Regional disparities in the contemporary spanish economy, with special reference to the Canary Islands

              REGIONAL DISPARITIES IN THE CONTEMPORARY SPAMSH
ECONOMY, WITH SPECIAL REFERENCE TO THE
CANARY ISLANDS
In recent years there has been a remarkable increase in the vo-lume
of research and publication on the economic history of con-tr
-L-.i.i,i.y..u--i,a i y oe-,y.:.a. l i i 1 . v i c.,vi~ +l.- ~&". ,- :---&--& ----- &- -&- &L:- A -..- LLIG i i i v a r I I L L ~ U L L ~ I L aL spcua u~ ui ia ucvc-lopment,
strongly linked with the quest for regional identity and the
claims for political autonomy from the centre, is the growth of re-gional
economic history. Few would disagree that the Spanish region
which has produced the greatest single contribution to an under-standing
of its economic past is Catalonia, scene of Spain's first at-tempt
at an industrial revolution in the late eighteenth and nine-teenth
centuries based on cotton and woolen textiles. This writer has
also been impressed by recent investigations on such topics as the
de-industrilisation of the south east of the Peninsula in the middle
decades of the nineteenth century, the failure of the economic take-off
in the Pais Valenciano and the emergence of large-scale capitalism
in Vizcaya during the Restoration monarchy2. Within the Peninsula,
the scarcity of documentary evidence has hindered historical writing
on Asturias. Yet here too scholarly publications have begun to ap-
1. See Rafael Aracil and Marius Garcia Bonafe, «Contemporary Spanish Econo-mic
History», Journal of European Economic History, 8 (1979), 463-78 and Joseph
Harrison, dpanish Economic History: From the Restoration to the Franco Régime»,
Economic History Review, 33 (1980), 259-75.
2. See for example Jordi Nadal, «Industrialización y desindustrialización del, sur-este
español, 1817- 1913», Moneda y Crédito, 120 (1972), 3-80, Emili Giralt, Dos
estudios sobre el País Valenciano (Valencia, 1978) and Manuel González Portilla, La
formación de la sociedad capitalista en el Pais Vasco, 1876 - 19 13,2 volumes (San Se-bastián,
198 1).
624 Joseph Harrison
pear on the industralisation process3. Galicia also has not missed out
on the boom in economic history, witness Ramón Villares' magnifi-cent
work on the evolution of the foro4.
With regard to the economic historiography of the Canary Is-lands,
there is an awareness among isleños and other writers that impor-tant
gaps still exist in our understanding of the structure and dynamics
of the production process. As Antonio Miguel Bernal reminds us, pio-neering
work has been carried out on the foreign trade of the islands
and their demographic experiences. Yet, despite the current fetish for
model building, we remain ignorant of many matters, not least the dis-tribution
of income and the mechanism of the interna1 market5.
One insurmountable problem facing the economic historian who m
D
sets out to make a precise comparison of the growth performances of E
the Spanish regions over time is the absence or relative scarcity of relia- O n
1.1- . L - L L A - - I ... C A:-.. A - T r - l - . . ~ ! . - A . - > . . L - al-^ ---- > L..-L->
-
UK SüILi s i IcaI ~I I IUI I I I~LIOI IA. S v a I c I u 1 AI IU~GS t u v a l u u w l v I l s ~ m L ~ u - m
four decades ago, Spain's foreign trades statistics, especially before O
E
1930, are notoriously untrustworthy6. Not until 1955 do we possess E
2
E satisfactory data on the regional distribution of Spain's national inco-me.
The data provided at regular intervals by the Banco de Bilbao 3
seeks to break down national income by province7. -
0
m
o
3. See especially Jordi Nadal, «Notas sobre la industria asturiana de 1850 a 1935)) n
Ayalga, Historia de Asturias (Oviedo, 1982), vol. 9, 11 2 - 77 and Rafael Anes and German -E
Ojeda, «La industria asturiana en la segunda mitad del siglo XIX: de la industrialización a a
la expansión hullera», Revista de Historia Económica, 2 (1983), 13-29. 2
n
4. Ramón Villares, La propiedad de la tierra en Galicia, 1500- 1936 (Madrid, 1982). n
n
5. Antonio Miguel Bernal, «La economia canaria» en Las Islas Canarias (Ma-drid,
1982), 207-59. See also Francisco Alonso Luengo, Las Islas Canarias: estudio 3
O
geográfico econdmico: notas sobre la tierra y los hombres (Madrid, 1947), Rafael Díaz
Llanos, Síntesis de la economía de Canarias (La Coruña, 1953), Tomas Cruz Garcia,
Ensayos sobre la economía canaria (La Laguna de Tenerife, 1961), Fernando Rodrí-gücz
y Rudiigüez de Acüda, Fu;maci6n de l¿i ecaiioxíu canuiia (Madiid, !?8!) 2nd
Eugenio L. Burriel de Orueta, Canarias: población v agricultura en una sociedad de-pendiente
(Vilassar de Mar, 1982).
