Col·lectiu Emma - Explaining Catalonia

Thursday, 25 october 2012 | ARA, FemCat


"The Catalonia that business leaders want" by Carles Sumarroca

(The Barcelona daily ARA recently published an article by Carles Sumarroca, chairman of FemCat –a major association of Catalan business leaders–, stating the organization´s views on the present political situation in Catalonia ("La Catalunya que volem els empresaris"). FemCat has kindly provided an urgent translation of the Catalan original) 

The Catalonia that business leaders want

Much has been said in the last weeks about the positioning of the business sector with regard to the political and economic circumstances that we are experiencing. It seems obvious that the answer to this question cannot be stated from a strictly business or economic point of view, since every business person carries (just like any other person) cultural, sentimental and political bias. Nevertheless, FemCAT believes that there are some economic issues that need to be underlined since, regardless of political matters, they have a lot to do with what is happening.

The development strategy adopted by successive governments of the Spanish state and its administrative structures in the last 30 years has not favoured the interests and specificities of the Catalan productive sector. Behind this fact lies a development model, stated more or less explicitly at times, which draws the economic plan for the state with only one pole, Madrid, of which all other things are considered subsidiary. This approach may have brought some benefits (development of large tractor companies, regulation of strategic sectors, ability to grow in Latin America...) but it has been very negative for Catalonia inasmuch as it has excluded other development models.

A direct and clear consequence of this model is the distribution of investment in the infrastructures that has caused nonsensical situations, such as the absence of a rail connection between the Mediterranean ports and Europe, the deplorable state of route A2 in Girona and the lack of autonomy in the management of the Barcelona airport, to quote just a few examples. Other consequences are less visible, but no less important in the long run: the priorities set for innovation, education and vocational training policies, as well as the support structures for the productive industry. While we do not deny that some positive actions may have been undertaken, we can clearly state that in all these issues the baseline policies of the Spanish state have not responded to the needs of our industrial and export-led productive network; in some cases, they have clearly worked against these needs.

The above described interpretation of the economic model and many other strictly political factors have motivated a system of tax revenues and spending that is inefficient for the whole of the state and very negative for Catalonia: disproportionate levels of fiscal deficit, maintained for such a long time, are unsustainable. They are not unsustainable just because they violate the principle of fairness that should guide the share of tax effort between citizens of different territories; an unbalanced tax collection and spending system becomes inefficient at facilitating the generation of economic growth. If a significant share of the tax effort is not invested in the most dynamic areas in order to enhance their ability to grow, they will end up choked due to the erosion of their competitive advantage. Catalonia cannot continue competing with success with countries who do invest a significant part of the tax effort of citizens and businesses into their own ability to generate wealth. We cannot have, in summary, the tax collection levels of a Nordic country and feed our productive sector with the public investment levels of an underdeveloped country.

In the context of a global economy, competitive advantages are related to many factors that do not only depend on businesses, but on the strategic alignment between the private sector and the government. In a country where businesses are industry-based and export-led like ours, education, innovation, technology transfer, vocational training and internationalization policies or, to put it plainly, the sole existence of industrial policies, become indispensable in order to guarantee the development of companies and their ability to compete in the international arena. If these policies are not properly set or there are not enough resources to implement them, it does not matter how well businesses do the homework: they will not succeed in the long run. FemCAT has conducted several benchmarking trips to exemplary countries, such as Finland, Israel and Massachusetts. All of them can be taken as models for several reasons and according to their singularities, but they share a common factor: an intense collaboration between the private and the public sector, based on fully shared strategies and a long-term commitment to put them in place.

Thus far, the elements that, from our point of view, have configured over a long period an economic reality that becomes, today, a political crossroads. Catalonia is an economic reality that would not have any problem to succeed in the context of an open European society, where free circulation of goods and people is a fact that will not change. In fact, it would seem that today Catalonia unites the characteristics that everyone quotes as key for overcoming the crisis: an entrepreneurial and creative society, with an industrial base and open to the world, from a commercial point of view as well as in the ability to host people and initiatives.

In 2004, when the business leaders who founded FemCAT wrote the manifesto that is still our guideline, we stated “we now see that advancing requires giving new impetus to the social and economic aims of Catalans” and added “this new drive must be promoted from within political circles, but also and more importantly, in economic and social areas.” Over eight years later, and for all the above stated reasons, we think it is obvious that the frame in which our country moves does not respond to the needs of our economy, and it even plays clearly against them rather often. We need, therefore, to find a new framework that ensures, among other things, an efficient assignment of the resources we generate, as a key mechanism to guarantee the necessary competitive advantage and, in consequence, the ability for future progress.

Business leaders alone cannot decide which framework this must be. It will be up to the whole of our society to, in a democratic manner, draw the future without relinquishing the maximum levels of collective ambition. We have to do it without fear, certain that any solution that collects large consensus in our society and responds to the legitimate ambition of our country to place itself among the most developed in the world, will also have, without a doubt, the support of our businesses.

Carles Sumarroca

Chairman of FemCAT

Barcelona, 21 October 2012

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Col·lectiu Emma - Explaining Catalonia

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Col·lectiu Emma - Explaining Catalonia