Federating The Recovery
“Life can only be understood by looking backward; but it must be lived looking forward.” I underlined this quote when I first read it in a book of aphorisms. It seemed to have been written by Kierkegaard for modern times. We live in a world of war and pandemic on a planet in climate emergency, enveloped in authoritarianism that feeds social discontent and stands on that anti-democratic triple “P” coined by Moisés Naím: Populism, Polarization, and Post-truth. However, certain issues can only be understood by looking backward. When remaining focused on the topic of this article (Recovery,) our rear-view mirror reveals some good news: everything has changed since the Great Recession of 2008.
Compared with the cut-backs, defeatism and ‘every man for himself’ attitude of that time, an intelligent Keynesian approach has emerged within our institutions during this pandemic crisis. Europe is back, and is bringing its best federal spirit, with mutualized debt, the Marshall plan of European funds, and with the purchase and distribution of vaccines. Spain too, through co-governance, has made progress along this path. The challenge is global, but regional government authorities are essential players in a game mainly being disputed on two pitches: job creation and boosting well-being. I will now highlight five major factors in this great economic, technological and environmental transformation, and how we are approaching them in the region of Valencia.
-Reindustrialization. After decades of short-sighted offshoring, Brussels is giving us a historic opportunity to reindustrialize under Next Generation EU. Since before the pandemic, we have been working to position ourselves in the critical sectors that the European Commission wants to strengthen. In collaboration with the private sector, that exercise in reflection has produced such initiatives as the Valencian Batteries Alliance to strengthen the automotive value chain; the Valencian Green Hydrogen Strategy to lower energy dependency in core industries, such as tiles; and a drive toward knowledge-heavy sectors, such as aerospace, as an essential complement to our traditional industry. The results can already be seen. The decision by Volkswagen to build a battery gigafactory in Sagunt underpins that path to reindustrialization. On the one hand, it strengthens the foundations of an already existing business fabric. On the other, it puts us on the cutting edge of a technological revolution and turns the Region of Valencia into an innovation center in southern Europe in terms of new sustainable mobility.
Alongside digitalization and sustainability, there is a third pillar of opportunities that Europe is opening up for this decade: resilience.
-New Welfare State. Along with digitalization and sustainability, there is a third pillar of opportunities being opened by Europe in this decade: resilience. The pandemic forced us to react at two speeds. In response to the initial urgency, we chartered aircraft to bring in medical supplies and boosted hospital capacity. Now we have a structural obligation. We are busy rolling out a new Valencian Welfare State with the biggest investment of this self-governance period to renovate and build hospitals, healthcare centers and socio-health centers (under the Créixer+ and Convivint plans, respectively). We are also focusing on the human factor, with a structural boost to workforces beyond the needs arising from the pandemic. That is the “Improved Normality” we should inherit from COVID.
-Public-private partnership. Social dialogue is the cornerstone of the Valencian Way and leads to one particular strength: stability. It is the foundation that leads to job creation and the generation of wealth that can then be redistributed throughout society. Create first, then distribute; in that order, as we are reminded by Mariana Mazzucato. After agreeing on a roadmap to recovery in the Region of Valencia under the “Alcem-nos” agreements, and defining the Valencian Strategy for Recovery with 410 projects applying for European funds, the Regional Government of Valencia and Valencian companies have already submitted 592 initiatives to the ministerial departments, which would generate almost 13 billion in investments. One important fact: 75% of the initiatives are being promoted by business. Business is leading the way. The Regional Government has played the role of catalyst for these initiatives: bringing together SMEs and leading companies, interconnecting sectors, and getting everyone involved in the innovation ecosystem. Those who join forces will succeed in this decisive decade.
-More co-governance. The pandemic has been a machine for producing federalists. But there is always room for improvement. I therefore have three suggestions for greater shared governance under the Recovery Plan.
One: include regional Strategic Economic Recovery and Transformation Plans (PERTEs) to support strategic sectors even if they are hyper-concentrated within one territory, as is the case of tiles in Castelló.
Two: give more weight to the autonomous regions in the planning, programming and management of the second block of the Recovery Facility, which starts in 2024. An example of this would be raising the percentage to be managed by regional governments from 50% to 75%.
Three: boost autonomous regional participation in the design of PERTEs tied to their territory in order to harness their knowledge and proximity.
There is an urgent need to replace the image of an obstructive Administration with that of a cooperative Administration. From the funnel of bureaucracy that multiplies formalities to the public lever that multiplies opportunities.
-It’s efficiency, stupid. This final factor is essential. The image of obstructionist authorities must be replaced by one of cooperative authorities. From the funnel of bureaucracy that multiplies procedures to a public lever that multiplies opportunities. Again, Mazzucato. Here are three legal initiatives launched by the Regional Government of Valencia: one: administrative simplification to expedite management of the European funds; two: a faster roll-out of renewable energies under a specific decree-law to expedite the energy transition in response to the energy emergency; and three: a Reactiva Plan to combat inflation, with grants given to companies and households, and with energy efficiency measures. In this decade, we will be judged on our management professionalism. Unlike the populist movements that simplify complex problems, governments need to effectively resolve those challenges. Management is simply the key. We must understand by looking backward in order to live looking forward.