6. Valentín Andrés Alvarez, «Historia y crítica de los valores de nuestra balanza
de comercio», Moneda v Crédito, 4 ( 1 943), idem, «Las balanzas estadísticas de nuestro
comercio exteriom, Revisfa de Economía Polifica, 1 (1945).
7. Banco de Bilbao, Renta nacional de España y su distribución provincial, see
especiaiiy ihe Serie humogkneu, 1955- 75 (Biibao, i978). See aisü Juiio Aicaide iii-chausti,
«Los desequilibrios regionales en la economía española)), Revista de Estudios
Regionales, 4 (1979), 193 -205 and idem;«Estructura y evolución de la economía can-ana
», in Canarias ante elcambio (Santa CNZ de Tenerife, 1981), 61 -80.
Regional disparities in the contemporary Spanish econorny ... 625
Despite the enormous importante of foreign trade to the Canary
Islands, the first serious official attempt to calculate the balance of
payments of Las Palmas was not carried out until the early 1960s.
Pedro León y García de la Varga argued that traditionally a state of
equilibrium had been maintained which was to be upset after 1962
as a result of the explosion of imports following the liberalisation po-licy
which was initiated by the Stabilisation Plan of 19598. Mean-while,
as Julio Alcaide shows, the regional distribution of income
data prepared by the Bank of Bilbao illustrates in stark fashion that
the Canary Islands possess a per capita income below the national
average. In this respect the two provinces of Santa Cruz de Tene-rife
and Las Palmas de Gran Canaria are similar to Galicia, La
Mancha, Aragon, Asturias, Extremadura and Murcia9. In addi-tion,
the Bank's figures show a profound change in employment
h e f ~ e e n!4 55 U I ? ~19 77, witk a prmeufirec! shift frem the prima=
ry sector (agriculture and fishing) to the tertiary sector (tourism
and associated trades)I0.
The main point to bear in mind about the economic develop-ment
of the Canary Islands is that the Archipelago has always dif-fered
substantially in character from the Peninsula, with the rare ex-ception
of the agricultura1 exporting region of the País Valenciano.
This was recognised by Bravo Murillo in July 1852 when he issued
a decree granting free post status to Santa Cruz de Tenerife, Las Pal-mas,
Santa Cruz de La Palma, Arrecife, Puerto de la Cruz de Orota-va
and San Sebastián de la Gomera. One hundred and thirty years
later Francisco Ucelay Sabina, vice president of the Junta de Canar-ias,
writing on the possible adhesion of the islands to the European
Economic Community, argued:
8. Pedro León y Garcia de la Barga, «El Sector exterior en la economia de Las
Palmas», Información Comercial Española (May 1963), 147 -58. See also idem, «La
insulandad canaria como elemento economico», ICE (Feb. 1964), 10 1 -5.
9. Alcaide, Desequlkbrios regionales, pp. 202 -4.
10. Alcaide, Estructura, p. 65.
Joseph Harrison
«Es evidente que Canarias en el contexto español presenta unas
características tan peculiares y tan diferentes a las del resto de
las regiones de España, que exigen que a la hora de la incorpor-ación
europea de nuestro pais, el caso canario haya de consider-arlo
aparte, dándosele un tratamiento especial» ' l .
For their part the islands have always sought free trade in order
to encourage their exports of agricultural products (barilla, wine, co-chineal,
potatoes, tomatoes, bananas), as well as to purchase raw ma-terial~
a nd manufactured goods as cheaply as p o~s i b l e ' I~n. sharp
contrast, Catalan and Basque industrialists argued that it was neces-sary
to construct a high protective barrier so as to encourage infant m
industry, keep out «dumped» manufactures, especially from the Un- E
ited Kingdom and safeguard employment in the manufacturing sec- o
n tnr. Afkr the 1 8 8 0 w~ h~e n cereal growers also saw the home market -
um
threatened by cheap cereal imports from North America, Valladolid E E
joined Barcelona and Bilbao in the infamous protectionist triangle S
E which secured the tariffs of 1891, 1906 and 1922, giving Spain the
highest degree of tariff protection in Europe. Yet while inefficient 3
wheat farmers clarnoured for state intervention to keep out British -
goods, Valencia and the Archipelago argued for greater trade libera- 0
m
E
lisation in order to capture a larger share of the high income market o
of northern Europe. As later events were to show the latifundio belt
of Andalusia and Extremadura or the minifundio zone of north west n
E Spain were no substitute for the markets of the advanced capitalist a
nations. n
After the loss of the Spanish Empire in the New World, com- n
n
pleted in 1824, the Canary Islands suffered three decades of decline, 3
partly as a result of policies pursued in Madrid to defend peninsular O
interests. As well as losing emigrant remittances, the Archipelago
was also the victim of the prohibitionist legislation of 1820, designed
to favour national industry. The large nurnber of petitions to the
Spanish government bears witness to the sufferings of the islandsI3. If
1 1 . Informe de la Junta de Canarias sobre la posible adhesidn de las Islas a la
CEE, second edition (Santa Cruz de Tenerife, 1982), p. 2 1.
