Bilateral Relations | Course Paper

Assignment on

international relations

Dariya Kulyk

04.12.2016

Introduction

International Relations are concerned with the study foreign affairs and

relations of countries. It has many different complexes such as economic, social,

and cultural relations and all are crucial in diplomacy. Diplomats and

representatives aim to preserve national communities and heritage in various ways,

from issuing passports to drafting peace talks. Globalization has demonstrated the

importance of interdependent governments and economies. Alliances such as the

European Union, NAFTA, WTO, etc have made international relations stronger

and powerful. Even though globalization has benefited strong countries and

cultures, it can make it difficult for other nations and countries to compete

globally. Foreign policy is becoming more aware of how globalization affects its

government and people. Diplomats still compromise and support their home

countries views and actions, and and aim to find a cultural “medium”. Overall,

diplomacy seems to have benefited from globalization, in terms of communication

and accessibility. Culturally, diplomats have always represented their governments

and their people, and this makes for a stronger, international community.

Culture, Globalization, and International relations are becoming

increasingly interdependent of each other; mastering all three enables a country or

people to be powerful and influential. While rare cultures are becoming

increasingly diminished, certain cultures and traditions are being preserved. The

popular cultures are used to benefit the majority and create solutions to various

issues. Globalization has been desired by many, bur has benefited very few.

Nations’ resources (whether it’s people or raw materials) become the key to its

future and survival of its “culture”. Inrernational relations depend on what a

country has to offer and continue the constant struggle for harmony and prosperity.

Our conference faces many challenges of the century; all of the three topics are

critical for diplomacy. With various knowledge and ideals from every corner of

this earth, we can collaborate and make informed, consented decisions to ensure

harmony and equality for all.

1. Country Profile for Spain: Economic and Social Context

Facts:

Kingdom of Spain

Capital: Madrid

Population: 46.7 million

Area: 505,988 sq km (195,363 sq miles)

Languages: Spanish (Castilian), Catalan and its variant Valencian, Gallego

(Galician), Euskera (Basque)

Major religion: Christianity

Life expectancy: 79 years (men), 85 years (women)

Currency: euro

Economic Freedom Snapshot:

2016 Economic Freedom Score: 68.5 (up 0.9 point)

Economic Freedom Status: Moderately Free

Global Ranking: 43rd

Regional Ranking: 20th in Europe

Notable Successes: Open Markets and Monetary Freedom

Concerns: Management of Public Finance and Labor Freedom

Overall Score Change Since 2012: –0.6

Spain is a parliamentary monarchy with a civil law system which is

rooted in Roman law and whose main characteristic is that its central principles are

codified into a referable system, which is the predominant source of law. Spain is a

Member State of the European Union.

Located at the crossroads of the Atlantic and the Mediterranean, Europe

and Africa, Spain’s history and culture are made up of a rich mix of diverse

elements. In 1975, Spain made the transition to a democratic state and built a

successful economy, with King Juan Carlos as head of state.

The constitution of 1978 enshrines respect for linguistic and cultural

diversity within a united Spain. The country is divided into 17 regions which all

have their own directly elected authorities.

The level of autonomy afforded to each region is far from uniform. For

example, Catalonia, the Basque Country and Galicia have special status with their

own language and other rights.

Andalucia, Navarre, Valencia and the Canaries in turn have more

extensive powers than some other regions. Asturias and Aragon have taken steps to

consolidate language rights.

The Spanish economy was of the most dynamic in the EU, but the

tourism, housing and construction industry mainstays were hit hard by the global

economic crisis of 2008-9. The bursting of the housing bubble tipped Spain into a

severe recession and by the spring of 2013 unemployment had risen to a peak of

27.2%. After experiencing a prolonged recession in the wake of the global

financial crisis that began in 2008, in 2014 Spain marked the first full year of

positive economic growth in seven years, largely due to increased private

consumption. At the onset of the financial crisis, Spain’s GDP contracted by 3.7%

in 2009, ending a 16-year growth trend, and continued contracting through most of

2013. In 2013, the government successfully shored up struggling banks – exposed

to the collapse of Spain’s depressed real estate and construction sectors – and in

January 2014 completed an EU-funded restructuring and recapitalization program.

Until 2014, credit contraction in the private sector, fiscal austerity, and

high unemployment weighed on domestic consumption and investment. The

unemployment rate rose from a low of about 8% in 2007 to more than 26% in

2013, but labor reforms prompted a modest reduction to 22% in 2015. High

unemployment strained Spain’s public finances, as spending on social benefits

increased while tax revenues fell. Spain’s budget deficit peaked at 11.4% of GDP

in 2010, but Spain gradually reduced the deficit to just under 7% of GDP in 2013–

14, and 4.7% of GDP in 2015. Public debt has increased substantially – from

60.1% of GDP in 2010 to nearly 101% in 2015.

Exports were resilient throughout the economic downturn and helped to

bring Spain’s current account into surplus in 2013 for the first time since 1986,

where it remained in 2014-15. Rising labor productivity and an internal

devaluation resulting from moderating labor costs and lower inflation have helped

to improve foreign investor interest in the economy and positive FDI flows have

been restored.

