18/02/2021

How to make Madrid bigger than Catalonia

3 min
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Around the date of the elections to the Catalan Parliament, articles have multiplied in the Madrid press about Catalonia's economic decline, its economic collapse, its impoverishment and the relationship between all this and the Catalan independence bid. In general, the arguments are that the Catalan economy has fared very badly as a result of the bid because it has lost companies, lost taxes, lost per capita income, lost welfare and, in short, lost its capacity for growth and leadership. All this would be demonstrated by the loss of the race with Madrid, and by the evident Catalan impoverishment. With the arguments and data they use, it is not clear whether they want to rescue the Catalan independentist from his ignorance or whether they want to encourage their own readers by reinforcing the message that the State is doing well, and Madrid even more so. Let me give a few examples.

As reported in these pages yesterday, the General Council of Economists and the Spanish Chamber of Commerce have just presented a study on 45 years of economic, social and business evolution of the autonomous communities. It is very rich in information and provides enough for a number of readings and articles. The headline in the press has been the competition - the race - between the Madrid region and Catalonia. The headlines announcing the Catalan economic catastrophe do not seem to pay much attention to the fact that, according to the report's data, Madrid's GDP per capita is exactly the same in relation to Catalonia's in 2019 and 1975: 16 per cent higher. What has changed is the GDP (i.e. GDP per capita multiplied by population). Madrid's higher population growth has allowed the proportion of Madrid's GDP over Catalonia's to rise from 89 per cent in 1975 to 102 per cent in 2019. Recalling many press headlines, one gets the impression that what is most disturbing in Madrid is the slowness with which Madrid is advancing with respect to Catalonia, bearing in mind that the whole of Spain is enthusiastic about Madrid. For years they have been announcing the sorpasso, and how slowly it is arriving!  

According to INE data (National Statistics Institute), in 2012 and 2013 Madrid overtook Catalonia in terms of GDP for the first time. In 2014, 2015 and 2016 it came in second again. Since 2017 it has been " imposing itself " once again. The years of returning to "second place" must have become unbearable! It is impossible to stop thinking in terms of football, given that it is the common cultural element and that Madrid is a metropolis and an intensely footballing community.

Another media outlet - perhaps the most belligerent - gives us the headline "From Spain's engine to debacle", where the collapse is nothing more than the fall in GDP in 2020 due to the effects of the pandemic, precisely when it turns out that the communities of Madrid and Catalonia are, according to a recent study by the Bank of Spain, the most similar in terms of GDP fall during 2020, and the two have approximately the same behaviour as the State as a whole. The same article shows what the "debacle" had been from 2001 to 2019: from 18.9 to 19.0 per cent of Spanish GDP! The idea of a "debacle" is deepened by another headline: "The new government receives a Catalonia 23,300 million poorer than in 2017". No mention of the generalised Spanish impoverishment.

Another author, a distinguished academic, sibyllinely states that "at least since there have been regional income estimates, Madrid had never, until the transition to democracy, been above Catalonia". He does not explain that it was precisely between the end of Franco's regime and the first years of the Transition, before the Statute of Autonomy, that the Community of Madrid surpassed Catalonia in terms of GDP per capita. The rapid growth of the State in the midst of the economic crisis fuelled a quantitative leap in Madrid's GDP and GDP per capita. 

The confusion between GDP and GDP per capita feeds other fantasies, such as the one headlined "Madrid, the region that gains most economic weight; Catalonia falls and the Basque Country sinks". What it reflects are demographic movements. The positions of GDP per capita or disposable income per capita are very stable. This seems to be the problem solver. The accusations that the Catalan independence bid is to blame for Catalonia's falling weight conceal satisfaction at this long-awaited loss of weight, which is still so difficult to consolidate. Criticism is impatience for the decline that is not coming. In fact, the good news from Catalonia is that the resilience of the Catalan economy is extraordinary.  

Remember how little time Franco took to enlarge the municipal perimeter of Madrid to make the capital bigger - unquestionably bigger - than Barcelona? Well, we are in the same place and for the same reasons.

Albert Carreras is director of ESCI-UPF

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