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ARI 10/2013 ARI 8 April 2013 Foreign Direct Investment in Spain: holding firm despite (or because of) the crisis William Chislett | Associate Researcher at the Elcano Royal Institute and author of three books on Spain published by the Institute. Theme Spain continues to draw significant levels of foreign direct investment (FDI), despite (or because of) the crisis. Reforms are making FDI in the country more attractive. Summary Gross investment, excluding Special Purpose Entities and thus the productive part of FDI, was €13.4 billion in 2012, down from €23.6 billion in 2011, but higher than the €12.2 billion of 2010. The motor industry, close to 90% of whose production is exported, has attracted some €2.5 billion of future investments. Spain slipped to 44th position in the World Bank’s 2012 Ease of Doing Business index. However, the index does not reflect the government’s reforms in various areas, which have not yet fed fully through into the economy and have the potential to enhance the country’s attractiveness. Analysis Background Foreign direct investment (FDI) has long played a prominent role in the Spanish economy, particularly since the 1959 Stabilisation Plan, which put an end to the policy of autarky that followed the 1936­39 Civil War and began to open up the economy. The inward FDI stock stood at US$634.5 billion at the end of 2011, up from US$65.9 billion in 1990 (see Figure 1). Among the world’s 15 largest economies, Spain’s FDI stock in GDP terms (42.1%) is higher than the US’s, France’s, Germany’s and Italy’s (see Figure 2). FDI inflows have ranged from a high of 26.4% of gross fixed capital formation in 2000, when the economy was in the middle of a long boom