A High Price for Prosperity

BY dint of hard work and unromantic planning, Spain is doggedly building itself into an industrial power. The gross national product has grown an average 6.1% annually since 1964, and at $32.2 billion is 13th in the non-Communist world, just behind Sweden and ahead of The Netherlands. Per capita income has surpassed $1,000 per year, up from $317 in 1960; that is still well behind the Common Market countries but light-years ahead of a prewar standard of living that compared to Bulgaria and Portugal. Spain is the world's fourth largest shipbuilder, ranks 13th in steel production, and this year has assembled 600,000 automobiles, including Spanish-built Fiats and Renaults. Some of that production was exported to African, Latin American and even to European countries, where Spanish cars are known for their durability.

The rapid industrial growth can be traced in part to Spain's particular blend of autocracy and technocracy. Because of the country's autocratic government, Development Planning Minister Laureano Lopez Rodo and his economists were able to draw up four-year plans in the certain knowledge that the programs they devised would be carried out. They directed private and government investment into key resource industries and, increasingly, those offering better than average growth, such as petrochemicals, electronics, autos, trucks and shipbuilding.

Foreign companies have been enticed into Spain by low taxes, cheap credit and guarantees that they could repatriate capital and profits; as a result, Chrysler, Fiat, ITT, Firestone, British Leyland and 3M Co. are among those that have invested heavily. In return, the foreign-owned companies have trained Spanish managers; for the first time the country has the beginnings of an entrepreneurial class. As a newcomer to industrialization, Spain also has benefited from up-to-date plant and equipment, giving it a competitive edge on countries like Britain that industrialized long ago.

Economic progress has not brought uniform prosperity to Spanish workers. Industrious and willing to learn, they have shared unevenly in the nation's burgeoning prosperity. The syndicates or official trade unions--rivaled recently by underground unions--exist as much to provide a steady labor supply as to protect workers. Strikes are discouraged, and are generally illegal and short. Some workers earn only the atrociously low legal minimum of $2 a day. Moonlighting is common; even among the middle class, it is not surprising to see army officers doubling as store managers or bank officers functioning as accountants. Envious of foreign workers who can spend more in one vacation day in Spain than a local man can earn in a week, 1,000,000 Spaniards have left home to work in other countries; the $500 million they send back annually helps to swell the national income.

The boom has speckled the Spanish sunshine with clouds that Lopez Rodo's planners had not counted on. The country is counting the cost of rapid urbanization. Hopeful peasants are forsaking such dirt-poor regions as Andalusia or Estremadura for the industrial cities, where there is scarcely enough new housing to shelter even a fraction of them. Tourists too have paid part of the price of Spain's new prosperity. Stretches of the sunny coastlines are now so grotesquely overbuilt that they have become little more than ugly concrete jungles; the famed Costa del Sol is referred to sarcastically as "Miami Beach East."

The price of prosperity is also being paid in terms of rampant inflation that is currently running at the rate of 1% a month at the same time that the expansion which fueled it is tapering somewhat. In Catalonia, Asturias and Bilbao, housewives recently defied a government ban and demonstrated against rising food prices. At a time when Spain is undergoing rapid change, and faces the pain of adjustment to a new political era, inflation of that magnitude is an ever-present worry to the nation's economic--and political --managers.

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