ECONOMY

Why public administration is not absorbing funds for modernization

There is some concern about the prospects of the Greek economy when next year’s Olympic Games are over; even more so, when the massive investment subsidies from the European Union’s Third Community Support Framework (CSFIII) start to dry up, as they are scheduled to do around 2006. The concern is well-placed, not because of any looming disaster but because we may easily get carried away by the present euphoria and justified optimism that is bound to engulf the country as the time of the Games approaches. The looming pre-election period is another source of optimism but, in this case, it is unjustified. With two certain election contests within a few months (for the national and the European parliaments), the government is bent on improving the feel-good factor among voters. A form of «collateral damage» in this climate is the lack of effective discussion and accountability: The CSF’s Information Society Program is a case in point. The planned subsidies of 2.8 billion euros are aimed at modernizing public administration in domains particularly important to citizens. The greatest part of public debate concerns the absorption of funds. The issue is quite serious; actual spending to date is still at 8.6 percent of the total. The Economy Ministry, however, appears optimistic that targets will be met, as a large number of proposals that are at the evaluation stage are soon projected to lift the absorption rate to around 40 percent. On the other hand, the two biggest parts of the program seem to have become stuck. One is a sub-program for networking the country with broadband connections, which would allow the transmission of large volumes of data and facilitate enterprises in boosting their competitiveness and capital values. But the sub-program, which accounts for one fifth of Information Society, is literally at a zero absorption rate. One of the main reasons for this is the weaknesses of OTE Telecom, practically the only organization that would be capable of undertaking initiatives. But the Transport and Communications Ministry is not contributing and information technology firms have their eyes set elsewhere, feeling unsure about their abilities in such large projects. So, even after the Commission gave the green light in July for regionally based firms to absorb subsidies, the future looks bleak. The second problem concerns the Syzefxis sub-program, regarding electronically linking 1,800 public administration offices and databases. Objections and badly prepared proposals are two factors that have blocked the ratification of tenders under Syzefxis, the planning of which was approved in April 2003. IT firms have been showing an interest here – indeed, an excessive one, as evidenced by the intense competition for the contracts which has also blocked progress. The prime minister is also said to be strongly interested in the sub-program. Senior Economy Ministry officials are taking the view that the success of the Information Society Program depends «on a large detailed agreement between the public and private sector… with mutually binding terms.» It appears obvious that in order to deal with the problems after the optimism at the prospect of elections and Olympic Games has evaporated, we must first admit our huge weaknesses on two fronts: organizational delays and lack of skills and preparation in human resources and public departments. How ready the public administration is to accept, study and apply the principles of real modernization is the crucial factor. The pressure applied by big business interests has already been proven to have the opposite effect.