Why Is Southern Spain So Poor?

[Music] Spain's economy is in bad shape in the economic press this company typically appears not exactly for the better with a skyrocketing unemployment rate companies that are not growing mediocre salaries and a temporary employment rate that is increasing rapidly things are not looking good but what if I told you that's not quite true Spain is not poor as a whole but has two very different economies the northern half made up of communities such as Madrid the B country and Catalonia is much wealthier than the southern half where there are much less developed communities such as

Andalusia and extra Madura yes in these cases we are talking about the regions that produce half of all the olive oil in the world however despite this if the Spanish economy is in such a bad way it is largely because the south of the country is dragging it down and let's see obviously in all countries there is territorial inequality there are always some regions that are richer than others and a good example of this is Germany where the eastern part which was Communist until the 1990s is today much poorer than the western part in the

Spanish case however the reasons for poverty of the South do not seem so clear that is Andalusia and extra Madura were never communist as East Germany was even more confusing historically southern Spain was in fact the richest region of [Music] all Al andalus was a real Bastian of wealth during the Middle Ages and under Muslim rule the city of Cordova even became the most populated city in Europe with nearly half a million inhabitants and these days you only need to walk through the streets of Granada or alaria to get an understanding of their enormous economic

power at that time but after the Muslim domination it was much the same story Cadiz was one of the most important cities in Spain and the world for centuries it was the departure point for Christopher Columbus's second Expedition it was practically the nerve center of global Maritime trade curious fact if Hispanic Americans these days have an accent similar to the Andalusian one it is precisely because of the strong commercial connections between southern Spain and the Americas so visual economic Community knowing all this it's clear that the pieces don't seem to fit why on Earth did

the successful south of Spain become one of the poorest regions in Europe was it intentional or a curse of Fate at what point did poverty hit places like Andalusia and extremadura in this video we tell you all about it [Music] why is southern Spain the poorest part of the country why not the north why not the East well the first clue can be found in a river the tarus the tarus river is the one that curiously separates the rich provinces from the poor ones somehow it is as if this River were the boundary between wealth

and poverty in Spain but is this a coincidence and how can a single River so drastically separate the economy of an entire country well you see the answer is not so much in the river but in what happened behind its lines in the Middle Ages when the southern Plateau was the scene of a bloody war between Christian kingdoms and Muslim empires the south of the tarus river was a fearsome Battlefield that was subject to insecurity violence and death and let's see while it is true that the Christian kingdoms that were in present day Spain fought

against the Muslims throughout the Iberian Peninsula when they arrived south of the tarus things changed up until that point Northern Spain had been conquered slowly as territory was gained the civilian population built settlements little by little let's say that the progressive Conquest allowed the construction of a social and human Network that made Northern Spain very [Music] cohesive in fact the conquest was so Progressive that it took more than 400 years from the initial Frontier in asteras to reach the Targus however when the conquest crossed the river the pace shot up and in only 100 years

the northern Christian kingdoms managed to dominate the vast majority of the Southern Peninsula and cornered the Muslims in the Kingdom of Granada that is while the north of the country was conquered in 400 years the South took only 100 years but what does the rate of recapture have to do with the economy well apparently a lot the territories that were conquered the fastest are precisely the same ones today that are the poorest of all but what is the mechanism behind all this how could the rapid conquest of the South be the cause of their the

answer lies in nobility Northern Spain was a territory close to the crown where it had power and resources with which to advance territory meanwhile to the south of the tarus the situation was completely different it was a very large expanse of territory where the crown no longer had so much power that is why in order to expel the Muslims from the south the Kings had to ask great favors from the nobility and the military orders in a way they externalized and professional ized the conquest although along with it the Nobles and Military were grouped in

regiments that advanced quickly and created few settlements fed on livestock that they could easily move and did not stay too long in the same place as a consequence even today it can be observed that the land south of the tarus has far fewer towns and cities than any other part of Spain what's more in southern Spain there are provinces such as the odad real albaset and bados they have a lower density of settlements than the Finnish iion of Lapland basically the North Pole and visual economic Community the lack of settlements had terrible economic consequences for

the Southern economy pay attention the curse of Conquest as we have said the nobility was in charge of taking over southern Spain but of course they did not do it for free at the end of the conquest the Nobles who captained the castillan armies claimed vast tracks of conquered territory for themselves and with that the no NOS gained enormous power in the region they became an elite that accumulated a lot of wealth at the expense of the common people without going any further Andalusia and extremadura became the regions of Spain with the highest concentration of

territory in the hands of the nobility that is to say while in the north almost 80% of the peasants owned the land they cultivated in the South the figure barely reached 30% the vast majority of the land belonged to land owners even so the problem of extreme power in the hands of a few was not a problem of inequality but this in turn generated other economic problems the most notable of these is that in those places where land ownership was less well distributed education rates were much lower specifically for every 10 percentage points of landless

peasants in a region the percentage of the population that could read and write was reduced by 5.1 percentage points the question is why did inequality lead to lower education some economists such as belan Tapia argue that given the poverty of landless peasants they could not easily Finance their children's education what's more the low density of settlements which keep in mind originated from the reconquest made it difficult for families living in the countryside to send their children to schools in the urban centers the question is why didn't the government or Society create some kind of public

