GaWC Research Bulletin 178 |
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Abstract INTRODUCTION: A CITY ON THE GLOBAL MAPThis article questions one of the most important and common assumptions in current research on global cities, namely, that globalization can be applied almost exclusively to the current period of economic restructuring in which states are assumed to be "losing control.” My analysis of the city of Bilbao shows that globalizing processes have been common to the history of the city ever since its foundation in 1300. In addition, I show that Bilbao's globalization and de-globalization through the centuries cannot be explained without taking into account the important role of the state in processes of economic restructuring and urban development (Boyer and Drache, 1996; Keil, 1998; Weiss, 1998, Sassen, 1999, 2000). In my analysis, political and historical factors become fundamental components of globalization. Thus I depart from conventional explanations of this phenomenon as an exclusively economic or even financial process affecting all cities similarly. I attempt to explore the organizational architecture of Bilbao in the world economy, and my approach allows us not only to capture a dynamic in formation (because Bilbao is not a well established global city in the top of the hierarchy), but also to explain this current cycle of Bilbao's globalizing process in comparison with previous cycles in history. In short, I discuss the specific trajectories through which Bilbao has become and is becoming part of global circuits, but I also question that such global linkages may represent the only basis to explain Bilbao's urban development throughout history, thus following the “limits of globalization” thesis (Cox, 1997; Beauregard and Pierre, 2000; Scott, 1997; Wade, 1996). Specifically, I argue that global flows must be explained and understood in the context of broader developments occurring at the local level in order to fully grasp the precise reach of globalization, which consists not only of "relations," but also of "structures," and differentiated "territories" (Dicken et al, 2001; Storper, 1997). Bilbao was already linked to global circuits shortly after its foundation in 1300, as the King of Castile chartered the city to be a node in the networks of trade between Castile and the world. The city played a role in the European subsystem of trade, for it was the place from where Castilian wool and Basque iron were exported to Europe. Basque merchants were present and active in the major world cities at the time, as has been well documented: in fact, Janet Abu-Lughod mentions “the Biscayans” as one of the sixteen “nations” present in the world city of Bruges by the end of the Middle Ages (Abu-Lughod, 1989: 90). The development of Bilbao during the following centuries up to the present time offers us the struggle of an expanding city which aims at preserving its commercial freedoms vis à vis the Spanish state1. Bilbao has played the role of a frontier town between Spain and Europe (and even America), adapting its commercial relations as a function of the ebbs and flows of world markets and the success or failure of centralizing efforts on the part of Madrid. Whereas for most of the Fordist period Bilbao was gradually integrated into the Spanish market, the current phase of globalization and a high degree of political autonomy for the Basque Country are taking the city on the road to internationalization once again. Bilbao has during the 1970s and 1980s undergone major economic restructuring to overcome the serious crisis triggered by the end of the Fordist model in the 1970s. The city is, in addition, the economic capital of a highly industrialized region with long contested political relations with the Spanish state. It may not be surprising that a rather small-size city in peripheral Europe claims globalizing status when globalization has become for most local planners and politicians the panacea for all urban problems, when the Guggenheim's success has instantly made Bilbao known in the world, and when the unification of Europe offers new possibilities for political and economic action in various European regions beyond their nation-states. The question is to assess what it means for Bilbao to be a city linked to global circuits, and how we can best pursue this question and avoid an "over representation" of globalization that ignores local, regional, and national explanatory forces. THE MAKING OF GLOBALIZATION IN BILBAOGlobalization is usually depicted as a cause or outcome rather than a process in formation, and arguments are mostly developed about its impact, usually portrayed as similar across time and space, on (a few) specific sites. If we maintain, as we do, that globalization is not exclusively a recent process (Arrighi, 2000; Chase-Dunn, 1999; Chase-Dunn et al, 2000), and aim at presenting the various ways in which a city has become global throughout history, then it is appropriate to speak of "paths to globalization" in the case of Bilbao. These will consist of various economic and political strategies developed at the regional level to establish flows and transnational connections with the world economy. They will also consist of local developments to cope with changes triggered at the global level, and structural and territorial adjustments to position the city in the context of world cities. Rather than presenting Bilbao as a passive receptor of global flows originating elsewhere, we develop a view of the city as an active participant in processes of globalization. Finally, if we present globalization as a process rather than an outcome, and are able to identify periods and paths to globalization in the case of Bilbao, we will also be able to speak of periods of de-globalization, in which the city's urban and economic development is best explained by forces at the national and sub-national levels. Bilbao's comparative advantage is based on long historical processes of deployment of transnational networks of exchange (goods, capital, information) across time and space, which have made Bilbao into a city linked to global circuits, as follows:
