Spain's Economic Transformation: Growth and Challenges (1960s-1970s)

Spain's Economic Boom: 1960s-1970s

During this period, the Spanish economy experienced unprecedented growth in the 20th century, leading Spain to join the group of industrialized countries. This stage of "development" was based on several key aspects:

• Stabilization Plans & Development Programs

  The Stabilization Plan marked the permanent abandonment of autarky and the beginning of the final stage of industrialization in Spain. International agencies provided loans to compensate for the lack of foreign exchange reserves. This program also incorporated economic and social liberalization plans. Three four-year plans were approved from 1964 to 1975, primarily focusing on the industrial sector and stimulating private sector actions. Key lines of action included the creation of development zones.

• Consolidation of Spanish Industrialization

  In this period, industry and services solidified their positions as the most important activities in the Spanish economy. Industrial growth was facilitated by the adoption of more advanced production techniques and significant capital accumulation. Increased technology imports further enhanced industrial productivity, which in turn helped reduce prices and increase wages.

• Migratory Movements & Labor Impact

  The technological improvements of these years, aimed at saving labor, limited job creation. Internal displacements within Spain were even more significant than external migration.

• Agricultural Restructuring & Rural Exodus

  By 1975, the agricultural population had decreased by more than one and a half million people. This was primarily due to two factors: the rural exodus and the reduced weight of food in total consumption. This shift led to increased agricultural wages, which encouraged entrepreneurs to initiate a process of mechanization.

• External Dependence & Economic Drivers

  Investment and the revolutionary technology that boosted industry and productivity largely came from abroad. Some European countries absorbed the surplus labor driven from the agricultural sector. European prosperity also suited the mass tourism movement, with Spain becoming a preferred destination. European tourists in the 1960s sought "sun and beach," affordable prices, and quality service. In essence, the "Spanish economic miracle" would not have been possible without income from tourism, remittances from emigrants, and foreign investment.

Limitations of Spanish Industrialization

By the early 1970s, Spain's per capita income remained significantly below that of Europe's more advanced economies. The period also saw a sharp rise in prices and weak job creation, although the unemployment rate remained relatively low. In October 1973, the oil crisis erupted, leading to increased inflation, a collapse in GDP growth, and a negative trade balance. This crisis starkly revealed the inherent contradictions of the growth experienced in the preceding decade.