Trading Places by Tim Harcourt

Author:Tim Harcourt [Harcourt, Tim]
Language: eng
Format: epub
Published: 2014-09-01T16:00:00+00:00

SPAIN: MACHO OR METROSEXUAL?

Why do Madrid hotels offer free beer and face cream? How has Spain handled its water situation? What social changes in Spain have created export opportunities? The Airport Economist checked into a hotel in Madrid to find out.

SPAIN FAST FACTS

CAPITAL

Madrid

POPULATION

46.6 million

GDP

US$1415.3 billion

PPP

US$1424.9 billion

GDP PER CAPITA

US$30 432

REAL GDP GROWTH

0.9%

EXPORTS TO SPAIN

$444 million (36th)

IMPORTS FROM SPAIN

$2553 million (19th)

NUMBER OF EXPORTERS

588 (2012–13)

THE Airport Economist thought there had been a mistake in his Madrid hotel room. The sign said that the beer in the bar fridge was free and that you could call reception to get it restocked. In addition, the bathroom had an amazing range of face cream, lotion and other male cosmetics not usually seen outside a GQ magazine catalogue. The Airport Economist rang the front desk and it was confirmed as hotel policy – unlimited beer and unlimited lotion! Imagine that in Australia! The hotel would go broke with the bar bill but the lotion would be untouched. The Spanish hotel industry certainly has a business model that might not work in the Australian market.

However, despite the differences in hotel policies, there are aspects to Spain that would be very familiar to Australians. For example, both countries are hot and dry. Distances are vast and the geographical terrain is difficult to navigate and explore. As a result, having top-class infrastructure is important and the construction industry is vital to economic prosperity. Water is in short supply, carbon emissions are high and both countries are developing alternative environmental technologies such as solar power.

However Australians would be less familiar with the Spanish economy, with its high unemployment, especially youth unemployment, despite low inflation and moderate wage growth (thanks to trade union wage restraint). Ironically, joblessness stands alongside some labour shortages and Spain has tried to use immigration to provide sufficient population growth to finance pensions, education and health. The economic institutions in Spain are failing, in contrast to the robustness of their Australian counterparts.

But what role does Australia play in Spanish consciousness? The Australian Ambassador to Spain at the time of my visit, Noel Campbell, says: ‘For modern Spain, there’s been a rediscovery of Australia. After all, four hundred years ago the Spanish explorer Torres thought he’d discovered the great southern continent, but had actually landed in Vanuatu. He named it “Australia del Espiritu Santo” after the Habsburg Empire in Austria.’ Ambassador Campbell believes the Spanish– Australian bilateral relationship is in good shape, but has even greater potential. ‘Four centuries after Torres, Australia and Spain are discovering each other, and nowadays we have strong ties in defence, education and tourism, although we could always do more, given Australia’s strong ties with Asia and Spain’s access to Europe, North Africa and Latin America,’ he says.

Michelle Wade – Australia’s long-serving Trade Commissioner in Madrid, who also has broad experience across Europe – said she was able to entice more and more Australian businesses across the channel to Spain. She explained:

Most Australian businesses coming to Europe start in London, but we were able

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