 |
You are holding the "Gaindegia Report 2009". It is a fine report outlining the most significant aspects of what went on in the Basque economy and society during 2009. It is not only unusual but practically impossible to find this kind of work or even one-off information featuring the whole Basque Country as its field of analysis, study and observation. This is the ugly, and for some sad, truth about information gathering and publishing. So this then, at least in my opinion, is the first virtue of the study that I am lucky enough to be introducing. |
|
This is a piece of work that overcomes political-administrative divisions to offer an annual snapshot of aspects of Basque life. Maybe we don't like what we see. Other Basques do not even wish to see us presented in this way, as a whole, but nevertheless here we are.
And this is what we have done in 2009. | |
Economist |
|
II
My commission to write this prologue originates from a missive sent to me by Xabier Isasi Balanzategi, President of Gaindegia. He wrote "The job comprises writing the PROLOGUE for the publication. This is a personal commentary focussing and commenting on the issues that have attracted your attention in the economic and/or social news during 2009."
As I am by nature an obedient person, I am going to attempt to comply with my commission by adapting its methodological content (commenting on issues that have caught my eye in 2009) whilst adding just one extra aspect: I aim to talk about 2010 and what might occur.
Let's go.
III
Economically and socially, 2009 was the year of the crash. Not one economic and/or social parameter or variable has behaved positively. Within this dismal landscape the following facts have made an impact on me.
A)
The coordination and agreement undertaken by the Central Banks (for the main economic areas and zones) to try and transform what to all extents and purposes looked like a depression into a serious economic recession. This is indicative of how close we were to an economic and/or social debacle with unforeseeable consequences and developments for the whole of Humanity.
B)
From a technical point of view and regarding the action of the Central Banks (Federal Reserve, Central European Bank, etc.), the "decision" and "maximum execution" of the measures implemented made a powerful impression on me. This was (and still is) literally a crisis that is being resolved by flooding the world financial system with money, increasing the system's monetary basis by unimaginable proportions. To quote the President of the North American Federal Reserve, Mr Bernanke, they will be "throwing money out of helicopters if necessary".
C)
Silly me. I thought I'd seen it all in terms of public account management and (political) administrators, but this was not the case. Once again, it has been demonstrated that our capacity for self-deception and/or cynicism regarding public life is infinite, given that the Spanish Government's attitude to "handling" the crisis cannot be classified any other way: either cynical or incompetent. Firstly, regarding the economic downturn, they started by repeatedly denying it and later owned up to it, too little too late. Along the way they mediated the application of a series of insufficient, ineffective and poorly conceived measures.
Strictly speaking, the downturn in the Spanish economy had been diagnosed sufficiently early. It was (is) clearly a crisis caused by excessive growth in the wrong direction (excess real estate sector) following inappropriate development guidelines. These guidelines were characterised by consumption and investment growth rates higher than internal wealth could be created based, as a consequence of the growth, on external debt due to insufficient internal savings, etc. When the plug was pulled on external credit, due to the crisis in the International Financial system, everything came tumbling down.
D)
For me, 2009, was also the year of the definitive break between the financial and productive economy. If one thing is clear, for public powers in most developed countries the former (financial economy) matters more than the latter (the productive economy). Many actions undertaken since the beginning of the crisis have been focussed on saving the financial system.
Help has come in the form of massive injections of liquidity, interest rates close to zero and generous help for the banking system so they can redress their balances and restore their damaged operating accounts.
However, all this has been done using public money, separated off by the private sector and generated by the real and transforming economy (via savings and taxes) without their agents (businesses) receiving any corresponding counter-services in the form of circulation of credit, to be able to develop projects and maintain or create employment.
IV
What can we expect in 2010? Of course, one of the best things that could happen is that, in terms of growth rates, the economy might at least hold steady and not decrease anymore because very little else is expected in 2010 in terms of a boost from the different components of the Gross Domestic Product (variable expressing the growth in an economic space).
2010 will also be the year of unavoidable structural reforms within the economy. The employment market, the pensions system, the whole Social Security model will undergo major reforms, from the largest to the smallest entity, depending on the needs of the situation and political conjuncture.
2010 will also be a year where we might see what might be qualified as "events derived from the xenophobic consequences of the crisis". Here I believe that it might be appropriate to apply a little common sense, and not be afraid to apply demands for rights and obligations in equal terms and learn from our neighbours' experience.
I'd like 2010 to be a year when public powers call time on or at least lose their reverential fear of the Financial System (Banks and Building Societies), aware that banks are only ever going to look after number one and that, consequently, they are not going to prioritise business survival.
Measures should be arbitrated for when the Financial System receives public aid so that this money is also guaranteed to reach the real and productive economy because in the Basque business world today, there are many projects awaiting normal financing, demanding "standardised" treatment or if you wish, deserving of as much privilege as the whole Financial System tends to give only to itself.
More specifically, in 2010, the evolution of the Basque economy will perform a little better compared to its surrounding area. Unemployment figures will rise less, employment will fall less, it will grow a little more. To get there, we are depending on how much and how well the French and German economies recover and the force and competition that Basque products can summon up to penetrate these markets. In this way, recovery will move forward sooner.
I would like 2010 to be the year that you all imagine and that all Basques wish for...
|
|
