Illogical Infrastructure Investments (IT In Transit #13)


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Date: February 2013.

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Illogical Infrastructure Investments (IT In Transit #13)

  1. 1. seven communities, one language eurocatalan newsletterIllogical Infrastructure Investments issue #13 february 2013 EDITORIAL The Case for the Mediterranean Corridor Josep Vicent Boira The latest book by Robert Kaplan, The Revenge of Geography (Random House, 2012), reveals just how much geography conditions human actions. And not only that! It seems that whenever we choose to ignore the bigger geographical picture then we end up paying the price for it sooner or later. Kaplan is right. But — and this is a geographer talking here— we shouldn’t think little of another fundamental vector of human activity: time, the tide of history that moves nations, propels countries forward and causes states to form (and break apart)... The confluence of these two dimensions, the geographical framework and the course of history, explains just about everything that happens! It is, above all, a question of geopolitics. In the Spanish state, the (geo)politics of infrastructures has been, at least since the 18th century, an ongoing battle between geography and political will. If the former favored an interconnected approach, the latter pressured for a more radial structure. And this radial structure won: Madrid, kilometer zero, the beginning and end for all channels of communication, the peninsular center from which all roads, routes, railroad lines —and orders! — emanate. Spain’s “productive” triangle can be traced between the cities of Madrid, Barcelona and Valencia, and today, on the side of the triangle that connects Catalonia and Valencia, not only is there no high speed train, but certain stretches only have a single-track railway in place. In other words, this one track must meet all the transit needs –in both directions— of this large economic region that runs along the Mediterranean axis. In 1835, Alexis de Tocqueville, in his book Democracy in America, used an image that is ideal for illustrating the case that concerns us here. According to Tocqueville’s thinking, centralization was the antithesis of intelligence. I can just make out, behind the “beams” of this human intelligence, routes of communication... “The United States has no capital. Enlightenment, like power, is disseminated throughout this vast country. Hence the beams of human intelligence do not all emanate from a common center but crisscross in every direction. Nowhere have the Americans established any central direction over their thinking, any more than they have established any central direction over affairs of state.” If Tocqueville praises the young American democracy for having a networked political and social structure, the same could apply to the economy and infrastructure. A transportation map without a single center, a real communications network like the one the European Commission is seeking to build with its TEN-T (Trans- European Network-Transport) project —to varying degrees of success, one must admit— has enormous potential. Are we capable of envisioning the freeing and multiplying effect this kind of communications network could have? In Spain, since the reign of Philip V at the start of the 18th century Spanish leaders have projected a radial model onto the State’s communications network, neglecting other axes of intense economic activity and demographic concentration such as the Mediterranean. Two and a half centuries after the reign of the first of the Bourbon kings, it was an American, Eugene R. Black, who in August of 1962 would start to turn the map on its head. Black, as a representative of the International Bank for Reconstruction and Development, signed a report about the Spanish economy that was directed at the government of General Franco and in which he recommended constructing a new high-capacity highway that would start at the French border and travel all the way down the coast to Murcia, since this road would “traverse areas of maximum transit density in Spain and where transit is increasing the fastest. It goes through important industrial and agricultural zones and serves some of the most important tourist areas of the country.” Thanks to this initiative, today we have the highway of the Mediterranean (AP-7 or E-15 in European terminology). It is a toll road, which is a heavy burden for the most productive area of the Spanish state. Nonetheless, at the start of the 21st century there is still no other suitable infrastructure (no freight railway, high-speed railway or highway without tolls) that connects this Mediterranean shore to the heart of Europe. The European Commission’s decision on October 19th to include the Mediterranean railway corridor on the list of strategic projects of a continental scale (where —surprisingly— it hadn’t been beforehand) has brought this debate back to the fore. Now, with this European support, the time has come to build a versatile and multimodal Mediterranean corridor that is connected to the Iberian Peninsula’s Mediterranean ports. This corridor would act as a high-speed interurban “avenue” for this large economic region, channeling movement, serving people and businesses, and generating activity by connecting these different territories. Spain’s radial communications policy makes it susceptible to the revenge of geography and the failure of history. It goes against what is geographically and historically logical. In other words, a radial structure is anti- (geo)political. And especially because if Spain wants to emerge from the current crisis it has three roles it has
  2. 2. to play when it comes to global geopolitical challenges: first, be the welcoming façade for all the Asian transitthat reaches Europe by way of the Suez Canal, and have the ports of Valencia, Barcelona or Tarragona bewell prepared to act as the southern gateway to the European Union; second, it must be the geo-strategic linkbetween the heart of Europe and Northern Africa and, lastly, it must act as a western “edge“ of a vast economicspace —the Mediterranean, with close to 450 million people— of potential consumers once the processes ofpolitical and social stabilization have been consolidated. None of these challenges will be solved with a radialcommunications policy in Spain. Not a single one. In exchange, all three could be solved with the infrastructuremultimodal and modern Mediterranean corridor that meets European standards. It is only in this way thatthe beams of human intelligence (or communication networks in their physical form), will criss-cross in alldirections, at long last, under our blue peninsular sky.Josep Vicent Boira is a geographer and a Full Professor of Urban Geography at the University of Valencia.He is a columnist and regularly contributes to different publications, such as the newspapers La Vanguardiaand El País. He has received several awards, among which are the Premi d’Assaig Joan Fuster and with theVicent Andrés Estellés award for scientific narrative. In 2009 he was awarded the Trias Fargas PoliticalEssay prize for his work on the Mediterranean axis and the Catalan-Valencian commonwealth.Translated from Catalan by Margaret LuppinoPhoto by Margaret Luppino
