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Future sacrificed

The severe cut in public investment in Spain is going to pass bill

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Future sacrificed
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The growth of investment, endowments of all forms of capital (physical, technological, human), is one of conditions necessary for an economy to sustain and increase its pace of growth in medium term. Depending on destination of same, it can also be foundation of economic modernization, increase in competitive capacity and, ultimately, well-being of population. The materialized by public administrations is an essential part of investment, to extent that it is concretized in assets that normally do not assume private initiative or are directly complementary of this, wher physical infrastructures, Educational or sanitary infrastructure, or in most strategic, such as those based on knowledge. In Spain, management of crisis has brought with it a notable decapitalization of economy that can be billed in coming years.

The information provided by Bank of Spain reveals continued decline of public investment in Spain since onset of crisis, to point of placing corresponding to 2017 in its minimum of last 50 years, 1.9% of GDP, lowest proportion since 19 70 and lesser of all Europe, with exception of Portugal. All capital endowments have suffered, and have done so in practically all of public administrations, to extent that in many cases new investment has been lower than depreciation experienced by existing stock.

The reason for this decline is no or than adoption of budgetary austerity policies with which to deal with crisis, revealed as inadequate. These contractions in investment were higher than those experienced by all public expenditures. The Bank of Spain emphasizes that this heading, which represents 10% of expenditure, withstood about 60% of fiscal adjustment. In addition to pronouncing existing recession, it does not facilitate sustainability of future growth. This is case of investment in educational infrastructure that has fallen in half since 2009, or sanitary facilities that have done so in 37%, as a document from IVIE points out.

They are exponents not only of inadequate responses to eurozone's sovereign-debt crisis from 2010, but also of erroneous elections in adjustment of public spending. Such a severe sacrifice in this type of investment limits capacity for growth, but by focusing on games such as education and health, it also does so with most immediate possibilities of well-being for majority of population. In an economy with one of highest unemployment rates in Europe and with highest proportion of unemployed youth, sacrificing education is doing so with future employment opportunities. To a much greater extent if we take into consideration requirements of adapting skills and competencies of work factor to technological transformations that are taking place in whole of global economy. It is of little use to salute current growth rates if y continue to be covered basically in external impulses or lower wages than competitors: it is bread for today and stagnation for tomorrow.

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