The local "growth machine" had already manifested itself in the fifteenth century, because commercial preservation and economic development became sine qua non for Bilbao, due to its poor agriculture and scarce food resources. Such a growth machine coalesced around powerful local merchants and the political elite in a strong local government which promoted economic development based on the local commercial privileges established in the fueros . Such commonality of local interests sought, alternatively, the preservation of local commercial franchises to trade freely with the world and the integration into the Spanish market with protection from the State. This varying arrangement of forces, which responded, essentially, to the configuration of world markets and the economic requirements of local commercial bourgeoisie, establishes the changing "globalizing" character of Bilbao throughout the centuries. BILBAO'S PATHS TO GLOBALIZATIONGlobalization is, thus, not a new phenomenon in Bilbao. All recent Basque efforts at internationalization have historical precedents. Basque economic internationalization can be observed already in the sixteenth and seventeenth centuries and then again in the period 1880-1936. Basque political globalization, clearly expressed in the Guggenheim project, also occurred before 1936 through the coordinated foreign action by the Basque Nationalist Party and then during the Second Republic (1931-39) by the Basque government (Ugalde, 1999), although never with the public visibility that the museum's operation has had in recent years. Bilbao's recent urban restructuring and revitalization offer mixed evidence regarding globalization. Urban restructuring, although initially triggered by forces at the global level, was mediated by policies and political responses at both the regional and national levels, and these influenced the outcome of the restructuring process. Revitalization, although portrayed as a globalization effort to reposition Bilbao in the context of world cities through the Abandoibarra project, has become hardly a global process, without significant flows of foreign investment3, and it remains a project of local or at best regional reach. However, Bilbao's globalization may have extended its reach during the most recent cycle, as shown by the impact of the foreign investments of Bilbao's global bank. The financial globalization of the BBVA had reached unprecedented levels during the 1990s, with a solid expansion into Latin American markets and attempts at consolidation within Europe. Similarly, the projects to enlarge Bilbao's port show the city's unequivocal intention to be incorporated into the growing flows of maritime trade. The significance of the BBVA headquartering in Bilbao can be observed in the fact that the Spanish government might be putting pressure on the bank's management to relocate to Madrid, should the Basque government go ahead with its political emancipation projects. Thus, economic and political globalizations are intertwined in the case of Bilbao, reenacting the tension regional-national. Structural adjustments in the local economy initially triggered by global forces, but mediated at the regional and national levels, and the long-standing political tension between the Basque region and the Spanish state, shape Bilbao's current urban developments. On the one hand, Bilbao remains a key node articulating large segments of the Spanish economy with global circuits via its port, which is managed by an autonomous agency 100 percent owned by the Spanish government. On the other hand, Bilbao's industrial fabric has become increasingly interwoven with the regional economy, and the city is no longer the only industrial center of the Basque Country, although it remains the largest one, and also the economic capital of the region. The Basque government places Bilbao at the core of its economic and political agendas, and thus the path from urban restructuring to regional geopolitics is marked by the standing tension between the regional and the national governments regarding control of urban policies and facilities. In this context, deliberate globalizing strategies implemented at the provincial and regional level by the only fiscally independent provincial governments in Europe4 constitute a show of political power vis à vis Madrid. The current phase of Basque economic globalization can be explained through three main factors: first, the new openness of the Spanish economy in the context of the European Union; second, the results of Basque regional policies promoting internationalization of companies, and third, a favorable currency exchange rate. As a structural component, perhaps the first factor is the most important one, because it has triggered a significant increase in the Basque figures of foreign trade (Basque foreign trade has tripled since 1994, according to EUSTAT, the Basque Statistical Office), and has motivated a changing geography of trade itself, from Spain as a main trading partner of the Basque Country, to the European Union. Membership in Europe has reactivated the Basque industrial base as well. Without a doubt, the process of integration into the then European Community in 1986 and then the overall process of building the common market and the Monetary Union have changed the entrepreneurial map of Europe, generating a more specialized industrial tissue within regions and an increase in business to business relationships, which was after all the main objective of the common market. Regarding public policies, it is evident that both Spain and the Basque Country maintain an active strategy of internationalization of companies. In the case of Spain through the ICEX (Instituto de Comercio Exterior, or Foreign Trade Institute) and the Ministry of Industry, and in the Basque case through SPRI (Sociedad para la Promoción y la Reconversión Industrial, or Society for