Time to re-think Catalonia and its economy
The unprecedented recession triggered by the Covid-19 pandemic has prompted Europe to respond in kind by setting up a €750 billion fund to rebuild and sustain the economy. Some of this cash is tied to long-term investments as part of the New Green Deal and the adoption of digital technologies. The relief fund beggars a necessary debate about Catalonia’s socio-economic model today. This newspaper has asked some of the top Catalan economists what 10 key areas should be the recipient of Europe’s funds, with a view to giving Catalonia and its economy a shot in the arm.
The world won’t be the same after the pandemic and some of the new routines are here to stay. A case in point is flexibility at work —with teleworking as the most obvious example— and the adoption of new technologies. Businesses have adapted to the pandemic and now the administration should follow suit. For instance, we must get rid of the red tape that slows down the setting up a new company and we must preach the benefits of adopting new technologies. This is not a digital transformation, but a cultural one, as one of the experts that we spoke to pointed out.
Public spending on infrastructures in Catalonia is well below what it ought to be (at least 2.2 per cent of GDP), but in future infrastructure investment should be decided according to demand rather than supply. In other words, no more airports should be built where there are no flights and no more railway track should be laid, if it means that the bullet trains will be running empty. Infrastructure spending should be informed by a cost-benefit survey that forecasts the economic, social and environmental benefits of the project in question. Therefore, we have an opportunity to end the arbitrary public spending we have had, often with a centralist tinge.
The coronavirus has caused a major public health, economic and social crisis that has also revealed the importance of scientific research. We are in the hands of thousands of scientists across the world who are doing research hoping to develop a preventative vaccine and a treatment that works. Barcelona is the eighth European city in terms of knowledge generation and the first in southern Europe. We must be strong in education, universities and research. We must make the most of the fact that the EU will prioritise R&D, when the time comes to distribute the funds. Furthermore, this investment should lead to better trained human capital and increased technological capital in the form of patents. These are two values that should help us to advance towards a new technology-based industry that is much more competitive.
Finally, another key factor is the distribution of those resources: it must be transparent, honest and professional. The public and private sectors must work hand in hand to ensure that it is so. And it must be accompanied by an honest dialogue between the administrations. The future will be collaborative or not at all.