Renowned economist José Carlos Díez is giving a lecture in Alicante on the impact of the war in Ukraine on the 2030 Agenda. With regard to the financial reforms being promoted, it ensures: this is not the time.
José Carlos Díez is professor of Macroeconomics and International Finance at the University of Alcalá de Henares, a delegate for Global Economic Analysis and a member of the United Nations Development Program Advisory Council, adding to his collaborations with some of the main media outlets. the importance of national and international communication. Organized by Fundación Mediterráneo and presented by BİLGİ Club director Toni Cabot, the conference will take place at the foundation’s own headquarters this Tuesday at 19:30 and admission is free until full capacity is reached.
Could the war in Ukraine affect the achievement of the sustainable development goals envisioned in the 2030 Agenda?
The energy transition is necessary, but this will have social costs. So, with gas costs skyrocketing and Germany postponing the shutdown of its nuclear power plants, a political agreement will need to be reached to adapt targets to the new reality.
In what position can Spain face these challenges?
In the short term, inflation blurs everything, but we are in a very good position for the development of renewable energies. We have more hours of sunshine than any other European country and investment in photovoltaic installations doubled last year and will double again this year. Due to its strategic location, it represents a historical opportunity for a province like Alicante where sunbathing is very high, so that having a roof for every sector means having a treasure. I insist that we are faced with an opportunity that needs to be seized, and that will also require streamlining bureaucratic procedures, because there cannot be projects that have been pending permission for five years.
Speaking of sustainable development goals, Alicante has a serious problem with water scarcity for irrigation, aggravated by cuts to the Tajo-Segura transfer. What could be the solution to this issue?
Since the approval of the last hydrological plans, we are talking about 1994 and 2000, rainfall decreased by 20%, at the same time the population doubled. Moreover, all this is in a context where tourism is growing exponentially. Therefore, in a situation that does not seem likely to improve in the future, on the contrary, we see less rain and more consumption. So knowing what’s going on, it’s surprising that desalination plants don’t yet have solar panels to keep prices down and a digitalization plan for all water management for irrigation hasn’t been in place yet. human consumption. Scarcity problems are solved by innovation and technology, and this is not new because it has been done for four million years. But the reality is that Spain lags further behind in R&D and the Valencian Community, as it is the twelfth autonomous community that has invested the least in it.
The tourism you just mentioned has a very important weight in Alicante’s economy. What future do you see?
Tourism has done well this summer, as it has achieved occupation and income levels very similar to before covid. The problem is, margins have shrunk due to the increase in electricity. In this sense, the future of the industry is uncertain and the Imserso program does not help to clarify the picture, as only 24 euros per person per day will be paid, all inclusive. Thus, we see that the State prefers the low-cost model and precarious wages to which it wants to escape, with such low prices.
Does it make sense now to impose a tourism tax as the Generalitat intended?
I don’t think any government is considering imposing more tax burdens during the election campaign. In any case, such fees exist in many cities around the world and they will come eventually, but considering how bad the industry is, I don’t think this is the right context.
However, PSOE and PP and different autonomous communities have been leading a real battle in terms of taxation in recent weeks. Logical?
In a time of crisis like the current crisis, there is no point in raising or lowering taxes. If you reduce them, inflation will increase, which will have a very negative impact on the 30% of the population with the lowest incomes, who are getting poorer. On the other hand, if you upgrade them, there is a real risk of business destruction. So the best thing to do to increase tax collection and reduce public debt is to remain calm, because what comes with it is to send a message to investors that it’s a responsible government. The opposite would be to challenge the risk premium.
There is a lot of fear about what could happen economically this winter. Will it be that bad?
It will be complicated by the gas problem. We will not have ration cards in Spain, but at the European level there is already an estimate of 10% reduction in consumption this year and 4% next year, which could translate into lower industrial output and a reduction in output. employment, which also affects our companies.
How long is the crisis?
We will not get out of this until the war in Ukraine is over and gas supplies return to normal. I insist that it’s about being in the best conditions for the moment peace is signed and that our country can reap great benefits from investments in renewable energies.