Spain. OECD Rural Policy Reviews: José Antonio Ardavín, OECD. Presentation for Discussion at the Working Party on Territorial Policy in Rural Areas

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1 OECD Rural Policy Reviews: Spain Presentation for Discussion at the Working Party on Territorial Policy in Rural Areas José Antonio Ardavín, OECD Paris, France December 2, 2008

2 Outline (1) Profile of Rural Spain (2) Rural Policy (3) Governance challenges (4) Policy challenges

3 (0) (1) Profile of Rural Spain Despite having a vast rural territory (92%), Spain counts with relatively few predominantly rural regions (Figure 1.1) (Figure 1.3)

4 (1) Profile of Rural Spain Therefore, Spain ranks low in comparison with other OECD countries in terms the territory (45%), population (13%), and GDP (10%) of PR regions. Figure 0.1. Te rritory, Population and GDP in Predominantly Rural Regions in OECD countries Territory Population GDP PR IN PU Considering also Intermediate areas Iceland Ireland Canada Sweden Finland Australia Norway Mexico Austria OECD Scotland Portugal Greece Denmark France Hungary Turkey Poland Korea United States Spain Switzerland Slovak Rep. Japan Germany Italy Belgium UK Czech Rep. Netherlands New Zealand Luxembourg 45% 49% 6% 0% 50% 100% Ireland Finland Sweden Norway Austria Hungary Greece Poland Denmark Iceland Mexico Turkey France Canada Portugal Slovak Rep. United States Australia OECD Scotland Korea Japan Spain Germany Italy Switzerland Czech Rep. UK Belgium New Zealand Netherlands Luxembourg 13% 52% 35% 0% 50% 100% Ireland Finland Sweden Norway Greece Austria Denmark Hungary Poland Turkey Mexico France Slovak Rep. Portugal Korea OECD (22) Scotland Japan Spain Germany Italy Czech Rep. UK Belgium Netherlands Luxemburg 10% 47% 42% 0% 50% 100% Poland Turkey Hungar France Denma Greece Portuga Scotlan OECD Austria Mexico Norway Australi Finland Sweden Canada Ireland Iceland

5 Average annual GDP growth (1) Profile of Rural Spain (1) Spain s recent long period of vigorous growth did not entirely include rural areas Figure 0.2. Decomposition of the difference between national and PR regions growth 4.50% Spain +positiv e f actors -negativ e f actors PR Av erage 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% National growth activ ity employ ment productiv ity participation population Regional growth

6 (1) Profile of Rural Spain The depopulation of rural areas in Spain has been more significant than in other OECD countries Figure 0.3. Map of municipalities with strong depopulation

7 Frecuency Frecuency (1) Profile of Rural Spain Frecuency with significant social consequences, such as ageing and masculinisation Figure Distribution of population older than 65 by type of region Predominantly Urban Intermediate Predominantly Rural Old age dependency rate Old age dependency rate Old age dependency rate

8 (1) Profile of Rural Spain (2) and public policy challenges in terms of accessibility and adaptation of public services Figure 1.15 Accessibility in European countries by road to cities with at least inhabitants

capita terms), but notably in terms of services for elderly population

4 Accessibility to education, health services and residences for elderly

9 (1) Profile of Rural Spain not so much in terms of secondary schools or health centres (although there are some localized regional needs in per capita terms), but notably in terms of services for elderly population Figure 0.4 Accessibility to education, health services and residences for elderly population Number of institutes per 1000 young (12-18) Local health centres per 10,000 inhabitants Residences for elderly population per 1000 pop >65

10 Total Factor Productivity in Agriculture (US 1996=1) (3) (1) Profile of Rural Spain The rural economy has experienced an structural transformation marked by the decline in agricultural labour force, significant production and productivity growth and of a solid agro-food industry Figure Evolution of agricultural labour force and productivity in Spain A. Ag ricultural Employm ent B. Pr oductivity in Agriculture 1.2 Spain EU Average United States

