The Chamber of Commerce has just published a note that questions a fundamental aspect of thePhoenix Report. To simplify, the report states that the Catalan economy has a productivity problem that makes it unsustainable, and that the main cause is one: the disproportionate growth of a few unproductive export sectors that can grow thanks to the massive incorporation of labor remunerated with low wages. On the other hand, the Chamber's document concludes that the productivity problem – which no one doubts – would not be concentrated in this type of sector, but rather would be generalized throughout the Catalan economy. For his part, Enric Fernández, chief economist at CaixaBank, agreed with this from "an article in ARA in which he affirmed that “the data […] confirm [that] the productivity problem is transversal”.The first problem with this conclusion is that it is wrong. The second is even more serious, and that is that it leads to inaction. To make ourselves understood: the debate is whether the illness has a localized cause that allows for a focused intervention or if the evil is diffuse and, therefore, what the sick person needs is rest and good food.Why is the conclusion false? The Chamber bases it on the analysis of the productivity of the different sectors of the Catalan economy. For lack of better data, it considers the ten macrosectors provided by Eurostat. It is a path that the authors of the Fènix Report embarked on and which did not lead us very far. So that the reader can grasp the problem, the ten macrosectors are so diverse that it makes no sense to compare their productivities (apparently, that of real estate activities would be five times higher than that of industry!). To top it off, tourism is not one of these ten sectors. The Chamber systematically identifies it with the sector “Wholesale and retail trade, transport, accommodation and food service activities”. This is a very risky identification, as this sector is five times larger than tourism (for example, only 8% of retail trade is aimed at tourism). A more fertile approach must start from the fact that the productivity of an economy is determined by that of its exporting activities, even if these only represent a relatively modest fraction of the total. It may seem paradoxical, but this fact is what explains why, even though string quartets, McDonald's workers, chambermaids, and airport firefighters do exactly the same thing in the same way everywhere, they are much more productive in Switzerland than in Catalonia (and therefore earn much more there).Starting from this point, Catalonia's productivity is determined by that of its manufacturing and its tourism, as this is fundamentally what we export.
Well, the productivity of Catalan industry is not only double that of our tourism, but since 2000, it has narrowed the gap with German and French industries (from which, unfortunately, it is still far). It follows that if we have fallen behind compared to Germany's overall productivity and have not narrowed the gap with France, it must be because tourism has grown too quickly; above all, much more quickly than industry.The comparison with the Basque Country is even more striking. Since 2000, the productivity of the Catalan economy has been distancing itself from that of the Basque Country, which started from a higher level; on the other hand, the productivity of Catalan industry was 15% lower than that of the Basque Country and is now 3% higher, and this sorpasso has occurred in a context where Basque industrial production has fallen faster than Catalan production. It is deduced that if Catalonia is losing ground with respect to the Basque Country, it is not due to a generalized problem, since in industry – which is the heart of the Basque economy and the most important piece of ours – we are doing better than them.The worst thing about making a wrong diagnosis is that it leads to an inoperable therapy. If we conclude that the productivity problem is general, the prescription must be dispersed: reduce fiscal pressure, improve infrastructure, improve institutional quality, increase effort in R+D+i, reduce absenteeism, etc. It is a set of prescriptions with which one cannot disagree, but which do not get to the root of the problem and which, at the end of the day, commit very little.The facts, therefore, confirm the diagnosis of the Phoenix Report and its therapy: the priority must be to curb the growth of low-productivity sectors, and very specifically tourism, which is the most important. Do the Basques make a greater effort in R+D, have better institutional quality and lower fiscal pressure? Undoubtedly, but if that were the key, our industry would not have been able to advance its own.
