Not A Good Week

It's not been a great week for tourism. Sure, the forecasts for tourism numbers coming to Mallorca are fine, but current levels of business obscure what's going on behind the scenes. The government's decree - one essentially to do with planning permissions - exposes the naïvité of an administration without a coherent strategy for the island's main industry.

It's been said often enough that the industry should be represented by ministers with some grounding in tourism. In Mallorca this has only truly happened once. The first ever minister, Jaume Cladera, was from the industry. Since then, only Carlos Delgado might be said to have had a real feel for tourism, something cultivated through years as mayor of Calvia. What we now have is a ministry run by someone with no background and for whom dialogue outside the government inner circle is primarily with the likes of GOB, the environmentalists. Of senior officials, there is the director-general, Pilar Carbonell. She is admirable in many ways, but it cannot be ignored that she comes from a restaurant background. She has not always been a great friend of the hoteliers.

Environmental claims cannot and should not be neglected, but to believe Barceló and the government the previous administration had signed a charter for "indiscriminate" building, both that of construction on rural land and of hotel extension. The word "indiscriminate" has been used in despatches with regard to the decree, but it is an exaggeration. The Partido Popular may rightly have been looked upon as cheerleaders for the hoteliers and few others, but its legislation was not a case of "anything goes", which is how the minister for land, Joan Boned, has styled it. Rather, it was legislation that finally, and after previous attempts (such as the 1999 tourism law), sought to effect a modernisation of resorts and of hotel stock, something badly needed in a hyper-competitive global industry.

For all his faults, Delgado adopted an essentially pragmatic approach that was designed to weed out substandard hotels and to raise quality. It is an approach that has brought some success: Mallorca's quality has risen. This pragmatism was also shown by one of the forgotten tourism ministers - Miquel Nadal. He's forgotten because he's in prison, but when not involving himself with corrupt activities, it was Nadal who brought in the decree whereby hotels with illegal places (i.e. those that had been created without planning permission) had to pay to make them legal. The result of this was the vast fund that is commonly and simply referred to as the "bolsa". It has been put to good use - for resort infrastructure improvements and other projects. Nadal was hardly anti-hotelier but he recognised a worthy and beneficial compromise when he saw it.

Little of this now applies. The current administration is an heir to the first Antich, PSOE-led government of 1999 to 2003 in more ways than just the tourist tax. The minister who was responsible for the old eco-tax, Celesti Alomar, was qualified in geography. This qualification is often associated with tourism but in different ways. One of them is a firmly environmentalist perspective, which was Alomar's. Finding the right balance between the competing needs of the environment and tourism is not straightforward, but the balance has been tipped one way or the other according to dominant ideology. Hence, there is constant incoherence, with the current government, one suspects, also listening to geographers at the university who have been expressing their concerns about construction for years.

To come back to charges of indiscriminate building, there was - during Jaime Martínez's time as Barceló's predecessor - one very revealing moment. It was when Martínez was responding to ideas for creating significant theme parks. He said that this would be virtually impossible because of planning restrictions. It is misrepresentation to suggest that the PP was giving carte blanche for wholesale destruction of the countryside and other parts of the environment. Which leads us to the part of the new decree concerning illegal buildings on rural land.

The PP had introduced an amnesty. In a way, it was a similar approach to the one that Nadal had adopted. The buildings can stay (though some might not have) in return for payment, with the idea of funds being used for assisting rural development which didn't automatically mean being destructive. Of these buildings, there are some which will now not form part of agrotourism, a branch of the island's tourism to which the government is showing a peculiar attitude: one would have thought it would be in favour, when it appears not to be.

The government, in justifying its decree, speaks of not allowing speculative development at the heart of which is often corruption. It has an argument in this regard, but if it is corruption that concerns it, then it should institute firm, independent auditing of permissions that are granted by the relevant authorities, typically town halls. And even those projects which are to be spared because they are ongoing might yet fall foul of zealous interpretation of being undertaken in the correct manner.

