Lanzarote: el papel de la crisis - Fundación César Manrique

headway made in 1991 proves to be clearly inadequate. After some critical years - especially
1990-1993 - from 1996 onwards, there began to appear signs of recovery and the
commencement of a new period of intense economic activity linked to the expansion of the
tourism sector in the broader framework of a prosperous national and regional situation
conducive to enhancing the interests of large-scale investors and entrepreneurs.
The heating of the Canary Islands’ economy came about quickly, favoured by the magnitude and
voracity of the financial resources at stake. To income from the tourism business should be
added the huge amount of European funds reaching the islands, in addition to state
contributions and the injection given by the Reserva para Inversiones de Canarias or RIC (reserve
for Canary Islands investment), which had been accumulated by the corporate sector thanks to
a fiscal incentive provided for in the Régimen Económico y Fiscal del Archipiélago or REF (the
archipelago’s economic and tax system) for the purpose of boosting investment through tax
exemption schemes. In 1998, the reserve built up a total of Pta226,186m, with plans to create
a basket of capital amounting to Pta2bn over the next 10 years. At the same time, however, the
rush to launder money triggered by the coming effective introduction in the year 2002 of the
Community currency, the euro, has also played an important part in raising the temperature of
the Canary Islands’ economic furnace, resulting in an unbeatable year in terms of the corporate
sector’s interests and profits. Nevertheless, the inhabitants of the Canary Islands still figure
among Spanish citizens with lowest income per capita, occupying twelfth place, i.e., below the
average and at a good distance from the Balearic Islands, the autonomous community to post
the highest rate.
The autonomous community administration, bedazzled by the myth of ongoing growth - in
1998, the Canary Islands’ GDP growth rate was 4.58 per cent, ranking third in Spain -, stoked
the engine while taking advantage of the energy released to persist in boosting the tourism
industry, which accounts for 42 per cent of Spain’s total supply - 11 million tourists a year
on the Canary Islands and 729,000 registered accommodation places in 1998 - and
contributed 80 per cent of GDP to the archipelago’s economy, with annual turnover in the
region of Pta1.7bn. With a scenario such as this, it is not surprising that, in 1999, the Canary
Islands Government Tourism Department should have planned to spend Pta1,500m on
promoting the islands to attract more visitors. Nonetheless, it does prove surprising that,
while the corporate investment reserve (RIC) and the administration itself helped raise the
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