.
Basque nationalism was repressed and the language outlawed.
Combined with reduced access to supplies from abroad, this led to a decline in economic output of at least 20%.
From 1940, Franco pursued an economic development strategy based on self-sufficiency, reflecting both the regime’s ideology of independent self-development and the virtual embargo of Spain by the international community.
As agricultural production failed to keep pace with the growth of the population, the conditions of the approximately 1 million landless rural laborers in the southern half of Spain
Mass emigration to the cities began in the 1950s and increased during the 1960s.
Years of repression led to the founding of the Euskadi Ta Askatasuma (ETA), a clandestine organization with the objective of creating an independent Basque state
Exports, which were limited to foods and raw materials
1941, INI oversaw the country’s portfolio of stateowned enterprises, and it subsidized industries to help them achieve self-sufficiency
The INI companies accounted for 15% of all Spanish investment during the early 1950s.
The steel industry collapsed
The violence reached a critical point in 1973 when ETA terrorists assassinated Luis Carrero Blanco, prime minister of Spain and designated to become Franco’s successor
Basque leaders debated whether to work within the new Spanish regime under King Juan Carlos or to break with Spain
The year 1979 was labeled “The Bloody Year” as ETA members murdered 118 individuals
The results of the referendum resulted in the passage of the Statutes of Autonomy for the Basque Country, which restored the Concierto Economico
After a few years of growth in the late 1980s, the Basque Country economy had slumped again by 1991.
Establishing a New Government
A new Basque government was formed in 1980, with Carlos Garaikoetxea of the Nationalist Party elected as president
deep crisis in 1980, hard hit by the distortions of the past several decades and a sluggish world economy
The Basque regional government also had to redefine its historical relationship with the local governments of the region’s three provinces.
The Concierto Económico with Spain allowed the young government to set up its own treasury.
Economic crises, labor strikes, and ETA violence had driven many talented entrepreneurs out of the country, and remaining business owners were frustrated
Basque officials became actively involved in the day-to-day management of failing companies
Javier Garcia Egocheaga, the new minister of industry, institutionalized the focus on companies by creating the Agency for the Promotion of Industry (SPRI) within the Department of Industry, Commerce and Tourism in 1981
The Ardanza Government
The early transfer of powers had been relatively straightforward
Negotiations between the Basque authorities and the Spanish government grew more sensitive as they tackled issues such as social security, pensions, unemployment benefits, and financial regulation of banks and insurance companies.
Azua left the government in 1987 to become CEO of the Bilbao Stock Exchange and the Bilbao Plaza Fianciero (Financial Market Bilbao
Azua refocused the government’s economic development strategy on clusters and developing the business environment
“Three R’s”—”Rescate, Reestructuracion y Reorientacion Laboral” that focused on financial tools to help companies adjust their strategies to compete in the new global environment.
The selection of clusters was based on work done for the Ardanza government at the end of the 1980s identifying some “natural clusters” already established as well as additional “emergent opportunities.”
The machine tools cluster signed a formal collaboration agreement with the government in 1992, followed closely by the appliances cluster (1992) and the automotive cluster (1993).
The appliances cluster evolved naturally from a group that had formed in 1984 as part of the Spanish government’s Conversion and Restructuring Plan for industry.
Ports and logistics
Electronics, computing, and telecommunications
The government established two new technology parks, Alava Technology Park (1992) and San Sebastian Technology Park (1993)
Representative offices were created in various countries, and dozens of bilateral agreements were negotiated to promote trade and business linkages with national and regional governments.
The Basque Economy in 2001 - The Basque Country had become the autonomous region in Spain with the highest disposable income per capita
unemployment had fallen from 25% in 1993 to 9.9% in 2001
Road infrastructure was well developed, and there were three airports and two major ports.
The region was also home to three private universities and one large public university with more than 90,000 students
There were 10 applied-technology centers, 13 R&D centers, 4 research laboratories, 2 public research organizations, and 3 technology parks
The number of Basque companies with quality certifications had increased tenfold since 1996, and 18% of all certified companies in Spain were Basque-based
A period of restructuring the cluster initiatives had begun in 1999
President Ibarretxe also proposed a dramatic new “Agreement for Coexistence” with Spain in 2001.
The proposal called for the recognition of the Basque identity, and retention of powers by the Basque Country as Spain ceded powers to the European Union
The ability to operate flexibly in these multilevel regionalized networks is essential to the continued ability to prosper