  3. 3. seven communities, one language eurocatalan newsletterIllogical Infrastructure Investments issue #13 february 2013 FURTHER READING When We Were Rich : High Speed Rail and Taxpayers Throughout The World Germà Bel - Public Works Financing Spain has been held up as an example of how the development of a high-speed rail (HSRail) network would be good for California. Spain and California have similar surface areas (505,645 and 423,970 sq km), relatively similar population (47 million and 38 million) and population densities (93 and 92 inhabitants per sq km), and the same distance (430 miles) between their main metropolitan areas: Los Angeles and San Francisco in California and Madrid and Barcelona in Spain. Reading about the U.S. debate on California HSRail from abroad, the core question from where I sit in Barcelona appears to be: If Spain can make it work, why can’t California? Of course, the answer is “Yes, California Can.” California is wealthier than Spain. The only thing it needs to develop HSRail is to increase taxes or increase public debt (or both), as Spain did extravagantly-when we were rich. The international HSRail story from Japan and France to Germany, Spain and Italy, and more recently to China, Korea and Taiwan consistently contains a bitter lesson: What might have been a good idea (under extremely high transit density and moderate construction costs) has turned into a taxpayer’s nightmare. This is so because most HRail systems have been initiated and expanded for political reasons without sufficient regard for ridership demand, capital expenses or O&M costs. Let us be clear: HSRail has been a good idea in some places. The TokYO-Osaka Shinkansen line manages 140 million passengers per year and, is a great financial and economic success, in spite of high construction and operating costs. So too is the Paris-Lyons Train a Grande Vitesse (TGV); it carries “only” 25 million passengers per year, but moderate construction costs allow it to be successful. HSRail needs a huge transit density to deliver positive economic and social returns (not to mention financial returns). Tokyo-Osaka was a good idea, for example, but the senseless extension of the Shinkansen network in the 1970s and 80’s brought Japanese Railways to bankruptcy, leading to its privatization in 1987. Only 30% of the debt could be transferred to the private investors. Spanish Nation Building Certainly, Spain provides good lessons, if taken as a case study. We have the second longest network of HSRail (155 mph) in the world, behind China. There are more lines under construction in Spain (1,043 miles) than in all the other European Union countries combined. The Spanish government announced on February 9 that US$33 billion will be spent until 2020 to keep HSRail extensions alive. One third of it (US$11 billion) will be used to finish the central segment of the 400-mile line linking Madrid and the northwest (total cost over US$25 billion). It is worth noting that that line is expected to handle between one and two million passengers per year in the central segments. HSRail is fast, reliable, and comfortable. It is more environmentally friendly than its natural competitor, the airline industry. But it is not as environmentally friendly as commonly thought due to the large taking of land, high noise, visual disruption, air pollution and high electricity consumption. Also, because in lines with low to moderate HSRail ridership, replacement of air transit will never compensate for pollution emissions during the HSRail construction phase. The newly appointed Spanish Secretary for Transportation (Ana Pastor, Conservative) has put it clearly: all Spaniards have an equal right to access HSRail. This is the same view held by the former Secretary of Transportation (Jose Blanco, Socialist). And perhaps by the next Secretary of Transportation, whoever it is. Unfortunately, Spain has the lowest ratio of passengers per HSRail-km in the world, about 10,000; that is six times less than Germany and France. This is not a final comparison: our ratio will be much lower by 2020, dropping to about 6,000 passengers per km, as the government’s plans for extending the network are implemented. However, transporting people and fulfilling mobility needs (that is, social welfare considerations) have not been a major factor in HSRail development in Spain. As was explicitly stated by former Prime Minister J. M. Aznar on 25 April 2000, the main rationale for HSRail in Spain is making Madrid, the political capital, equally accessible to all Spaniards by means of HSRail. Demand considerations? Available alternatives? Costs? Territorial effects? Actual environmental effects? These questions did not enter the decision equation, which was based on just one variable: nation building. On one side we have been lucky. Average construction costs in Spain have been relatively moderate (but are increasing): about US$40 million per mile in 2011. They are much lower than costs in other countries, and
  4. 4. especially lower than in Italy, the EU leader, with costs of up to 2011 US$150 million per mile (and more) onits most expensive lines.All of the HSRail investment in Spain has been funded with government budget subsidies (Spanish Treasuryor EU payments) and debt. But the level of demand cannot sustain even the operating costs (when properlyaccounted for). And the situation will get worse as new, very low-demand lines open in the future. Demandwill be much higher for California HSRail, but costs will get close to the upper band in Italy, if the full projectis finally implemented.Opportunity CostWell, Spain is not as rich as it used to be just a few years ago. Because of this, Spanish families and firms aretrying hard to reduce private debt, and we are cutting down public spending in schools, hospitals and otherareas to contain (not yet to reduce) government debt. At the same time, billionsof Euros will be wasted in economically and socially senseless HSRail lines.More and more Spaniards are wondering about the opportunity costs of HSRail. What could have we donewith so many billions invested in low-ridership HSRail? Perhaps a much less expensive modernization ofconventional rail? Maybe a much more aggressive investment policy on information technology extension-where we are behind the EU average standards? To maintain and improve our investment in education, soimproving our future productivity and well-being? Money is a limited resource, and by choosing senselessHSRail lines we gave up those much better alternatives. This, by far, is the main lesson from Spain.Germa Bel is Professor of Economics at Universitat de Barcelona. Author (with Daniel Albalate) of Economicsand Politics of High Speed Rail: Lessons from Experiences Abroad (Rowman & Littlefield, forthcoming 2012).He will spend the 2012-2013 academic year as visiting professor at Cornell and Princeton.
