Cutting
red tape and inflation has drawn inward investment of nearly $900 million
in the first eight months of last year
major
international drive to attract foreign investors has been launched by
the Hellenic Centre for Investment (ELKE) in the run up to the Athens
Olympics.
The programme, under the slogan ‘Greece: A Winner’s Choice’,
aims to highlight the country’s competitive advantages in the period
2002-2004. Public and private agencies will cooperate on a variety of
initiatives and projects.
Greece needs inward investment to bolster its economy against the impact
of a global slowdown and reduced state spending imposed by the government’s
pro-business structural reforms.
The government’s success in bringing down the rate of inflation
and producing a modest surplus on the budget, and Greece’s above
average economic growth rate, appears to have produced an upturn in
overseas investor interest. During the first eight months of last year,
foreign direct investment rose to $880 million.
In
comparison, outward investment by Greek companies last year totalled
$500 million, reversing the pattern of recent years in which the country
invested more abroad than it received.
ELKE general manager Haris Issaias emphasises the country’s stable
economy, full access to the EU markets and strategic location close
to the emerging markets of southeast Europe and Turkey.
“Membership of the eurozone is a plus for Greece because it provides
stability in the macroeconomic variables such as growth of gross domestic
product, inflation and interest rates, and these are important to investors,”
he says. “The eurozone is a factor that will make foreign investors
come to Greece who might not have otherwise.”
Foreign investors have cited a complex bureaucracy, complicated tax
regulations and protective labour laws as reasons for being wary of
doing business in Greece in the past. Today, however, government officials
are becoming much more aware of the need to be investor-friendly.
Mr
Issaias says: “Our mission is to promote Greece as a country for
investment. We are trying to encourage cooperation between Greek and
foreign companies.”
He acknowledges that administrative procedures involved in getting an
investment project off the ground in Greece can be time-consuming and
complicated, but adds that the purpose of his agency is to find solutions.
Greek
firms have invested heavily in the Balkans
“We
have set up a unit to provide support for investors in two ways,”
he says. “First, we guide them in terms of what they should do,
and how to deal with delays or any lack of cooperation.
“Second, after an investment has been approved, we have the right
to intervene on behalf of the investor with the appropriate authorities
in order to solve any problems they may have in implementing the project.”
Costas Bakouris was appointed ELKE’s chairman last year with the
brief of making Greece more attractive to investors. “We are creating
a country that is going to become more friendly towards business, which
will have all the elements it needs to compete effectively in the marketplace,”
he says.
“We are making changes in order to be more competitive and to profit
from investments. The government needs to be less bureaucratic and have
fewer rules in order to be more flexible and more effective.”
ELKE,
funded jointly by the EU and the Greek government, is a ‘one-stop
shop’ for foreign investors and offers its services free of charge.
It is empowered to make recommendations to government concerning investment
laws and other business procedures.
“We examine those areas that are not very competitive and propose
changes to the appropriate ministers in order to overcome this problem
and to focus on improving those sectors,” says Mr Bakouris. “The
operating climate is improving and we’re getting many more enquiries.”
A significant initiative of the ‘Winner’s Choice’ promotion
is Athens Business Club, which aims to attract some 25,000 members from
around the world. Its website (www.athensbusinessclub.gr) offers users
a wide range of information on opportunities.
Privatisation
of state companies and liberalisation of the markets in which they previously
enjoyed monopolies have
created a new climate for inward investment. Banking, energy, air transport,
infrastructure projects and agriculture are all areas offering opportunities.
Access to European technology research and development funds is one
of the advantages on offer and ITC (information technology and telecommunications)
is another sector being strongly promoted.
The telecoms sector has been deregulated and opened up further to competition,
and the government is now moving towards allowing private investors
to build, own and operate electricity generation, transmission and distribution
projects in Greece.
Adequate
infrastructure is a prerequisite for Greece becoming more competitive.
This is why so much has been invested in improving its infrastructure
networks during the past decade, not least of all in an attempt to increase
its appeal to potential investors.
Long recognised as one of the world’s favourite holiday destinations,
Greece’s climate gives it a natural advantage. Better transport
facilities open the way for this to be exploited further. “With
new infrastructure, such as roads and airports, our country will become
much more accessible to visitors,” says Mr Bakouris.
More
generally, improved highway arteries, rail networks and upgraded port
and airport facilities are helping Greece to position itself as an investment
hub for the region – a springboard to the regional markets of the
Balkans, the Black Sea, Eastern Europe and the Eastern Mediterranean.
“Greece is the gateway to the Balkans. We have made investments
in those countries and therefore we are the best partners for them,”
says Mr Bakouris.
Greece has maintained strong cultural and economic ties in these regions
and Greek companies have already invested heavily in the Balkans –
more than $6 billion during the last decade.