The geostrategic upheavals of the last five years have already completely reconfigured both foreign investments in Spain and those made by the country’s entrepreneurs abroad. The disconnection with Russia is total and is accompanied by a distancing from China that the United States and Germany are taking advantage of, while there is less harmony with the United Kingdom after Brexit. Experts pessimistically warn that the economy is already following in the footsteps of progressive polarization between world powers.
“There is an increasing fragmentation of the global economy, even if we cannot speak of deglobalization”, Federico Steinberg, principal researcher at the Royal Elcano Institute, explains from Washington. After the change in the “dominant ideas”, the effects “eventually appear in the economy”, even if they take time to become reality. This is what the data has just shown in 2023, with “the United States and Europe reducing risks to China”.
A few days ago the Spanish Government reported that foreign investments fell by 18% in Spain last year, and Spanish investments abroad fell by 43%. However, these percentages are full of nuances if you analyze the detailed data just published by the Secretary of State for Trade, in which it can be seen that the trend changes radically depending on the relationship with each country.
Last year, what could be called a new global investment order emerged. The United States dedicated 8,146 million euros to Spain, 119% more than in 2019, and Germany almost 3,000 million, 190% more, while China cut its investment by 27%, up to 131 million. 3,693 million came from the United Kingdom, 32% less. “It is not very clear who is a friend of the United States, but who is the enemy,” says Steinberg.
Javier Díaz-Giménez, a professor at IESE, warns that factors such as interest rate rises also have an influence, but he agrees on the importance of the moment. “Before with money you could buy anything anywhere in the world” and now “you have to be a friend to enter strategic sectors of a country”. The world, he points out, is debating between a “cooperative” and another “conflictual” environment, and “there are many operations on hold due to uncertainty”.
“The international situation has become enormously tense in the last two years”, notes José María Peredo, professor of International Politics at the European University of Valencia. The investment relationship with the United States is being strengthened, but from his point of view, “China will not give up the European market for Russia” because in its case “politics and economic decisions are not always linked”.
Spanish investments abroad have had a similar pattern, with a strong increase in flows to the United States, up to 5.85 billion last year thanks to Biden’s infrastructure plan. Last year, Spanish investment in China was 91 million.
