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Lanzarote: economic situation and future   April 2009
 
José Luis Hernández Socorro Curriculo
Accountant. Manager of Gestiones.com
 
We are all facing an unprecedented economic crisis. Every day, the media talks about how bad things are and about how there is not one, but two crises:

> The financial crisis, which was created by the financial institutions, both international and national ones. The appearance of subprime mortgages in the USA was the initiating factor of the current situation as banks gave money to people who couldn’t pay it back.
> The Real Estate crisis. This is linked to the financial crisis. People who bought a property and then waited three or four years before reselling it, had a huge and almost fictional profit.

The number of unemployed is continuing to rise. There are already 22,000 unemployed out of a population of 130,000. The number of tourists visiting the Canaries has decreased considerably and specifically in Lanzarote (where it's seen more than a 20% decrease). Our main customers are German and British and this island depends directly on the economy of these countries. The primary industry (agriculture and fisheries) was almost completely abandoned and now we realize that, even though the Canary Islands are supported by the "monoculture" of tourism, the truth is that the primary industry should not have been abandoned, so now we would have had more ways to escape.

Regarding the real estate issue, the big problem is that there are still proprietors who have not assimilated into the situation we are currently in. For instance, the owners of business premises and houses are reluctant to lower the rent, but the market will cause them to see that if they don't lower the prices, they won’t have tenants.

Another one of the big problems is the high cost of the market basket. No matter how much they say that this high cost is caused by the "transport costs" and the "dual insularity", people in the street are up to their ears in hearing this broken record. The truth is that food supplies in Lanzarote are in the hands of two big suppliers and they are reluctant to lower the prices. On the major islands, there are big shopping stores such as Carrefour, Alcampo, Mercadona, etc., and all of them compete to earn a larger market share, but in Lanzarote there is a monopoly. Finally, a big food supplier, Lidl, is opening in Lanzarote. This means that big surfaces are starting to come into our island. However, the establishment of large commercial spaces depends on the existence of commercial building areas and the Arrecife’s General Urban Plan hasn't begun yet because of political reasons and perhaps, because of business advisability.

Years before during the 80’s and 90’s, skilled laborers were a necessary component of the construction world, and they earned more money than university graduates. Skilled workers like plasterers, electricians, plumbers, etc., earned a lot of money, but had to finish the construction quickly so they could sell the property and all of the properties they finished, they were able to sell. Without a doubt, now things have changed and we realize that what we were seeing was more of a fantasy rather than a reality.

It’s clear that there are other tourist destinations, but the singularity of the island of Lanzarote, its equipment and tourist infrastructure and the long experience we have with tourism, is a valuable treasure that we should preserve. We should focus on the quality of what we provide the tourist, to be cordial to and with them, to make them smile. All of us like to be treated well when we go on vacation. We should take advantage of this difficult situation to revitalize ourselves, modernize what we have, and create culture for the tourist (the tourists that visit us with their children hardly have options of things to do with the little ones), make renovations, convert these old-fashioned tourist complexes, improve our airport and make it a better gateway for tourists, make the experience better for the cruise ship passengers by organizing markets, improving public spaces both in cleanliness and appearance, and in general, we need to make sure that all visitors remain enchanted with this island and with the people that they visit.

For once, all of the politicians and business people of this island could put aside their disputes and agree to clean up the island’s big problems; otherwise, things are going to continue to get worse and all of us are going to lose.

Now it’s necessary to adjust to the new situation that all of us are in, get in agreement, everyone go in the same direction and above all, develop creativity. As Einstein said, "Let’s not pretend that things will change if we keep doing the same things. A crisis can be a real blessing to any person, to any nation, for all crises bring progress. Creativity is born from anguish, just like the day is born from the dark night."

 
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