Aragon's bright future: how FDI is transforming the Spanish region

Aragon, an autonomous community in the north-east of Spain, is enjoying a strong economic spell and is looking to attract new foreign investors, particularly in the logistics, agribusiness and automotive sectors, according to Javier Lambán, president of the government of the region.

One of 17 autonomous communities in Spain, Aragon has a total population of 1.3 million inhabitants and an area of 47,700 square kilometres, making it slightly larger than the Netherlands geographically. Its economy grew by 3.6% in 2017, the highest rate of growth of any region in Spain (the national average was 3.1%).

Perfectly placed

“Our economy is performing a lot better today than before,” says Mr Lambán, who took office in July 2015 and represents the PSOE Aragón, the regional socialist party.

“Unemployment has dropped a lot to only 11%. A number of business sectors have been driving our economic growth, including industry, agribusiness and tourism. Investor confidence has improved markedly and a lot of optimism exists today.”

He adds that logistics in particular has become a significant industry for the region, mainly because of its favourable physical location. Zaragoza, the region’s main city with 661,000 inhabitants, is only 305 kilometres from Barcelona by road and 316 kilometres from Madrid. It is also only 400 kilometres to Toulouse, one of France’s biggest cities, on roads through the Pyrenees mountains. About 70% of Spain’s economy and 25 million inhabitants are within a 350-kilometre radius of the region.

When travelling via high-speed AVE passenger trains it takes only one hour and 23 minutes to travel from Zaragoza to Barcelona, and one hour and 15 minutes to Madrid. Aragon also has road and rail connections to the three Mediterranean ports of Barcelona, Valencia and Tarragona, and to the three Atlantic ports of Pasajes, Bilbao and Santander.

“Zaragoza has the second most important cargo airport in the country after Madrid-Barajas,” says Mr Lambán. “The amount of freight it handles has been increasing every year. Aragon’s logistics platforms have about 19,000 square metres of space available for companies that want to set up here. Zaragoza also expects to connect by freight train with the city of Yiwu in the Zhejiang province of China this year.”

Playing to its strengths

In 2017, Zaragoza Airport processed 142,185 tonnes of cargo. It is integrated with the largest logistical platform in southern Europe, an intermodal transport hub made up of rail, road and air links. The airport is now placed second in Spain in terms of the volume of cargo it handles.

In March 2016, the governments of Aragon and Yiwu signed an agreement to maximise the economic benefits of the Yixinou freight train that links the Chinese city and Madrid. Starting this year, the train is expected to stop at Zaragoza and will transport merchandise to and from Aragon and Zhejiang.

On top of its cargo strengths, the region is a hub in Spain when it comes to the production of cars. Opel’s plant in the town of Figueruelas, close to Zaragoza, produced 382,425 vehicles in 2017. The majority are exported to the rest of Europe.

Mr Lambán says that Aragon is also becoming one of the key centres in the country for renewable energy. It has a semi-arid climate and about 300 sunny days per year, making it ideal for the development of solar power. A strong, dry wind blowing from the north-west – called the ‘cierzo’ – is also common, meaning the region offers great potential for wind power.

Learning potential

Mr Lambán is keen to emphasise the high quality of high schools and universities in Aragon. The University of Zaragoza dates back to 1542 and has colleges and academic facilities spread throughout the city.

Some faculties, such as humanities and computer science, are located on two smaller campuses. One is in the city of Huesca, situated 75 kilometres north-west of Zaragoza, and hosts the faculties of health and sport science and business and public management. The other is located in the city of Teruel, 170 kilometres south, which is home to the technical college and the faculty of social and human sciences.

“Aragon is generating more and more opportunities for young people all the time,” says Mr Lambán. “We are ensuring that the young are prepared for the digital age.”

Mr Lambán adds that there are a number of key factors that are helping attract foreign investors to the region. “Aragon is recognised for its political stability. It is a peaceful region with a high quality of life. Very few strikes take place here. Human capital and talent are of a very high order. There are lots of well-educated people here, people trained in engineering, and with lots of technical skills. Salaries are also competitive compared with other parts of Spain and Europe,” he says.

Strong links

Along with Madrid and Catalonia, Aragon is one of the three leading autonomous communities in Spain, according to the EU’s Regional Competitiveness Index. Mr Lambán says that there is a strong relationship between Aragon and other autonomous communities of Spain, in particular with the neighbouring regions of Valencia, Navarra and Catalonia.

“Catalonia and Aragon are very connected regions,” he says. “Barcelona has a port that is very important to us. I very much hope that the problems around Catalonian independence are solved quickly and in a peaceful way.”

Mr Lambán also stresses the importance of the rest of Europe to the Aragon region. He says that a rail tunnel already exists through the Pyrenees connecting it with France, though it needs modernising so that bigger and more powerful trains can pass through it.

“Brussels would like to see this rail link fully developed,” he adds. “Within 10 years, I think we will see it functioning properly. The EU is of key significance to the region. We have not received as much financial help from the EU as other autonomous communities in Spain but our economy is highly inter-connected with that of the rest of Europe.”

Aragon suffered in the wake of the international financial crisis – as did all of Spain – but is now positioning itself well as a centre for logistics, the automotive industry and agribusiness. While Madrid and Catalonia look set to remain Spain's economic powerhouses, Aragon is well placed to play to its strengths and attract the investment it needs to maintain its economic success story.