I am delighted to be here with you at the closing session of this “Wake Up, Spain!” Symposium, which is taking place as Spain prepares its Recovery, Transformation and Resilience Plan. I would like to congratulate the organisers on the wide range of participants who have shared their ideas on the future of Spain’s economy and society.
Global economic prospects have improved in recent months, helped by the deployment of vaccines and stimulus packages in some countries, in particular the United States. In our most recent analysis (March 2021) we projected global GDP growth of 5.6% in 2021 and 4% in 2022, and both these figures are upward revisions on last December’s forecasts.
The Spanish economy was hit hard by the pandemic, recording a 10.8% fall in GDP in 2020, due mainly to the economic importance of the most affected sectors, such as tourism.
That said, we expect a robust recovery as vaccination advances and health restrictions are lifted. In fact, we expect GDP to grow by around 6% in 2021 and around 5% in 2022, mainly supported by domestic demand and a gradual recovery of tourism.
Spain is a benchmark in terms of gender equality and climate change policies that will drive a green and inclusive recovery. And the Recovery Plan will undoubtedly be one of the most important factors in boosting the country's economic reconstruction.
This plan is a unique opportunity for Spain. It could be compared to the enormous transformation the country underwent when it joined what was then the European Communities in the mid-1980s. It is a key instrument, not only to reactivate the economy, but also to undertake the major transformations that Spain needs, which are to build a more competitive and diversified economy, to reduce inequalities, and to prepare for a greener and more digital future.
First, it will be necessary to address structural labour market challenges. Spain entered the pandemic with high unemployment and a high share of temporary workers. And the pandemic made things worse, with women, young people and low-skilled workers on temporary contracts being disproportionally impacted.
To avoid any lasting damage, some of these workers will need to move to sectors and businesses with better growth prospects, which will require “re-skilling” and “up-skilling”.
Second, the Recovery Plan and financial support from the EU provide a great opportunity to promote long-term growth by improving the resilience of the economy without undermining Spain’s public finances. In the aftermath of the previous crisis, Spain’s public investment fell to the lowest in the OECD. Increasing public investment, especially in the areas of digitisation, innovation, environment and education, can not only boost productivity, but also promote private investment.
Third, the crisis exposed gaps in access to technology and in digital skills and expertise. For example, only 20% of small firms in Spain use e-sales and cloud computing services, and the use of digital technologies to introduce new business processes or products is limited. For this reason, one of the four key pillars of the Recovery Plan is digitisation, which is being allocated 29% of the Plan's investment.
Effective partnerships between companies and research institutes can enhance the innovation capacity of SMEs, and should be accompanied by public job training programmes in ICT skills targeted at low-skilled and older workers.
And fourth, it will be crucial to establish a good governance system for the Plan with cooperation across all levels of government. We therefore very much welcome the multi-level governance system introduced in December 2020, with the involvement of the Autonomous Communities and local councils.
As is also the case in other countries designing similar schemes, it will be important to strike the right balance between fast absorption and accountability. The new law to simplify regulations should help improve the capacity to absorb funds. However, it will be essential to establish transparent procedures and criteria for the prioritisation of projects and to incorporate a sound cost-benefit analysis in order to get the most out of the Plan.
At the OECD, we are excited about this Plan, and stand ready to support the Spanish government and the actors represented at this symposium in its implementation.
Since the outbreak of the pandemic, the OECD has been producing analyses and policy recommendations to help address the crisis. They are all available on our digital hub, which now has more than 188 reports on all the areas in which we work, and which has a section in Spanish.
We are also working on an initiative launched by the Spanish Prime Minister on his last visit to the OECD during our 60th anniversary celebrations to promote safe international mobility to revive SMEs, tourism and other priority sectors.
Over the last few years we have worked with the European Commission on 85 projects in support of structural reforms at the national level, and this year we will work on a further 67 projects. We are at your disposal to provide the same support to the ambitious reform and investment programme that Spain intends to implement.
The Recovery Plan is the blueprint for a new beginning for Spain. We see it as extremely far-reaching and comprehensive, and we are pleased to see that it includes reforms and resolutions in many areas that overlap with OECD recommendations.
We hope that the forthcoming OECD Economic Survey of Spain, which we will present soon and which will analyse many of the aspects of the Recovery Plan, will support its implementation.
Spain is waking up, and the OECD is ready to help Spain design, develop and implement better policies for better lives.