page_title: Economic history of Spain
section_title: The "Spanish Miracle"
hierarchical_section_title: Economic history of Spain / The Franco Era, 1939–75 / The "Spanish Miracle"
caption_attribution_description: English: USSR GDP per capita
context_section_description: Spanish membership in these groups was not politically possible, but Spain was invited to join a number of other international institutions. In January 1958, Spain became an associate member of the Organisation for European Economic Co-operation (OEEC), which became the Organisation for Economic Co-operation and Development (OECD) in September 1961. In 1959 Spain joined the International Monetary Fund (IMF) and the World Bank. These bodies immediately became involved in helping Spain to abandon the autarkical trade practices that had brought its reserves to such low levels and that were isolating its economy from the rest of Europe.
  In December 1958, after seven months of preparation and drafting, aided by IMF, Spain unveiled its Stabilization Plan on June 30, 1959. The plan's objectives were twofold: to take the necessary fiscal and monetary measures required to restrict demand and to contain inflation, while, at the same time, liberalizing foreign trade and encouraging foreign investment. The plan's initial effect was deflationary and recessionary, leading to a drop in real income and to a rise in unemployment during its first year. The resultant economic slump and reduced wages led approximately 500,000 Spanish workers to emigrate in search of better job opportunities in other West European countries. Nonetheless, its main goals were achieved. The plan enabled Spain to avert a possible suspension of payments abroad to foreign banks holding Spanish currency, and by the close of 1959, Spain's foreign exchange account showed a US$100-million surplus. Foreign capital investment grew sevenfold between 1958 and 1960, and the annual influx of tourists began to rise rapidly, bringing in very much needed foreign exchange along remittances from Spanish workers abroad.
  
  As these developments steadily converted Spain's economic structure into one more closely resembling a free-market economy, the country entered the greatest cycle of industrialization and prosperity it had ever known. Foreign aid took the form of US$75 million in drawing rights from the IMF, US$100 million in OEEC credits, US$70 million in commercial credits from the Chase Manhattan Bank and the First National City Bank, US$30 million from the Export-Import Bank of the United States, and funds from United States aid programs. Total foreign backing amounted to US$420 million. The principal lubricants of the economic expansion, however, were the hard currency remittances of one million Spanish workers abroad, which are estimated to have offset 17.9% of the total trade deficit from 1962 to 1971; the gigantic increase in tourism that drew more than 20 million visitors per year by the end of the 1960s, accounting by then for 9% of GNP; a car industry that grew at a staggering compound rate of 21.7% per year from 1958 to 1972; and direct foreign investment, which between 1960 and 1974 amounted to an impressive US$7.6 billion. More than 40% of this investment came from the United States, almost 17% came from Switzerland, and the Federal Republic of Germany and France each accounted for slightly more than 10%. By 1975 foreign capital represented 12.4% of the total invested in Spain's 500 largest industrial firms. More important than the actual size of the foreign investment was the access it gave Spanish companies to up to date technology. An additional billion dollars came from foreign sources through a variety of loans and credit devices.
  To help achieve rapid development, there was massive government investment through key state-owned companies like the national industrial conglomerate Instituto Nacional de Industria, the mass-market car company SEAT in Barcelona, the shipbuilder Empresa Nacional Bazán. With foreign access to the Spanish domestic market restricted by heavy tariffs and quotas, these national companies led the industrialisation of the country, restoring the prosperity of old industrial areas like Barcelona and Bilbao and creating new industrial areas, most notably around Madrid. Although there was considerable economic liberalisation in the period these
caption: GDP per capita of Spain from 1913 to 1990.[6]
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