Is the cycle of exiting crisis merely being repeated?

Coincidental with a slump in tourism, unemployment shot up, and not just because there were way fewer holidaymakers. Construction had all but ground to a halt. There was no credit, there was little liquidity, and investors - still fearful of the crisis - were reluctant to embark on projects.

The other archipelago, the Canaries, was experiencing exactly the same problems. The government had come up with an anti-crisis plan, which basically involved aid to business and training programmes, the latter having been the recognition of a need for re-training for work in sectors less hammered than tourism and construction had been. Yet for all that there was this plan, the loudest voices were for a tourism-construction combination as the route to recovery. The then president of the Canaries, Paulino Rivero, agreed. “Exit from crisis will come from this pairing, as it cannot be otherwise. We have the economic structure that we have and anything else is at present unthinkable.”
Rivero could easily have been speaking about the Balearics, where tourism, despite the cuts it has suffered from different crises, has formed the bedrock for recovery and at a level of growth that has outstripped other regions of Spain and the country as a whole. This has been admitted by successive Balearic governments. Even the current one, absurdly depicted as somehow wishing to diminish tourism, has spoken in glowing terms of the power that tourism possesses to effect recovery.

Tourism monoculture is a misnomer, but the description is understandable. This exists in the Canaries but even more so in the Balearics. The most objective economic studies, such as IMPACTUR, with which the Balearic government is involved in assessing the economic impact of tourism, rated tourism as having contributed 41% of regional GDP in 2019. The Canaries, with the second highest exposure to tourism, were around 30%.

But recoveries from the different crises of oil, recession, credit and pandemic, like indeed economic development since the 1960s, haven’t relied solely on tourism. There has also been construction, which may only contribute some six per cent of GDP but is nevertheless a vital cog in the economy’s wheel.

Construction is not synonymous with tourism, but there is a great deal of overlap and symbiosis. And the combination that Paulino Rivero referred to during the financial crisis was being highlighted only weeks into the state of alarm in 2020. Yes, there was a hell of a lot of uncertainty in May three years ago, but the route to easing this uncertainty was paved with tourists and building works. It had been ever thus and was destined to be repeated once more.

The Forum de la Societat Civil is a grouping which wishes to see a reconstruction (no pun) of the Balearics through a revised economic model. Its membership includes environmentalists and citizen lobby groups such as Tramuntana and Palma XXI, but there are also unions and business - the Pimem federation of small to medium-sized business associations is a member.

At a recent press conference, the forum presented the first of what will be three publications under the umbrella title of ‘Evolution of Transitions’. A key message from that conference was that exit from the pandemic crisis has focused on the same solutions as previously - more tourism and more construction. Where the latter is concerned, the focus is the wrong one. Rather than social housing, there have been private homes, a sizeable number of which are bought by foreigners; some of these are then let out as holiday rentals. The focuses that the forum has in mind are labour (better pay, better training, for instance), the vulnerability of different groups in society, and housing. The forum is suggesting a system of indicators to assess, objectively and quantifiably, if there are transitions to address these issues and to bring about “a more sustainable model of production”. The fear is that previous crisis cycles are merely being repeated and will result in more, not less tourism and more human pressure on the environment.

We hear almost daily about the need to change the model and about initiatives which are supposedly going towards bringing about this change. But as some of the more sensible voices in the Balearics have noted, e.g. one-time finance minister Carles Manera, change can’t happen overnight and it is dangerous to think in terms of downgrading the importance of tourism.

The forum, one guesses, has already drawn its conclusions, but there has to be time to shift a model that has existed for sixty years. Without abandoning the tourism focus, it has to happen.