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rfmcdonaldBack in May 2007, Carol Matlick in Business Week (How Spain Thrives on Immigration) wrote about what was seen as the largely positive effect of mass immigration--already notable in the first part of this decade, becoming a mass phenomenon more recently--for the Spanish economy.
Spain's recent strong economic growth has come to an end, not least because of the ongoing collapse of the building industry and the related troubles in Spain's financial sector. Just like as in other immigrant-receiving countries facing hard times, as reported in The Globe and Mail--Spain's welcoming attitude towards immigrants is changing.
It goes without saying that the mass return of immigrants isn't likely to happen. As immigrants interviewed in the article point out, if things are bad in Spain they're going to be worse in their homelands. Besides, many of these immigrants have put down roots in their adopted country. Why should they leave?
Over the past decade, the traditionally homogeneous country has become a sort of open-door laboratory on immigration. Spain has absorbed more than 3 million foreigners from places as diverse as Romania, Morocco, and South America. More than 11% of the country's 44 million residents are now foreign-born, one of the highest proportions in Europe. With hundreds of thousands more arriving each year, Spain could soon match the U.S. rate of 12.9%.
And it doesn't seem to have hurt much. Spain is Europe's best-performing major economy, with growth averaging 3.1% over the past five years. Since 2002, the country has created half the new jobs in the euro zone. Unemployment has plummeted from more than 20% in the 1990s to 8.6%, within shooting distance of the 7.2% euro zone average. The government attributes more than half this stellar performance to immigration. "We are very thankful for all these people who have come here to work with us," says Javier Vallés, economic policy chief for Prime Minister José Luis Zapatero.
[. . .]
Spain has had special reasons to welcome outsiders. As recently as the mid-1990s it was an economic backwater with an aging population and per-capita income only 80% of the EU average, vs. 96% now. But lower interest rates and a healthy dose of aid from Brussels sparked a demand for labor.
To fill jobs, Spain looked abroad. Immigration rose from 57,000 in 1998 to more than 600,000 for each of the past two years. The biggest influx, about 800,000 since the mid-1990s, came from Ecuador, followed by Morocco and Romania. Spain, unlike France and Germany, places no restrictions on immigration from the EU's new members in the old Soviet Bloc.
Spain's recent strong economic growth has come to an end, not least because of the ongoing collapse of the building industry and the related troubles in Spain's financial sector. Just like as in other immigrant-receiving countries facing hard times, as reported in The Globe and Mail--Spain's welcoming attitude towards immigrants is changing.
In the continent's younger economies, notably Spain and Ireland, the worldwide financial downturn has predominantly been a crisis of the building industry. In Spain, a quarter of all working-age adults last year were employed in the booming construction sector.
The boom quickly ended: This summer, home sales in Spain were down 30 per cent over last year and new mortgages down almost 40 per cent -- and that was before credit markets collapsed.
According to analysts, construction and real-estate loans make up almost one-fifth of the lending portfolios of Spain's commercial banks. While Spanish banks are generally considered more secure than other European institutions, Spain's Socialist Prime Minister, José Luis Rodríguez Zapatero, was forced to issue a €50-billion bailout package for the major banks on Monday, as well as raising state deposit insurance to €100,000.
The downturn has left more than 2.6 million people out of work in this country of 45 million, with unemployment at 11.3 per cent, the highest in the 27 European Union countries.
[. . .]
This week, Mr. Zapatero announced that his government's 2009 budget will increase unemployment benefit payments by more than 24 per cent, or €3.6-billion. The government will pay more than €29-billion in benefits and retraining-assistance payments.
And more than half of those workers were immigrants, hired from Romania, Morocco and especially from Latin America during the past 10 years by construction firms. Mr. Zapatero has spent the past four years making these immigrants, who now comprise one-tenth of Spain's population, feel at home.
This month, he began to offer another option: He would pay them a year's benefits, in cash, if they went back home for at least three years. Forty per cent would be payable in advance, the rest upon arrival. When they returned to Spain, they would get their old immigration status back.
"We definitely have too many workers here, and we wanted to give immigrants another set of options," Mr. Zapatero's Immigration Minister, Concha Gutierrez, said in an interview at Madrid's parliament yesterday.
"We're not telling them to leave. ... They can use their benefits to set up a new business and make a new start in their original country."
It goes without saying that the mass return of immigrants isn't likely to happen. As immigrants interviewed in the article point out, if things are bad in Spain they're going to be worse in their homelands. Besides, many of these immigrants have put down roots in their adopted country. Why should they leave?