11 loyment Ra te 2005 Average Annual Employment Growth Unemployment Rate 2005 USD PPP Population Growth Population Growth and diversification, with positive outcomes for the most diversified regions Figure 0.5. Relationship between diversification of rural region s economy and various indicators GDP per capita (1) Profile of Rural Spain Population growth GDP per capita Population growth OEC D PR R egions Spain Remote PR R egions Spain Ac c es ible PR regions Higher GDP per capita OECD PR Regions Spain Remote PR Regions Spain Accesible PR regions oec d PR r egions 2 oecd PR regions Higher Spain remote PR regions Spain remote PR regions 1.5 Spain ac c es ible PR regions Spain accesible PR regions population growth 8 Higher employment 6 Employment growth growth OEC D PR r egions 2 Spain remote PR regions 0 Spain ac c es ible PR regions Share of Employment in Manufacturing and Services Share of Employment in Manufacturing and Services 4 OECD PR regions Spain remote PR regions Employment growth -2 Spain accesible PR regions More diversified OECD PR regions 30 Share of Employment in Manufacturing and S ervices OEC D PR r egions Spain remote 15 PR regions Spain ac c es ible PR regions 10 Spain Lower remote PR regions Unemployment Spain accesible PR regions unemployment Unemployment Share of Employment in Manufacturing and Services Share of Employment in Manufacturing and Services

Average yearly growth 2001-2007 most evidently into rural tourism 25% 20% 15% 10% 5% 0% Figure 0.

accomodations (resident guests) Rural accomodations (foreign guests) Close to 12,000 rural

12 Average yearly growth most evidently into rural tourism 25% 20% 15% 10% 5% 0% Figure 0.6. Growth of rural tourism with respect to tourism sector in Spain All hotels (resident guests) A. Average yearly growth B. Share of total tourism in Spain Overnight stays Guests All hotels (foreign guests) Rural accomodations (resident guests) Rural accomodations (foreign guests) Close to 12,000 rural accommodations 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% (1) Profile of Rural Spain Share of National Overnight stays Share of national guests Share of total overnight stays Share of total guests Share of foreign overnight stays Share of foreign guests Network of close to 100 Paradores Source: Casaturismorural.com map by Google Source: Parapromotions-spain.com

but also in rural manufacturing industrial districts, which employ almost 340 000 people Figure 0.7.

13 but also in rural manufacturing industrial districts, which employ almost people Figure 0.7. Localization of industrial districts in rural areas (1) Profile of Rural Spain A. IDs in PR regions B. IDs in rural settings in all types of areas

heritage, with more than 100 000 km2 of protected

14 (1) Profile of Rural Spain (4) Last but not least, Spain rural areas host a vast and unique natural heritage, with more than km2 of protected areas, the largest in Europe Figure Natura 2000 Network in Spain

15 (1) Profile of Rural Spain and rural areas in Spain are already involved significantly in the production of renewable energy Figure Renewable energy new capacity growth and associated employment generation Employment (Est. workload in man-year) (Est. net job creation) Capacity (New C apacity Installed ) (Est. New C apacity) Wind power (MW) Hydroelectric (MW) Solar thermal (000 m2) Solar thermoelectric (MW) Solar photovoltaic (MW) Biomass electricity (MW) Co-combustion (MW) Biomas thermal uses (ktoe) Biogas (MW) Biofuels (ktoe) Thousands Thousands

16 Scope of Rural Policy (2) Rural Policy (1) Rural policy in Spain has evolved Part of Figure Evolution and process of broadening scope of Rural Policy in Spain More than agriculture Institutional developments in some CCAA PRODER Rural development conceived as: Agricultural support New agrarian legislations Decentralization to Regional Administrations CAP Cohesion Funds LEADER Pillar II Transition and Rural Development policies Current programming Post war period Incorporation to the EC after accession to EC and LDSMR Time

