Franco's Spain: Economic Phases and Development (1940-1975)

Franco's Spain: Economic Phases (1940-1975)

a) Autarky (1940s)

Francoist authorities implemented a policy favoring limited industrial production.

1941: INI (Instituto Nacional de Industria)

The INI was the Franco regime's instrument responsible for reviving industry during the post-war years. The 1940s were known as the "Years of Famine." The public estate was bankrupt with no financial reserves, leading to economic stagnation. Recovery began around 1950. The 1947 Marshall Plan did not benefit the dictatorial regime.

b) Stabilization Plan (1959) and Development

Rationing was abolished, and free pricing, trade, and movement of foodstuffs were established.

Since 1951: Negotiations with the U.S.

Negotiations began with the U.S., resulting in a Mutual Assistance Treaty in exchange for allowing the installation of military bases in Spain. The U.S. provided economic aid. Spain exported agricultural products such as oil, citrus, and wine. Tourism increased in the 1950s. In 1959, the devaluation of the peseta immediately increased inflows of foreign currency and tourists.

Techies (1957)

Modern, conservative economists and politicians.

The Stabilization Plan led Spain to forced austerity, cutting public spending, restricting credit, freezing wages, limiting overtime, and devaluing the peseta. This was the most far-reaching economic operation by the State between 1939 and 1959. It had immediate effects but high costs for the working class.

1957: Common Market

In 1959, Spain wanted to join the Common Market, but due to the dictatorship, it was not allowed to enter.

1962-1975: Development Plans

Three four-year development plans were implemented. Laureano Lopez Rodo was the mastermind behind these plans, which identified preferred investment directions and allocated resources accordingly. In the 1970s, Spain had one of the highest growth rates of world industrial production, with an annual rate of 10% between 1960 and 1973. The flow of hard currency from tourism and savings from emigrants in various European countries continued.

PV GDP (1960-1973): Madrid, Catalonia, and the Canary Islands grew to 46%. The highest standard of living was in Guipúzcoa, Vizcaya, Barcelona, Madrid, and Alava.

1963: Law on Bases of Social Security

This law established Spanish retirement pensions and extended health coverage to 90% of the population.

1970s: Economic Crisis and Transition

In the 1970s, the general crisis of the Western capitalist economy, caused by rising energy prices, a slowdown, and an economic slowdown, coincided with the death of the dictator and the onset of democratic transition.