Ricardo Martínez Rico
Executive President of Equipo Económico
“We are becoming ever more global, and that is extraordinary”
How should the situation evolve in Spain now that we are starting to emerge from the crisis?
With the combination of three broad strategies in economic policy, Spain should be able to overcome difficulties and continue to grow. The first of these strategies involves following an economic policy that will carry us back toward macroeconomic balances, reducing the public deficit and ensuring stability in prices, the current account, and the financial account of Spain’s balance of payments. The second is a reform strategy. We have demonstrated that when we reform the largest horizontal and vertical sectors (public administration, the labor market, the financial sector, the internationalization of companies, energy, and so on) our economy starts to grow again. The third strategy has to do with the openness of our economy: we must make efforts to be ever more competitive, not just in Latin America but also in the United States and the United Kingdom. The combination of these three elements will allow us to talk about a return to economic growth and job creation.
Internationalization: a need or an opportunity?
It is a combination of both. During the 1990s, for companies that did business abroad, internationalization represented a huge opportunity, and was also the vision of their directors and managers. But if we look at the year 2012, with a collapse in domestic demand, internationalization was more need than an opportunity. Many of the start-ups that have been generated recently are highly specialized in services, and services are not so easy to export. But what these companies are good at is investing abroad. In the early 1990s, our investment abroad was scarcely equivalent to 4 percent of GDP, while the latest available data for last year shows that it was equivalent to 50 percent of GDP.
During the crisis many enterprises internationalized that now seem to be coming back to Spain.
I hope that doesn’t happen. The data that we have analyzed shows that efforts to internationalize are so important that, once internationalization has been achieved, and having learned the lessons of a crisis of confidence and domestic demand on a grand scale, all efforts have to be made to maintain international trade. Our exports to the European Union accounted for almost 70 percent of the total. This figure now stands at around 63 percent due to the fact that we are becoming ever more global, and that’s extraordinary. Some companies are making huge efforts to make sure they’ve got the United States as their main market or to have operations in Ghana, or be present in South Africa. If domestic demand recovers now and we are capable of maintaining high foreign demand we will increase our chances of growth. Our main investment has been in the most competitive countries in the world, where our companies compete both with local companies and with other businesses from the world’s 140 countries that want to find their place in that market. Our companies have undergone a learning process. Some fifteen years ago, the main countries where we invested were Argentina, Chile, and France, where we learned a great deal. Once we learned how to be global investors, Spanish enterprises set their sights on being investors in the most competitive countries in the world. This is also firmly linked to the fact that there are a lot of Anglo-Saxon funds among the shareholders and financers of our companies: what better than to also invest in this Anglo-Saxon world. Thus, if they then want to knock on Blackstone’s door seeking finance, they can say that they’re a Spanish company with a great deal of shares in the United States.