World Report

Classified as a top priority region by the EU, Galicia has given a fresh boost to its economy and is seeking foreign investment

ituated on the northwest coast of the Iberian Peninsula just above Portugal, Galicia is the most fertile area in Spain. The region is ideally placed for maritime transportation between Europe and the Americas, and its appeal for investors is further enhanced by political and macroeconomic stability, moderate labour costs and a highly qualified workforce.

Designated an “Objective 1 Area” by the EU, Galicia is able to offer grants of up to 40 per cent to new investment initiatives until 2006. With EU support, significant improvements have been made to the transport and communications infrastructure, and the region has become an international reference point for the development of renewable energy, having already reached EU targets for 2010.

Last November, Galicia suffered one of the worst ecological disasters of the past decade when the Prestige oil tanker broke in two off the Atlantic coast. Since then, the autonomous regional authority has launched a drive to give a fresh impetus to the economy.

MANUEL FRAGA IRIBARNE
President of Xunta of Galicia

‘Our efforts in business are focused on R&D; and innovation’

“Policies approved since the Prestige accident have strongly promoted production and infrastructure in order to keep Galicia competitive,” declares Manuel Fraga Iribarne, President of the Xunta of Galicia. “We are focusing on increased investment, either through the public sector with the collaboration of the private sector, or through private investment.”

Galicia has set itself the target of reaching the Spanish and EU averages of GDP per capita. Other priorities include job creation, strengthening welfare state policies and promoting the information society.

Galicia maintains its spiritual tradition, with the Cathedral of Santiago de Compostela at its heart

“Our efforts in business are focused on R&D and innovation, on policies to guarantee quality and on collaboration between companies through clusters,” says Mr Fraga. “The competitiveness of Galician companies is at the same level as the rest of the EU. In some industries, such as textile, tinned food and agriculture, it rises above that level.”
Already well positioned in international markets, Galicia possesses strong competitive advantages in its fish products, motor vehicle, timber, textile and clothing industries, and has enjoyed enormous export growth over the last ten years. British companies are already present in the automotive, pharmaceutical and transport sectors and IGAPE, the economic development agency, is eager to attract more.

Once isolated behind the range of mountains that divides it from the rest of Spain, modern Galicia is committed to developing even closer relations with the rest of the world. As Mr Fraga says: “Galicia is a region that looks beyond its borders and is assuming a more and more active role in the EU forums, while strengthening its links with other regions.”