Bernardo M. Villegas
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Rebalancing Strategy
published: Mar 31, 2017



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Sun Rising Again in Spain

           For one whole day last June 8,  2013, I was an ordinary tourist in Spain.  I was one of the more than 50 million tourists who have visited or will visit Spain for the whole of 2013.  Thanks to a close Catalan friend who spent his early childhood in the UNESCO-designated World Heritage Site of Tarragona, I got a very personalized tour of this ancient Roman city that is one of the numerous attractions replete with  history, culture, art, cuisine, beaches, and fiestas for which Spain is famous.  During the eight hours or so during which my friend Jaume generously showed me the City and its surroundings, I actually got a taste of all the above-mentioned attractions: the  Roman ruins, Ampitheater, the Forum; the Cathedral, dating to the 12th-13th centuries, combining Romanesque and Gothic architectural elements;  convents with their magnificent cloisters;  beaches on the dark blue Mediterranean sea; bands celebrating one of the many feasts of the region; and a most sumptuous lunch made up of Catalan cuisine (the best restaurants in the world are usually in the Catalan region, e.g. the old El Bulli in Barcelona and now El Cellar de Can Roca in Girona--where my friend Jaume spent the rest of his childhood).

          Our one-hour journey by car from Barcelona to Tarragona was symbolic of what could happen to Spain in the next two to three years.  As we left Barcelona, we were met by torrential rains not different from what we experience in Manila sans the wind.  Jaume---who is a techie and has all sorts of gadgets to monitor the weather--reassured me that, although we brought an umbrella just in case, we would not need it because his weather monitor was indicating that the sun would shine in Tarragona.  True enough, the whole time we were in Tarragona, the sun was shining and the temperature was perfect, neither too warm nor too cold.  I thought to myself that this touristic experience is a harbinger of what could happen in Spain in the next two to three years.  After going through the most difficult years of austerity and pain, Spain in my opinion will rise again as the sun rose on Tarragona.  The first reason for my optimism is the very industry of tourism which is actually booming, thanks to the depreciated Euro and the lower prices brought about by the recession. Some of the most avid tourists were the spouses of the top executives in our Advanced Management Program (AMP).  Spain, like Japan today in Asia, is a bargain for tourists.

          The second reason comes from the insights I gained meeting close to a hundred Spanish entrepreneurs in Madrid and Barcelona in a series of economic briefings I gave on the Philippine and ASEAN economies.  These briefings were under the auspices of the Confederation of Spanish Industries in Madrid, the Chamber of Commerce of Barcelona and the IESE Business School, one of the top business schools in the world today.  I was accompanied in Barcelona by some 20 top Philippine industrialists who were participating in the AMP that the University of Asia and the Pacific offers regularly in cooperation with professors of IESE.  In the business to business encounters that followed the economic briefings I gave, the Philippine delegation were more than convinced that Spanish business has a lot to offer to the Philippines and Southeast Asia in terms of advanced technology, leading brands, and management expertise in such areas as real estate and construction, alternative energy, food processing, fashion, infrastructure, transport and communication, shipbuilding, and, of course, tourism.  The ongoing crisis is a temporary financial difficulty borne of bank failures due to a real estate bubble.  Spain is a First World country as far as management and technology are concerned.  We were convinced that the more entrepreneurial Spanish business people can leverage on these assets by being more present in the emerging markets of Asia, starting in the Philippines and then reaching out to the whole ASEAN Economic Community.  The message we gave to the Spanish industrialists was that the Philippines could be their gateway to the ASEAN Economic Community (AEC).

          The CEOs and owners of business from the Philippines who were with me admitted that we have to do more to address the "mutual ignorance" that our two countries are suffering from.  As a top official heading a special office created by the Spanish government to promote the "Marca Espana" (Spanish brand) complained, "People here in Spain work a lot of hours but the cliche is that here everything is done tomorrow and that people sleep siestas."  Some of our participants admitted to having such an outdated notion of Spain and the Spaniards.  It was eye opening for them to talk to their counterparts in such industries as agribusiness, investment banking, construction, energy, tourism, health care, etc. and to realize that Spanish business practices as are modern as those of the Germans, South Koreans or the Japanese.  In fact, some of us were also able to confirm that such reports as "fifty percent of young Spaniards in their twenties are unemployed" are grossly exaggerated.  It was good to read a feature article in the Business World on June 18, 2013 written by Daniel Gross, Director of the Center for European Policy Studies, affirming that "labor market experts consider the unemployment rate a potentially misleading indicator, because a youth unemployment rate of 50% does not mean that half of the young population is unemployed.  That is why one should look at the unemployment ratio--the percentage of the unemployed in the reference population--rather than at the unemployment rate."    Without denying that many of the university graduates are having great difficulty finding jobs at the present time, our Philippine business delegation got a more positive impression of the state of Spanish industries. 

          Although the information that we got from the business encounters were necessarily anecdotical, the general impression that I got in both Madrid and Barcelona coincides with an article that appeared in the Financial Times on May 10, 2013 (page 5):  "For countless Spanish companies, and for the national economy as a whole, exports have emerged as the one bright spot in a country scarred by soaring unemployment and a plummeting demand from consumers, corporations and the government alike.  Shipments of construction materials, car parts, Rioja wine, textiles, machinery and complex software area all booming, amid claims that Spain's only hope of recovery is to export itself out of the crisis."  Even my Catalan friend and tourist guide, Jaume, who now works for a company selling construction materials, is considering shifting from corporate employment to an entrepreneurial mode.  I may still convince him to look for export possibilities to the Philippines and the ASEAN Economic Community.  Girona, the richest province in the Catalonian region, has many exportable products and services.  Jaume has numerous contacts in Girona.  For those interested in exploring business connections in Spain, contact Mr. Arman Racho Talbo at artalbo@philembassymadrid.com or artablo@gmail.com or tel. +34 697 960 112.  For comments, my email address is bernardo.villegas@uap.asia