Dependence on ’old economy’ mix fuels hangover in Valencia
dimecres 3 de març de 2010, per
By Victor Mallet in Valencia - Published: March 3 2010 02:00
When the Spanish economy was growing fast in the middle of the last decade, the Mediterranean region of Valencia was growing even faster.
"There was strong demand for housing, high investment and it was easy to obtain credit," says Juan Eloy Durá Catalá, a businessman who heads the Valencian Building Employers’ Federation. "And we had wonderful customers for second homes - the English and the Germans."
The region did not attract just homebuyers from northern Europe in search of the sun. It sucked in hundreds of thousands of immigrants - legal and illegal - from eastern Europe, Latin America and north Africa to help build apartments. "We had real problems finding people to hire," says Mr Durá.
Now it is hangover time. Valencia’s quintessentially Spanish mix of "old economy" industries - orange growing, manufacturing (Ford makes cars in Valencia) and, above all, property development and construction - means it is suffering disproportionately from the global economic crisis and the collapse of Spain’s housing bubble.
"I’m in all the wrong industries," laughs Mr Durá, who owns car dealerships as well as a construction company.
The closure of hundreds of small businesses and the loss of nearly 200,000 jobs in the past year alone have cast a pall over the region and its capital, the city of -Valencia.
Unemployed immigrants, along with a small but growing number of Spaniards, have been knocking at the doors of aid centres run by Caritas, the charity arm of the Roman Catholic church, in search of financial help.
Mamadou Ba, a 26-year-old Senegalese who risked his life to reach Spain by boat to the Canary Islands, landed just as the economic boom was ending and has not had a job in the three years he has been living as an illegal immigrant in Valencia.
A few streets away, five Spanish students are having a smoke between classes and discussing a jobs market they unanimously describe as "disastrous". Unemployment in Valencia has risen to 22.5 per cent of the workforce, compared with 18.8 per cent for Spain as a whole. Meanwhile, youth unemployment is twice as bad.
"The economy is tilted towards immigrants," grumbles Kevin Navarro, a 20-year-old who describes himself as a rightwing opponent of the Socialist government. He is studying to be a nutritionist but says he would happily take a job waiting tables or unloading trucks. "There’s lots of help for immigrants and they’re not paying social security."
There is no shortage of plans for modernising the Spanish and Valencian economies and reviving the jobs market. José Luis Rodríguez Zapatero, the prime minister, has laun-ched a proposed "sustainable economy law" for the nation that promotes innovation and calls for investment in renewable energy and high-tech industries.
In Valencia, an employers’ organisation has commissioned an economic study that recommends a "redesign of the economic model", along with improvements in education and reform of the labour market, the tax system and the civil service.
Government austerity measures, however, suggest that little public money will be available to pursue these aims in the next few years, while attempts to lure a higher grade of tourist have been endangered by years of over-investment in ugly coastal developments.
Mr Durá is convinced that a healthy construction industry - albeit more technologically advanced and focused on upmarket conference centres, health farms and golf courses - is essential to job creation and the recovery of the Valencian economy.
Biotechnology and the like are all very well, he says, "but you won’t create 100,000 jobs" with them. "The only sector that absorbs workers who are relatively unskilled is construction," he concludes. "It’s difficult for a society to change its model very quickly."
Valencia, it seems, remains addicted to the old-fashioned business of building.
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