MACROECONOMIC REPORT SPAIN

YURIKA MURASAWA

YURIKA MURASAWA

Country BackgroundSpain borders the Mediterranean Sea and is located in southwestern Europe. The country’s failure to continuously embrace mercantile and industrial revolutions resulted the country to fall behind in it's economic power. Although Spain was not particularly altered during the World Wars I and II, it has been afflicted by a civil war between 1936-39. But after the change to democracy and the swift modernization in the economy, Spain’s economic growth has started to increase. Now, Spain is able to maintain a GDP per capita of $29,400 which is significant

considering it is a small country and yet it is able to be ranked 48 out of 227 countries. Since Spain is basically surrounded by various bodies of water, it is constantly able to export and import goods from other countries, thus paying less for their transportation cost as it is not a landlocked country. Overall, Spain is considered a NIC as it may display some MEDC indicators and LEDC characteristics from its literacy, infant mortality and unemployment rate.

Literacy Rate

In 2003, Spain’s literacy rate was very low with 97.9%, which indicates that more than 2% of the population who are over 15 years old cannot read and write. Since a literacy rate of 99.9% is considered as a MEDC, this country’s literacy rate shows a LEDC characterisitic as it is below the ideal percentage. Although the number may be small, the drastic

growth in the literacy rate can be observed over the course of the years (as shown in the graph). The development from 92.8% to 97.9% of the population becoming literate, between the years of 1980~2010, may have resulted because of the improvement in their education system and change in the laws. It has become mandatory for students to be enrolled in school for 11 years, as a compulsory education for students. Also, the disparity between the male and female percentage of the literacy rate is exhibited. While 98.7% of males can read and write, only 97.2% of the female population is educated. This is similar to many other countries because a trend where a higher percent of the male literacy rate than the female population is identified.

Infant Mortality RateIn comparison to the literacy rate, the infant mortality rate in Spain is rated as a MEDC characteristic. As of 2011, there are a total of 3.39

deaths out of 1,000 live births which is ranked 212 in comparison to other countries in the world. Since the lower the percentage of the infant mortality rate is better, Spain is indicated as a MEDC in this case because of the low number. The infant mortality has decreased drastically compared to the rate in 1918, since the flu pandemic has spread during that period and

caused the health care to become very poor. But with a very significant comeback and improvement in the country, Spain was able to maintain a better health care and a healthier environment for the people of Spain.

Unemployment Rate

The unemployment rate in Spain is 20.1% (2010 est.) which is ranked 166, in comparison to the world. The growth in the Spainish economy began to slow down in 2007 and has eventually reached a recession during the second quarter of 2008. This decline in the economic growth resulted with decrease in consumer spending and oversupply of housing, as the exports begun to increase. It became an incentive for the government to advance the economy through several methods (like loan guarentees), yet it did not stop the growth of the unemployment rate, which has increased from 8% in 2007 to 20% in just 3 years. But overall, this statistic displays a LEDC characteristic of Spain since in an ideal world, everyone has a job. The unemployment rate that indicates the country as a MEDC should have a percentage close to 5% or less.

Conclusion

Spain is considered as a NIC according to its MEDC and LEDC characteristics in its economy, representing itself inbetween from being lower than a MEDC yet showing properties that are higher than a LEDC. Some of those indicators that represent Spain as a NIC are; literacy rate, infant mortality rate, and unemployment rate. Overall, Spain is rated as a NIC because it represents a few MEDC indicators as well as LEDC characteristics; like a low literacry rate and a high unemployment rate.

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