Spain's 1973 Oil Crisis: Economic Impact and Industrial Shifts

Crisis and Conversion in Spain

In 1973, Spain faced a significant economic crisis triggered by the global oil crisis. This crisis had profound effects on the Spanish economy, reflecting its peripheral position in the global market.

External Factors

• Emergence of semi-peripheral countries with cheaper labor, supported by states, primarily in Southeast Asia, leading to a New International Division of Labor.
• Continued technological innovation, replacing manual labor.
• Increase in oil prices, marking the onset of the crisis, as oil had previously been a cheap alternative to coal.
• Closure of traditional external labor markets, resulting in the expulsion of immigrants.

Internal Factors

• Rising labor costs due to an improved standard of living.
• Stagnation in domestic demand due to fear and reduced savings capacity.
• Structural deficiencies in the production system, including obsolete technology and lack of innovation.

Key Features

• Sectoral Differences: Industries such as metallurgy, shipbuilding, textiles, clothing, and footwear were most affected.
• Business Challenges: Both large and small enterprises faced closures, reduced output, and increased debt, leading to unemployment.
• Regional Disparities: The most affected areas included the Basque Country, Catalonia, Asturias, and major metropolitan areas like Madrid, Valencia, Barcelona, Bilbao, and Seville.

Action Policies

Rising unemployment and the characteristics of Spain's industrial system necessitated government intervention. Economic policies aimed to reduce social and regional impacts included:

• Royal Decree of June 1981 (compiled by Adolfo Suarez's government).
• White Paper of 1984 (developed by Felipe Gonzalez's government).
• Support measures: financial (credits), tax (deductions, bonuses), labor (early retirement, employment promotion funds), technological research support, and ZUR (Urgent Reindustrialization Zones).

Spanish Industry Characteristics

Mature and Conversion Processes

These sectors faced reduced demand, declining competitiveness, and the elimination of subsidies, resulting in low industrial production and financing problems.

Dynamic Sectors

Sectors like automobile, petrochemical, food processing, and construction had higher expectations for productivity and specialization due to high demand and export potential. However, they also experienced crises.

Cutting-Edge Sectors

High-technology sectors faced delays and difficulties due to dependence on external research and technology, a predominance of small and medium enterprises, and poor adaptation of the workforce and education system. These sectors are concentrated in science parks.

Problems: Poor investment in research and development, sectoral and business planning issues, technological backwardness, low productivity, higher prices, reduced competitiveness, and relocation led to a serious crisis.