Industrial Promotion and Restructuring). Political officials usually portray relative success of internationalization strategies through an indicator that measures the number of companies going global with the assistance of public programs funded by the government and the various chambers of commerce. In the Basque case, internationalization has occurred rapidly, and now the Basque economy enjoys a significant presence in international markets. In addition, it is important to take into account that success in exporting strategies for the Basque Country has been influenced by the rate of currency exchange between Spain and the various European countries. High rates of exchange and sustained appreciation of the peseta in international currency markets towards the end of 1980s and beginning of 1990s became a liability for Basque companies. Compounding this problem, the relative stagnation of the Spanish economy during those years in the context of a worldwide recession deeply affected the Basque Country's economic performance. On the contrary, recent changes effected in Europe en route to the building of the common market and the monetary union, and finally the creation of the common currency, have been beneficial to Basque companies. The long and positive economic cycle on an international level starting in 1993 has also contributed a great deal. There is a Spanish context for the Basque economic rebound of the period 1994-2002. Basque internationalization has occurred within the context of an increasing internationalization of the Spanish economy as a whole. Thus, Spain's international economic profile has grown appreciably in recent years. It is now the world's sixteenth largest exporting country. Major export items include motor vehicles, machinery, chemicals, base metals and their manufactures, vegetable products, plastic materials and textiles. Major import items include machinery, electrical equipment, motor vehicles, chemical products, mineral fuels and petroleum products, and base metals and their manufactures. Spain traditionally runs a large deficit in its balance of trade. In 2001 the EU accounted for almost 70 percent of Spain's exports and some 65 per cent of its imports, according to ICEX, the Spanish Foreign Trade Institute. Unlike the relative poor performance of the Basque Country in this division, Spanish foreign direct investment (FDI) grew strongly from the mid 1990s with the Spanish economy becoming a net exporter of capital in 1996. Spanish FDI reached a high of 58 billion euros (US$53 billion) in 2000, when Spain was ranked as the world's sixth largest capital exporting country, but fell to 29.3 billion euros (US$26 billion) in 2001 as the foreign investment climate deteriorated. Much of the growth in Spanish investment abroad in the past decade is due to an aggressive expansion into Latin America by larger Spanish companies (including important Basque companies), although that has now slowed. The origin of this expansion is state-led policies of protection of "national champions" in the face of foreign competition (Etchemendy, 2001). POLITICAL GLOBALIZATIONEconomic performance is not the only way to measure efforts at globalization on the part of Basque authorities. In Bilbao, restructuring came at the same time as another domestic political process not directly linked with globalization: the devolution of political power to the regions and the organization of a de facto federal state in Spain. So while the traditional ties of the city's economy with national development (steel and shipbuilding sectors) vanished, a new set of regulating forces appeared at the regional level. In this context, globalization acquires a more profound and far reaching meaning in the Basque case because it provides the political opportunity structure for, and thus it becomes a regional political strategy of, emancipation from Spain . Globalization is embraced by Basque political leaders as a process by which the Basque Country can be linked to the world, possibly without Spain's patronage and mediation. The best known example of such a strategy is the Guggenheim project. The Guggenheim operation is clearly a globalizing strategy because a main purpose of it was to establish a link and a flow with an international partner and to raise the threshold of global visibility for the Basque region as a whole. In addition, the Guggenheim operation is a political strategy by which an aspiring independent region reaffirms itself in an increasingly important field such as cultural politics. However, the Guggenheim operation is not an isolated case of Basque attempts at political globalization as a means toward emancipation from Spain. A most recent and conspicuous example is the proposal by the Lehendakari , or President of the Basque Government, to modify the status of political relationships between the Basque Country and Spain, by suggesting a new mode of Basque association with the Spanish state. This so-called plan para la convivencia (plan for living together) was first proposed in the Fall of 2002, and triggered fierce criticism on the part of many Spanish politicians and commentators. The plan proposes the possibility of free association of the Basque Country with the Spanish state. It is not, therefore, a plan for rupture with the state, but one that aims at the recognition of full Basque political identity and the development of the mechanisms to execute self-government within the context of global capitalism, including an additional set of powers that the regional government does not have as of now. The ideological underpinnings of the plan are to be found in so called new regionalism5. In fact, in a recent conference of Basque President Ibarretxe at the London School of Economics, he cited a presentation by geographer Edward Soja in Bilbao, and even Manuel Castells's ideas, to suggest that we live in a regionalized world on multiple levels in which the centralized governments of traditional European states no longer have a monopoly on power and