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Spanish miracle

The 142m high Torre de Madrid, built in 1957, heralded the "Spanish Miracle".

The Spanish miracle (Spanish: el milagro español) was the name given to a broadly based economic boom in Spain from 1959 to 1974. The international oil and stagflation crises of the 1970s ended the boom.


  • History 1
    • The pre-boom situation 1.1
    • Initiation of the boom 1.2
  • Course of the boom 2
    • Infrastructure development and tourist destination 2.1
    • Rural exodus 2.2
    • Mass tourism 2.3
    • Industrialisation 2.4
    • Automotive industry 2.5
  • See also 3
  • References 4


The pre-boom situation

The 19th century in Spain was marked by political instability and war that continually disrupted economic development, leaving Spain lagging far behind the leading European countries and their economies. The period of the late 19th and early 20th centuries was one of relative stability during which there was considerable economic development. Political instability returned in the 1920s, which was made worse by the Great Depression, culminating in the devastating Spanish Civil War of 1936 to 1939. The war was won by right wing forces led by Francisco Franco, who was installed as dictator. Cut off from trade by both the Eastern and the Western Bloc, Franco's regime pursued a policy of autarky. Steps were taken to help modernise the country by government investment in critical infrastructure and industry. Examples of this include the launching of the Spain's modern national highway system, with construction beginning in Catalonia in 1948 and the modernization and expansion of the Port of Barcelona in 1948. In 1949, the regime initiated the construction of Spain's first mass car producer, SEAT, also in Barcelona. But cut off from external trade by boycotts of other European countries, the country could only make a slow recovery from the war with its limited and damaged resources. Industrial production did not regain its 1936 level until 1955, and the crucial agricultural sector took until 1959 to recover its pre-civil war level. The re-establishment of diplomatic relations with the USA and its allies in the mid 1950s led to some easing of Spain's economic difficulties.

Initiation of the boom

The "economic miracle" was initiated by the reforms promoted by the so-called technocrats who, with Franco's approval, put in place policies developed in Spain under the guidance of the International Monetary Fund. The technocrats, many of whom members of Opus Dei, were a new breed of politicians who replaced the old falangist guard.[1] The implementation of these policies took the form of development plans (Spanish: Planes de desarrollo) and it was largely a success: Spain enjoyed the second highest growth rate in the world, only slightly behind Japan, and became the ninth largest economy in the world, just after Canada. Spain joined the industrialised world, leaving behind the poverty and endemic underdevelopment it had experienced following the loss of most of its imperium in the 1820s.

Course of the boom

Infrastructure development and tourist destination

The economic expansion was heavily based on public investment in infrastructure development and the opening of Spain as a tourist destination. The "miracle" ended the period of autarky. The economic development brought noticeable improvements in Spanish living standards and the development of a large middle class in Spain. While Spain remained less economically developed relative to most of western Europe in the 1970s, in the "miracle's" heyday, 1974, Spanish per capita income had reached 79% of the European Economic Community. The size of the economy grew in just 13 years from 12bln to 76 bln. The production of electricity climbed from 3.61 million megawatt-hours in 1940 to 90.82 million megawatt-hours in 1976. Because of the country's limited fossil fuel resources and unreliable hydroelectric potential, the period saw the first stages in establishing a network of nuclear power stations to meet the rapidly growing energy demands.

Rural exodus

The work force demands of the Spanish miracle were met by a rural exodus which created a new class of industrial workers in Spanish cities. The economic boom led to an increase in the construction of largely unplanned slums on the peripheries of many Spanish cities. Due to the prior periods of industrialization in the northern parts of Spain (especially in Catalonia and the Basque Country) many of the internal migrants came from the Spanish speaking regions and moved into Catalan or Basque speaking areas where Franco had banned the speaking of any language other than Spanish.

The Rural exodus was similar to the French banlieue or, more recently, the vast migration of China's rural workers into its cities. Some cities preserved their historic centres, but most were altered by often haphazard commercial and residential developments. The same fate befell long stretches of scenic coastline as mass tourism exploded.

Mass tourism

Being short of natural resources, the opening up of Spain to mass tourism provided the country with a large source of foreign exchange that was used to pay for the capital imports (machinery, etc.) needed for a rapid expansion of infrastructure and industry. This labour-intensive industry also provided much employment. Tourism accounted for about ten percent of GDP at its peak in 1970. Another important source of foreign exchange were the many workers who worked in the factories and construction sites of the postwar boom-time countries of Europe, especially Germany, Switzerland and France.


A monument in Spain for the SEAT 600, the car symbol of the Spanish miracle[2]

The rapid economic expansion reinvigorated old industrial areas: the Basque country and Ferrol northern coast (iron and steel, shipbuilding), in and around Barcelona (machinery, textiles, cars and petrochemicals) it also drove an enormous expansion in refining, petrochemicals, chemicals and engineering. To help achieve rapid development, there was massive government investment through key state owned companies like the national industrial conglomerate Instituto Nacional de Industria, the mass market car company SEAT in Barcelona and the shipbuilder Empresa Nacional Bazán. With heavy protection from foreign competition within the domestic Spanish market, these companies led the industrialisation of the country, restoring the prosperity of industrial areas like Barcelona and Bilbao and creating new industrial areas, most notably around Madrid. Although there was economic liberalisation in the period, these enterprises remained under state control.

Automotive industry

The automotive industry was one of the most powerful locomotives of the Spanish Miracle: from 1958 to 1972 it grew at a yearly compound rate of 21.7%; in 1946 there were 72,000 private cars in Spain, in 1966 there were 1 million.[3] This growth rate had no equal in the world. The icon of the Desarrollo was the SEAT 600 car, produced by the Spanish company SEAT. More than 794,000 of them were made between 1957 and 1973, and if at the beginning of this period it was the first car for many Spanish working-class families, at its end it was the first second one for many more.

See also


  1. ^ Jensen, Geoffrey. "Franco: Soldier, Commander, Dictator". Washington D.C.: Potomac Books, Inc., 2005. p. 110-111.
  2. ^ El coche como símbolo del declive
  3. ^ J.L. García Ruiz, "Barreiros Diesel y el desarrolo de la automoción en España" PDF.
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