ECONOMY

Sustainable growth cannot rely on empty words about competitiveness

If economies could develop solely by the deployment of additional resources, the world would be decisively different today. For one, Saudi Arabia would be a financial powerhouse. The Soviet Union would still be in place and the world’s monopoly in steel and space technology, Japan, would still lead in the global electronic and banking markets. All those countries progressed impressively a few decades ago and nothing suggested what the future had in store for them when they were still in top shape. Yet, they were all characterized by closed systems of power and dominion. They had put emphasis on specific sectors, either due to the availability of natural resources (oil), or due to their political goals (a strategy to dominate), or simply due to their following the dynamics prevalent in their societies. But today, Saudi Arabia is not considered a developed country, the Soviet Union has fallen apart and Japan is still struggling to overcome a long-term recession. The Greek economy is facing similar questions today. Many maintain a simplistic view of the future, seeking resources in order to maintain the high rates of economic expansion. They explore ways and means of quickly finding resources for the financing of new, large public projects; they look forward to European Union subsidies in order to promote their plans for the modernization of the economy and they search for capital that will help them meet the public sector’s borrowing requirements, which have proved higher than initially calculated. The «mechanics» of growth are, of course, necessary, and present a vast field of action for generations of brilliant economists. However, they cannot support the attainment of the real goal: sustainable development. If they could, it would be possible to describe today’s world in terms of the trends prevailing in the 1960s. We would not have to reinvent the wheel. We would be living in a predetermined and rather boring world. The countries that have succeeded in developing do not owe their success to the surplus of capital. They owe it to their well-trained human resources, their institutional and legal frameworks that facilitate entrepreneurial activity and, most of all, to the fact that their societies have an ethic for rewarding effort. The lack of such critical factors in Greece fully explains the lack of sustainable development. Special studies have shown that only about one in five Greek companies can stand up in international competition. The rest exist because the law allows them to, because governments spend huge amounts on public procurement, because of their ability to evade taxes and social security contributions and last, but not least, because they indeed function within an economy where competition is not working. They owe their existence to such phenomena, the very factors that drown development. Moreover, this is the reason behind a paradox: While all pay lip service to the need to bolster the productivity and the competitiveness of the Greek economy, very few realize in practice what this would entail for them and even fewer believe that the necessary measures to this end should be applied. No one admits it, but they all find comfort in a common belief: All the talk about enhancing competitiveness will remain exactly that, talk without substance. And, everything will remain intact, as it always has been…