ECONOMY

PM must articulate a new vision

Businesspeople expect Prime Minister Costas Karamanlis to deliver today, in the customary policy statement made by prime ministers at the Thessaloniki International Fair, a speech that will provide a new vision for growth in the Greek economy. Above all, they expect him to transmit to his audience, and beyond, a sense of optimism that by taking a certain direction, economic policy can help the country move up a notch, closer to developed economies. In other words, the business community expects a new economic policy and the articulation of a vision that will move beyond mere management of the economy and provide a blueprint for future progress; a vision that will move beyond preoccupation with EU funding and fiscal limitations and will mobilize the private sector to invest heavily in both old and new economic activities. Indeed, if we follow developments in the EU, we will see that the era of the state as a major promoter of growth through public expenditure is coming to a close. Progress, and incomes, are now entirely dependent on developments in technology, new business investments, opportunities in new markets and the performance of big and small businesses. The government, therefore, must use its policy to liberate productive forces and encourage investment in sectors in which there is high demand worldwide. In this way, jobs will be created, return on capital will improve and incomes increase. The business community would like to hear the prime minister announce the abolition of counterincentives that render investment impossible or, at best, not particularly attractive. They expect, for example, that the much-trumpeted «refoundation of the State» will mean a more favorable attitude toward business activity and the end of unsavory entanglements with business and the resulting corruption in public administration. They expect higher education to change radically because, in its present state, it is impossible to envisage a competitive, robust economy in the future. The new economic policy must also create the conditions to channel private investment where the government feels that Greece’s relative advantages will be. If, for example, the government believes that the sector with the most potential is tourism and that a strong tourist industry will drive future growth, it must ensure that a range of infrastructure and services that today do not exist in many parts of the country are in place: from building ports, airports and roads to upgrading health services. State action must pave the way for investment, if economic growth is to be maintained at a high level. According to businesspeople active in the sector, tourism can indeed serve as the locomotive of growth in the near future if Greece can be made a destination for high-spending tourists as well as a place of part-time residence for rich Europeans who will build their holiday homes. This is a development model that fits Greece and may be the best way to attract foreign capital: An investor as experienced as George Soros had recommended this approach in an interview to Kathimerini. Implementing this policy will require a series of decisions. The legal framework must be simplified and the system freed of the excessive intervention of local administration or planning authorities. A different tax policy that will bring down prices, especially in properties near the coast, is also needed.