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Catalonia leads Spain in productive foreign investment, representing 22.5% of the total, greater than its economic weight and above Madrid's share. The figures are from a new report on the economic impact of foreign direct investment in Catalonia, prepared by the department of economic studies of the Barcelona Chamber of Commerce. "Maintaining these figures against the opposition of Spain deserves a lot of credit," said the president of the Chamber, Joan Canadell. He continued: "I would like to see what would happen to Spain if they had a state going against them, as we do."

The department's director, Joan Ramon Rovira, explained that data from 2017, the latest available, shows Catalonia accounting for 22.5% of the productive capacity associated with foreign investment. This was higher than Madrid, on 17.1%, below its contribution to Spain's GDP. At the same time, he warned that we have to be careful with the "headquarters effect", which causes the share of foreign investment in Madrid to increase to 68.1% and that of Catalonia drops to 13%, "and therefore, if this effect is not removed, Madrid remains the great beneficiary, but that's an erroneous interpretation".

What is the headquarters effect? By default, when investments are calculated, they are based on the location of the company's headquarters and attributed to that territory. According to the Chamber's experts, this is an error because the investment must be counted where it is made, since otherwise "the data bias is very heavy".

Data

At the same time, the data show that the net stock value of productive assets linked to foreign investment received in Catalonia is estimated at 25.593 billion euros (£23 billion; $29 billion), which represents 10.9% of Catalonia's GDP and 22.5% of all the productive assets linked to foreign investment in Spain. In addition, the absolute value of this stock in Catalonia increased steadily each year between 2014 and 2017, coinciding with the economic recovery.

In addition, the number of jobs associated with foreign investment in Catalonia is estimated at 313,515, 9.5% of all workers in Catalonia and 22.5% of all those linked to foreign investment in the whole of Spain. In the words of Canadell, "the independence process has not affected foreign investment, and where there is a change, in 2018, it is in the growth of total investment".

With regard to the international comparison, based on balance of payments data abroad, the Chamber has had to estimate this comparison for Catalonia, since there is no official balance of payments for the territory. Thus, according to the Chamber, Catalonia stands out as one of the Western European countries with a greater weight of the accumulated stock of foreign investment as a percentage of its GDP, with 57.4%, along with the United Kingdom, Sweden and Portugal. "This data highlights the ability of the Catalan economy to attract foreign investment in the European context," the body says.

Canadell stated that "despite the political pressure that Catalonia has received, the Catalan economy has commendable resilience and is very attractive internationally." However, the Chamber warns that "we must not compete so much in terms of foreign investment but rather in quality, prioritising the future".

"An opposing state"

The president of the Chamber praised the report's data and stated that "once it has been explained, it is unacceptable to provide the data without taking into account the headquarters effect". He also criticized that "Spain has not favored investments in Catalonia for years, and budgets are always much lower for Catalonia than for Madrid".

In this sense, "it is clear that Spanish politics favors the centralized economy of Madrid", and has given as an example the fact that there is still no high-speed AVE rail link between Valencia and Barcelona, "because what that does is mean the Valencian economy has to look towards the centre and not the north, because they make it easier for them."

Finally, asked about whether the independence process has been a burden for the Catalan economy, Canadell asserted that "Catalonia and Barcelona are in the spotlight and making the news. It has had a positive effect and probably a negative one as well, but despite that we're doing very well".

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