(3 of 11)
Over the Howls. In desperation, Franco turned to his young Commerce Minister, Alberto Ullastres, a brooding ascetic who had been arguing futilely for change. On a hot July day in 1959, Ullastres announced a sweeping stabilization plan. Credit was tightened, the budget slashed, the peseta devalued to a realistic 60 to the dollar. With the aid of a $400 million international loan, Ullastres threw open Spain's doors to imports necessary to rebuild its economy. And over the howls of government protectionists, he pushed through a series of measures to encourage foreign investors to enter Spain.
The success of the stabilization plan was miraculous. By 1963 Spain had $1.1 billion in foreign reserves and a booming economy. To help it along, Franco was persuaded to go on to an even more ambitious four-year development plan. At the heart of the plan are the seven development "poles" scattered throughout provincial Spain. Borrowing a page from Puerto Rico's successful Operation Bootstrap, Planning Minister Laureano López Rodó offers a five-year tax holiday, duty-free equipment imports, easy credit facilities and attractive plant sites to private industries willing to set up shop in these areas which are starving for capital.
Brittle Glories. Typical is Valladolid (pop. 158,000), a grey stone city on the Castilian plateau. Known to the 8th century Arab invaders as Belad Walid (Governor's Town), it was for 450 years the court of Spain's Christian kings. Ferdinand and Isabella were married there in 1469; Columbus died there in 1506; Cervantes probably wrote the first part of Don Quixote there. But its glories were brittle, and Valladolid faded into a shabby market center and rail junction.
How it has changed. Today Valladolid is a thriving, springing city, ringed with factories. Some 70 companies are moving into town, bringing an investment of $75 million and 8,200 new jobs. Great clusters of new brick apartments have risen from abandoned lots. The city's 14th century university has even started a new department: cinematography. "It's astounding that it could all have happened so fast," marvels local Development Boss Antonio Narro de Povar. "We're beginning to look like a little Madrid."
Luckily for Spain, its development push coincided with a vast surge in the living standards of the rest of Western Europe. Hordes of Europeans with hard money in their pockets began pouring southward across the Pyrenees, lured by cheap prices, fiestas and bullfighting, by clear skies and endless beaches, by the ancient exotic attraction of a semi-Arab land that had dropped out of Europe with the Spanish Armada.
Castles & Beaches. The regime was too smart to look a gift horde in the mouth. It started plugging tourism for all it was worth. Spain's stern moral codes were relaxed to permit bikinis on beaches where 15 years before men had been arrested for not wearing tops. Resort hotels sprouted in bunches, and the government added nine Spanish castles and monasteries to its own network of hostels and inns. Iberia airlines bought 18 new jets and more than doubled its flights to make Spanish beaches easier to reach.
Tourism has boomed beyond the regime's wildest dreams. Spain is now the favorite playground of