ECONOMY

Inward foreign investment fell further in 2003 but the outlook seems brighter

The flow of foreign investment into Greece declined further in 2003, according to data in the latest report of the United Nations Conference on Trade and Development (UNCTAD), officially presented in Athens yesterday. According to the report, Greece received a total of $47 million in foreign investment in 2003, against $51 million in the previous year, and its ranking in the world table receded 10 positions to 127th, above countries like Rwanda, Kenya and Nepal, but below Yemen and Oman. Countries are ranked according to the share of global foreign investment they attract, in relation to their gross domestic product (GDP). Greece is graded with 0.193. Over the years, Greek inward foreign investment has clearly declined, despite the fact that its GDP followed an upward trend while the country joined the eurozone. However, Greece’s prospects in attracting foreign investment appear definitely brighter; it ranks in 36th position, above countries like Portugal and China. At the same time, Greece is in 51st position worldwide as regards outward foreign investment; this is largely attributed to the outward-looking attitude of Greek enterprises which have invested in neighboring Balkan countries. In yesterday’s presentation, organized by the Hellenic Center of Investment (ELKE), the general secretary of the Finance Ministry, Giorgos Mergos, said it is necessary to create an investment climate that will boost employment, growth and regional convergence. «There has been a serious deterioration in attracting foreign investment to Greece in recent years, despite the growth of the economy… This is why the prime minister recently described 2005 as competitiveness year. Through initiatives and structural changes we shall be led to a more outward-looking economy that will be more competitive and create jobs,» he said. The government’s initiatives in this direction will involve tax reform, including cuts in company taxes and a stable tax regime over time, investment incentives that will seek to tap new technologies, fighting red tape and a more efficient public sector that will save resources for more productive procedures. ELKE’s vice president, Dionysis Hionis, noted the prominence which the services sector has acquired in the global investment environment. «The inexpensive, reliable and technologically advanced public infrastructure combined with human resources constitute the main factors for attracting foreign direct investment. The challenge for the Greek economy is set by the difference between its position now and the position it could command,» he said. To be sure, foreign investment declined globally last year, reaching $560 billion – the lowest figure since 1998. The fall was particularly marked in developed countries, where it approached 25 percent. The prospects for 2004 are upbeat, given rising global production trends and the continuing liberalization of legislation regarding foreign investment. Of the 244 legislative reforms concerning foreign investment in 2003, 220 aimed at granting greater freedom to its movement.