CATALONIA -- Harvard Political Review
Catalonia in Contention by Ali Hakim from Harvard University
#9N2014 #WeWillVote
"It is important to acknowledge the plethora of social and political
factors associated with the recent spike in the desire for Catalonian
independence. These include the region’s long history as a sovereign
entity, its own language, spoken alongside Spanish by a vast majority of
residents, and its unique culture, which, for example, denounces the
popular Spanish tradition of bullfighting as inhumane."
A Parasitic Relationship
Leonid Peisakhin, a political science professor at New York
University, discussed Catalonia’s economic prospects with the HPR.
“Catalonia is the economic engine of Spain in many ways: certainly when
it comes to established industries, but also in the service sector,” he
said. “It’s just a lot more diverse than many other regions [of the
country].”
To give some numbers, Catalonia serves as home to approximately 20 percent of Spain’s total economic activity, and contributes roughly 25 percent of the central government’s tax revenue.
Madrid, however, directs a mere 11 percent
of its spending back toward the region. Some officials in Barcelona
claim that their constituents pay about $19 billion more to the nation’s
capital each year than they receive in return. An economically
imperiled Spain has no choice but to redirect some of the revenue from
its most booming region toward its struggling ones. Nevertheless, the
current system seems to unfairly and ironically punish Catalonians for
their relative success. It’s easy to see why 60 percent of the area’s population wants out.
Artur Mas, the region’s right-leaning president, has been pushing for
a fiscal pact with Madrid, by which Catalonia would be allowed to
collect and manage its own taxes. Spanish officials, however, have been
turning a blind eye toward the issue. “Basically what the central
government is doing right now is pretending the problem doesn’t exist,”
Peisakhin explained. “They are trying to establish tough credentials
early on in the negotiations and say that whatever concessions [they] do
make won’t be substantial.” Mas has declared that without an agreement,
he will be forced to support a referendum on secession.
Even under the current system of tax collection and redistribution,
what little money the region does receive from Madrid is invested
unwisely. The central government directs funding without consideration
for Catalonia’s export economy, which is based largely on small- and
medium-sized enterprises. The rest of Spain’s economy, excluding the
agricultural sector, tends to rely on large corporations with strong
ties to the state. Therefore, business leaders in Barcelona claim that
much of Madrid’s spending decisions are politically rather than
economically motivated. A popular example is the €41 billion bailout of Bankia, an entity formed through a state-sponsored merger.
If Catalonia wants to reach its economic potential, investment in
infrastructure is crucial in order to facilitate international trade.
The region is currently responsible for 35 percent of Spain’s exports,
including 45 percent of high-tech exports. The direction of state funds
toward small-scale firms is also a priority for the city’s commercial
elite. Unfortunately, Catalonians can no longer rely on the Spanish
government, which has political interests and an economic model
different from their own, to invest responsibly in their regional
economy.
Dídac Querlat, a political scientist at the Juan March Institute in
Madrid, told the HPR that “the Catalonian authorities have reached the
conclusion that the promises and commitments that come from Spain are
not credible anymore. They [no longer] believe that they can reach a
better economic and political agreement [through cooperation with
Madrid].” Without control of its own taxes, remaining politically
attached to Madrid only hinders Catalonia’s progress as a region.
Even so, anti-separatists point toward the region’s massive debt, the
largest of any territory in Spain, as a reason to keep the country
unified. While Catalonia’s debt is sizeable, it amounts to only 80 percent of its GDP—less
than the EU average. As an independent state controlling its own tax
program, therefore, the region would have the ability to gradually repay
what it owes. It certainly would not be able to do so with Madrid
continuing to siphon off its economic resources.