The government’s efforts to implement labor, pension, healthcare, tax,

and education reforms – aimed at supporting investor sentiment – have become

overshadowed by political activity in 2015 in anticipation of the national

parliamentary elections in December. The European Commission criticized Spain’s

2016 budget for its easing of austerity measures and its alleged overly optimistic

growth and deficit projections. Spain’s borrowing costs are dramatically lower

since their peak in mid-2012, and despite the recent uptick in economic activity,

inflation has dropped sharply, from 1.5% in 2013 to a negative 0.6% in 2015.

GDP (purchasing power parity)

$1.615 trillion (2015 est.)

GDP (official exchange rate)

$1.2 trillion (2015 est.)

GDP – real growth rate

3.2% (2015 est.)

1.4% (2014 est.)

-1.7% (2013 est.)

GDP – per capita (PPP)

$34,800 (2015 est.)

GDP – composition by sector

agriculture: 2.5%

industry: 17.74%

services: 74.35% (2015 est.)

Population below poverty line

21.1% (2012 est.)

Labor force

22.98 million (2015 est.)

Unemployment rate

22.5% (2015 est.)

24.5% (2014 est.)

Unemployment, youth ages 15-24

total: 53.2%

male: 53.4%

female: 52.9% (2014 est.)

Budget

revenues: $473.6 billion

expenditures: $527.9 billion (2015 est.)

Taxes and other revenues

38.8% of GDP (2015 est.)

Budget surplus (+) or deficit (-)

-4.4% of GDP (2015 est.)

Public debt

101% of GDP (2015 est.)

Inflation rate (consumer prices)

-0.5% (2015 est.)

-0.1% (2014 est.)

Agriculture – products

grain, vegetables, olives, wine grapes, sugar

beets, citrus; beef, pork, poultry, dairy

products; fish

Industries

textiles and apparel (including footwear), food

and beverages, metals and metal manufactures,

chemicals, shipbuilding, automobiles, machine

tools, tourism, clay and refractory products,

footwear, pharmaceuticals, medical equipment

Current Account Balance

$16.48 billion (2015 est.)

$13.6 billion (2014 est.)

Exports

$277.3 billion (2015 est.)

$317.1 billion (2014 est.)

Exports – commodities

machinery, motor vehicles; foodstuffs,

pharmaceuticals, medicines, other consumer

goods

Exports – partners

France 15.7%, Germany 11%, Italy 7.4%, UK

7.4%, Portugal 7.1%, US 4.5% (2015)

Imports

$298.3 billion (2015 est.)

$345.6 billion (2014 est.)

Imports – commodities

machinery and equipment, fuels, chemicals,

semi-finished goods, foodstuffs, consumer

goods, measuring and medical control

instruments

Imports – partners

Germany 14.4%, France 11.7%, China 7.1%,

Italy 6.5%, Netherlands 5%, UK 4.9% (2015)

Debt – external

$2.064 trillion (31 December 2014 est.)

$2.238 trillion (31 December 2013 est.)

Stock of direct foreign investment –

at home

$746.8 billion (31 December 2015 est.)

$721.9 billion (31 December 2014 est.)

Stock of direct foreign investment –

abroad

$707 billion (31 December 2015 est.)

$674 billion (31 December 2014 est.)

Exchange rates

Euros (EUR) per US dollar –

0.885 (2015 est.)

0.7525 (2014 est.)

Fallout from the global financial and eurozone crises has hurt the Spanish

economy, but a number of structural adjustments have enhanced prospects for

recovery. Comprehensive reforms have been made in corporate taxation, reducing

the top rate to 28 percent from 30 percent. The rate will be further reduced to 25

percent from January 2016. A new labor law intended to enhance flexibility in

areas such as compensation and working hours has been implemented.

Despite some progress, large fiscal deficits and high levels of public debt

necessitate a greater commitment to sound public financial management and a

return to a sustainable level of government spending. Corruption continues to

undercut respect for the rule of law.

2. Foreign policy issues of Spain

The current wave of instability and conflict affecting Europe’s neighbours

(to the South and East) has been a key issue on the Spanish and European agendas

during the second quarter of 2015. In particular, the tragedy in the Mediterranean

Sea that unfolded in April has returned the controversial issue of migration to the

forefront of the debate, both at European and national levels.

As a member of the United Nations Security Council (UNSC), and a few

months before it assumes the monthly presidency of the organism (in October),

Spain has actively contributed to the discussions regarding issues such as the fight

against terrorism, the review of resolution 1325 on Women, Peace and Security,

and preventive diplomacy.

Economic diplomacy also remains a central plank of Spanish foreign

policy. Spanish Foreign Minister José Manuel García-Margallo and King Philip VI

have continued to make new contacts and consolidate existing ones in terms of

investments, trade and cooperation. In this sense, Spain hosted official visits by

Iranian Foreign Affairs Minister Mohamad Javad, Egyptian President Abdel Fattah

Al-Sisi, Chinese Deputy Foreign Affairs Minister Wang Chao, Brazilian Vice–

President Michel Temer and the head of the Moroccan government, Abdelilah

Benkirane. Along the same lines, Spain’s diplomacy chief, the prime minister and