For an updated economic model of the Canary Islands

Residents and tourists on Las Canteras beach, in the capital of Gran Canaria. / ARCADIO SUAREZ

Opinion

Political leaders should have economic thinkers and experts, as well as technicians specialized in different subjects who spend their time reflecting on what the Canary Islands should do in order to have less dependence on foreign countries in the future

Just over two years ago, the world seemed to be doing adequately well, with respectful relations between countries. Intercontinental logistics worked, the energy supply did not give special shocks, the shopping basket did not suffer significant increases. However, after the economic crisis caused by the pandemic and accentuated by the current geopolitical situation, everything seems to have changed in our lives.

This has dragged us into a context that has had a direct impact on the international energy markets, generating serious logistical difficulties for commercial exchanges due to changes in the main international routes, making it difficult to supply both essential products and other durable and semi-durable, leading to
an exorbitant increase in prices, which has had a significant impact on end consumers.

This situation has highlighted even more the great dependence that some countries have on each other, whether from an energy perspective, such as the supply of basic necessities -specifically from Russia and Ukraine- or for the supply of essential components - China paralyzed its production and/or distribution- and required in the manufacture of certain goods in other countries, whose production has been interrupted.

Countries, for a few years, to protect themselves, have been reducing their foreign activity

Even though we have been in a process of deglobalization for some years, which has implied a setback in the international flows of goods, services, capital and people,
the pandemic revealed the still high dependence on China as the world's factory and the need to stop depending on this country. It is no longer so interesting to relocate companies because the increase in wages and income levels in developing countries reduce the competitive advantages of the 1970s.

For some years now, in order to protect themselves, countries have been reducing their foreign activity and promoting their domestic consumption, to which they tend to entrust their economic growth, taking protectionist measures over time for their defense. Such has been the case with
USAwith the policies adopted by former President Trump and the United Kingdom, with its government fluctuations and its decisions on Brexit.

Different states are promoting domestic production in various ways, either by imposing import duties on foreign goods or through tax exemptions for domestic industries. They take measures to repatriate companies and boost the industrial sector in the face of the risks of outsourcing strategic production, as well as to favor the necessary readjustment in factories to shorten supply chains.
This can lead to lower efficiencywith the consequent increase in costs, but nevertheless contributes to a higher level of safety.

And the relocation of factories is possible due to the obvious repercussions that factors such as the pace and level of penetration of automation, robotics, artificial intelligence and digitization in all productive sectors are going to have on the economy.

In this world environment of deglobalization:
what is done in the Canary Islands? In my opinion, it is mired in an unprecedented administrative blockade, in the face of rapidly changing circumstances, and therefore driven to resolve the immediate. The rulers are immersed in a spider's web that prevents them from having space to reflect, with little time to react and, therefore, make strategic decisions about how our economic future should be addressed.

In the Canary Islands we have the worst employment data, although with a larger active population

In the Canary Islands we have the worst employment data, although with a larger active population; a growing number of people who neither work nor want to work; a progressive longevity and, therefore, an increasing dependence on time that requires greater public spending; as well as an increase in poverty, holding
the country's highest rate of people at risk of social exclusion, therefore, it is the Autonomous Community in which the number of households without any type of income has grown the most.

Despite operating an economic growth higher than the national average, the Canary Islands will not recover the size of the economy prior to the pandemic until 2024 (data from the Autonomous Community) and it is necessary to take into account factors such as the high increase in prices of raw materials, in particular, the increase in energy prices, the problems of global supply chains and, at the moment, the rising financial costs that will make credit to companies and families more difficult.

Obviously, nobody doubts it, tourism will continue to be our driving force, but, although the reserve forecasts are initially favorable, a possible change in trend cannot be ignored, since inflation and
the problems of energy supply in some of the main countries that send tourists towards the Canary Islands can truncate these expectations.

In my opinion, we have to prepare ourselves so that we do not have to depend so much on the outside, supporting a growing industrial sector with cutting-edge technology, promoting organic, sustainable and local agriculture. It is necessary to streamline the administrative processing of files related to renewable energies, since
The Canary Islands continue to lag behind Spain in its implementation. On the other hand, more and more purchases of goods and provision of services are made digitally, but the regulations are not adapted, in many cases, to these important advances in the economic world.

Given the saturation of public administrations, political leaders should have economic thinkers and experts, as well as technicians specialized in different subjects who spend their time reflecting on what the Canary Islands should do in order to have less dependence on foreign countries in the future. That is, to update the economic model of the Canary Islands.

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