17 (2) Rural Policy In the last two decades rural policy in Spain has relied fundamentally on EU programmes, implemented in a decentralized fashion Figure 0.8. Distribution of Total Public Expenses by Axes Objectives in EU countries and Spanish ACs Malta Bulgaria Rumania Germany Poland Estonia Latvia Netherlands Czech Rep. Lithuania Greece Hungary European Slovak Rep. Italy Denmark Sweden Slovenia Belgium Spain Portugal Austria United France Cyprus Finland Ireland Luxemburg Axis 1 Axis 2 Axis 3 Axis Cantabria Madrid Galicia Canary Islands Aragon Catalonia Asturias Spain Basque Country Valencia Extremadura Andalucía Castilla y Leon Castilla la Mancha La Rioja Balearic Islands Navarra Murcia Axis 1 Axis 2 Axis 3 Axis

18 (2) Rural Policy Despite regional differences, in general, Total Public Expenditure (EU+National+Regional) by objective shows a significant agrarian bias Table 2.1. Rural Development Total Public Expenses in Spain and EU * Agrarian sector competitiveness improvements Axis 1 objective Environmental and rural landscape improvements Axis 2 objective Quality of life and rural economic diversification Axis 3 objective Leader Initiative Axis 4 European 34.7% 46.3% 16.1% 1.2% Union Spain 52.3% 34.6% 11.0% 2.0% Measure 411 Measure 412 Measure 413 * Expenses oriented towards technical assistance (511, 611) not included Source : European Commission (2008)

19 Millon E uros (bars ) S pain P ortugal Denmark E s tonia Italy Ireland S weden L ithuania Netherlands G reece E uropean Union Hungary Aus tria United K ingdom C z ech R ep. G ermany B elgium P oland F rance Malta F inland L uxemburg S lovenia S lovak R ep. B ulgaria R umania C yprus L atvia (2) Rural Policy Spain has embraced the EU LEADER from the beginning, extended it to its own version (PRODER) and is currently the country with highest absolute and relative expenditure under this methodology % of Total R DP (line) Millon E uros (bars ) Andalucía V alenc ia Aragon C antabria C atalonia S pain Madrid C as tilla y L eon G alicia E xtremadura C as tilla la Mancha As turias B as que C ountry L a R ioja Murcia B alearic Is lands C anary Is lands Navarra % of Total R DP (line) Figure 0.9. Total public budgetary allowance made to Axis 4 (LEADER) in Europe and in Spanish ACs

20 Scope of Rural Policy (2) Rural Policy (2) An important shift is ocurring in the Spanish approach to rural policy More than agriculture Institutional developments in some CAs A multi-sectoral policy: more than EU CAs start multisectoral approaches PRODER Law on Sustainable Development of Rural Areas Merger of Ministry of Environment and Ministry of Agriculture Implementation to follow: Sustainable Rural Dev. Programme Inter-Ministerial Commission Council on Rural Development Rural development conceived as: Agricultural support New agrarian legislations Decentralization to Regional Administrations CAP Cohesion Funds LEADER Pillar II Transition and Rural Development policies Current programming Post war period Incorporation to the EC after accession to EC and LDSMR Time

21 (2) Rural Policy originated at the regional level, as many ACs launched initiatives Spain s ACs such as: (before 2007) Some other OECD examples Conforming Inter-ministerial commissions Launching Broad rural policy programmes Adopting new* or reforming** legislation on rural policy Merging Ministries* or new Ministries** for rural development Castilla y Leon Castilla la Mancha Extremadura Basque Country Galicia Andalusia Castilla la Mancha Castilla y Leon Basque Country* (1998) Extremadura**, Navarre* Galicia* Castilla la Mancha** Finland (1981), Mexico (2001), Spain (2008) Finland (1991), Ireland (1999), Mexico (2001), Netherlands (2004), UK (2004), Spain (2008), France* (2005), Mexico* (2001), Germany** (2003), UK*(2006), Spain* (2007), UK* (2001), Ireland** (2002), Spain* (2008)

