The aftermath of the 2008 financial crisis left Spain ill-prepared to face the covid. The provision of health infrastructure remains below 2011 despite the investment due to the pandemic. With data from 2018 it was still 10% lower valued in euros. And given the increase in the total investment of the administrations that there was in 2020, of 6.7%, although a good part of this went to health, it is impossible that it could have been recovered.
“The gap is of such magnitude that it is impossible to close it no matter how much was spent in 2020 to deal with the virus. We are still very far away. We are talking about investment goods, not medicines ”, explains Matilde Mas, professor at the University of Valencia and one of the authors of a study on the evolution of investment in Spain prepared by the Valencian Institute of Economic Research (Ivie) and the BBVA Foundation.
For a decade, investment in healthcare has suffered annual drops of 10%, 20% and up to 30%. It is therefore a question of magnitudes against which an improvement of 6.7% in one year is totally insufficient to recover what was lost.
The adjustment that was applied to public accounts from 2010 focused mainly on government investment, which remains practically frozen and in 2020 was still 43% of that made in 2009. Such low accumulated levels for a decade they have had a strong impact especially on health services, reducing their endowment and equipment. And this has exacerbated the hospital congestion problems suffered during the pandemic, the report notes.
These data are calculated in euros after subtracting inflation and asset depreciation. And there are no comparable statistics in the EU in euros on the stock of investments in healthcare. But if you take figures such as the number of beds available per patient affected by coronavirus, Spain is in a worse situation than its European peers.
And this same phenomenon has also occurred in education. According to the study’s calculations, in 2018, the last year for which there is disaggregated data, annual investment in education was still close to 20% below that of 2011 and the stock of equipment was 15% lower. In transport infrastructures, annual expenditure volumes are almost 60% lower and the stock is the same as in 2011. The accumulated equity in investments reached its maximum in about 30,000 million in health in 2011, in about 25,000 million in education in 2010 and about 330,000 million in transport infrastructure in 2013.
In all chapters, public investment has not even been sufficient to compensate for the deterioration suffered by assets, except in the road and rail networks. Although a part has occurred in infrastructures that were excesses of the bubble such as some airports, polygons or sports centers, the impairment has been generalized and affects public services in a very important way.
“Spain has an opportunity in the European funds to increase the levels of public investment that serve to cover the maintenance of the current infrastructures and social facilities and allow the net investment, once the depreciation of the assets has been subtracted, to be positive again for expand and improve endowments “, underlines the document.
Last year, the pandemic caused a fall in total investment in Spain of 11.4%, a collapse greater than that of GDP, which fell by 10.8% and that of employment, which fell by 4.2% thanks to the ERTE brake. Despite the fact that the public part soared 6.7% to counteract the covid, private sector investment plummeted 14% as it was greatly affected by the restrictions.
In 2020, investment in transport equipment sank 25% compared to the previous year; in housing 18%; in non-residential construction, which includes public infrastructures, 11%, and in machinery and equipment, 8%. In contrast, investment in intangible assets (software and R + D + i, among others) was less burdened with a decrease of 1.9%. And the acquisition of ICT (hardware and communications) only decreased 3%. In part, these items benefited from the fact that the companies that were able to put their staff to telework.
“It is a type of investment that is much more resilient, less volatile and that improves the productivity of the company,” says Matilde Mas. Spain is only ahead of Greece in Europe in investments in intangibles. The good news is that the Spanish economy is cutting and growing in this chapter more than the rest. But the bad news is that it is not only necessary that: to better absorb technology you also have to invest in training staff and reorganizing the company. And in this, according to Matilde Mas, Spain is far behind: “European funds are a great opportunity to correct these deficiencies that cannot be wasted,” he says.