ECONOMY

Greece keeps losing competitive edge, global report reveals

The Greek economy is losing its competitive edge with every passing year, according to the latest World Competitiveness Report published by the Institute for Management Development (IMD) and presented yesterday by the Federation of Industries of Northern Greece (SVVE) in Thessaloniki. A main conclusion of the report is that the other developed economies and those of the large developing countries (China, India, Russia) are growing at a much faster pace than those of the European Union. SVVE President Dimitris Symeonidis, who presented the conclusions of the report, remarked that in 2003 Greek fell two places, from 42nd to 44th, in the overall classification of the 60 developed and developing economies. In 2000, Greece stood 34th, its best-ever place. There are four criteria employed in determining the competitiveness rating: economic performance, administrative competence, business competence and infrastructure. In 2003, Greece fell to 45th place in economic performance (from 44th in 2002), 49th in administrative competence (46th in 2002), 39th in business competence (from 36th) and 39th in infrastructure (from 36th). Among the 12 eurozone countries, it is dead last in economic performance and infrastructure, 11th in administrative competence and ninth in business competence. The IMD does not say that EU is in a recession but does point out that its economies are «anemic,» which, it says, it is equally dangerous to global economic growth prospects. The EU started seriously lagging behind the other economies last year, the report says. On the other hand, the 10 EU newcomers appear to be more competitive due to lower labor costs. This entails the possibility of production shifting there. Besides, both for Greece and the EU, social security is described as a «live bomb» due to demographics. Symeonidis said that the report’s most worrying segment is the one describing how developing economies are growing much faster than the EU. «This means that achieving the goals set in Lisbon requires much greater effort, perseverance and the achievement of a much higher growth rate,» he said. In March 2000, EU members had agreed on a series of measures designed to make the EU the most dynamic, technologically driven economic bloc by 2010. This goal appears unlikely to be achieved. The IMD report places the United States, Canada and Singapore at the top of its competitiveness rankings for 2003. It also mentions that most economies that improved their competitiveness belong to so-called «Pacific Rim» countries. These countries, especially in the Far East, are absorbing the majority of global investment. On the opposite end, the economies with the highest drops in competitiveness belong to European countries. In concluding the presentation of the report, Symeonidis said that the new developments require, on the part of EU countries, including Greece, quick reflexes, maximum adaptability and, especially, a strong political will for a new and effective policy. «A policy that, above all, will not hesitate making the necessary changes immediately,» he said. More bad news for Greece came yesterday in a report by Eurostat, the EU’s statistics service, which said that Greece has the highest unemployment rate among people aged 15-24. The jobless rate for this age group is 27.1 percent. Overall, Greece’s jobless rate was 9.3 percent in December 2003, compared with an EU average of 9 percent.