  5. 5. seven communities, one language eurocatalan newsletterIllogical Infrastructure Investments issue #13 february 2013 FURTHER READING Once again the Spanish Government will not honour investment obligations in Catalonia next year Catalan News Agency / Gaspar Pericay Coll Barcelona (ACN).- The Spanish Government’s budget for 2013 does not honour the legal obligations regarding investment to be made in Catalonia. Instead it continues with a long tradition of funding Catalonia way below its needs and investing much less in Catalonia than in other parts of Spain. Instead of getting 19% of the infrastructure investment made throughout Spain – which is foreseen in the current legislation – in the Spanish budget for 2013 Catalonia will only receive 11.9%. The Spanish Finance Minister, Cristóbal Montoro, justified the decision by saying “there is no money”, although the law talks about investment percentage and not absolute amounts. Furthermore, essential infrastructures for Catalonia’s economy, and therefore for Spain’s and Europe’s competitiveness, are under-budgeted while the Spanish Government finds the money to build non-priority infrastructures, such as high-speed railways in Galicia. On top of this, the Catalan Minister for Territory and Sustainability, Lluís Recoder, emphasised that the Spanish Government had only executed 35% of the public work initially foreseen in its budget for 2011, while it had executed 111% of the public work made in Madrid. Unfortunately, the pattern to fund Catalonia below its needs is generalised and not only affects infrastructural projects. For instance, the Catalan Culture Minister emphasised that the Spanish Government has reduced its funds to Catalan cultural centres and festivals by 70% over two years, leaving some of them without funds. Additionally, the Catalan Health Minister claimed that the Spanish budget for health research in Catalonia, a true biomedical research pole in Southern Europe, has been reduced by 50%. In fact, Catalonia suffers from a chronic fiscal deficit, which is very often ignored or even denied by the rest of Spain and the Spanish nationalists. They refuse to acknowledge Catalonia’s solidarity effort and even state it “invents” the figures, neglecting data published by the Spanish Finance Ministry. A chronic fiscal deficit With data from 2009, Catalan taxpayers only received 57 cents back from each euro paid in taxes in the form of investments or services. According to official data released by the Catalan Government, between 1986 and 2009, Catalonia has been giving an average of 8.5% of its GDP to pay for services and investments made in the rest of Spain (calculated using the monetary flow formula). The Spanish Government has only released this sort of data once, in 2008, with data from 2005. It showed that Catalonia had a fiscal deficit of between 6.38% and 8.70% of its GDP, depending on the formula used. The amount represented in 2005 a fiscal redistribution effort ranging from €10.86 billion to €14.81 billion respectively. Nowadays, it could represent an effort of almost €17 billion. This imposed solidarity effort is judged to be excessive by a large part of the Catalan society, which would like the fiscal deficit to be reduced and limited, especially when essential infrastructures are not built and public services are under-budgeted in Catalonia. 11.9% instead of 19%, required by law This approach of funding Catalonia below its real needs, repeated over decades, asphyxiates the Catalan economy and its public services and has a direct impact on the citizens’ lives. The delays in building essential infrastructures for the Catalan economy hit not only Catalonia’s competitiveness, but also that of Spain and Europe. During the Zapatero Government’s period the Spanish Parliament recognised this historical lack of investment. In order to compensate for this historical lack, it legislated to guarantee that for seven years a minimum investment percentage corresponding to Catalonia’s GDP within Spain would be attained. This measure was included in the Catalan Statute of Autonomy (as the third temporary disposition), approved by the Spanish Parliament and the Catalan people through a referendum. This means that the Spanish Government should have allocated 19% of all its infrastructure investment to Catalonia, independent of the total amount. Instead, the Spanish Government decided to allocate just 11.9% of its global investment to Catalonia. The Spanish Finance Minister, Cristóbal Montoro, justified the decision by saying “there is no money”, although the legal obligation refers to percentages and not final amounts. In the 2012 budget, instead of investing 19% in Catalonia the figure was 11.1%. Back then, the Spanish Finance Minister did not feel obliged to meet “agreements reached by third parties”, he said, even if they took the form of a law in place. High-speed train in Galicia, the top priority Furthermore, the Spanish Government found money to build non-essential infrastructures such as the high- speed train to Galicia, linking Galician cities among themselves and Madrid. The fact that the elections will be held this October in Galicia and that the People’s Party (PP), which runs the Spanish Government, also runs the regional government was not mentioned by the Spanish Finance Minister as a reason for such an investment. In any case, the Galician high-speed train will receive more funds than the Mediterranean Railway Corridor, which links Southern Spain with Central Europe, going along the entire Mediterranean shore, where the main export centres, industrial poles, sea ports and tourist areas are located. The Spanish Government insists on the Central Railway Corridor, to be built parallel to the Mediterranean The Mediterranean Railway Corridor is considered to be an essential infrastructure for international freight transportation backed by the Governments of Murcia, Valencia and Catalonia and business associations at
  6. 6. local but also at European level. In addition, the European Commission has also considered it a priority and hasincluded it among the Trans-European Networks. However, now, the Spanish Government wants to include inthis list the Central Railway Corridor, which would link Madrid and Toulouse going through the middle of thePyrenees. The Central Corridor responds to the centralist and radial logics traditionally applied by the SpanishGovernment to the main infrastructures. The Central Corridor was ruled out by the European Commissionlast year as being inefficient and would not receive EU funds. However, the Spanish Government does notgive up. Nonetheless, the Spanish Government is insisting on building the Central Corridor at the same timeas the Mediterranean Railway Corridor, which would split the scarce resources available between the twoworks and therefore it would delay the construction of an infrastructure essential for Catalonia’s and Europe’scompetitiveness.Gaspar Pericay Coll is a journalist and the editor of the Catalan News AgencyPhoto by: X. Pi courtesy of the CNA