22 (2) Rural Policy and recently institutionalized at the national level Box 2.5 Law on Sustainable Development of Rural Areas at a glance (Aprived. Dec 2007/ Valid since Jan 2008) Defines Rural Development Objectives and Actions Provides an official definition of rural areas and classification of territories Rural to Revitalize / Rural Intermediate / Rural Periurban Defines RD programming instruments Multi-annual Sustainable Rural Development Programme (PDRS) and Plans by Zones Creates Institutions for governance of Rural Policy Inter-ministerial Commission (CIDRS) / Council (CDRS) / Roundtable of Associations (MADR) Includes a menu of possible interventions economic diversification / nature conservation and management of natural resources / creation and maintenance of employment / infrastructure, equipment and basic services / renewable energy / water / ICTs / citizen safety / education / culture / health / public employment / social protection / and urbanism and housing Provisions for budgeting and co-financing Own budget and co-financing provisions

23 (3) Governance Challenges The new framework will face significant governance challenges in terms of horizontal coordination among national authorities Figure 2.7. Structure and Members of the Inter-Ministerial Commission for the Rural Environment Recommendations Inter-Ministerial Commission for the Rural Environment (CIMR) PRESIDENT Minister of Environment, Rural and Maritime Affairs (MARM) Vocals (17) Undersecretaries of the following Ministries: 1. Foreign Affairs and Cooperation 2. Economy and Finance 3. Justice 4. Interior 5. Industrial Policy ( Fomento) 6. Education, Social Policy and Sport 7. Labour and Immigration SECRETARY DG of Sustainable Development of the Rural Environment (MARM) 8. Industry, Tourism and Commerce 9. Environment, Rural and Maritime Affairs 10. Public Administrations 11. Culture 12. Health and Consumption 13. Housing 14. Science and Innovation 15. Equality Balanced representation and strong leadership Rural proofing tools Ownership of different participants of the Sustainable Development Programme Coherence and integration with EU programmes and instruments Secretary of State of Rural Environment and Water (MARM) Secretary General of Rural Environment (MARM)

24 (3) Governance Challenges vertical coordination between the national and regional levels (Autonomous Communities, ACs) Which have constitutional authority on agricultural / rural development / territorial policies and each of which has different institutional approaches for dealing with rural development Recommendations: Transparent and consistent negotiation of co-funding Homologation of instruments of diagnosis, planning, monitoring and evaluation (Figure 2.9) Environment Rural Development + Environment Navarra Asturias Castilla la Mancha* Rural Development Galicia Extremadura (before 2007)* Rural Development + Agriculture (and primary sectors) Regional Development Environment + Territorial Ordering and Housing Madrid Agriculture + Rural Development Cantabria Catalonia Extremadura (post 2007) Rioja Basque Country Agriculture + Fisheries/ Livestock +Alimentation + Water Andalucía Aragón Castilla y León C. Valenciana I. Balears Castilla la Mancha* Extremadura (after 2007)* Murcia

25 (3) Policy Challenges The PDRS will for the first time, design multisectoral policies to cope with the challenges of rural areas. In this context, four priorities are: (1) Dealing with depopulation, ageing and social challenges in rural areas... Through innovative approaches of public service delivery By increasing opportunities for women, youth and migrants in rural areas (2) Diversifying and increasing the competitiveness of the rural economy Through entrepreneurship support adjusted to the requirements of rural areas Specific support to sectors of high potential such as rural tourism, manufacturing and knowledge intensive service activities Involving financial institutions in rural development (3) Fostering rural-urban linkages and balanced development of periurban areas Placing special attention to land use changes Covering the growing demand for services in periurban areas With specific governance frameworks between regions and municipalities Taking advantage of rural policy instruments (4) Addressing environmental concerns and promoting sustainable development Biodiversity management and conservation Natural resource management An integral policy for renewable energy in rural areas Reducing the risk related to climate change

26 OECD Rural Policy Reviews: Spain For information: José Antonio Ardavín, OECD

1.1. SOCIAL AND ECONOMIC FRAMEWORK Population Economic development and productive sectors

1. Background 1.1. SOCIAL AND ECONOMIC FRAMEWORK 1.1.1. Population 1.1.2. Economic development and productive sectors 1.2. TRANSPARENCY AND ACCESS TO ENVIRONMENTAL INFORMATION 1.1. Social and economic