education in fact in many places throughout Spain elementary schools were financed by municipal or church contributions yet local Elites were able to block Public Funding initiatives in order to control the population they wanted to have dependent labor and at the same time avoid paying taxes that would have been necessary to finance free education now then how did this all translate to the economy as a whole well pay attention because you are going to flip out as you can see until 1860 Andalusia was actually the second richest region in Spain second only to Madrid it was

not until the arrival of the 20th century that it really started slipping to become one of the poorest of course not all of southern Spain is Andalusia but even so the data is surprising if we have said that the cause of the poverty of southern Spain lay in the problems of land distribution the powerful Elites and the rapid Conquest then how is it possible that Andalusia was so rich until 1860 well the key here is that the lack of education and land distribution did not really become a problem until the end of the 19th century

up until that time practically the entire Spanish economy was based on agriculture there was no need for educated Engineers or entrepreneurs with savings to create wealth nor were there large commercial networks between different territories that would allow the development of a powerful industry proof of this is that there were hardly any roads or railroad lines trade was curtailed by expensive customs and in fact until 1868 Spain did not even have a single currency so so what does all this mean well the Spanish provinces were economically isolated the people lived off their crops and little else

in order for a region to be rich all it needed was a lot of fertile land and enough people to cultivate it and it turns out southern Spain had both qualities so it's no wonder Andalusia was so rich however the real problem came with the Industrial [Music] Revolution in the second half of the 19th century the Industrial Revolution began to take hold in Spain with it barriers to trade disappeared in just 40 years the mileage of Railways increased five-fold the amount of goods transported increased tenfold and the financial system was unified in 1868 the bank

of Spain issued the P for the first time a bank note that served to unify the payment systems of all the regions and which allowed the promotion of trade and investment throughout the country almost overnight Spain went from being a country with isolated regions to having an integrated economy and society and that had consequences from then on wealth began to concentrate in a few Northern provinces specifically places like Catalonia and The Basque Country began to grow at the expense of draining the economic potential that had been spread throughout the territory but what did the unification

of the national economy have to do with the rise of Northern Spain and the fall of the South the answer lies in Industry if you notice the poor regions of southern Spain had a lot of trouble developing a competitive industry however Northern regions such as those mentioned quickly achieved a large and competitive industry of course industry was very profitable for the northern economies much more so than Agriculture and this led them to build up a process of wealth creation that has lasted to this day the question is why did Spanish industry grow so much in

the north while in the South it lagged so far behind well visual economic viewers here the issue of education and the distribution of of wealth were very important you see when it comes to setting up factories you need people who are qualified educated who can read and write understand machine manuals and even have Innovation skills and as we have said the level of Education in southern Spain was considerably lower but on top of a good education in order to develop a powerful industry entrepreneurs are needed people with commercial skills and with some savings to start

a business and not surprisingly in this respect the North had another strong advantage AG Northern citizens had more land than in the South which was dominated by the elites that is many families were accustomed to business to trade and Innovation and they also had assets with which they could save to start new businesses Southern Elites may not have had the incentive or knowledge to innovate in industry and workers did not have the capital to do so on their own but in the north it was just the opposite the economy distributed in many hands allowed the

development of many industrial projects that eventually came to fr I but even Beyond this there was one other reason that led to the success of Northern Spain which was perhaps the most important of all here we are talking about economies of scale you see when the economic integration of Spain began there was a huge process of concentration of the country's industry that is most of the factories were assembled and moved to the same places that meant that according to historians such as Sanchez Al boros Northern IND industrialization stole the industry that could have Arisen in

the South but why did all the factories want to be in the same locations well think about it if you have a car factory you will want to have a screw Factory A Tire Factory and a sheet metal factory nearby what's more you will want to be in a place where many people live to serve as employees you will want to have Rail and Road Connections to transport goods and you will want to be close to other entrepreneurs to learn from or partner with but you will also want to be close to your customers in

order to sell as much product as possible well all these were conditions that the north of Spain fulfilled better than the South remember that the South had fewer cities and towns that is to say low density of employable population and potential buyers of products few connections of Highways roads and Railways and in short little capacity for business agglomeration and if we add to that the lack of education and the problem of economic Elites the result is that Northern Spain became a more propitious place to start a new industry plainly and simply over time the factories

were all clustered in the same place all interested in being close to each other in this way the north of Spain specialized in Industrial Products while the south of Spain specialized in agricultural products which ultimately led to the difference in wealth that still exists today be that as it may it should be noted that this is a much broader and more complex issue there are more factors to take into account such as the availability of Natural Resources y graphy or plain luck but the theory that we have presented to you today comes out of very

interesting recent academic reports that support these hypotheses very well and which in case you are interested in getting to know them in depth we'll leave you a link for them in the description at this point however it is now your turn what do you think was the factor that doomed the self of Spain do you think there is a solution and what other reasons can you think of to explain this difference in wealth you can leave me your answers in the comments as always don't forget that we release new videos every week so subscribe to

the Channel and hit the little bell so you don't miss any of our updates if you like this video like it and I'll see you in the next one all the best see you next [Music] time