decision-making, and in which political power is shared among various levels and through interconnected networks. Not surprisingly, Ibarretxe cited the Guggenheim operation as one major and well-known example of the Basque outlook on global matters. THE ROLE OF THE STATE IN BILBAO'S GLOBALIZING PROCESSAmong the main agents in the process of globalization are transnational corporations, industrial and financial, which develop their global strategies across states that are seemingly powerless to control them (Sklair, 1998). However, the role of the state in globalization processes, especially in nations and regions with strong state structures, such as the Basque Country, has been conspicuously neglected in most of the literature, although there are important exceptions (Brenner, 1998; Bunnell, 2002; Chiu et al, 1997; Hill and Kim, 2000; Yeung, 2000). Rather than assuming from the outset that states disappear under globalization, we believe that they often transform themselves to mediate in the incorporation of global flows into local economies. In addition, states may contribute to globalizing processes started at the local level via public policies that promote internationalization of companies and foster direct foreign investment. The case of Bilbao offers an interesting illustration of two powerful state administrations, regional and national, with political relationships fraught with tension and contention over history. Each "state" may have developed independent strategies towards globalization, although both may have been subject to similar global forces. In fact, Basque globalization has more often than not been powered and mediated by the state, be it the regional state, the national state, or both. State policies have throughout history favored (or inhibited) the move of Basque actors towards globalization or de-globalization. Periods of globalization in the Basque case, therefore, are not exclusively a consequence of technological improvements in communication and transportation technologies and a resulting "time-space compression" (Harvey, 1990) of varied nature and extent throughout history, but also, and clearly, a consequence of well defined state policies. In the first place, Bilbao was promoted as an international city when chartered by the King of Castile to be a node in trade between Castile and the world. The disputes about Bilbao as a free-trade zone and the contentions about the location of the customs offices, up to the nineteenth century, reflect an increased concern for centralization on the part of the Spanish state. These disputes greatly contributed to shape the changing role of Bilbao in transnational economics and as a free-trade city. Similarly, the interlinks between business and politics during the nineteenth century show how Basque industrialists benefited from state policies, seeking state protection and export subsidies, and thus adapting their production and distribution channels accordingly (Glas, 1997). In addition, national policies of industrial restructuring always protected national champions throughout the twentieth century, even during the 1980s crisis, although Bilbao's basic industry disappeared due to global structural developments that went beyond the reach and control of domestic policies and politics. Moreover, the regional state via significant public investment is behind urban revitalization and the Guggenheim project. Finally, Basque support to internationalization of companies is an example of active state policies at the regional level. These distinctive characteristics of Basque globalization suggest that globalists focusing on transnational corporations (Sklair, 1998) and the role of information technology (Castells, 2000) and finance (Sassen, 2001) have not paid sufficient attention to the modes of intervention and regulatory practices exerted by states in the global economy. Whether states's regulatory practices contribute to the ordering of the global economy out of seeming chaos is hard to tell and is not tested by my study. However, states do help local economies to position themselves in a context of self-protection against external forces. Thus globalization becomes mediated at the national and local-regional levels, with variable effects on individual "global" cities. The case of Bilbao is particularly relevant in this context. Centralization, deregulation, autarchy, privatization have been the main structural moves of the Spanish state throughout history. These variations have significantly generated cycles in Bilbao's economy and its global positioning. In sum, global processes materialize in national territories. How nation states and even regions regulate globalization, or actively participate in it, thereby transforms the process. The Basque government has effectively contributed to globalizing tendencies in the Basque economy. In Bilbao, the revitalization plan is funded with public money, although the creation of Bilbao Ria 2000 represents an attempt to privatize planning and maximize returns from the sale of land without incurring in major public expenses and debt. Similarly, the whole Guggenheim project was funded by the Basque government at no cost whatsoever to the Guggenheim Foundation, and the Basque government and the Treasury of Biscay will fund the approximately 7.5 million euros deficit per year of the museum. State-led globalization strategies can also be observed in the implementation of a comprehensive plan for infrastructure renewal and, most prominently, the active support of Basque regional agencies to the internationalization of Basque companies. Basque foreign presence, in general, is supported and funded by the Basque government, as a public strategy of economic and political visibility abroad. Finally, the role of state, regional and local policy is visible in processes of spatial polarization, which the initial wave of works on the global city had been too quick to attribute exclusively to globalization forces (Mollenkopf and Castells, 1991). In the case of