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SPAIN: Immigrants Make the Economy Grow

Carlos Alfieri

BARCELONA, Aug 30 2006 (IPS) - Immigrants have been a major factor in Spain’s robust economic growth, according to a new study by Caixa Catalunya, one of the country’s largest banks.

Spain’s economy has grown at an average rate of 2.6 percent a year over the last decade, but without the contribution of immigrants, gross domestic product (GDP) would have fallen by 0.6 percent over the same period, according to the report by the bank, which is based in the northeastern province of Catalonia.

Between 1995 and 2005, Spain experienced the highest growth in immigration in the whole of the European Union. In fact, 78.6 percent of its demographic growth was due to immigration.

In those 10 years, the number of immigrants in this southern European country grew by 8.4 percent, compared to 3.7 percent in the EU as a whole.

Until the 1950s, Spain and Italy were among the countries with the highest birth rates, and not only in Europe. But since 1970 a marked decline in the birth rate occurred, as women gradually entered the labour market.

At present, the populations of Italy and Germany would be declining, were it not for a massive influx of foreigners, who have also provided a cash injection to pension and social security funds, drained by the general ageing of the native populations.

Economist Raquel Vázquez of Caixa Catalunya’s research unit told IPS that “immigration is responsible for more than 50 percent of employment growth in Spain, and the influence of immigrants has been decisive in raising private consumption and demand for housing, which, as is known, are the twin pillars of GDP growth in our country.”

Vázquez added that “although less marked, the same trend can be seen in all of the European countries, whose economies would shrink without the contribution of foreign workers. Only in France, Finland and Ireland would GDP have grown over the last decade without the presence of immigrants.”

However, without immigration, per capita GDP growth in Ireland would have dropped from 5.9 percent a year to 1.1 percent, and in France, from 1.6 percent a year to 0.3 percent. In most European countries, economic activity would have posted negative rates without the labour of foreign nationals, particularly in Germany (-1.5 percent a year) and Italy (-1.2 percent a year).

The Caixa Catalunya study released on Monday reports that the contribution of immigrants to economic growth in the EU as a whole has averaged two percent a year over the last 10 years. Without their presence, GDP growth per person would have fallen to -0.2 percent a year.

During the 1995-2005 period, the population of the 15 countries of the EU (prior to the bloc’s latest expansion) increased by 15.7 million people, of whom nearly 12 million were immigrants.

In an interview with IPS, Carlos Martín, an economist with the Trade Union Confederation of Workers’ Commissions (CCOO) – one of Spain’s two largest labour federations – pointed to some of the aspects of the impact that immigration has had on economic growth in Spain.

“There is no doubt that the impact has been decisive, but we must keep in mind that a large proportion of the three million immigrant workers in the country – between 30 and 50 percent – are here illegally and have no labour rights,” he noted.

“In these conditions, workers receive extremely low wages, which reinforces the economic development model applied in Spain, based on reduction of labour costs, lack of job security, intensive use of labour, and the production of goods with minimal added value, with its essential elements being construction, services, and above all the hotel industry,” he stressed.

“This model,” Martín went on, “means food today and famine tomorrow, although some people are amassing enormous fortunes as a result. But a truly competitive economy at the global level requires job stability, research, innovation, and continuous education of the work force.”

Meanwhile, an unending flow of makeshift boats continues to land on Spanish shores overloaded with undocumented immigrants, mainly from sub-Saharan Africa, who make a sea crossing that is fraught with dangers.

The government of the Autonomous Community of the Canary Islands (a Spanish archipelago southwest of the Iberian peninsula, off the African coast) reported that the bodies of 490 would-be immigrants have been found so far this year between the coasts of Africa and Spain.

But the Red Cross and the Red Crescent estimate that between 2,000 and 3,000 people have been lost at sea. Last weekend, some 15 bodies of people who had set out from Senegal were found on a beach in Mauritania.

They had all died of dehydration and were thrown overboard by their shipmates, after a week of arduous sailing in two boats. The 179 survivors were rescued close to the Mauritanian coast.

The massive wave of immigrants arriving in this way led to the minister of the Interior, Alfredo Pérez Rubalcaba, appearing before the Spanish parliament on Aug. 24 to explain the government’s immigration policy.

The spokesman for the Canary Islands caucus in Congress, Paulino Rivero, demanded “a change of course” in the policy of the administration of socialist Prime Minister José Luis Rodríguez Zapatero, and complained about the “absolutely overwhelming” situation faced by authorities in the Canary Islands as the flood of immigrants reaches their coasts day after day.