IV.

Economy

Spain has traditionally been an agricultural country and is still one of the largest farming producers in Western Europe, but since the mid-1950s industrial growth has been rapid. A series of development plans, initiated in 1964, helped the economy to expand, but in the later 1970s an economic slowdown was brought on by rising oil costs and increased imports. Subsequently, the government emphasized the development of the steel, shipbuilding, textile, and mining industries. Today, Spain has a gross domestic product around two thirds that of the leading western European economies. Spain derives much income from tourism.

The annual budget in 2006 included revenue of about US$332.5 billion and expenditure of about US$308.3 billion. On January 1, 1986, Spain became a full member of the EU. In order to meet the convergence criteria specified for entry into a future EU economic and monetary union, Spain has been trying to reform the economy, in particular to reduce its budget deficit mainly through spending cuts. However, inflation, unemployment, and the public debt remained high in 1994 following severe recession in 1993, with some degree of economic recovery in 1995. In March 1995 Spain devalued the peseta by 7 per cent within the Exchange Rate Mechanism. In 1996 Spain had the highest rate of unemployment within the EU at 13.8 per cent. The GNP in Spain in 2004 was some US$919 billion, or US$27,340 per head.

A.

Agriculture, Forestry, and Fishing

Agriculture is a mainstay of the Spanish economy, employing just over 9 per cent of the workforce. The main crops are wheat, barley, sugar beet, maize, potatoes, rye, oats, rice, tomatoes, and onions. The country has extensive vineyards, and citrus and olive groves. In 2006 production of wheat was estimated to be, in tonnes, 5.58 million; barley, 8 million; and potatoes, 2.50 million. Annual production of other important commodities included, in tonnes, rye, 158,700; sugar beet, 6 million; and grapes, 6 million.

Climatic and topographical conditions make dry farming obligatory for a large part of Spanish agriculture. The Mediterranean provinces, particularly Valencia, have irrigation systems that represent the work of many generations, and the formerly arid coastal belt has become one of the most productive areas of Spain. Combined irrigation and hydroelectric projects are found particularly in the valley of the Ebro. Large sections of Extremadura are irrigated by means of government projects on the River Guadiana. Small-farm irrigation from wells is common.

The raising of livestock, especially sheep and goats, is an important industry. In 2006 livestock on farms included about 22.5 million sheep, 25.1 million pigs, 6.46 million cattle, 245,000 horses, and 136 million poultry.

The cork-oak tree is the principal forest resource of Spain, and the annual production of cork, more than 70,000 tonnes in 1992, is second only to that of Portugal. The yield of Spain’s forests is insufficient for the country’s wood-pulp and timber needs. Roundwood removals in 2006 totalled around 15.7 million cu m (555 million cu ft).

The fishing industry is important to the Spanish economy. The annual catch was about 1.07 million tonnes in 2005 and consisted primarily of sardines, tuna, mussels, squid, octopus, hake, anchovies, and mackerel. In 1995 and 1996 the large number of Spanish boats fishing in British and Irish waters, many of them flying British flags of convenience, caused confrontations between British and Spanish fishermen.

B.

Mining

The mineral wealth of Spain is considerable. In 2003 annual production included about 20.6 million tonnes of coal, 265,000 tonnes of iron ore, 70,000 tonnes of zinc concentrates, 2,000 tonnes of lead, 4.9 million tonnes of gypsum (1992 figure), and 2.41 million barrels of crude petroleum. The principal coal mines are in the north-west, near Oviedo; the chief iron-ore deposits are in the same area, around Santander and Bilbao; large mercury reserves are located in Almadén, in south-western Spain; and copper and lead are mined in Andalusia. Other minerals produced are potash, manganese, fluorite, tin, tungsten, wolfram, bismuth, antimony, cobalt, and rock salt.

C.

Manufacturing

Among the leading goods manufactured in Spain are textiles, iron and steel, motor vehicles, chemicals, clothing, footwear, ships, refined petroleum, and cement. Spain is one of the world’s leading wine producers, and the output in 1995 was about 18.9 million hectolitres. The iron and steel industry, centred in Bilbao, Santander, Oviedo, and Avilés, produced about 13.4 million tonnes of crude steel and 5.5 million tonnes of pig iron in 1994.

D.

Tourism

Spain’s tourist industry is centred on the bathing resorts of the Mediterranean coast, especially Andalusia and the Balearic Islands, but also embraces Madrid, Barcelona, Seville, and other famous cities, as well as rural Spain. Income from tourism, US$21.9 billion in 1994, helps compensate for Spain’s chronic trade deficit. Visitor arrivals in 1995 totalled around 63.2 million.

E.

Energy

About 53 per cent of Spain’s electricity is generated in conventional thermal plants primarily using coal or refined petroleum. Hydroelectric facilities produce 16 per cent, and nuclear installations, 24 per cent. In 1993 Spain had an installed electricity-generating capacity of some 43.8 million kW, and output in 2003 was about 247 billion kWh.

F.

Currency and Banking

The basic monetary unit was formerly the peseta, but as part of Spain’s commitment to the European single currency it adopted Euro notes and coins as from January 1, 2002. As at early 2008 0.68 Euros equalled US$1. The country is served by a large number of commercial banks. The principal stock exchanges are in Madrid, Barcelona, and Bilbao.

G.

Commerce and Trade

In 1995 Spain imported goods valued at about US$110 billion and exported goods valued at about US$85 billion. Principal imports include mineral fuels and lubricants, machinery and transport equipment, crude materials, manufactured goods, food, live animals, and chemicals. The main exports include machinery and transport equipment, food and live animals, chemicals, motor vehicles, iron and steel, and textiles and clothing. The most important trading partners of Spain are the United States, Germany, France, Italy, the United Kingdom, and Portugal.

H.

Labour

In 1995 the Spanish workforce comprised about 15.6 million people. About 2.3 million were employed in manufacturing; 1.1 million in agriculture, forestry, and fishing; 7.4 million in service industries; and 1.1 million in construction. Unemployment soared to almost 16.8 per cent during 1995 (more than 4.5 million individuals). In 1993 about 11 per cent of Spain’s workforce was unionized.

I.

Transport

Spain had about 666,292 km (414,014 mi) of roads and about 455 passenger cars per 1,000 people, in 2003. Rail service over about 14,484 km (9,000 mi) of track is provided by both government-owned and private companies. In 1992 a high-speed railway line from Madrid to Seville began operating. There are metros in Madrid of 112 km (69 mi), Barcelona, of 72 km (45 mi), and Bilbao, of 26 km (16 mi). The government-controlled Iberia Airline operates domestic and international services. There are international airports at Madrid (Barajas), Barcelona (Prat del llobregat), Alicante, Almeiría, Bilbao, Gerona, Gran Canaria, Ibiza, Lanzarote, Málaga, Palma de Mallorca, Santiago de Compostela, Saragossa, Seville, Tenerife, Valencia, and Valladolid. In 1995 the merchant navy had 1,101 vessels of a gross tonnage of 637,000.

J.

Communications

There were around 422 telephones per 1,000 people in Spain in 2005; in 1994 mobile telephones numbered 411,930. Television sets in use totalled about 24 million and radios, 13 million (1997 figures). There were a large number of independent national and regional radio stations and three national/commercial television networks, and two regional networks broadcasting in Basque and Catalan. The country had 151 daily newspapers in 2004, with a combined daily circulation of about 4 million. Influential dailies include A.B.C., published in Madrid, and La Vanguardia, issued in Barcelona. In 1994 more than 44,000 books were published.