Bilbao, the original geographic bifurcation of the metropolitan area along the separate banks of the Nervión River decisively contributed to the "dualization" of the area already during industrialization in the late nineteenth century. This trend has only intensified with middle-class residences on the right bank and factories and workers on the left bank of the River. Although patterns of dualization were reinforced after restructuring took place during the 1980s, we cannot say, in the case of Bilbao, that globalization caused a new spatial order. Rather, urban policy failed to ease the existing urban polarization after industrial dismantling occurred due to global restructuring in the steel and shipbuilding sectors. POST-INDUSTRIAL CITY OR EMERGING GLOBAL CITY-REGION?One of the labels attached to cities in the current period of restructuring after the demise of the Fordist model is "postindustrial." Tertiarization has triggered a rise in the labor force occupied in the service sector and a concurrent decrease of industrial jobs that have moved elsewhere. Yet this has happened in some cities that have been presented as exemplars, and it would be too tempting to assume a similar outcome in the case of Bilbao. After all, globalization has caused basic industrial sectors of the city (steel and shipbuilding) to disappear, but this does not mean that we can use the label “postindustrial” to speak about Bilbao because the metropolitan area still hosts an important industrial sector. It will be worth exploring this question at the regional level because the Basque Country as a whole remains an industrial powerhouse and the economic ties of the city with the region have multiplied in recent decades. In fact, the thesis of a recent rise of global city-regions (Scott, 2002; Simmonds and Hack, 2000) can be applied to the Basque case. Bilbao is not a clear-cut "postindustrial" city in the making. The Basque region is rather an industrial and emerging ("global"/globalizing?) city-region, with Bilbao as its economic and industrial capital. Despite severe employment losses in the 1980s, in 2002 industry still employed 29 percent of the active population in the Basque Country as compared to 41 percent in 1985. In Metro Bilbao, that figure is 25 percent (38.9 in 1985). Between 1985 and 2002 the number of people working in the Basque Country has increased from 656,400 to 894,500, an amazing 36 percent increase, despite the fact that the regional population has remained constant or even decreased slightly. Most of these jobs have been created in the service sector (213,000), following a global trend towards tertiarization, but the interesting point is that in 2002 there were only 15,000 fewer jobs in industry than in 1985 (253,800 versus 268,100), a decrease of only a 5.3. So restructuring not only mean de-industrialization, but also re-industrialization, as seen in Table 8.1 below. After the low point reached in 1994, industrial employment recovered to almost the level it enjoyed in 1985. Table 8.1. Provincial Distribution of Industrial Jobs in the Basque Country, 1985-2002
Source: EUSTAT, and own elaboration
What is new in historical terms is a redistribution and decentralization of manufacturing activities within the region. Industrial growth has occurred chiefly in the provinces of Guipuzcoa (32 percent employed in industry) and especially Alava (34 percent). In fact, Alava went from 38,500 to 47,000 industry workers during the period, a 22 percent increase, and Guipuzcoa went from 95,300 to 96,200 industry workers, a 0.9 percent increase. Vizcaya, however, has lost industrial jobs. It went from 134,200 in 1985 to 110,700 in 2002, an 18 percent decrease. The number of regional industrial jobs decreased almost steadily between 1985-94, with only a small peak in 1989, the gain in industrial jobs occurring only since 1994. The year 2002 is the first since 1994 in which the number of industrial jobs in the region decreased from the previous year7. The times when Metro Bilbao was the only industrial area in the Basque country are over. In a trend that began in the 1960s (and therefore predates the 1980s restructuring), the region is becoming spatially reorganized as a poly-nucleated city-region of two million people with a high population density of 289 people per square kilometer. Its main urban center remains Bilbao, but less than half of the regional population now lives in that center. Commuting for work within the region is becoming more common, although travel time to the farthest workplace from anywhere in the region does not exceed one hour and the communication infrastructure is very good. Nevertheless, the province of Vizcaya still concentrates 53.9 percent of the regional population and 43.5 percent of all regional industrial jobs in 2001. Metro Bilbao concentrates about a third of all regional industry. Bilbao has 41.5 percent of the regional population and 77.1 percent of the provincial population. Metropolitan Bilbao continues to be the largest industrial concentration in the Basque Country, although its relative importance has diminished from the golden times in the first half of the twentieth century, when it was the only industrial area in the Basque region. The most industrial province in the Basque Country is no longer Vizcaya, but rather Alava, closely followed by Guipuzcoa. In Alava, industrial jobs (47,000) represent 16.41 percent of the provincial population, which totals 286,387 people. Guipuzcoa is home to 96,200 industrial jobs, or 14.2 percent of the provincial population, whereas Vizcaya's 110,700 industrial workers represent only 9.8 percent of the total population of the province. This is the first time in seven centuries of history that the Basque economy is no longer based on iron and shipbuilding, and it is the first time in history (since the 1960s to be exact) that the Basque economy is more than the city of Bilbao. Despite the fact that the city of Bilbao may be lagging behind the region in terms of economic performance, as we have seen