12. Alonso Luengo, Las Islas Canarias, p. 268.
13. See «Informe relativo al comercio interior y exterior de las islas Canarias)), El
Museo Canario, 35, 1974 cited in Antonio Miguel Bemal, «En tomo al hecho diferen-cial
canario)), in Canarias ante el cambio, pp. 32-3.
Regional disparities in the contemporary Spanish economy ... 627
the tariff of 183 1 was more free trade in character, the Instruction of
1841 soon put an end to hopes of an export bonanza based on wine
and cochineal. The disillusion was completed by the triumph of the
Moderados. Throughout the 1840s the Canary Islands were the vic-tims
not only of a decline in international trade but also of a reduc-tion
in traffic between the main ports of the ArchipelagoI4. Indeed,
Bavo Murillo's decree of 1852 followed a decade of intense lobbying
from the fuerzas vivas of the islands.
The prosperity of the Archipelago from the 1850s down to the
First World War was largely a result of the links of the islands with
northern Europe, in particular Great Britain. Joaquim Nada1 Farrer-as
argues that the Canary Islands became a dependancy of the British
economuI5. A number of examples will illustrate this development.
In the midst of protectionist legislation in the Peninsula, imports of
coai from Britain to the isiands rose from £4,346 in 1865 to
£850,000 in 1913. British merchants such as Alfred L. Jones and
houses like Wolfson and Fyffes soon established a near monopoly in
the production and exportation of the banana, which replaced co-chineal
as the main export product after 1870. In addition Las Pal-mas
replaced Tenerife as the leading commercial centre of the is-lands
16.
Pre First World War prosperity, in sharp contrast to the decline
of Catalonia after the loss of the Cuban market for its textile pro-ducts,
quickly evaporated with the outbreak of the European confla-gration.
Exports of bananas fe11 from three million huacales in 19 13
to 500,000 in 19 17 while prices tumbled even more rapidly. The
submarine warfare in the Atlantic in 191 7 virtually put an end to
this lucrative trade altogether. Once again the fate of the Archipela-go
differed enormously from Peninsula Spain with the exception of
Valencia, whose citrus fruit growers and horticulturalists also lan-guished
as a result of the submarine blockade of the Mediterrean
coas:. ?:',eanwhi!e, indiuiha! firiii~ií i Cataluiiia aad made
vast fortunes owing to wartime orders from the belligerents for such
14. Ibid, p. 34.
15. Jmquim Nada! Farreras, d2epenr'enci. y si?hrlemrrn!!n: e! cise cznirie>>,
Hacienda Pública Espñaola, 38 (1976).
16. Bernal, La economia canaria, pp. 248-50. See also Antonio Lopez Gómez,
«El cultivo del plátano en Canarias», Estudios Geográjicos, 126 (1972) 5-68.
628 Joseph Harrison
items as woollen goods for blankets and uniforms and the possibility
of import substitution as Britain, France and Germany vacated the
domestic market. Between 19 15 and 19 19 Basque banks trebled their
portfolio.
In common with the eastern littoral, the Canary Islands suffered
from the Ottawa Agreement which came into force in 1933 granting
commonwealth producers preferential treatment in the British mar-ket.
There can be little doubt that while the rest of Peninsula Spain
was spared the worst excesses of the inter-war slump because of
Spain's high leve] of tariff protection of economic autarky, the separ-ateness
of the Archipelago's development from the mother country ,,
meant once again that it was to become the victim of a contraction -
in the international economy. E
After the triumvh of Francoist forces in 1939 the regime im- O
-
posed upon Spain a policy of autarky which resulted in low and of- =m
O
ten negative rates of growth. The regime, unlike the Second Repu- EE
blic, refused to countenance agrarian reform. Hence the Canaries, S
E
deprived of the international market, again fe11 victim to the low ag- =
gregate demand of the domestic market. 3
- -
0m