spainwatch

Spain through the looking glass

The great sell off

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Like many intellectually vain people, I tend to think I’m better at speaking foreign languages than I actually am. This means I spend a lot of time in Spain pretending I understand what is going on when, in fact, I haven’t got a clue. Every now and then, though, I get tired of faking it.

The other day, for instance, I went to a newsstand near my house to buy the El País newspaper. Because costs for most things have gone up since the start of the year, I had to check the price. The newsagent told me and said something else which I didn’t get but which – by the look on his face – was obviously supposed to be funny. So what did I do? I made a stupid grunting, giggling, spluttering noise and turned away.

Halfway through the door, however, I realised I wanted to know what the man had actually been going on about. At which point he said: ‘Sale muy barato, no? Todo El Pais, solo 1.30 euros’ (something like ‘That’s pretty cheap for the whole country, right? Only €1.30’).

‘Oh,’ I said, the penny finally dropping. ‘It’s a joke, a play on words!’ My newspaper, you see is called El País, which means ‘the country’. He was making a (rather bad) joke about how cheap Spain was.

I laughed again, mostly to make up for not having laughed harder the first time. But it was only when I got halfway down the street that I got to thinking: how much might it actually cost to buy a whole country? Was there actually a way to work it out?

A first quick internet search led me to a fairly standard economic equation on wikianswers. According to one author, when you are buying a business, a common formula is to take annual gross sales and add 10%. So if you were to sell a hardware store that grossed 500,000 dollars annually you would aim to sell it for $550,000. Applying the same model for Spain, if Spain’s annual GDP is $1.49 trillion, we could realistically hope to flog off the entire country for $1.582 trillion dollars. Not exactly a snip, but the sort of deal the US could seriously ponder given its GDP nudges 15 billion dollars annually. And if you were to factor in the debt Spain is carrying at the moment, you certainly might manage to chip a bit off the asking price.

But what if countries were more like houses? Could we measure their value by calculating their total land value? Let’s say, for instance, that I want to buy all the land in Spain. I’ll first assume – conservatively – that 90 per cent of Spain’s roughly 500,000 square kilometres is either undeveloped or agricultural land. The average price for this ‘unused’ land price is €177.6 per square metre and so for this 450,000 kilometres squared, we get a value of 76,950,000,000,000 Euros. To this we need to add the value of the other, built-up, 10 per cent, for which we’d have to fork out the staggering sum of 80,300,000,000,000. The grand total for Spain is now 157,250,000,000,000 Euros and things are starting to look decidedly pricier than the €1.30 I paid for my newspaper the other day.

Then we could also probably get a bulk discount. In 1803, Thomas Jefferson effectively doubled the size of the United States by buying up Louisiana for the bargain basement price of $15 million, or less than 3 cents per acre. Some half a century later, Alaska was snapped up for the even cheaper sum of $11,250,000. So perhaps we could knock a quarter or even a third off the price in the paragraph above, especially given that some of the land in Spain is, for various reasons, going to be unusable.

Beyond economics, there are other ways to value countries. One method would be to count the cost in lives lost through wars related to nationhood. Estimates show, for example, that some 20 million Soviet citizens died to protect the USSR against the Germans while tiny East Timor saw around 100,000 people lose their lives in a long struggle to gain independence from Indonesia. Meanwhile, in the Spanish Civil War as many as half a million people died to defend the version of the country they believed in. Thus Spain was ‘bought’ at the cost of 500,000 deaths.

Then there are the instances of soft power as way of ‘buying’ countries. Some commentators argue China is currently buying up slabs of Africa with its policy of exchanging infrastructure for trade opportunities. For instance, China currently buys 60 per cent of Sudan’s oil exports and a whopping 71 per cent of Sudanese exports while promising to invest heavily into water infrastructure and air and sea ports for the country. At the pointier end of the spectrum, private investors are engaged in turbo-charged land grabs in both Asia and Africa as first-world countries rush to ensure future food security. The UK charity Oxfam says 30 per cent of land in Liberia has been sold off in the last 5 years; as a result, people have been forcefully evicted and left without access to food sources. In such cases, countries are effectively being sold out the back door.

And with the Spanish government drawing up privatisation plans for everything from the country’s rail network to the nation’s water supplies, there may well be a few opportunities for private companies to grab their own bit of Spain for a lot less than you might think. Stay tuned.

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Written by georgemills25

January 26, 2013 at 13:34

One Response

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  1. Loved the opening lines of this post. Describes very accurately a constant feature of my life.

    richard

    January 28, 2013 at 11:50


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