ECONOMY

Soros sees future of Greek economy in ‘high’ tourism

The Greek economy can advance and prosper in the international environment only if it develops itself to cater to upmarket tourism and wealthy foreigners wishing to acquire holiday homes; this is virtually the only prospect that could attract foreign investment capital, according to George Soros, the well-known American fund manager and investor. Soros, in Athens to attend a close friend’s wedding a few days ago, met with a number of business leaders and exchanged views on the future of the Greek and other Balkan economies. Soros noted that the Greek economy today lacks the long-term orientation that would give it a distinct position among European markets and mobilize significant resources toward development. He believes the answer is that Greece must become a pole of attraction for northern Europeans looking for a home in the sun, and must incorporate specific policies regarding the development of infrastructure, education and health services to be built around and converge to this pivotal target. Migration south Soros predicts that the high income levels in Western Europe and its relatively quickly aging population will induce large numbers of retirees to move to warmer places five or six months of the year. Such migratory trends would obviously be accompanied by huge income transfers, boosting demand in the economy. Greece’s comparative advantage, Soros said, is its natural beauty and unique climate. Spain, which is already such a destination, has begun showing signs of saturation. Investment in this field will not further expand there (he has already invested colossal sums himself). «If certain basic things changed here, I would be prepared to invest. If I am not convinced, the other option may be Morocco,» he stated. Upgrading quality The success of such an endeavor, according to Soros, will necessarily depend on a number of key factors. The first would be considerable improvements in infrastructure networks, particularly as regards transport (except, perhaps, in Athens which has received the lion’s share of European Union investment subsidies); second, would be upgrading the quality of services at various levels; third, would be the creation of a good system of health services, mostly by the private sector; and fourth, cheaper land in the provinces. Thus, all policies, from taxes on real estate, for instance, to the channeling of EU investment subsidies to infrastructure, education and health services, must be marshaled around the pivotal model of Greece as an upscale tourism and holiday/residential destination. This is the strongest concept for the Greek economy, Soros argued, one that could give it a significant boost in the next 10 years, generating new domestic and foreign investment, and enabling it to acquire a stronger foothold in the international division of labor, tap its comparative advantage and significantly increase its national income and employment levels. Above all, this vision of development must be adopted by the government. Thessaloniki the ‘ignored’ Soros has already developed a keen interest in the Balkans. He plans to invest in their markets and believes that they present another great opportunity for the Greek economy. The Americans, he says, have left the field open to the Europeans. He notes that a number of big US universities have even taken Balkan subjects off their curricula. But the European Union has not moved in to fill the vacuum. He believes that the Balkans can become a region of peace, political stability and economic prosperity, which would be to Greece’s benefit. The Balkans may provide opportunities for investment and considerable growth in coming years but this must be tapped within the framework of the coordinated policy of the European Union, which, however, remains hazy. According to Soros, the EU must formulate a specific policy of support and integration and devote considerable sums to buttress institutions and infrastructure in these countries, for which the incentive must be the prospect of membership. He believes that a special commissioner must be appointed for the region, and that if John Kerry is elected US president in November, the outlook for the Balkans will improve. For Soros, Thessaloniki has been ignored and unfairly treated in terms of the allocation of funds for services and infrastructure, and should have received a great deal more. He hopes the government will soon attend to this imbalance and believes that private capital would respond accordingly. He views the Thessaloniki port as the natural harbor of the Balkans. «Greece cannot breathe with just one economic lung,» he adds.