Introduction
The Kingdom of Spain, also simply known as Spain
is located at the crossroads of European and African
civilizations. Over the course of its entire history,
Spain has enjoyed a truly rich and complex history,
having been invaded, inhabited and dominated by
both European as well as non-European civilizations.
It was Spain's location at the narrow Gibraltar,
which perhaps provided for the nation's interaction
with a number of pre-classical and classical civilizations.
A brief on the geography of Spain shows that she
is located in the southwestern part of the European
continent at the Iberian Peninsula, occupying
some 80 percent of this Peninsula. The remaining
20 percent are occupied by neighboring country
of Portugal. On the north, Spain has common borders
with France and Andorra with the Pyrennes range
of mountains serving as their natural frontiers.
In addition, the Balearic Islands of Mallorca,
Menorca, and Ibiza located in the Mediterranean
Sea, the Canary Islands in the Atlantic Ocean
and the Islands of Ceuta and Melilla located in
northern Africa are also part of the Spanish dominion
today. A comparison with her European neighbors,
Spain enjoys the position of being the 3 largest
nation, while standing 5th as far as her population
is taken into account. The topography of Spain
also shows that it is home to Europe's five big
mountain ranges, of which some 50 percent are
located at elevated plain. However the landscape
of each has extreme variations from green and
fertile, to almost desert-like, in addition to
the long coastline overlooking the Mediterranean
Sea. (Yahoo-Spain, 2004; CIA World Fact Book,
2001; Coutsoukis, 2004)
A brief on the climate of Spain shows that she
has three types of climates namely continental,
maritime, and Mediterranean. However, the majority
of the peninsular Spain is covered by the continental
climate, which is characterized by wide diurnal
and seasonal variations in temperature and by
low, irregular rainfall including high rates of
evaporation which results in an arid landscape.
With the annual rainfall ranging between 30 to
64 centimeters, the Spain has two rainy seasons,
first between the months of April and June and
the second during October ad November, with spring
being the wettest time of the year. The winters
are cold, despite the high humidity, with the
regions of Iberico home to the coldest areas including
frost. Summers are warm with average daytime temperatures
averaging at 21 degrees in the northern regions
and between 24 and 27 degrees centigrade in the
southern Meseta regions. The nighttime temperatures
too have slight variations averaging between 7
and 10 degrees centigrade.
Spain - Socio-Economic and Cultural Factors
Statistics as of year July 2001 reveal that Spain
has a population of approximately 40 million inhabitants,
with the growth rate at a stable 0.1 percent,
birth rate at 9.26/1000 population, and death
rate at 9.13 deaths per 1000 inhabitants. An overview
at the age structure of the Spanish population
shows that some 14.6 percent of the lie within
the ages of 0-14 years, while the majority lying
between the ages 15 and 64 comprise of 68.2 percent
of the entire population. The average infant mortality
rate is 4.9 deaths per 1000 live births, while
average life expectancy at birth for the entire
population is 78.93 years. The females enjoy a
higher life expectancy at 82.623 years as compared
to the males averaging at 75.46 years.
Cultural Minorities and Ethnic Groups
A national of Spain is given the title of Spanish,
while Spain is also home to other ethnic groups
comprising of people from the Mediterranean and
Nordic regions. As of 1978, the Spanish Constitution
has given complete guarantees and autonomy to
a number of different nationalities and regions,
which comprise of the entire Spanish nation. Major
ethnic groups include Basques, Catalians, Galicians,
Andalusians, Valencians, Asturaians, Navarrese,
Aragonese as well as small number of Gypsies.
Majority of the Spanish population belongs to
the Roman Catholic with 97 percent share, while
the remaining 3 percent are shared by other religions
including Protestants and Muslims. The major languages
spoke in Spain include Castilian Spanish which
is also the official language spoken by 74 percent
of the population, Catalian Spanish spoken by
17 percent, Galician by 7 percent and Basque language
spoken by some 2 percent of the people living
in Spain.
Spain enjoys a healthy 97 percent literate population
with all those above the age of 15 years able
to read and write. (CIA World Fact Book, 2001;
Coutsoukis, 2004)
Political and Legal Climate
A brief on the political transition from dictatorship
to democracy in Spain shows that the death of
General Franco in 1975 perhaps proved to be a
turning point as the nation entered a new era
of democracy. This was followed by the legalization
of political parties and first free elections
in more than 4 decades, duly held in 1977. A year
later, a new democratic constitution was approved
through a referendum, which restored the monarchy
of King Juan Carlos and his heir apparent Felipe.
The new constitution also repealed a number of
laws in practice during the era of General Franco.
Nearly a decade later, in 1986 Spain joined the
European Community, later also known as the European
Union. Since then, it has been a progressive era
for Spain's political parties as well as the Monarch,
both of who have vowed to make Spain one of the
most active members in the EU and NATO alike,
a strategy which has been more than accomplished.
This can be evidenced in the Spain's membership
as one of the founders of the European Monetary
Union as of January 1999.
Spain has a parliamentary form of government
with the majority of power resting in hands of
the 350-strong Lower House, also known as the
Congress of Deputies. The upper house or the Senate
has 208 seats and another 51 regional representatives
who are directly elected from their respective
regions. The Spanish Parliament or Cortes is sworn
into for a four-year term, with the possibility
of early dissolution if and when found necessary.
The emphasis of all these members of Parliament
has been to take the nation towards decentralization,
and though it may some time for the entire system
to achieve its targets, the move alone has provided
considerable autonomy to the more than 17 autonomous
communities spread across the breadth of Spain.
