By Beatrice E. Rangel
From May to October it rains in Spain. This year however the refreshing showers could turn into vicious hurricanes should Mr Pedro Sanchez, Prime Minister of Spain, get his way and pass a law pulling back the political agreements that gave rise to democratic life in Spain.
Two goals are being sought by this Vogue magazine poster boy. First, he wants to establish a Truth Commission to assign responsibilities for human rights violations that took place during the Spanish Civil War (1936-1939) or about a century ago. The legal revamp also aims at evicting Francisco Franco's remains from a National Monument (El Valle de los Caidos).
These two priorities seem a bit exotic when one thinks that the greatest challenge facing Spain is economic restructuring. Indeed, while Spain has brought its unemployment rate down from 20% to 18% and is out performing in growth rate the rest of the eurozone, this trend is not sustainable lest significant reforms are adopted rather quickly. These have to do with promoting competition, reforming education; restructuring the pension system and unifying the labor market.
This would create a robust platform to consolidate the gains from the crisis. Because while Germany today has seen the cost of its labor unit rise, Spain has lowered those costs. Also a whole new generation of export-oriented firms have mushroomed.
Exporting firms went from 97,000in 2007 to 151,000 in 2012. These value-creating units are best connected to international markets and truly tuned in with changes in those markets. They are both technology savvy as well as competition oriented and financially sophisticated. Should these firms receive more encouragement both from government as well as from investors Spain could turn into this century's growth miracle. This reality makes Mr Sanchez' priorities look truly misplaced both in time as well as in circumstance.
Accordingly, one must look beyond the surface to see Mr Sanchez; vision for Spain. Engaging in this exercise is rather difficult as Mr Sanchez has been an unknown cadre for Spain's Socialist Party for the better part of the last decade. There however are the never missing confidants from his times as students of economics and when he worked for the United Nations in Kosovo.
All these sources seem to agree on two things: Mr Sanchez is a very clever man and he is very ambitious. His great concern seems to have been how to modernize Spain and do away with what he regards a corrupt elite.
But his ideas on modernization differ from most value creating minds. He believes the state can and should do almost everything with the business community serving as supporting cast. He further thinks that at this stage of the information revolution it is possible to relaunch the welfare state. He also believes in the cleansing properties of ideological shake up and intends to practice this rule to consolidate power.
A Truth Commission will have the virtue of making the right and the center defensive. Too many offspring of Franco's ruling elite chair banks and Spanish multinationals and preside over state authorities. The sheer thought of being identified with the dictatorial past will give them shivers.
Evicting Franco's remains will ignite a debate on collaborationism that will paralyze the body politic. This will eliminate unpredictability, as it will force all political actors to discuss a single topic which would be the atrocities that gave rise to the current political order.
And Mr Sanchez and his followers will of course have an alternative political order to present while the rest of political actors are running for shelter.
In the meantime, Mr Sanchez will have a hefty list of corruption scandals to throw at political leaders from left and right. The nature of the debate would be so corrosive and fear-inspiring that most Spaniards would begin to believe that they have been kidnapped into a political trap aimed at perpetuating a corrupt elite in power. And like the people of Hamelin they would follow a savior who happens to be Mr Sanchez.
They could end in a greater predicament given that the Sanchez recipe weakens the institutional framework while jeopardizing economic growth. Then it will not rain but pour misfortune.Beatrice Rangel is President & CEO of the AMLA Consulting Group, which provides growth and partnership opportunities in US and Hispanic markets. AMLA identifies the best potential partner for businesses which are eager to exploit the growing buying power of the US Hispanic market and for US Corporations seeking to find investment partners in Latin America. Previously, she was Chief of Staff for Venezuela President Carlos Andres Perez as well as Chief Strategist for the Cisneros Group of Companies.
For her work throughout Latin America, Rangel has been honored with the Order of Merit of May from Argentina, the Condor of the Andes Order from Bolivia, the Bernardo O'Higgins Order by Chile, the Order of Boyaca from Colombia, and the National Order of Jose Matías Delgado from El Salvador.
You can follow her on twitter @BEPA2009 or contact her directly at BRangel@amlaconsulting.com.