  7. 7. seven communities, one language eurocatalan newsletterIllogical Infrastructure Investments issue #13 february 2013 FURTHER READING Whither Spain’s high-speed trains? - Billions have been spent on building a rail network that will soon link Madrid with Paris - Economists argue these prestige projects have largely proved to be loss-makers Luis Gómez - El País in English On January 9, the day after the inauguration of the AVE high-speed railway line between Barcelona and the Catalan town of Figueres, engine drivers Manuel Niño and José Luis Herguido boarded an AVE train in Madrid. Theirs would be a historic trip: they were traveling in the first passenger train that would cross the border into France on a wide-gauge European line, ending more than 160 years of isolation and finally making it possible to travel from the Spanish capital, via Barcelona, to Paris. What the two men noticed as they traveled the 131-kilometer stretch between Figueres and the French border was that the 30 tunnels and 60 bridges they passed through and over prevented the train from coming close to reaching its top speed of 300 km/h. The line cost 3.7 billion euros, and will never make a profit, according to recent studies. Prime Minister Mariano Rajoy will surely have enjoyed last week’s jaunt between the Catalan capital and Figueres, the birthplace of Salvador Dalí. The reception the Popular Party (PP) leader received may have been cool, with so much secessionist sentiment in the air in Catalonia these days, but after all, his three predecessors have all unveiled major high-speed links. In any event, he will have another opportunity later this year when the AVE line between Albacete and Alicante is opened, completing the rapid route between Madrid and Valencia. Rajoy is due to join French President François Hollande in April to inaugurate the Paris-Barcelona-Madrid route. Spain is in the depths of an unprecedented recession, and the government is slashing spending on all kinds of public services, yet there is no question of putting the country’s high-speed rail network on hold: spending for this year will reach three billion euros. Addressing Congress on the day of the inauguration last week, Rajoy highlighted the benefits of the AVE network, saying that the trains bring prosperity and understanding. Prosperity and uniting the nation are concepts that previous prime ministers have emphasized in relation to the AVE network, starting with the Socialist Party leader Felipe González, who oversaw the construction of the country’s very first high-speed line to his home city of Seville in 1992. His successor, the PP’s José María Aznar, promised that no Spaniard would live more than 30 kilometers from an AVE train. Twenty years after the first high-speed train cut a swath through the Castilian uplands, the evidence suggests that they are simply not viable economically, or even necessary to provide rapid links between the country’s cities. But no politician seems able, or willing, to put a stop to the spread of the AVE. Over the course of the next six years, Spain intends to add 2,300 kilometers to its existing network, making it eight times that of France’s and four times that of Japan - only China has a larger network. In reality, when Rajoy and Hollande cut the ribbon in Paris sometime this spring, they will be inaugurating a line that already exists, and which came into service on January 9. Since then it has been possible to travel between Madrid and Paris on the European wide-gauge and at high speed, except for a stretch between Perpignan and Montpellier. To do so requires a brief change of train in Figueres. From the centralist perspective that has driven the development of the AVE - with Madrid as its hub - the Paris route is commercially unsustainable: in the best case scenario, from April, it will take nine hours to get to Paris, a half-hour saving on the current journey time. To get to the heart of the French capital by 4pm means boarding a train in Madrid at 6am; boarding at the more comfortable time of 1pm means arriving at 11pm. One travel writer has described the recent opening of high-speed lines as “a journey to nowhere, albeit quickly.” Which is pretty much what the Madrid-Paris route will be, at least from an economic perspective. So far, there are no independent studies of Spain’s high-speed plans that suggest they will ever be anything other than a money pit. When asked by EL PAÍS if it knew of any economist or transport and infrastructure expert who supports the investment in the AVE network, the Public Works Ministry was unable to supply a name. Instead, the website of ADIF, the state-owned company tasked with the maintenance of the high-speed rail network, explains the benefits of the AVE. “Its benefits extend to many Spanish regions thanks to the inter- operability between the conventional and high-speed networks through technology that allows for trains with changeable gauges to use both.” Fewer deaths on the road is another advantage, according to the Public Works Ministry. The facts speak for themselves: the Madrid-Seville route attracts around 14,000 annual passengers per kilometer, more than Madrid-Barcelona, but way off the 59,000 for the train between Paris and Lyon each year, or the 51,000 on the Cologne-Frankfurt line. This is not to mention the 235,000 annual passengers per kilometer who use the Tokyo-Osaka bullet train. Just to cover its operational costs, high-speed trains need a constituency of between 6.5 million and eight million passengers a year; none of Spain’s routes come close. Spain’s planners seem to have forgotten that the country has closed high-speed routes for these reasons - the
  8. 8. Toledo-Cuenca line was used by just a few dozen passengers most of the time. There are days when nobodyboards the AVE at Guadalajara or Tardienta in Huesca. Tardienta has a population of just 1,000 people, but yetit has a high-speed train station. Is this the model that will connect up Spain and make it prosperous?Stations like this were part of the plan from the start, but nobody thought to question the logic of every Spaniardbeing within walking distance of a high-speed train. The dual concept of prosperity and connection has becomea mantra repeated by successive governments. And yet, 20 years after the opening of the Madrid-Seville line,there is no evidence that the towns where the train stops along the way have benefited more than others.Ciudad Real’s population grew by 10.9 percent between 1991 and 2001, while that of its neighboring Castilla-LaMancha provincial capital, Albacete, swelled by 14.5 percent without an AVE station during that period.Ciudad Real saw a 32.9-percent increase in new housing, compared to Albacete’s 30 percent. Córdoba, whichhas a station on the Madrid-Seville high-speed line, saw an increase in visitor numbers, albeit only for the firsttwo years after the line was opened, says Daniel Albalate of Barcelona University, who has written extensivelyabout Spain’s high-speed rail network.Germà Bel is an economist and former Socialist Party deputy in the Catalan regional parliament, as well asan expert on infrastructure. He is highly critical of Spain’s transport and infrastructure policy. His 2010 bookEspaña capital París, origin y apoteosis del Estado radial (or, Spain, capital Paris, the origins and apotheosisof the radial state) has become the benchmark study on white elephants and the trend in this country to buildfirst and think later.