It is known that exports have played a key role in the evolution of the Spanish economy during the last decade. Its extraordinary dynamism prevented the decline in GDP during the 2008-2013 crisis from being more pronounced than it was, and amplified growth in subsequent years of recovery. Sales of goods abroad increased their weight in GDP from 17% in the first decade of the century to 24% in the most recent years. This has been the fundamental cause that the chronic deficit in our balance of payments has turned into a surplus, and that this has been maintained for a record time of eight years, even in a context of strong expansion of domestic demand. There is no doubt that the increase in the weight of exports in GDP constitutes the most important structural transformation that our economy has undergone so far this century.
The “but” is that the gains in competitiveness that made this unquestionable achievement possible were based basically on the containment of labor costs, and not on the growth of productivity or the increase in technological content. In fact, the bulk of export growth was concentrated in sectors with low or medium-low technology content.
The weight of exports must continue to increase in order to guarantee the continuity of the balance of payments surpluses and make possible an economic growth that is less dependent on national demand, and therefore more sustainable and less generator of imbalances such as inflation, debt or deficit external. But the margin to gain competitiveness by way of containing wage costs has probably already been exhausted. In the near future, the only sustainable and lasting way to continue improving the contribution of the foreign sector to GDP can only come from increased productivity, as well as from increasing the technological content and sophistication of our products.
Unfortunately, the time frame provided by the way of containing wage costs has not been used to carry out the structural reforms necessary for the Spanish economy to move up the technological ladder, which requires many years of maturity to fruit. Among the innumerable neglected reforms, the one that produces the most sadness is education. Legislative changes in this area have focused on irrelevant ideological issues, doing nothing to reduce school failure or raise the science skills of our young people, and little to improve vocational training.
But the future prospects of our exports are not only going to be determined by the structural deficiencies derived from the political inaction of the last decade. There are other factors at play whose impact on the functioning and configuration of international trade in the future is unknown. First, trade wars – the tensions between China and the West are here to stay – as well as possible changes in EU trade policy aimed at protecting European industry from competition from countries with environmental regulations in the face of climate change. less strict.
A second factor is found in the changes in the organization of global production chains that may be triggered by the effect of the pandemic. And thirdly, the impact derived from disruptive technological advances such as artificial intelligence, robotization or 3D printing. All of this as a whole may represent a true paradigm shift in international trade relations, with implications difficult to foresee for the Spanish foreign sector.
María Jesús Fernández is a senior economist at Funcas