Barceló's desire for a new economic model is laudable in the sense that he wishes there to be greater diversification of the economy and greater share of the wealth that tourism generates, but this requires operating from a position of strength and not from one that undermines or disincentivises investment. It has not been a good week.

Actions Of A Vindictive Government

You can cut a government so much slack. Or perhaps it's a case of giving it enough rope with which to hang itself. There will be no hanging or lynching, though. There are too many willing to give it all the slack it wants as retaliation for the Partido Popular. Which is understandable, until you begin to appreciate just what this government is up to. This assumes, however, that the government itself knows, because it is giving an excellent impression of not knowing. Instead it glosses its policies with vagueness. There's a new economic model rising. Is there? And what economy might be left to be modelled?

The tourist tax was one thing, but now we have a series of measures that have emerged from the most ominous sounding of the government's raft of legislative devices - the decree. It has decreed. The very term smacks of finality, albeit that parliament needs to apply a compliant rubber stamp. It also has a sense of taking no regard of any alternative interests. For a government whose motto contains the insistent dialogue, it seems to be short on conversation, except with itself. It is pulling a fast one.

The decree of "urgent measures" that the government has announced in suspending or quashing elements of three key bills introduced by the Bauzá administration - farming, land and tourism - has echoes of a similarly urgent decree that the previous PSOE-led government passed. It was one from 2008 which dealt with, among other things, building on land deemed to be wetland. From that decree came all manner of complications, most of which still exist. A major one is the Ses Fontanelles commercial centre development in Playa de Palma. The Bauzá regime was left with the consequence of the decree. If it were to deny construction, there was a massive compensation claim to be paid. There are other examples, such as in Puerto Pollensa. Somewhere along the line, these are issues which will have to be resolved, with the Ses Fontanelles development now seemingly an impossibility.

The 2008 decree created legal uncertainty. The current government is creating the same. It says that it is not, but its certainty can only ever be short-term. If there were to be a change in government in 2019 and a return of the right, then its decree will be overturned. This is tit-for-tat politics, something which Mallorca is highly adept at. The decree oozes vindictiveness directed at Carlos Delgado and Biel Company, the ministers responsible for the three laws in question. In the case of Company and his farming law, the government has succeeded in ostracising one of the very few business associations that operate in harmony with other parts of its industry. Asaja, the agricultural businesses association (of which Company was once president), has long worked from the same script as unions in seeking to improve opportunities.

Asaja has declined an invitation to form part of a committee which will have as one of its briefs the current serious problem of lack of water. It has done so because it objects to the government decree which puts a halt to development of farm land for purposes other than just farming. While it's true that the Company act may have favoured larger landowners, the thinking behind it was sound. There is a vast amount of land devoted to agriculture, and yet the primary sector is responsible for not much more than one per cent of GDP. The law wanted to improve productivity, to create new opportunities and jobs. The decree will do precisely the opposite.

Farming unions like the fact that the government will be dedicating some of the tourist tax to agroforestry in order to "modernise" it. But what does the government mean by this? It talks of modernisation in one regard and turns it back on it in another. Joined-up thinking? Hardly.

While the hoteliers are the usual suspects when it comes to opposing the government, the farming businesses and the builders have not been. Now they are. The builders are warning of a collapse of recovery because of restrictions the decree imposes on redevelopment and some new construction in the tourism sector. The two industries - tourism and construction - go hand in hand in Mallorca. Attack one, and you attack the other. For a government - any government for that matter - looking to boost employment, the decree makes little sense. Except that it does, if you are a vindictive government. 

And an aspect of this restriction will limit the room for manoeuvre in transforming mature (obsolete) parts of the resorts. In this regard, the hoteliers are absolutely right in saying that the government lacks an overall strategy for tourism. It can wish to assign some of the tourist tax to resort infrastructure, but then puts a clamp on the means of doing this. Joined-up thinking? It most certainly is not.