“You won’t find a single economist who agrees with the investment in high-speed railways,” says Albalate,adding: “It’s possible that the engineering sector has been helped, although French and German companieshave benefited most. We now have some knowledge and experience about managing high-speed rail routes,which is not surprising given that we have more kilometers than any other country, apart from China. But wehave not generated any wealth through this enormous investment.”Spain’s commitment to high-speed railways has impacted negatively on conventional rail routes, as well asthe transport of goods by rail: less than four percent of all goods in Spain are carried by rail, compared toGermany’s 22 percent, or the EU average of 18 percent. High-speed rails cannot be used by other trains, andare designed exclusively for carrying passengers, an approach that other countries avoided. Routes that cancarry high-speed and conventional trains have a top speed of up to 250 km/h. “Opting purely for high speedhas meant cutting routes in the regions. We have created a transport network for business passengers,” saysAlbalate. In short, billions of euros have been spent to save 15 minutes on a journey time.Spain has spent 46 billion on the new rail lines over the last two decadesSpain has spent 46 billion euros on high-speed railways over the last two decades, but the final bill will endup being much higher. Paying off the cost of Spain’s ambitious public works program is growing, in much thesame way that mortgage payments increase over time. It is part of the country’s deficit problem, notes Albalate,who employs the following metaphor to describe the benefits of the AVE: “It is like building infrastructure inthe desert.”The Barcelona-Figueres route is lined with unfinished work at stations such as the airport link to El Prator Girona: nobody knows when they will be completed. Public Works Minister Ana Pastor said last autumnthat there would be no more new AVE stations, and that the budgets for projects already underway would berevised downward.In fact, Pastor used a new term to describe the government’s policy from now on: “sustainable investment andrealistic solutions,” which will mean cutting the estimated 700-million-euro bill for building 24 new stations. A12-year plan has also been announced for later this year. Could this finally be the moment that Rajoy summonsup the courage to say which cities and towns will be left out of the AVE network?Luis Gómez is a journalist at the newspaper El PaísPhoto by: Carles Ribas courtesy of El País
  9. 9. seven communities, one language eurocatalan newsletterIllogical Infrastructure Investments issue #13 february 2013 OPINION No one is packing their bags just yet The international chambers of commerce in Catalonia deny that their members are worried about the process of self-determination. Berta Roig - El Punt Avui / L’Econòmic It is one of the main arguments of those who are against Catalonia holding a referendum on independence; that there is a risk multinationals will flee and that foreign investment would shy away from the new Catalan state. This argument is built on the maxim that says that the business world dislikes change, and it is further fueled by declarations of business owners such as the head of the editorial group Planeta, José Manuel Lara, who threaten to decamp to Spain’s central plateau if Catalonia leaves the Spanish state. President Artur Mas, aware of these fears as well as the need to explain that the legitimate aspirations of the Catalan people are not incompatible with political and economic stability, sent a message of confidence to the accredited foreign consuls in Catalonia. “This is a country that has talent, an open mentality and a presence in the world,” he told them. Regarding the foreign companies located in Catalonia, the new political context is being followed with interest but without concern. “This debate is being closely monitored but for so far it has not generated any reaction or change of strategy,” explains the general director of the French Chamber of Commerce in Barcelona, Philippe Saman. France is the main trading partner of Catalonia and the first recipient of Catalan exports (10,761 million euros in 2011). The head of the Catalan-Israeli Chamber of Commerce, Giacco Ventura, was even more emphatic, noting, “Israeli companies have a very good relationship with Catalonia and trust it completely.” In fact, as explained by the president of the Italian Chamber of Commerce in Barcelona, Emanuela Carmenati, “what is worrisome is the economic instability.” The Chamber of Commerce of the United States in the Spanish state will discuss in their upcoming board meeting what their official position is about the political process going on in Catalonia, but as their management has explained, it is more a response to the petitions of journalists than because their members have been voicing any general concerns about the matter. As a possible bailout looms, the business world appears to be much more worried about how the economic situation with evolve and less about the early elections in Catalonia or the preparation of a referendum of self- determination. In other words, just as those in charge of the Catalan subsidiaries of the chemical companies Basf and Dow Chemical explained a few days ago, what will determine the strategy of these companies will be market developments, but they would not pack their bags simply because of a change of borders. The general director of the French Chamber of Commerce in Barcelona points out that he has seen no signs of possible relocations and adds that “for now, all the projects that French companies have started in Catalonia are still moving forward.” Because this is another element that has caused widespread debate. Would an independent Catalonia remain attractive to foreign investors? According to data from the Ministry of Enterprise and Labor, an average of14.7% of the total foreign investment in Spain between 2000 and 2010 ended up in Catalonia, a figure significantly higher—33.96% in 2010— if we refer exclusively to productive investment. For those who advocate the economic infeasibility of an independent Catalonia, one of their main arguments is that the country would lose its attractiveness, but the truth is that given the dismal economic situation in Spain, these new borders could actually be beneficial. This is how, for example, the head of the Catalan-Israeli Chamber of Commerce explains it. “When a company decides to invest it analyzes the performance of the economy in question, and may be more inclined to come to Catalonia if the economic situation here is better than in Spain,” said Ventura. In fact being associated with the discredited Spain brand has been harmful for Catalonia not only when it comes to attracting investment but also regarding financing possibilities in international markets. For Emanuela Carmenati the consequences of independence would “depend on the tranquility or anxiety that is transmitted to the markets and how the process develops.” And this will be the key. Multinationals crave stability, regardless of which color flag is waving. In this regard the Ministry of Enterprise and Labor considers that the images of hooded protesters storming the Starbucks coffee shop in the city center do much more harm to the task of attracting investment than a possible drift towards independence. Berta Roig is a journalist. Translated from Catalan by Margaret Luppino Photo from the archives of El Punt Avui