in chapter seven with data on foreign trade, the Basque region is reconfiguring itself as a compact territory with three main cities well linked by good communication infrastructure. The industrial tradition of Bilbao and the region remains strong, although the industrial base has diversified and reterritorialized. However, industrial clusters are widespread, and this probably makes the Basque Country a sort of "neomarshallian node" (Amin and Thrift, 1992) in an emerging global network of regions. In addition, the Basque region constitutes a unique example in Europe of a region able to run its own Treasury, and this makes the Basque Country better able to organize and fund public policy at the regional level. On the other hand, the new European political configuration with "network states," as Manuel Castells (1998) has named it, operating at various spatial scales, apparently favors the old Basque quest for political emancipation, or at least this is how local political leaders perceive it. The Basque region acts in practice as a developmental state much in the manner of East Asian countries8. A significant difference, however, is that the Basque Country is not a newly industrialized country, but rather a region with an old industrial tradition of centuries. Building a (global?) city-region in the Basque Country has an extraordinary, and contentious, political dimension. Ever since the devolution of powers granted by the Spanish democratic state in 1975, the Basque political elite (PNV) has redirected its efforts for greater political autonomy in the newly created and still somewhat "under construction" European space. This is the case not only because the focus of economic policy at the regional level is convergence with Europe, but also because various political decisions are made to gain greater regional representation in Brussels, following the tradition of the foreign relations of the PNV before 1936. In this context of Basque "reterritorialization"9, Bilbao's centrality in the regional and national economies will likely become the subject of increased dispute. On the one hand, Bilbao is the economic capital of the Basque region, and regional political elites strive to mobilize their political capital to control the city. The loss of an electoral base in the metropolitan area by the Spanish left, following industrial restructuring, has been accompanied by the rise of political efforts by the PNV to mobilize its nationalist base in the city. Despite the global visibility of the Guggenheim museum and its significance as a political strategy of globalization, the future of Basque Country's and Bilbao's international role depend on the power of its financial sector and the ability of the region to maintain its foreign trade accomplishments. In both cases, the Basque economy performs as a node linking Spanish and European markets, although the Basque region represents a powerful manufacturing production site as well. Basque exports to other countries have multiplied by a factor of three during the past eight years, underlining both the reindustrialization of the region and the globalizing tendencies favored by the common European market. The port of Bilbao functions as a redistribution locus for large segments of Spain's manufacturing production, as well as a major import site for foreign production. Finally, the Banco Bilbao Vizcaya Argentaria represents the power of the local financial industry, and its global expansion during the twentieth century serves as an example of the Basque Country's and Spain's financial strength, as well as a reminder that globalization may not represent a radical break with past developments. FINAL NOTES ABOUT GLOBALIZATIONGlobalization is not an entirely new process , although transnational financial strategies and the role of information technology may be strengthening its role in world economic processes at the turn of the twenty-first century. Rather, globalization appears to be a cyclical or spiral process, perhaps not irreversible, in which states's positioning toward global forces depends on both the strength of globalizing tendencies and the national and regional political arrangements prevalent at any given time. One of the consequences of considering globalization a variable process is that it directs our attention to history, it suggests the value of understanding present processes in the light of past outcomes10. Thus, global city research intending to construct a geography of globally-linked cities has to take into account previous geographies of linkages between nations and regions11. If globalization is a historical process, and thus place and time specific, then we should give less weight to teleological explanations and grand narratives such as "time-space compression" and "the space of flows," and be prepared to accept different outcomes of the process in different places and times. Another consequence of portraying globalization as a variable process is to allow us to consider whether and when the current cycle might end. At least two recent, and perhaps influential, arguments have been presented about the end of globalization as we are experiencing it. One of them, by Harold James (2001), shows how and earlier wave of globalization tendencies was disrupted by popular resentment against the hypermobility of capital flows, trade, and international migration during the Great Depression. The other argument, by Alan Rugman (2001), proposes regionalized strategies for business profit, showing that global strategies are simply a myth. This is not the place to comment at length on these arguments. Suffice to say that the question about the end of globalization as we know it is a legitimate one when the process is analyzed in historical perspective. Global analysis is not a zero sum game in which understanding the rise of international forces necessarily involves the neglect of attention to national and sub-national forces. Put differently, globalization is not the only one factor that can explain urban