From the year I was born, which I prefer not to disclose, until 1995, Spain was one of the countries in the world that experienced the most growth in wealth (5.5% increase in productivity and 6.2% increase in GDP per capita). It was first, the Francoist Spanish miracle, then the exemplary political transition as a global reference, and finally 1992 with its Olympic Games in Barcelona, its Expo in Seville, and its cultural capital in Madrid. We laughed and were happy, but we were not aware of how misguided we were. As The Economist said: the party is over.
Thus, we went from a rising 90% of per capita income compared to Europe in 1995, to a descending 82% in the year 2000… I remember going to Ireland, Poland, Estonia, etc. and seeing them lagging behind: no highways, obsolete airports, iconic hotels at prices lower than in Spain… now it’s a different feeling…
Currently, we are at 85% of per capita income compared to Europe because the countries that are joining are lowering the average and our statistical wealth no longer increases… and we are also comparing ourselves to Europe, which in turn is declining (40% less wealth compared to the USA since Closa founded it in 1987).
From the outset, the Spanish economy poorly absorbed entry into Europe because we emphasized tourism, services, agriculture, and other sectors as engines of the economy, abandoning industry and selling our companies instead of expanding internationally to gain size and seek productivity as a driving element. In addition, the reduction in interest rates as a result of entering the Eurozone caused a real estate bubble from which we still have not recovered. Thus, companies like TINSA still do not assess the same volume of properties in, for example, Barcelona as in 2007… and inflation should be added.
However, perhaps these data are no longer useful for evaluating the economy, and we should turn to other more sophisticated indices: the Human Development Index, which combines life expectancy, education, and per capita income; the Social Progress Index, which measures social and environmental well-being, or… the Subjective Happiness Index, which consists of surveys… and from which the INE conducted one for me last week.
At that moment, I realized that I am now happier than before… and with all the people of all ages with whom I have consulted, they have expressed the same opinion… so let’s not be so grumpy!
Josep MA Romances, Chairman and Founder of Closa Capital
