What We Can Learn From the Basque Country

This article explains what Portugal and Spain can learn from the Basque. The Basque Country is one of Spain’s 17 Autonomous Communities in the current territorial arrangement negotiated in Spain in the aftermath of Francisco Franco Bahamonde’s death on 20 November 1975. Franco was the fascist Dictator who ruled Spain between 1939 and 1975. The Basque Country has been partly associated with violence and terrorism since the terrorist band ETA was founded in 1958. ETA announced a definitive ceasefire in October 2011 (ceasefire statement can be read in English from http://www.theguardian.com/world/2011/oct/20/basque-ceasefire-statement-full-text).

The Spanish Constitution approved in referendum on 6 December 1978 recognizes nine historical nationalities. Only in the Basque Country and Catalonia nationalist parties have ruled with absolute majority or in coalition most of the time since 1978. The Basque Country and Catalonia have demanded more autonomy and today along with Navarra are Spain’s most devolved communities in a quasi-federal state (Spain).

There is much that the rest of Spain and Portugal can learn from the Basque, including Catalonia. Leaving violence and terror behind –hopefully for good- the Basque are ahead of the game in the Iberian Peninsula in a majority of areas and indicators. The Basque have the best job market and the best performing educational system in Spain at the primary and secondary levels. The best Universities on Iberian soil are however located in Catalonia.

For decades Spaniards were most concerned with ETA’s terrorism and violence in the Basque Country. Spaniards today are most concerned with unemployment. The Center for Sociology Research (Centro de Investigaciones Sociológicas or CIS) determines every month the three most worrisome issues for Spaniards in the well-known “three main problems” computed every month (http://www.cis.es/cis/export/sites/default/-Archivos/Indicadores/documentos_html/TresProblemas.html). Unemployment, the economic crisis, corruption and fraud, and the political establishment were the top three plus one most voted issues in November 2013.

Transparency International (Spain Chapter) computed the transparency ranking among Spain’s Autonomous Communities in 2010 and 2012 (http://www.transparencia.org.es/INCAU_2012/Ranking_Transparencia_Global_INCAU_2012.pdf). The Basque Country and La Rioja topped the ranking in 2012. Catalonia (#10 out of 17) and Madrid (#12) lagged behind.

The 2012 OECD PISA Report on educational achievement and performance among High School students was recently released. In the results for Spain (http://www.mecd.gob.es/dctm/inee/internacional/pisa2012/boletin21pisa2012.pdf?documentId=0901e72b8178650b) Navarre (517), Castilla-León (509) and the Basque Country (507) rank in the top-three above the OECD average. This performance places the Basque Country ahead of New Zealand, Denmark, Slovenia, Ireland, Australia and Austria in the recent OECD PISA Report averages for language comprehension and mathematics performance.

According to Eurostat, Spain’s unemployment rate was the second worst in the European Union at 26.7% only behind Greece’s 27.3%. According to the Spanish Statistics Institute the Basque Country was the Autonomous Community in Spain with the lowest overall unemployment rate and the lowest under-25 unemployment rate (under 25 years old) in each of the first three quarters of 2013. The Basque Country must be doing things differently after all. What can the rest of Spain and Portugal learn from the Basque? Why are the Basque systematically the best performers in Iberia?

Contrary to a majority of Autonomous Communities in Spain, the Basque Country has a dense and deep myriad of small and medium industrial enterprises which work in advanced technological sectors such as automotive, biotechnology and energy. These small and medium enterprises are able to generate employment which is very resilient to international competition/outsourcing and rather seasonally unaffected. Many other coastal Autonomous Communities in Spain largely depend on tourism revenue which is extremely seasonal, hiring and firing before an after the summer.

Contrary to a majority of Autonomous Communities in Spain, the Basque Country has been ruled by coalition governments during most of the present democratic stage. Coalition governments may be more unstable than majority governments, but are less prone to corruption and fraud than majority governments that perpetuate over time. Corruption charges in Andalusia or Comunitat Valenciana are related to politicians who have remained in power well over eight years.

Because part of the real estate boom in Spain was related to construction of apartment buildings on the seashore in the Mediterranean, Autonomous Communities in northern Spain were arguably less hit by the burst of the bubble.

Overall regional debt has remained relatively low in the Basque Country compared to other Autonomous Communities. According to the Bank of Spain (http://www.bde.es/webbde/es/estadis/infoest/a1310.pdf) public debt-to-GDP in the Basque Country was 12.1%, only behind Madrid’s 12.0%. Catalonia’s public debt-to-GDP was in the meantime the highest in Spain at 27.2%. Whereas the city of Madrid owes a whopping 2,297 euros per inhabitant and Barcelona 726 euros per inhabitant, Bilbao owes a mere 6 euros per inhabitant.

Bilbao’s phenomenal transformation from a vintage industrial city to a modern services and culture center has tried to be replicated without success by many other Spanish cities. Bilbao built the Guggenheim Museum and the subway and has recently demolished the old football stadium of San Mamés. The smart transformation implied devoting the full culture budget of Bilbao for six consecutive years to the building of the Guggenheim Museum.

The Basque are better planners than everyone else on Iberian soil. They are also smarter spenders and more able to identify the focus of a society and maintain the pulse over time to accomplish a transformation.

The Basque Culinary Center (BCC) is another example of a state-of-the-art, world-renowned institution founded by visionaries able to identify a niche opportunity. BCC  was founded by Mondragon University part of Mondragon Corporation, the World’s largest cooperative with over 70,000 employees today.

The Organization of Consumers and Users (OCU) released in 2012 a list of the best cities to live in Spain. Vitoria (#2) and Bilbao (#4) were ranked in the top four. A strong job market coupled with a wide offer of culture and strong education and healthcare services explain the incredible performance of Basque cities.

Overall there is much that the rest of Spain and Portugal can learn from the Basque. Once violence and terrorism has been left behind, we should begin a dialogue based on mutual understanding and –through curiosity- mutual learning. We would all be better off if we were able to embrace diversity in order to learn from difference and enjoy it. ETA killed hundreds of innocents. Franco repressed the Basque Country for decades. We must learn to digest history and look forward. The Germans, a people with the most difficult history behind them- were able to do so in the aftermath of World War II. Incapable Spaniards and Portuguese seem to be willing to embrace absurdity in a peninsula that should be one borderless territory once and for all.