restructuring and economic development processes in cities, as Janet Abu-Lughod (1999) has suggested. On the contrary, we have seen that Bilbao's urban fortunes and the city's international vocation have been variously constrained or facilitated by national and regional factors throughout the centuries. Globalization, therefore, is only one among many forces affecting Bilbao throughout history, although in recent local political and economic processes it has worked as a symbolic catalyst12. A second major force affecting the city's economic development has been the relationship between the regional economy and the Spanish state, a relationship which has greatly influenced the political map in the Basque Country since the industrialization of Bilbao in the late nineteenth century. The moves toward greater centralization on the part of the Spanish state, and the recent devolution of political and economic power to the Basque region have reconfigured regional developments in several periods. In sum, not everything happening at the local level needs to be determined or greatly influenced by processes occurring in larger contexts. If globalization represents only a partial explanation of current processes in the world economy, then we could be prepared to ask whether the recent wave has integrated the world to a qualitatively greater extent than it was integrated during former waves13. Globalization is a geopolitical process , in which states, rather than losing control, try to position themselves as potential global players. Their fate depends on the relative strength of national economies in the global context and it also depends on positionality in such global context. The cases of Spain and the Basque Country offer parallel examples of this global strategy. In the case of Spain, globalization of capital occurred based fundamentally on 1980s policies of protecting national champions in the face of increased deregulation and privatization. National champions in the financial and industrial sectors were thus able to avoid being absorbed by foreign companies and then, during the 1990s, could play an essential role in Spanish's foreign investment, especially in Latin America. In the Basque case, regional geopolitics is in crescendo . Basque public investment has multiplied by a factor of eight since the 1980s and Basque support for the internationalization of companies is a key of regional economic policy. Basque geopolitics actively seeks more presence in the new European space and the international arena, at the expense of regional ties with Spain. The Guggenheim operation and the recent Basque proposal of "free association" with the Spanish state are clear examples of this strategy. In both cases, local actors interpret globalization as the next stage in modernization processes. Implicitly there is the idea that globalization is an equalizing force, that as the world becomes more alike economically and culturally, all cities have a possibility to become global, that is to become "central nodes" in a global network. However, position in the global hierarchy makes a difference, although this assertion can only be tentative because a global and complex organizational architecture of the global economy linking cities around the world is not yet developed. Specifically, Bilbao is part of the North Atlantic economy, which is the most globalized region in the world today14. Such positionality greatly affects Bilbao's (and Spain's) moves toward globalization at the present time. Globalization is a network of relations, structures, and territories. It is not a linear and uniform process but contingent and complex and, although one can see similarities across time and space, the local outcomes may not be similar and homogeneous. One of the most fruitful ways to study globalization is to consider its occurrence in a specific place throughout history. In a clearly relational way, my analysis of Bilbao did not focus exclusively on any particular powerful institution or structure. Rather, it tried to capture the plurality of relations among various structures, institutions, and actors. Yet some actors, institutions, and structures are more significant than others: the city, the region, the nation-state, and the global economy. Globalization acquires specific meaning when it is considered within such plurality of forces acting at various spatial scales. Globalization does not consist only of relations or flows among structures or territories. It also includes the ways structures are changed in the globalizing process, and the ways in which territories become embedded in such networks of relations15. Globalization may have been prematurely overgeneralized in recent analysis of the global economy because few studies have surveyed in detail the circumstances of a specific place throughout history. By studying globalization through a specific place we can put the process in perspective and in context, and realize that economic development and in general a place's fortune obey a complex array of forces of which globalization is only one (albeit important) part. The Basque region represents a unique case for study because the confluence of both political and economic factors in the region's moves towards globalization characterizes the region's current developments. Whether globalization will remain or will retract in the coming years may challenge both Basque strategies of emancipation from Spain and the region's approach to economic development. 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Basque Paths to Globalization. 1 This tension regional-national is best expressed by a variety of groups of interests. For example, whereas the merchants in the city always had an interest in free trade, industrialists often sought protection from the State. 2 Data about New York, Chicago and Los Angeles are taken from Janet Abu-Lughod (1999) New York, Chicago, Los Angeles. America's Global Cities , Minneapolis: University of Minnesota Press, page 407. The comparison with Bilbao is my own elaboration. 