Spanish Economic Transformation: 1959-1975

Expansion of the Crisis (1959-1975)

Economic Expansion (1959-1973)

The timid recovery in the fifties was quite worrying. It could have been without oil for lack of money. In 1957, the government incorporated technical experts in economics (technocrats) linked to the Opus Dei religious institution. The most prominent were Rubio (Minister of Finance) and Ullastres (Minister of Commerce), who prepared the Stabilization and Liberalization Plan of 1959.
Spain won the aid of the IMF and OEEC. The stabilization plan consisted of modifying autarky and establishing the foundations for the Spanish economy to progressively convert into a classic capitalist system. The economic situation as a result of applying autarky was absolutely disastrous, and not by the will or initiative of France. This policy went against their ideological principles, and they accepted the threat of bankruptcy of the state and the insistence of new ministers.
The first months were quite negative: the productivity of the companies fell, workers' wages fell in real terms, the cost of living increased, and the number of unemployed persons increased. Under these conditions, some industrial sectors could start making an effort to export with the aim of placing their surplus. The lack of domestic demand because of low wages meant that the products not sold in stores accumulated in factories. However, the positive effects of the stabilization plan began to be felt from 1961.

The Causes of Economic Expansion

In Spain, industrial production grew, and the income per capita was nearly multiplied by eight. Spain became an industrialized country, and Catalonia increased and diversified its industry considerably. Sufficient funding to build facilities, purchase machinery, and pay labor to have benefits for the new firm, the financial resources available in Spain and the products could be exported to obtain this financing. The 1960s were not sufficient, since it showed a balance of payments deficit. These alternatives were tourism, foreign capital investments, and sustained exploitation of labor.
The economic expansion favored Western countries to come to Spain, an increasing number of foreign tourists related to the strong devaluation of the peseta caused by the stabilization plan. Spain was a dictatorship that suppressed the labor movement, which attracted capital from foreign companies. The dictatorship achieved a double objective: Spanish workers overseas sent part of their salary to their families who remained in Spain, while the rate of unemployment was reduced by the development plans driven by the Franco government. Investing state funds to prepare a series of spaces (to install infrastructure industries) --- or industrial development poles. The land of these estates were less if the investment itself and lestrangera to set up industries. Catalonia had a major estate in the Zona Franca of Barcelona and Tarragona estate.

The Crisis (1973-1975)

Inflation, unemployment, and closure of companies. Negative balance of payments, increase the budget deficit. The economic expansion of the sixties was stopped after 1973 because of a crisis that had external causes (increase in oil prices). Franco's full physical decline complicated the situation. The first factor was the inflation crisis in 1973. The second factor was the collapse of the relationship of exchanges, which caused a major deficit of trade balance. The third factor was the increased budget deficit, caused because the state had more expenses than income. This worsening situation worsened by the end of the regime and demanding the pressure of important sectors of society. The last years of Franco's dictatorship, Spanish society had changed somewhat; however, the regime had also been frozen. This made the ideological principles of Franco remained delegitimized to the new social and international circumstances.