The Balearic economy, 'Spain's factory'

Historian Jordi Nadal said this when referring to the Catalan economy in light of its industrialization and modernization in the 19th century. At this point, in the 21st century, perhaps we could say that tourism is – island tourism in particular, given its demographic weight and contribution – the large factory (of foreign currency) of Spain. Without the inflow of foreign currency provided by tourism, the current account balance—more than 4% of GDP—would not be balanced, nor would the income and energy deficits be fully covered. Certainly, Catalonia is the main recipient of the nearly one hundred million annual visitors, with 25% of the total; 50% above its demographic weight. But, relatively speaking, the Islands are, in relation to their population, the main contributor to the external balance, to the trade deficits, of a Spanish economy that otherwise imports much more than it exports, with a number of stays five times the Principality's own, already very high figure. A contribution that represents 13 percentage points of GDP and is growing steadily.

This contribution, beyond the summer visit of the King and Queen to Mallorca, does not provoke any particular recognition. It's obvious that to maintain contributions to the Spanish economy, with the complicity of local authorities, if it's been necessary to carve out territory, no one has asked permission. If this has distorted the rest of the productive sectors through short-term profitability, no one has apologized. The machine of shifting profits to a few and assuming joint social costs has not stopped. Transport is subsidized, the VAT rate is kept low, and a labor market with lax supervision and seasonal unemployment financed by all is tolerated. And all this under the lure of creating new jobs—no matter the quality—which weighs less and less on the islanders' labor market. Year after year, the goal is to maximize the arrival of tourists to make it easier for the Spanish economy to balance its books and break records for employment and overall GDP, through incessant growth in supply and at the cost of deteriorating quality of life indicators. Meeting the increasing tourist supply with ever-increasing demand, though not always at higher prices, has become the challenge of each year. Of the season. It's not sustainability, nor compatibility with natural resources. Nor is it maintaining the levels already achieved (i.e., with zero growth rates) to improve their quality, in the face of the suicidality of rising rates.

Any Spanish government, regardless of its political affiliation, benefits from this trend. But when it comes to examining the ravages of this process, the various governments look the other way. Favoring an economic model based on the influx of more and more immigrants is not accompanied by any public compensation for its side effects. In the financing of public services, it is the de jure population that determines the transfer; the pressure on the de facto, seasonal residents of the population cannot be matched by a flexible supply of physical infrastructure, or human resources in our hospitals, or the adaptation of municipal services. The fact that there is a housing problem, with inflated demand from non-residents, and that neither natives nor newly arrived workers can access it, does not seem to concern state officials. Nor does it concern the fact that the cost of living is much higher than the general average, with markets inflated by foreign demand, which in no case reflects the transfer through regional financing. It is well known that if the government wants more resources, it will squeeze its own resources with more taxes (Catalonia), with the debt burden (Valencia), or by encouraging further exploitation of the land by recording increasing property transfers (Balearic Islands). And for the citizens, as wealthy farmers, as we islanders are perceived to be, if we want better services, we will seek them out in the private sector on our own, ignoring the fact that not everyone can afford them, thus widening the gap of social inequality.

I don't know if all those island politicians who are gloating at the Bourbons' summer reception in Palma, or who submit to the interests of their parties' state executives, feel compensated by those photographs, political promotions, and generalist speeches. But I do know that this helps distance citizens from an economic reality that has benefited some natives, continues to save the Spanish economy, and marks a very poor future for the island economy.