There are many aspects to the challenge of improving a country's competitiveness. Success in this area depends greatly upon the extent to which the following two elements are present: social cohesion and a capacity for wealth generation; components which are not mutually exclusive. On the contrary, creating wealth is pointless if there is no adequate distribution of that wealth throughout society, but neither will we be able to be competitive by focusing exclusively on developing social measures.
Dedicating a greater part of its budget on social spending does not necessarily make a country more egalitarian and more successful at promoting social cohesion. If we look at the rates of inequality in income distribution throughout Europe, we can see that the countries with the least income distribution are those with higher GDP per inhabitant.
Income inequality is growing at an alarming rate around the world. Indeed, 46% of world wealth is in the hands of a mere 1% of the population. We must, therefore, focus on closing the gap as much as possible in terms of unequal income distribution amongst inhabitants of the Basque Region. Today, we can say with satisfaction that Euskadi would rank second in Europe, with only Sweden ahead of us, something which is undeniable proof that the wealth creation and social policy can, and should, go hand in hand together.
Nevertheless, it is evident that we cannot feel any measure of satisfaction with the current economic situation. Neither can we deem the present levels of unemployment and social welfare dependence as acceptable, although the level of cohesion which we proudly possess, does allow us to face the future with greater optimism.
I personally believe that we must raise awareness amongst socio-economic and political players in our country regarding the challenge of improving competitiveness by working together in both parameters of the equation. More often than not, the players involved tackle this process in a completely one-sided manner, looking through one sole prism of reality; while at the same time, the other key aspect is ignored altogether. It’s up to us to educate Basque society on the challenge being faced.
Wealth creation must be placed at the core of Basque Social policy. To that end, our main goal must be to build an increasingly competitive and highly internationalised industry, which generates value-added products and services. Our newly structured industry would be based upon an efficient system of Science and Technology, with innovative business models, ones which facilitate the participation of people in companies (a key element of income distribution). This model would have close ties to the Basque Region and an intergenerational commitment which would make business projects sustainable.
Meanwhile though, we must work towards building a cohesive society with social policies aimed at boosting employment and fair income distribution, while guaranteeing adequate levels of solidarity with the less fortunate amongst us. Furthermore, equal access to healthcare, education and housing, makes it all the more evident that the construction of a competitive society is based squarely upon the foundation of justice and social welfare.
The challenge before us at this time is certainly daunting to say the least; maintaining our current level of social welfare while being faced with ever-growing international competition is becoming increasingly complicated. The challenge is made even more difficult by the need to overhaul our educational system so that it is better adapted to the new playing field. In addition to promoting research and innovation, this reform, in turn, demands a clear, long-range vision and vast amounts of investment; all of which comes at a price.
Both the level of self-government, which we enjoy here in the Basque Region, and the contribution of all the various players leading the way in the process, provide us with important tools and capacities to improve competitiveness. And by making this a priority, we can make headway in the struggle against unequal income distribution in our Region.
*Published in El Economista, 24/02/2014