  10. 10. seven communities, one language eurocatalan newsletterIllogical Infrastructure Investments issue #13 february 2013 OPINION Nissan as an example Josep Oliver - Diari ARA Nissan’s decision to manufacture their new car in the Zona Franca factory near Barcelona is, without a doubt, a breath of fresh air. Amidst an onslaught of depressing news, especially that regarding political corruption, Nissan’s decision to manufacture their new model in Catalonia has been uplifting news. And even more so because this is not a one-off incident. Companies ranging from Ford to General Motors to Renault are expanding production and/or producing new models throughout Spain. And they are choosing to do so despite stiff competition from the rest of the world. In fact, at the start of the crisis both Nissan and Volkswagen already took steps to consolidate their investment in Catalonia: the former by moving the production of their pick up van here, and the latter by manufacturing the Audi Q3. So what is happening? For some time I have been saying that, in the face of the collective discouragement and alarmism of certain colleagues, we must be willing to pay closer attention to what is happening at the base level of our economy, which is made up of manufacturing companies and the exports sector. And what this good news is telling us is that one part, a very significant part, of this necessary process of readjustment and restructuring in manufacturing has already happened in our country. And we can see it is starting to bear fruit. Since the outbreak of the financial crisis it has been clear that for countries as heavily indebted as Spain and Catalonia there was only one solution: the deflation of internal costs and an increase in productivity. This has been a painful process, as shown by data on the erosion of salaries’ purchasing power. But the drop in labor costs and the rise in exports show us that this has been a successful policy. And the decision of big multinationals to expand their factories in Catalonia clearly confirms this. It is true that these improvements in the external sector of our economy (or in foreign investment) do not suddenly solve the enormous problems we face in the labor market and with economic growth. But they are the foundation on which we must build a future with an improvement in incomes in a world as competitive as the one we live in. In the midst of such collective depression, do allow me to congratulate them, and I believe we should all congratulate each other. Despite the stormy weather, we are on the right track. Josep Oliver is a tenured professor of Applied Economics at the UAB (Autonomous University of Barcelona). Translated from Catalan by Margaret Luppino Photo courtesy of Diari ARA
  11. 11. seven communities, one language eurocatalan newsletterIllogical Infrastructure Investments issue #13 february 2013 OPINION Catalonia and the Knowledge Revolution Antoni Castellà - Diari ARA If we define knowledge as a synonym of to know, as the result of the application of reason, empirical method in the study of reality and the way of explaining this reality, we would observe that since the origin of mankind the level of knowledge we have attained has had a clear impact on development. In other words, knowledge has played a key role in how communities have related to one another and how —why not say it— power has been used among civilizations. Today we could simply call this being competitive. This was what the Europeans were aiming for one decade ago in the Lisbon declaration, where it was stated that —faced with the challenge of being competitive on a global level— Europe could hardly compete with an economy based on natural resources or work organization costs, but it could compete with an economy based on knowledge and added value: by offering what no one else knows how to do, or be the first ones to do it. So then, will those countries that take the necessary steps to have a knowledge-based economy truly be competitive? And how well is Catalonia prepared for this challenge? Are we ready to participate in this process? It is clear that in the 19th century we were ready to participate in the Industrial Revolution. Catalonia was the only country in the world to participate in that process without having any natural resources of its own. Our strength, what gave us an advantage, was talent, human resources and creativity. Catalonia took a giant leap, and this was what set it apart from an ailing Spain that was in a state of shock from losing its colonies, incapable of reacting to what was happening in the world and, thus, a burden for Catalonia. And despite everything Catalonia survived, thanks in large part to a powerful economic, cultural and national renaissance. Now history has placed us at a similar crossroads. We are facing a global economic crisis with high volatility in the markets, and it is something that not all sectors will survive: some will emerge reinforced while others will disappear. What is certain in this unstable context is that knowledge-based sectors are the ones that do survive and grow, and Catalonia has the potential to become the most important knowledge hub in southern Europe, far removed from an ailing Spain obsessed with territorial unity and hijacked by a political leadership with an antiquated and government-centric mentality. A significant indicator is the economic concessions awarded by the European Research Council, the most competitive funds with which Europe honors the best scientists on the continent. At least 65% of the grants coming to Spain go to Catalonia, and if we calculate it by million inhabitants, Catalonia is the third country in the European Union [to receive the most grants], surpassed by only Sweden and the Netherlands. This has been possible thanks in large part to the state structures the Catalan Government set up in the sciences more than a decade ago: First. A clear policy to attract and retain talent that is competitive and open to the world. Second. A network of cutting-edge Catalan government research centers with complete autonomy when it comes to policies affecting the direction of scientific research, human resources and financial management, and a culture of assessment with clear consequences, all of which is far-removed from the Spanish bureaucratic, official government-funded and interventionist model. Third. A system of a dozen reasearch-oriented universities that that are currently leaders within the Spanish system despite not being able to excercise their full potential due to the Spanish state’s legislative straight- jacket. Fourth. An extensive network of research infrastracture that, beyond the evident and essential service they would provide to the system, would decide what the science priority should be in the public budget. The challenges in the coming months are, on the one hand, for the Catalan Parliament to approve the first law of Catalan science, which should safeguard Catalonia’s own model, and secondly, to further develop the core traits of the university reform. This reform, which started two years ago, defines the strategy for academic course offerings and our own academic model for teaching staff though the new Serra Hunter Program –a powerful tool to attract and retain talent—, and promotes the internationalization of our system to give it greater international visibility. This combination of elements seeks to create a new Catalan university model that will become the main engine of economic and social development in Catalonia. All of this needs to be addressed at the same time as we look to another enormous challenge for Catalonia: the ability to massively transfer the knowledge generated by our system to the country’s productive fabric, and encourage our companies to see innovation as a powerful competitive leverage. After more than a century of our joining the industrial revolution, we must now join the knowledge revolution and thus also consolidate the necessary second renaissance that will allow Catalonia to become a new state. A state in which knowledge acts as a means for bringing about change in a much-needed process of political, social and economic regeneration. We can do it!
