Regions must develop

We politicians tend to repeat we are going through critical periods, there are important choices ahead of us and we are in a transition period. Because we keep saying this for decades, people do not believe us. We run the risk of crying wolf and nobody believing us. I am afraid the wolf is here, though. In the last couple of years, Greece has entered an exceptionally critical period. Our choices will decide the country’s future for the next decades and will consolidate the development model that will characterize Greek society for the coming generations. The future is here and we have to face reality and make the right decisions. The knowledge, experience and political will of the new administration and Prime Minister Costas Karamanlis are the best guarantees for the country’s course. In the past decades, historic, political and social circumstances and needs forged a centralized development model. Provincial commercial and economic centers were devalued and the middle class is concentrated in a few large cities. The countryside today thus lacks infrastructure and trained human resources with high-level knowhow. As a whole, though, society in Greece has made considerable development leaps that place the Greek economy among the world’s most developed. This contradiction in terms regarding our growth objectives must be convincingly answered by politics. On the one hand, we have a generally developed economy. It is known that, due to the cost and nature of various production factors, the appropriate growth model for developed economies is investment in knowledge and technology, which have a high added value. We must realize that in the globalization society where capital is on the move in a constant quest for the best returns, this country cannot prevent the departure of labor-intensive investments. We then need high-added-value investments, which in turn require highly skilled human resources. On the other hand, there is the demand to spread development to the countryside. Regional development is a national survival objective. The concentration of development in a few cities torpedoes social cohesion and, in the long term, is a danger on a par with the demographic problem. A five-city Greece with an empty countryside is not the Greece of our dreams. To make the two demands one, we need high-added-value investments, suitable for the Greek economy and regional development, while keeping the appropriate human resources in the countryside. Then, and only then, will the capital investing in knowledge and technology turn to and settle in the Greek countryside. Utilizing natural resources For the countryside to attract the human resources required, infrastructure must be first developed to draw and hold these people. Elementary regional investments must come first, based on the utilization of the local comparative advantages of the countryside. Those advantages may be natural resources: underground, surface or overground. Exploiting them, with the support of the state, is essential for the countryside’s growth. Underground natural resources are minerals and raw materials, gold deposits, the (albeit limited) Greek oil deposits, lignite, bauxite, marble, etc. Surface resources basically are agriculture and tourism. Greeks can produce healthy and tasty agricultural products. And of course, farming can be restructured by promoting new crops for new markets, such as energy products (sorghum, sunflower, etc.) to produce biofuel and solid biomass. Finally, overground natural resources are Renewable Energy Sources (RES). Wind parks constitute a development propellor for Greek regional economy. The utilization of local natural resources raises many issues about environmental protection and local consensus. True, the inadequate attention paid to the environmental factor in the past during development planning at global level often led to natural and ecological disasters. Certain errors in implementing investments tarnished them and led to local reactions. Nowadays, though, technology has evolved and can safely answer nearly all questions. For example, there now are environmentally friendly technologies for mining and utilizing gold that do not use cyanide and do not harm human health. At the same time, research and science have reversed myths of the past that provoked local reactions. The most popular myth was the «danger» from low-frequency, electromagnetic fields around the Public Power Corporation’s lines and installations. It is now known and can be proved with measurements that an electric shaver or a hair-dryer produce a much more intense magnetic field than that measured on the fence of a PPC substation. Unfortunately, technophobia and an excessive focus on non-existent environmental hazards, due to lack of information, could have painful consequences. A case in point is the inability to rationally develop an electricity transmission system. Besides criminal negligence by previous governments to promote the investments needed for the country’s electricity system, local communities also bear some responsibility. This has rendered our power system inadequate today, and the danger of it crumbling is constant. The situation for the RES is similar. Eventually, the issue boils down to balancing two seemingly conflicting interests: development and environment. To balance these two, particular attention must be paid to the town-planning issue and the positioning of the installations allowed. This applies to all investments. The energy and natural resources sectors are privileged business markets, an attractive field for new investments that fit and serve our development vision as they mainly apply to the countryside. In this process, the role of foreign capital is crucial. The Greek business world must be ready for partnerships with important international groups. Athens encourages the penetration of such foreign capital and is monitoring with interest the moves of large European energy groups or specialized companies penetrating the Greek market. In the last three months alone, the RES sector attracted foreign direct investment (FDI) of 85 million euros to Greece. In parallel, considerable investment projects by Kavala Oil, Cassandra Mines and the Biolignit xylite mine have begun, totaling 350 million euros, of which 60 million in foreign capital has already been invested. Making a start in realizing FDI of 400 million euros in energy and natural resources within eight months is a significant achievement which makes all of us in the Development Ministry proud. The development vision for the Greece of 2020 depends on the courage, clear-sightedness and reasonableness of all parties: central government, the judiciary and local communities. If everyone cooperates without dogmaticism, we can ensure the balance between development and environmental protection. (1) Giorgos Salagoudis is Deputy Development Minister.