elenasalgado2In order to overcome the serious economic recession that it is mired in, Spain needs a new business spirit, new niches in the business world and a more competitive administration.

(From Madrid and Bogotá) DESPITE THE FACT THAT SOME continue to deny it with useless sophisms and dressed-up figures that are contradicted by the harsh reality day in and day out, the extremely serious economic recession that we have been mired in for the past few months is threatening to trigger a profound transformation in the Spanish economic structure.

In the first place, the total of unemployed workers is threatening to not just reach the four million that the gloomiest fortunetellers were predicting, but to hit the five million mark; in other words, almost 20% of the working population. And no less important is the fact that, aside from the loss of thousands of jobs, numerous businesses in every sector will close their doors in the upcoming months if they have not already done so, confirming the recent fall in economic activity and the fact that the country appears to be stuck in a recession that is no longer limited to production sectors or any specific type of business (even the number of tourists visiting the country has fallen). There is also the dangerous (and not new) flight of capital to other more competitive places with more attractive labor markets. And lastly, another aspect that must be reviewed, as it is being felt in the real estate, service, and import sectors, is the magnitude of the true crisis from which Spain is suffering: we are dealing with a problem of competitiveness. Either we become more competitive, with better training and performance, or we are doomed to an economic tsunami with unpredictable results.

SCARCE COMPETITIVENESS

Indeed, the true crisis is one of competitiveness; in the midst of this sea of figures, specious promising predictions for the short-term and even unjustifiable self-justifications from the economic leaders, Spain is weathering the current economic situation worse than any other European country, and its macroeconomic figures are the worst in the whole EU and, of course, OECD region.

We are in the middle of a tricky situation that must be realistically and critically examined in order to arrive at an exhaustive analysis of how we have gotten here, to this dead point at which our economy is in agony, almost devoid of life. Only this way, without sparing any effort on the criticism and while highlighting the true shortcomings of our economic system, will we be able to come up with a suitable diagnosis for the situation, which is much more serious than what our very own president says – as has been seen these past few weeks -, and point out the structure’s deficiencies that are preventing it from facing up to the immense challenges that the Spanish economy has before it. It is time for realism and some serious surgery, even if it might be painful and have some social costs.

This structural weakness of the Spanish economy to which I referred to earlier is manifested in numerous ways.

The shortcomings of an economy that tried to pass itself off as exemplary and immune to rough times have been made clear. It was not so, and the country will not remain outside of the path of the crisis. How stupid it was to think that in the era of globalization it could escape the influence of an international economy that functions as a single whole, and in which all of the elements (countries) are interconnected. Under these circumstances, the dearth of serious measures adopted by the current executive and the lack of a desire to change course are especially alarming. And let this serve as a warning to web surfers: the OECD, the EU, the IMF and other international institutions have already alerted the world to the seriousness of the crisis and altered their worst initial forecasts regarding Spain.

In our country, in view of the obstinacy being displayed, a more significant analysis of the crisis and the real impact that it could have in the upcoming months is sorely missed. Less self-complacency, more self-criticism.

A NEW BUSINESS CULTURE

“How could these companies be so bad for so long?” the analyst Thomas Friedman wondered in the New York Times, referring to the economic crisis. And this question is more than applicable in Spain, where the big real estate giants have closed their doors and a large chunk of the leading companies are announcing layoffs. The process, however, is a response to a crushing logic: the Spanish economy is not prepared to face up to a crisis of this magnitude because it has many confirmed faults that have been revealed by numerous reports by international economic organizations. What to do, then, in order to undertake this daunting challenge?

In the first place, a new, more innovative business culture with a more global vision and the ability to internationalize its projects is necessary.

The arrival of new technologies to Spanish companies has been very slow, Spanish businessman are far behind in this field and personnel are often ill-prepared to work with them. A more global vision? Spanish companies have a minimal presence in Eastern Europe, Asia and Africa; we are not well-represented enough in numerous markets where, in contrast, other countries with a smaller demographic weight are.

And then we must be more innovative and focus on other strategic sectors like new technologies, renewable energy and new niches in tourism, international trade and energy development. In short, Spanish businesses are still not very international at all; businessmen must pack their bags and go out and sell their products and ideas. Other industries must also be supported, since those that were providing employment until now are no longer doing so. Change is difficult, but not addressing these changes would mean that many businesses would have to close up shop. Remaining static at this point in time could be lethal.

Not only are there bad businessmen who do not know how to adapt to the new times, but a new work culture is also needed. As indicators of competitiveness show, people do not work very much in Spain, and we work poorly and expensively. Our production costs are very high, similar to those in the United States, France and the United Kingdom, but our products are worse, and not at all competitive. We work longer hours but we do things worse – what a disaster! And if that weren’t enough, we sell less abroad, and as such our market is much smaller. We need a new work culture, to lower costs and to get past the current state of vacation that the country has been in for decades. Anyone who thinks Spain is going to get out of the crisis by working like the country normally does is completely wrong and does not understand how things work nowadays. Whoever thinks that is daydreaming.

We must work more and better, being more innovative; that is the strategy for getting out of the crisis.

THE ADMINISTRATON’S USELESSNESS

As a third factor which explains Spain’s underdevelopment in many aspects and the reason why the crisis is battering the country more than in other developed nations is the non-functionality and almost congenital uselessness of our administration. Wading through bureaucracy in Spain is a nightmare. The legal system is paralyzed, registering a company is a much more arduous task than in anywhere else in the world and taxes are high, complex and not at all related to the dynamism of the business world. Without an agile, efficient and responsible administration, which is currently lacking, it will be very difficult to compete in a global world with large economies like the English-speaking ones, which have much more prepared and efficient administrations, capable of coming up with solutions and adapting to the times. There are too many unions in Spain’s administration, while more work, discipline and a feeling of duty is missing.

It might seem reactionary to state things like this, but it is the pure truth. It takes nearly seven weeks to start and register a business, while in the rest of the developed world – Northern Europe and the United States, for example – it is a matter of days. Besides, three million government officials for a country like Spain is ridiculous; the majority are not needed. More rationality and work is necessary in order to be more efficient in the global world.

THE RIGIDITY OF THE WORKFORCE

And then there is the rigidity of the workforce. In times of crisis it is necessary to loosen up the workforce, make layoffs easier and cheaper and also be able to create a system that allows for quick, cheap and agile hiring. During a period in which numerous labor markets that are more competitive than Spain’s are emerging throughout the world, our economy urgently demands a profound restructuring of the work force, no matter how much our unions might not like it, and how much some residual political forces might tenaciously oppose it. It just makes it clear that they are not in touch with reality. This labor reform is necessary already, and we cannot waste any more time because the rigidity of this market is one of its shortcomings that explain our lack of competitiveness. The true crisis is competitiveness, including that of our political leaders when it is time to manage the current situation.

And lastly, a much more entrepreneurial, dynamic and business social culture is needed in Spain; there are too many government employees and people applying to public jobs and not enough businessmen and entrepreneurs. This career path needs to be promoted in our society, and the public powers must show some understanding towards these often neglected and even misunderstood collectives. The treatment that self-employed workers are subject to in Spain’s administration is absolutely shameful. And what can be said about the businessmen? They continue to be demonized by an outdated and archaic culture that tends to portray them exploiting other classes and as caricatures of terrible whip-brandishing masters. As a fundamental part of the economic structure, SMEs and self-employed workers must be supported with tax breaks and more facilities. There are too many government employees in Spain, and not enough businessmen to start bringing about some profound change.