Economics and Agribusiness in the Pyrenees

The principality of Andorra, founded approximately a thousand years ago, is one of the oldest and smallest countries in Europe. Located between France and Spain, in the Pyrenees mountain range, Andorra is a landlocked and hard-to-reach country. For centuries, two co-princes, the President of France and the Spanish Bishop of Urgell (Catalonia), have symbolically ruled the principality. Nevertheless, in 1993, Andorra adopted a parliamentary constitution, while maintaining the figures of the two princes as sovereigns of the principality. Currently, the country has a total territory of 468 square kilometers, which is about two and a half times the size of Washington, DC. Mostly rugged mountains and narrow valleys dominate the Andorran landscape. Likewise, the country has a total population of some 86.000 citizens, 84% of which live in an urban setting, notably the capital city of Andorra la Vella with more than 23.000 inhabitants. The national annual gross domestic product (GDP) of Andorra is approximately US$3.3 billion (PPP). However, the country has experienced sluggish and even negative economic growth in recent years. Traditionally a country devoted to sheep and cattle raising, today the Andorran economy is divided into 12% agriculture, 34% manufacturing, and 54% services. Similarly, it is estimated that the agricultural industry employs 1% of the national labor force, while manufacturing employs 4%, and services employ another 95%. Meanwhile, the agriculture industry utilizes 44% of the national territory, while another 34% is forested.

Economics and Agribusiness in the Pyrenees

In terms of natural resources, Andorra has hydropower, mineral water, timber, iron ore, and lead. Within manufacturing, the national industry is focused on furniture and wood products. Likewise, a significant portion of Andorra’s economy is dependent upon the banking and financial services industries as well as its status as a fiscal paradise and tourism, particularly skiing. Simultaneously, the country’s agricultural industry has as main products rye, wheat, barley, oats, vegetables, tobacco, sheep, and cattle. During 2015, Andorra imported US$1.3 billion worth of goods and exported US$58 million, resulting in a trade deficit of about US$1.24 billion. Furthermore, that same year, Andorra’s main export, representing 21% or US$12 million of the country’s total, were integrated circuits. Similarly, the country’s main import, representing 7.5% or US$98 million of all international purchases, were cars. Even though Andorra does not formally belong to the European Union, it has preferential trade agreements, uses the Euro as its official currency, and benefits from access to the Schengen zone. In terms of trade, Andorra’s main partners are members of the European Union, mainly Spain and France, as well as the United States.

Lastly, land distribution in Andorra has also evolved throughout the last half century. Back in 1961, permanent pastures and meadows in the country covered 25.000 hectares, while arable land represented 1.000 hectares. More recently, by 2014, permanent pastures and meadows accounted for little over 18.000 hectares, while arable land represented almost 3.000 hectares.

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