  12. 12. Antoni Castellà i Clavé holds a degree in Business Administration and a Masters in Business Administration(MBA) from ESADE. He has been a Professor at ESADE since 1996. He has developed his career in the businessworld at IKL, Krupp and Hoesch Stahl. Member of the Catalan Parlament for the province of Barcelonasince 1999. Until 2010 he was second secretary of its Bureau. He also chaired its Legislative Committee onEconomy, Finance and Budget and was member of its Committee on Education and Universities and VicePresident of its Advisory Council on Science and Technology. He is currently Secretary for Universities andResearch of the Government of Catalonia.Translated from Catalan by Margaret LuppinoPhoto courtesy of Diari ARA
  13. 13. seven communities, one language eurocatalan newsletterIllogical Infrastructure Investments issue #13 february 2013 IN DEPTH The meaning of ‘More than a Club’ Ramon Pont - Catalan International View FC Barcelona’s motto ‘Més que un Club’, or ‘More than a Club’, better defines the club than any possible adjective: FC Barcelona [Barça] is known for being much more than a mere football club, it is known for its attractive playing style developed in the ‘Masia’, for its social commitment and its identification with Catalonia. Nevertheless, this model did not grow overnight: its roots reach deep into the history of the club, its dedicated fans and professionals and the social environments that have shaped its private and public faces. So, what makes FC Barcelona so special? Is it possible to win sporting championships year after year while at the same time being seen as a social role model? Its sporting and social model is based on a set of core values that accompany all the elements in the FC Barcelona structure. Values such as teamwork, respect, tolerance, commitment, responsibility, effort and excellence are rooted in the club’s philosophy. This core set of values are transmitted to all the young sportsmen and women who grow up in the youth teams at FC Barcelona, possibly later becoming world-class stars such as Leo Messi, Andrés Iniesta or Xavi Hernández, excellent football players, while at the same time, excellent role models both on and off the field. As Pep Guardiola said in his acceptance speech for the Honorary Medal of the Catalan Parliament, ‘what I am now as a person, what has taught me to be so, is sport. I have learned how to win, and to celebrate with humility, sport has taught me how to lose and that really hurts, but losing is what teaches you how to rise up and to value how difficult it is to win’. This sums up the philosophy inherent in FC Barcelona’s working model, from the first team stars to the 8 year olds or the 16 year old youngsters who participate in the FC Barcelona Foundation social projects in Barcelona or in such far-flung places as Rio de Janeiro. This is what makes FC Barcelona so special, its set of core values is truly respected by all, players are nurtured by this methodology and their on-field attitude reflects as much. FC Barcelona is not a Societat Anònima Esportiva (Public Limited Company) with shareholders and subject to individual powers. The club is run as a democratic institution, with presidential elections being held every 6 years by the club members (more than 169,000). This is a fundamental principle of Barça’s model, that the club is run and elected by its members, and as such, it must represent their wishes and goals. The wishes and goals of FC Barcelona’s members go far beyond just winning sports prizes, they also encompass the Club’s need to be a relevant social actor, known for its social responsibility both in Catalonia and around the world. The FC Barcelona Foundation is the institution responsible for channelling FC Barcelona’s sense of social responsibility. Created back in 1994, the Foundation has since been the vehicle for all of the Club’s social initiatives and projects, thus becoming an important social force in the construction and execution of said projects. Nowadays the Foundation focuses on four key elements: Sport as a social tool, Education in Values, Infancy and Youth as its main targets and FC Barcelona’s social projection. Therefore, the Foundation’s mission is to educate in values through the use of sport as a social tool for individual and community development. It is extremely interesting to see how the Foundation finances its projects. It receives 0.7% of FC Barcelona’s ordinary income, following the UN mandate on official development aid. The Foundation also receives 0.5% of every professional player and staff member’s salary, which is an unprecedented arrangement in professional sport that allows the Foundation to work with an effective budget. The Foundation divides its work into three areas. The first of these are the General Programmes where we find the FutbolNet and the Barçakids programmes. FutbolNet is a social development project aimed at youngsters aged from 10 to 16 who come from underprivileged backgrounds. In the programme, football is played with a new, innovative methodology: there is no referee and the game is divided into three parts. During the first part, both teams meet and discuss the rules of the game (some of the rules are pre-set such as mixed teams or that for all goals to count, one of them has to be scored by a girl), a ‘teamer’ follows and guides the discussion. The second part is the actual football game. Since there is no referee, both teams play under their own rules and they must solve the conflicts that arise during the game, with the ‘teamer’ only intervening if no solution can be found. Finally, during the third part, both teams meet again and discuss the results of the game and obtain points according to their sporting and social results. FutbolNet is being carried out in 20 Catalan towns and in Rio de Janeiro, with the help of the local social services. The programme lasts for 6 months with the participants progressing through different stages, ending up in a joint tournament.
  14. 14. The programme Barçakids aimed at children aged from 6 to 12, takes place during an entire school day (from9 am to 5 pm) and aims to transmit the inherent values of sport and of FC Barcelona to the participants as wellas giving the school system and its teachers resources to use throughout the year. The digital platform offers educational content for children, teachers and parents, by facilitating values in sport that areaccessible to everyone. Barçakids is now being implemented in many Catalan schools and is looking to extenditself to other countries and social areas.The second area is that of Campaigns. Under the ‘We Are What We Do’ slogan, the Foundation has three yearlycampaigns that concentrate on three different values to be promoted in society. These campaigns aim to raisesocial awareness and to help the social entities that work with them on a daily basis. The campaigns are:We Are What We Eat; promotes the Mediterranean diet and healthy habits.We Are What We Respect; fights against racism and promotes tolerance.We Are What We Achieve; promotes sport for disabled people.Last but not least, another important area of the Foundation’s work are the Alliances that are established withother institutions with a common and particular goal. Examples include an alliance with the Bill and MelindaGates Foundation against Polio, with the Fundación Pies Descalzos, the Inter-American Development Bank’sproject for youth development in the Americas and with UNICEF’s worldwide youth development projects.These alliances help the Foundation promote FC Barcelona’s values while tackling specific issues alongsidesome of the most important social entities in the world.Therefore, FC Barcelona’s ‘More than a club’ motto is more than a slogan. It is a truthful reflection FCBarcelona’s sporting and social relevance. From its footballing superstars to its youth coaches and its socialprogramme, everything that FC Barcelona touches is based on one philosophy, in the belief that sport, whencorrectly channelled, can, as far as possible, promote change in many people’s lives and solve many of theworld’s problems.Ramon Pont is Vice President of the FC Barcelona FoundationPhoto courtesy of Catalan International View
