Why Tenerife? Without any explanation as to this question, an interpretation of it might be "what's the point of Tenerife?" On its own, it does sound odd, but the world (some of it) is going to get used to the question being posed. "Why Tenerife" is a slogan and it is intended to draw attention to what Tenerife has to offer for foreign investors, to its location as a hub for three continents (Europe, Africa and America) and to further develop international air and sea routes.
This initiative brings together various organisations on the island, such as the Tenerife Council and the Chamber of Commerce, who will share resources in advancing what they hope will be a new model of economic promotion for Tenerife. Key to the whole thing is a recognition that, or so says the vice-president of the Santa Cruz chamber, the only opportunity in current difficult economic times is to "look outside and to be attractive to businesses which might locate themselves (in Tenerife)".
Such an outward-looking attitude doesn't necessarily come easy to those with an insular mentality. Islands breed certain attitudes, and suspicion of outsiders, of whatever type, tends to be one. The presence of such an attitude might be denied by Mallorcans, but it prevails in Mallorca nevertheless, as no doubt it does in Tenerife, or has done.
There are similarities between Tenerife and Mallorca, other than attitudinal ones. The two islands' populations are virtually identical, Tenerife having fractionally more people than Mallorca, even if Tenerife is significantly smaller than Mallorca (roughly half the size). There is a similar reliance on tourism, but surprisingly perhaps, given that Tenerife is known for its greater level of all-year tourism, the annual volume of tourism is quite a bit lower than that in Mallorca (three to four million tourists lower).
Apart from tourism, Tenerife's economy has a similar mix to Mallorca's: agriculture, some industry, construction (not that there is much of this at present) and ambitions for further developments in the world of information and communications technology. One advantage that Tenerife enjoys over Mallorca is its status as a special tax zone, which means a considerably lower rate of corporation tax. This status is a recognition of a natural disadvantage, being stuck out in the Atlantic; Mallorca may suffer from being isolated but not as much as Tenerife does.
But this isolation, tax advantage or no tax advantage, is just one reason why attempts at attracting foreign investment might be difficult. And for Tenerife, read also Mallorca. If there were to be a similar campaign for Mallorca - a Why Mallorca? campaign - what would be the benefits? Any?
Economic diversification for Mallorca is essential, but there are several obstacles to inward investment or to that which might mean more than just small amounts of employment opportunities. One of them is the standard of education (in the public education sector at any rate), a problem shared with Tenerife. This might not matter if investment requires primarily manual skills, but information technology, if this is to be the key to diversification (and Mallorcan politicians keep insisting that it is), tends to demand rather more than the local education service can offer; the Balearics and the Canaries both underperform badly.
Other problems are ones that are all too familiar: political capriciousness, the result of government changes, trade-offs between coalitions and a general absence of any form of consensus across the political spectrum; political favouritism and suspicions or examples of corruption; environmental challenges and legal decisions that can take even businesses with the best due diligence by surprise.
A further problem, at least at present, is a structural one in government. It is one that is being highlighted by the planned introduction of the environmental tax for large retailers and the car-rental sector. The minister overseeing this tax, the vice-president, José Aguiló, is also meant to be the minister for business and employment. How on earth he reconciles these roles by going around looking to slap taxes on businesses I have no idea. It makes no sense to have one minister in charge of such potentially competing portfolios.
The fact that there is a minister with joint responsibility suggests that the government has not thought through what its commitment to business development might be. Indeed, does it actually have one? It would argue yes, but the evidence suggests no. This is a government interested in the short-term and the short-term alone. Its strategy for business is a shambles, which is a compliment in that it suggests that there might actually be one.
In Tenerife, they are at least trying. In Mallorca, they are not even doing that. Why Mallorca? Who knows.
Any comments to andrew@thealcudiaguide.com please.
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