ECONOMY

Lackadaisical attitude plagues Balkan economic recovery plan

Greece has committed itself to setting aside at least 0.20 percent of its gross national product (GNP) for international development aid. This arises from its obligations as a member of the European Union and of the Development Aid Committee of the Organization for Economic Cooperation and Development (OECD). Within this framework, Greece drew up its second five-year development aid plan for the 2002-2006 period, an important part of which is the Greek Plan for Balkan Economic Reconstruction (ESOEAB); this provides for the granting of 550 million euros in development aid to the other six Balkan countries (Albania, Bosnia-Herzegovina, Bulgaria, the Former Yugoslav Republic of Macedonia, Romania and Serbia-Montenegro) The legal framework for ESOEAB was completed in August 2002 with the signing of bilateral agreements with these countries. Unfortunately, only a few isolated projects have been financed to date, through extremely inadequate technocratic and managerial processes which make it impossible to assess their efficiency and sustainability and yield minimal, if any, benefits for the Greek economy. Characteristically, there is no system for monitoring spending. It is by now clear that the Greek government is procrastinating to avoid the disbursement of funds to which it has committed itself, whether out of unwillingness or inability is not clear. In either case, only around 6 percent of the planned aid has been entered in the 2003 and 2004 state budgets. Lack of know-how One of the reasons for procrastination is the lack of relevant know-how for the management of such a big and important endeavor. Since September 2002, the Foreign Ministry has annulled two tenders for the selection of a technical adviser to manage the program, ultimately decreeing that it was unnecessary and uneconomical. It would seem that the government has no real desire for a technical adviser so that it can act at will. In the six recipient countries, meanwhile, interest in ESOEAB has decreased markedly, as in the second year of the program they have seen neither its structure nor the procedures they must follow in submitting proposals for particular projects. We have to admit that Greek economic diplomacy is non-existent; on the whole staffed by competent people who, nevertheless, have not been given the right tools to play a substantial role. We also have to acknowledge that we have neither a program nor the structures necessary to provide external development aid. It is really a matter of time before we are exposed as unreliable to the international community, particularly developing countries, which will soon realize our inability to implement announcements and promises. If we agreed on these two facts, we may begin to take the issue of economic diplomacy and aid seriously. But I fear that a great deal of precious time has elapsed and unique opportunities have been lost for Greece. It will soon be too late for the role of leading player in southeastern Europe – a role which at least theoretically belongs to Greece and which all parties involved expect Greece to play. Glossy picture I do not consider that Prime Minister Costas Simitis has the political courage to admit the full failure of Greek economic diplomacy in the official announcements he is due to make on the progress of ESOEAB in Thessaloniki on November 24. He will be forced to give a glossy picture of reality, perhaps the result of briefings presented by inadequate aides. It would, nevertheless, be useful for him to know that if ESOEAB had been properly organized, it could now have proper structures and an innovative and efficient system for providing economic and technical aid to Greece’s Balkan neighbors, one that could have also attracted other resources from bilateral economic cooperation programs. Missed opportunity It must be made clear that aid donor countries usually benefit equally or even more than recipient countries, as the donor usually sets the conditions. The financed projects are usually undertaken by firms of the donor country, which also furnishes supplies and the additional equipment required. Other offsetting benefits usually become the subject of bilateral agreements for the external aid to be granted. Greece’s performance as a donor country ranges from the infuriating to the ridiculous, depending on the mood of the observer. For a start, our country does not have a strategy for providing external economic aid. The Balkans should have been the main target of Greek economic diplomacy. Viewed from any angle, that’s where the opportunities for and the interest of Greek firms will be in future. Unfortunately, the Greek government does not seem to grasp the seriousness of the matter and the historical challenge. The Balkans will develop soon and dynamically. Greece has two options: either to lead in this process (and reap the obviously considerable benefits) or remain a mere spectator. So far, it has been doing the latter while professing the former. (1) Nikos Georgiadis is a development economist.