3 The lack of foreign investment in the Abandoibarra project does not mean that foreign investment is non-existent in the Basque Country. Foreign investment in the Basque Country as a whole is represented in various industrial sectors such as the auto component industry. I thank one of the anonymous referees for bringing this to my attention. 4 It is important to note that fiscal authority in the Basque Country is in the hands of provincial governments, not the Basque regional government. 5 For a comprehensive account of so-called “new regionalism” see Keating, M., (1998) The New Regionalism in Western Europe. Territorial Restructuring and Political Change , Edward Elgar, and Keating, M., (1997) The Political Economy of Regionalism , Frank Cass 6 The thesis of this book substantially refutes arguments about the loss of significance of manufacturing in some cities, certainly in Bilbao, although the range of variation among cities is considerable. For a good account of three cities in which industry has lost relative weight, see Savitch, H., Post-Industrial Cities: Politics and Planning in New York, Paris and London , Princeton: Princeton University Press, 1988 7 The analysis in this section is based on data from EUSTAT, the Basque Statistical Office. 8 For analyses of East Asian global cities and their relationship with their developmental states see Bunnell, T. (2002) Cities for Nations? Examining the city-nation-state relation in Information Age Malaysia," International Journal of Urban and Regional Research 26.2, 284-98; Douglass, M. (1993) The NEW Tokyo story: Restructuring space and the struggle place a world city, in Fugita, K. And R. Hill (eds.) Japanese Cities in the World Economy , Temple University Press; Sirat, M. and S. Ghazali (1999) Globalization of Economic Activity and Third World Cities: A Case Study of Kuala Lumpur , Kuala Lumpur: Utusan Publications; Wu, F. (2000) The global and local dimensions of place-making: remaking Shanghai as a world city, Urban Studies 37.2, 1359-77 9 In the Basque case state reterritorialization becomes competition for urban control between the regional and the national state. Neil Brenner has been a major introducer of this term in globalization studies. According to him, globalization is a mere reterritorialization (or re-scaling) of state activities to a higher, global level. I do not hold this view in its entirety, but I believe that the term can be utilized with a more broad meaning. See Brenner, N. (1999) Globalization as reterritorialization: the re-scaling of urban governance in the European Union , Urban Studies 36.2, 431-51 10 A major recent work on globalization is Janet Abu-Lughod's New York, Chicago, Los Angeles. America's Global Cities, Minneapolis: University of Minnesota Press, 1999. In her book, Abu-Lughod develops a historical approach to her three case studies which is both stimulating and convincing. Another major work that questions globalization's "newness," although it does not include comprehensive case studies is Marcuse, P. and R. van Kempen, Globalizing Cities. A New Spatial Order? , New York: Routledge, 2000. 11 Recent work by Taylor et al shows that New York and London are not exemplars but rather exceptions in a world of linked cities (Taylor, P. J., G. Catalano and D. R. F. Walker, "Measurement of the World City Network," Urban Studies 39 (13), pp. 2367-2376; Taylor, P. J., G. Catalano and D. R. F. Walker, "Exploratory Analysis of the World City Network," Urban Studies 39 (13), pp. 2377-2394). A similar point is developed in Yeung, Henry Wai-Chung and Kris Olds, "From The Global City to Globalising Cities: Views from a Developmental City-State in Pacific Asia," Paper presented at the IRFD World Forum on Habitat --International Conference on Urbanizing World and UN Human Habitat II, Columbia University, New York, June 2001. 12 Bob Jessop has argued that globalization "is just one face of a complex re-scaling of social processes which can be also interpreted from other scalar viewpoints, such as localization, regionalization or triadization" (see Jessop, B., "The Crisis of the National Spatio-Temporal Fix and the Tendential Ecological Dominance of Globalizing Capitalism," International Journal of Urban and Regional Research 24 (2), 2000) . See also Machimura, T., "Symbolic use of globalization in urban politics in Tokyo," International Journal of Urban and Regional Research 22 (2), 1998, pp. 183-94. 13 For a comprehensive view on this point, see Chase-Dunn, Christopher, "Globalization and World-System Perspective," Journal of World-Systems Research , Vol V, 2, 1999, pp. 165-185. 14 Cross-border mergers and acquisitions, which dominate global foreign direct investment today, are highly concentrated in the North Atlantic economy and the OECD countries (see Sassen, S., (ed.), Global Networks, Linked Cities , New York: Routledge, 2002, p. 10). 15 As Dicken, Kelly, Olds and Yeung (2001, p. 91) put it: "We must avoid privileging specific organizational loci of analysis. Studies purporting to develop an undersanding of the global economy have generally analyzed just one, or perhaps two, types of agents, such as firms or industrial sectors. Other agents (such as states, labor organizations, and global regulatory bodies) an non-human intermediaries (for example port facilities, telecommunication infrastructure, policy documents and manuals) have been neglected or even dismissed as irrelevant and anachronistic." For an understanding of networks as an architecture suitable for analysis of the global economy, see, inter alia, Dicken, P., Kris Olds and Henry Wai-Chung Yeung, "Chains and networks, territories and scales: towards a relational framework for analysing the global economy," Global Networks 1 (2), 2001, pp. 89-112; Storper, M., "Territories, flows and hierarchies in the global economy," in K. R. Cox (ed.) Spaces of Globalization: Reasserting the Power of the Local , New York: Guilford, 1997, pp. 19-45.
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