The Balkans suit Greek investment
Investment by Greek companies abroad, especially in the Balkans, where (at least in theory) Greece has a competitive advantage, seems to represent a fine choice for the private sector at this juncture. This alternative is of great importance nowadays, when the Greek economy seems to lack direction and specific goals which would fire the productive mechanisms of the economy and would lead to new investment within Greece itself. For almost a decade, the engine of development of the Greek economy was fired by the drive toward the eurozone membership and by the effort to prepare the country’s infrastructure, in order to host the Olympic Games this past August. The expected benefits of the success of both those drives and, on the other hand, the fear of failure, proved catalysts for policy making on the political as well as on the economic front. To paraphrase the famous question, «What shall we do in the absence of foreigners?» There are some quite obvious difficulties in the setting of a new national goal which will open the doors of development and will motivate the private sector, a fact which is reflected in the short-term plans of Greek companies. After all, this is also proven by the indices concerning the expectations of the business world, which are constantly declining. And so it is the private sector, especially the large Greek companies that employ thousands of workers, which must dare overcome political constraints and the deficiencies of the Greek economy – the crisis of public finances, low competitiveness, and institutional rigidities – and seek to take advantage of opportunities present in neighboring markets. There are at least three reasons why they should be constantly enhancing their investing interest in the Balkans. The first relates to the fact that those markets are almost untouched, since they are just beginning to develop financially and commercially, leaving behind the structures and procedures of the past. European Union decision makers realize that the Balkan countries need financial support and new infrastructures, as they are expected to join the union before the end of the decade. Massive funds and subsidies will be directed to the area in the coming years, and development will lead to higher private income and rising demand. For example, Bulgaria and Romania are expected to see their gross domestic product expand by more than 5 and 6 percent respectively, on an annual basis in both 2004 and 2005. Rising demand, a basic factor in determining the viability of any new investment, may be considered as a given for those countries. The second reason has to do with the fact that the Balkan countries will retain their national currencies for some years to come. The exchange risk factor allows for greater profit margins. At the same time, the comparatively much lower wage costs in those countries will increase the competitive advantage of Greek companies in global markets. The third reason for an expansion of Greek companies in the Balkans is that not only will it lead to better profits and higher returns for their shareholders, but also because it will create new professional avenues in the future, by managers and well-trained personnel, who will be aiming to further their professional careers. After all, the difference between a flight between Athens and Thessaloniki, and one between Athens and Sofia or Belgrade, is small. The Balkan markets can well provide the hinterland for the development of the Greek economy, and its investment opportunities are there to be tapped.
