State policy and industrial development in Extremadura

Abstract

Extremadura is primarily an agricultural region. The secondary sector occupies only 19% of the labour force, and generates only 23% of the regional product indicative of an economic structure characteristic of underdeveloped regions.

The causes of this limited industrial development are complex. It could conceivably be a result of historic abandon, based on disinterest on the part of the regional oligarchy, who have preferred to invest capital gained in agricultural or commercial enterprises in other regions or abroad. However, although this is, in fact, true, it is also true that, in recent decades, some of the most advanced state planning carried out in Spain have been applied in Extremadura.

The first project was the Irrigation Plan (Plan de Riegos) of Las Vegas del Guadiana, also known as the «Plan Badajoz», initiated in 1953. It was followed by a programme aimed at stimulating the establisment of industry, initially in the area affected by agricultural transformations, and later extended to cover the entire region. Various measures were involved: (1) firstly between 1964 and 1968 and in 1974-1975 «Priority Zones for Industrial Location» («Zonas de Preferente Localización Industrial») were promoted; (2) later, in 1977, a para-state holding called «SODIEX» was created; and (3) finally, between 1978 and 1981, Extremadura was declared a «Major Area of Industrial Expansion» («Gran Area de Expansión Industrial»).

Nevertheless, industry in Extremadura is still limited in extent and badly structured, in spite of the establishment of several hundred new companies. This study aims: (a) to determine the industrial structure resulting from government promotional legislation during this period, (b) to discover the defects of, and omissions in, government intervention, and (c) to indicate the problems which account for such unsatisfactory results.