One of the major gains accomplished by Spain
from the joining of the European Union has been
the numerous benefits and advantages gained though
the use of the EU's single currency including
but not limited to the maintenance of adequate
balance between the national fiscal policy and
the monetary policy of the Euro, the single currency
introduced by the European Union.
Spain - Economic Climate
A brief on the economic climate of Spain reveals
that the nation with a population of more than
40 million inhabitants and the population growth
rate averaging at 0.6 percent, the Gross Domestic
Product as of 2002 statistics was 675 US dollars
with real GDP growth rate at 3.5 percent. The
GDP per head as of the same years was US dollar
16,225 while inflation averaged at 2.9 percent.
The purchasing power parity (PPP) per head was
22,271 US dollars for the same year. The ration
of current account balance with that of GDP was
-2.3 and that of Foreign Direct Investment to
GDP was 3.8 percent. (Economist, 2004’ The
Columbia Electronic Encyclopedia)
A brief at the various measures taken to improve
taxation showed that as of January 2003, the personal
income tax was reduced from 48 to 45 percent,
with simultaneous fall in standard rate of capital
gains witnessing a fall from 18 to 15 percent.
As for corporation tax, this has s uniformly applied
at the rate of 35 percent. While companies with
a turnover of less than 5 million Euros, the same
corporation tax is levied at 30 percent for the
first 90,000 Euros. In addition, the areas of
job creation, investment in research and development,
environmental investment, and investment abroad,
there is a facility of corporation tax. The Value
Added Tax or VAT is however uniformly levied at
16 percent across the board.
A brief on the export and imports of Spain show
that the sector of merchandising have witnessed
a rise from US dollar 113 billion in 1999 to US
dollar 125.8 billion as of 2002. However, a strong
demand for imported products has raised the trade
deficit from 30.3 billion US dollars to that of
US dollars 33.1 billion during the same period.
The enhanced trade deficit also resulted in increasing
the current account deficit, which reached at
2.4 percent of GDP as of 2002.
The statistics as of 2001 exports showed that
43 percent comprised of intermediate goods, 41.1
of consumer goods, and 13.9 percent of capital
goods. In similar context import figures for the
same period showed that 47.9 percent comprised
of intermediate goods, 27.1 percent consumer goods,
and 18.5 comprised of capital goods during the
same period. The leading markets for Spanish exports
were France with a share of 19.1 percent, Germany
at 11.6 percent, and Portugal at 9.7 percent,
and Italy receiving 8.9 of the total Spanish exports.
As for the Spanish imports, this was shared by
Germany's exports at 16.45 percent, France at
16.4 percent, Italy at 8.9 percent, and United
Kingdom's exports to Spain at 6.4 percent. (Economist,
2004; Economist, 2002; The Columbia Electronic
Encyclopedia)
Analysis
From the above detailed data, statistics, reports
and comments from a number of organizations including
the World Bank, the CIA World Fact Book, and famous
magazine such as the Economist, Spain indeed presents
one of the most attractive and alluring nations
for any potential business venture. This is amply
confirmed from that fact that Spain has enjoyed
more than d decades of economic and political
success, as well as foresees a further development
of its continuous economic and political policies.
This accomplishment is indeed unique, as there
is hardly any other example of a European nation,
which has accomplished so much in so little a
time.
From the political perspective, one can easily
observe that over the last more than 3 decades,
Spain has created a democratic system wherein
the political parties duly alternate in governments,
and the government on its part ensures that the
goods and services as required by the larger Spanish
population are delivered with least set of criticism,
if any. Though, one must also take into account
this has not been an easy ride altogether, as
also evidenced from a failed military attempt
in 1981, or for that matter the scandal involving
the Socialist government of Felipe Gonzalez in
the middle of 1990 regarding the introduction
of so called death-squads used against Basque
terrorist. However, in both the cases the nation's
rule was broken, and as was expected, it was tactfully
tackled by the able monarchy of King Juan Carlos.
In pursuing such stable political and economic
set of policies, Spain has certainly attracted
attention from all around the world, as also providing
ample evidence for a nation where businesses and
enterprises are sure to succeed.
In praising the economy and political structure
of Spain as one of the most ideal nations for
businesses, one must also take into account some
of the risk factors that may well bring awareness
for all potential business investors. For example,
one may note that the Spain has painstakingly
constructed a democratic system of governance
which allows a minimal amount of conflict between
its various political faction and parties, there
have been instances which have served as a signal
for the presence of flaws in the same democratic
set up. For example an insight on the Spanish
government's hold on its internal affairs, in
particular its security concerns showed that it
was equally vulnerable, as also evidenced from
terrorist bombings of March 11, bringing the government
to its knees, and practically shaking the entire
government structure. For the People's Party headed
by Jose Maria Aznar, it was perhaps one of most
dreadful experiences as the government had begun
to think that their party will be voted into power
for the second 4-year term as well. Yet, with
the terrorist attacks, this has virtually broken
the composed and stable government, and forced
them to think otherwise.
Nevertheless, Spain has truly emerged as a successful
economy as well as a stable political government,
one, which takes pride in not only producing policies,
but also implementing them with the true essence
of a democratic government and an equally loving
monarchy under King Juan Carlos. Perhaps one of
the most striking aspects is Spain's tremendous
economic growth, duly making the average Spaniard
approximately 75 percent richer as compared to
some 3 decades earlier. This is in addition to
the national economic growth, which has continued
its growth pattern for the last more than a decade,
and has not seen any rival even when one take
into account the European average.
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