  15. 15. seven communities, one language eurocatalan newsletterIllogical Infrastructure Investments issue #13 february 2013 OUR CULTURE OUR HISTORY Victòria dels Àngels: a lesson in life and song Marina Villacampa - Catalan International View Victòria dels Àngels (Barcelona, 1923-2005) was one of the greatest sopranos of the twentieth century. With an innate ability to sing, she captivated international audiences with her outstanding vocal range. She was born in the majestic building which houses the Universitat de Barcelona, where her father worked as a concierge, at a time when the city’s cultural and academic activities were in full swing. ‘The University didn’t only provide us with a house, but also a huge cultural and spiritual inspiration’. Dels Àngels always claimed that music was part of her life from a very young age, thanks to her mother in particular, who also had a special gift for singing. During a vibrant period of Catalonia’s expansionism in which a new generation of musicians emerged (Enric Granados, Pau Casals, Eduard Toldrà and Robert Gerhard), alongside the construction of auditoriums such as the Gran Teatre del Liceu and the Palau de la Música Catalana and numerous conservatories, Victòria dels Àngels entered a conservatory where she studied singing, guitar and piano. Her undeniable talent and natural ability to learn, meant that in just three years (half the usual time), she completed her studies with a distinction. The beginning of her professional debut began with a singing competition on Ràdio de Barcelona in 1940, which she won with a performance of Mi chiamano Mimí from Puccini’s La Bohème, a piece which was to accompany her throughout her professional career. Her first concerts shortly after included works by Franz Schubert, Manuel de Falla and Mozart. At this time she began to collaborate with the Ars Musicae group, whose repertoire consisted of works from the twelfth to the seventeenth century and which was especially dedicated to the music of the Hispanic, Italian, French, German and English Renaissance. Dels Àngels was one of the first Catalan artists devoted to performing early music and she did so with an amazing lightness that she explained with these words: ‘you have to have a lot of imagination, but without emphasizing the dogmatism of a particular interpretation’. The soprano added, ‘I learned everything about music from Ars Musicae’. Indeed it was thanks to the group that she was able to continue her musical education, since her family were unable to afford it. 1944 was an important year as it saw her achieving widespread fame with her solo presentation in the auditorium of the modernist Palau de la Música in Barcelona. ‘I saw it as a sign of appreciation to them after so much effort’. She transmitted her extraordinary commitment and understanding of music, and the result was spectacular. Critics acknowledged her ‘universal intuition and strict technical ability’, and her incredible feel for music became increasingly apparent. Geneva, Portugal, Madrid, Paris, Stockholm and London played host to her first European tours, during which she signed an exclusive contract with the British record label EMI, who recorded much of her repertoire. Every time she visited a country for the first time, dels Àngels performed a recital in order to get a feeling for the audience. She soon moved on to other continents to sing in South Africa, South America and the United States, where her recitals included the 20 songs from her opera repertoire (Strauss’ Ariadne auf Naxos, Mozart’s Don Giovanni, Wagner’s Tannhäuser and so on), and she debuted some others including German lied, and French and Spanish songs. She was fluent in 5 languages and had excellent expressive powers, with no hint of harshness or shrillness, an undeniable ability to interpret different moods and incredible stage-presence. During the 50s, opera houses around the world competed for dels Àngels and she was in great demand. At this time she recorded most of her operatic repertoire and established a close relationship with the Metropolitan Opera House in New York, where her success was spectacular. In 10 years she gave 140 performances, 13 recitals and performed 13 roles and formed part of the company that toured the United States. Her husband, Enric Magriñà, who she married in 1948, was her agent and accompanied her during the long periods she was away from home. The stage director Wieland Wagner, grandson of composer Richard Wagner, was captivated by Victòria del Àngels’ voice at a concert in New York and asked her to perform the role of Elizabeth in Tannhäuser at the Bayreuth Festival (created by Richard Wagner in the second half of the nineteenth century to display his talents) conducted by Wolfgang Sawallisch. ‘With you, I have found the ideal Elizabeth’, Wieland Wagner declared. The fact that a non-German singer should perform at Bayreuth was absolutely unprecedented and unthinkable, and Victòria acknowledged the event was, ‘one of the most exciting moments of my life’. In addition to the hundreds of performances she gave on the American continent, the European opera houses also competed for her attentions. In 1955, for example, the soprano sang Puccini’s Madame Butterfly at the Liceu in Barcelona, though when she returned twelve years later, her husband broke off relations with the theatre. Following an argument surrounding her artistic cache, dels Àngels had to wait 25 years for normal relations to be resumed and to sing there once more. She became an ambassador to the world. Dels Àngels received awards from all sides. Nevertheless, in spite of her absolute dedication to singing, she strove to maintain a personal space in her life. In the 1960s, as the mother of two children she reduced the number of foreign tours. ‘My children have given me the opportunity to be like everyone else, something which has always been a concern of mine’. She also liked to spend time cultivating herself, reading and listening to music, among which she especially liked Mahler’s Fifth Symphony as, ‘it is a cry and I associate it with many moments of my life’. Moreover, she was a complete anti-diva and avoided the fake-sounding epithets that accompanied the queens of song (the divine Maria Callas, the marvellous Joan Sutherland and so on) claiming that one, ‘must be a person like anyone else, regardless of
  16. 16. one’s fame’. Nevertheless, she befriended with many of them, such as Renata Tebaldi, Jessye Normann, EditaGruberova and Joan Sutherland herself.The 1970s were to be the final phase of dels Àngels’ operatic career and a tragic season on a personal level,which also affected her voice, due to her separation from Enric Magriñà. She said goodbye to opera with aperformance of Debussy’s Pelléas et Mélisande in Madrid; an opera which, due to its concert-like structure, wasadded to a fully booked season of recitals awaiting dels Àngels. Her new manager, Xavier Vivanco, relaunchedher international career. Victòria dels Àngels once more toured the world in the eighties, accompanied by thepianists Paul Berl, Gerard Moore and Alicia Larrocha, and their recitals were to make lied into a universalgenre. Lied is romantic music, essentially German in origin, inspired by popular German music. Dels Àngelsincluded popular music from many countries in her repertoire, using it to connect with audiences which wereunaccustomed to classical music.‘I urge my students to read, especially poetry, because the world of poetry is critical for the singer (...) Achievingthe inflections and colour necessary for singing helps, among other things, to improve their own vocaltechnique’. The soprano gave master classes throughout the 90s in which she never tired of insisting that onemust transcend the singing and music and seek out the symbolic aspect.‘Personally, I have not plans to retire. I guess life wilI retire me’. Victòria dels Àngels died in Barcelona in2005 and something unique passed away with her. Her ability to instantly captivate an audience and theexpressiveness and humanity that she brought to her roles made the impossible appear easy. She was neverattracted by playing the part of a queen, preferring to play characters she could identify with, such as Mimípucciniana (La Bohème). ‘Mimí was one of my favourite roles, she was sensational. Before I die, I shall rememberI was always Mimí, a simple girl who suffered’.Marina Villacampa is the Chief Editor of the new 440 Clàssica magazine, dedicated to traditional andcontemporary classical music and opera. She has created and worked on projects in the fields of music andthe performing arts, such as the production Bach conversa amb Martí i Pol. She has also worked with JordiSavall’s Fundació CIMA.Photo courtesy of Catalan International View