Spanish Economy To Be Boosted By Investment

Press, Volume CII, Issue 30288, 14 November 1963, Page 13

Spanish Economy To Be Boosted By Investment

MADRID The Spanish Government has announced that it will invest £2OOO million during a four year plan for economic development starting on January 1, 1964. This is double the amount spent by the Government during tihe last four years, a period during which Spain has climbed from a difficult economic situation in 1959 to an all-time peak of national prosperity this year. Education is first on the new list for government spending, followed by agriculture and transport. No increase in taxation will be needed to meet higher Government spending. Organisers believe that the State's revenue will increase as the gross national product grows. The amount of revenue assigned to capital investments has been earmarked to grow at a yearly cumulative rate of 10 per cent, while current expenditure will be restrained to a growth rate of five per cent a year. To complement the plan, other measures, to be announced soon, will include taxation changes, a redistribution of incomes, and the concession of credits. Some experts have expressed doubts about whether it will prove possible in practice to finance the plan as at present proposed. Some economists claim that the details so far known of the plan are insufficient to permit an accurate assessment of its chances of success. Specific plans for spending the government money are, however, already being announced. The Minister for Education, Mr M. L. Tamayo, for example, has said that the Government intends to increase the number of Spain’s scientists and technicians. He says priority in education will be given to primary and technical education and training in skills, particularly for unskilled workers. He says, too, that agriculture, greatly under-capitalised in Spain, is next on the list for government spending. Basic preparation for the four-year plan began more than 18 months ago, when a decree was issued appointing Mr L. Rodo as Commissioner. He is a 48-year-old

civil servant, who first caine to public attention when he made reforms in the Spanish civil service. It was twb-and-a-half years before that—in August, 1959 —when Spain got the “shock treatment” which her Minister of Commerce, Mr A. Ullastres, hoped would jerk the ailing economy back to health. Then Mr Ullastres devalued the peseta and Spain moved into Organisation for European Economic Cooperation as the eighteenth member of the body formed to facilitate European exchange of goods. New taxes were imposed and the budget was slashed. Bank credits came under control. Four hundred million dollars' worth of annual imports of raw materials and other goods were freed from import restrictions in Spates first free trade move since 1939. A decree favouring foreign investment was issued, and some 415 million dollars’ worth of credits were secured abroad. The Spaniards tightened their belts and settled , down to work. The sweeping changes and enforced austerity paid off. This year, Spain is enjoying an economic boom. There is financial stability and full employment. Industrial wages rose by at least 10 per cent last year, helped by a higher minimum wage established by the government for farm and industrial workers. Now, finally, the Spaniard is beginning little by little to taste the joys of twentiethcentury living. The number of cars on Spanish roads, although still

low by Western European standards, has doubled in the last five years. Home production of motor vehicles in 1962 totalled 67.564 cars and 138,828 scooters and 'motorcycles. Last year. 250,000 television sets were sold, compared with only 39,000 in 1958, and the trade expects to sell 400,000 by the end of this year. The average Spaniard is eating more, and better. Consumption of olive oil, the chief cooking fat in Spain, increased by 55 per cent between. 1955 and 1961.

Spaniards were also eating 27 per cent more meat per head, and 58 per cent more sugar at the end of those six years. Spain is now hoping the four-year plan for economic development will be the springboard which will start the country on the road to an economic prosperity undreamed of in the difficult days of early 1959. The 500 million dollars spent in Spain by foreign tourists each year will be a big factor in financing the plan.—Reuter.