Boosting Gijon's Economy

The port city of Gijon in the Spanish region of Asturias has always lived off the sea. The fishermen exchanged their nets for shovels late in the 19th century, as the city turned to exploiting local coalmines, and later shipbuilding.

But economic recession hit the area hard in the 1980s. Today, an expansion of Gijon's port costing 600 million Euros ($777 million) is transforming the city.

The multinational company Arcelor -- one of the largest steel makers in the world -- is happy about the project that's doubling the size of Gijon's port. The European Union's structural fund has contributed 250 million Euros to the development.

Arcelor manager Manuel Junquera said it's going to mean millions more tons of minerals like coal can be brought in from countries like Australia and Mauritania for use in Arcelor steel plants.

"Like all steel makers, we need to bring in minerals to extract the steel, as we don't have these minerals in Spain," Junquera said. "The only way to bring these in is by boat." He said the expansion of the port was important for Arcelor, as it became able to accommodate larger container ships.

"It's a very big project for Asturias and very significant," Junquera said.

Port expansion is transforming the city

Local fishermen have raised concerns about the impact of the port expansion on their fishing activities. But most local people seem very positive about the project.

The older generation particularly feels that after all the job losses in the region, there needs to be something here for the young people.

In the depressed post-industrial 1980s, all of the main industries here were in crisis, including steel making, mining, shipbuilding, textiles and dairy farming. Unemployment was at 25 percent.

But now, the city is on the up. The old port, once partly abandoned, is now a promenade with a healthy splash of cafes and restaurants.

Diversification should make Gijon less vulnerable

Gijon's Mayor, Paz Fernandez Felgueroso, said she thinks the port expansion project is the most representative example of the city's economic revival. She said the port contributed some 10 to 12 percent of the local gross domestic product.

"This gives you an idea of what the port means to us, not just that direct impact but also indirectly -- in transport, commercial traffic and the movement of people," Felgueroso said.

According to Felgueroso, the impact on the regional and local economy has only been possible due to the considerable amount of money the EU is contributing to the port.

The mayor's local employment plan is aimed at not only encouraging multinational giants like Arcelor, but also smaller businesses. Felgueroso said it's important to increase diversification in the local economy to make it less vulnerable to the rapid changes that virtually destroyed many of the major industries here two decades ago.

Small industries question port's significance

Cider is one of Asturias' most symbolic products. Teresa Riera, the director of the cider company Sidra Escanciador, has mixed feelings about the port.

"We know the port is doing a great job for bulk container transport, but it's a different thing when it comes to transporting a container or two of bottles of cider," Riera said. "This is really what we're about and the people in my sector."

Riera said the region needed both types of business in order to develop. But it isn't perfect.

"While the expansion of the port is going rather well, it lacks a bit of initiative," Riera said. "I don't know if it's political or business."

Forty percent of Escanciador's annual production of ten million bottles is exported. So it would seem Escanciador, which employs 22 people, would be using the nearest local port at Gijon, 30 kilometers away. But despite the port's expansion, the company still transports its cider 300 kilometers by highway to the port of Bilbao, which offers them better rates and faster shipping times.

In response to this issue, a spokesperson for the Gijon Port Authority said they don't know of a problem with regard to access by small businesses to bulk container ships. The Authority said it believed it was satisfying the needs of all local cider makers.

For most people in Gijon, they only see the big picture. As long as the EU-backed port expansion stimulates the economy and creates jobs, it's making the vast majority of the locals in this old port city very happy.