ECONOMY

Northern Greece exporters call for a national strategy

Greek opponents of globalization may take heart from the country’s recent export performance. According to data released by the Exporters’ Association of Northern Greece (SEBE), the ratio of exports to Greece’s gross domestic product, which indicates the degree of extroversion of the economy, is one of the lowest among developed countries and is still falling. The value of exports fell to 8.3 percent of GDP in 2000 – ranking Greece just 105th worldwide – from 9.7 percent in 1990. The ratio of exports to imports has also followed a falling curve, from 40.5 percent in 1990 to 38.6 percent in 2000. The trade deficit has been growing steadily, but exports actually grew at a faster rate than imports last year, reversing a long-term trend. The data is contained in a SEBE study based on questionnaires to members and containing proposals for the drafting of a national strategy for exports (NSE). The authors argue that the clear downward trend in the competitiveness of Greek exports is not only due to the hard-drachma policy followed in recent years but also to a failure to adapt production to the requirements of the international market. The real convergence of the Greek economy will only come about through an improvement in the international competitiveness of enterprises, which in turn can only be based on their technological and administrative modernization and the development of international partnerships, says the study. Additionally, Greek exporters today no longer call for incentives as they did in the past, but wish to see the lifting of a series of counterincentives and the creation of a favorable and stable environment, it stresses. The conditions of globalization have made more imperative than ever the need for solving the problems of exporting enterprises which are facing international and intra-Community competition, often having to compete on unequal terms with the enterprises in other countries of the European Union. On a general level, SEBE recommends the uniform application throughout Greece of rules and practices applying in other EU countries, the simplification of formal procedures, the tapping of new technologies, the suitable further training of public servants, and what it rather vaguely calls a change in mentality. Higher levels of competitiveness can be achieved by trimming non-commercial expenses such as the high cost of money, reducing transaction costs, providing effective and cheaper insurance for export credits, improving customs and transportation facilities, and simplifying procedures. Other longstanding demands include the upgrading of Export Trade Organization bureaus abroad, the vertical and horizontal clustering of enterprises for export promotion, support measures for new exporters, tax incentives, improvements in applying the value added tax system, more favorable terms of bank financing, a reduction in the high social insurance contributions, the abolition of various levies and the more effective utilization of export credits and international trading companies. A necessary condition for the creation of a National Strategy for Exports is the establishment of a coordinating body of all agencies involved. Prospects The exporting enterprises’ answers to the SEBE questionnaire show that their overwhelming majority consider quality and consistency to be the main factors in being preferred by their clients, against the lower prices of competitors. They also appear optimistic regarding future prospects, particularly in the sectors of plastic products and jewelry. An analysis of statistical data presented in the appendix to the study indicates the countries, branches and products involved in the Greek export trade that show clear upward trends and high market shares. Particularly good opportunities appear in the Balkans (mainly Turkey, Bulgaria and Romania), the Middle East and North Africa, but also in demanding markets such as those of North America. However, in contrast to and despite a stagnation or falling trends in Greek exports to most EU countries, exporters consider the EU as offering the best prospects for higher trade growth, followed by the Balkans, North America and central and eastern Europe. A branch analysis of Greek exports shows that their composition has been considerably diversified away from the preponderance of the traditional sectors of fresh foodstuffs and clothing, with the addition of a broad range of new and innovative products with high added value. These are mainly to be found in the branches of petroleum products, chemicals, pharmaceuticals, machinery, appliances, plastics, and electronic equipment. A strong performance is also displayed by the aluminum, copper, marble and cement sectors. Trends According to Eurostat data, Greek exports last year rose 18.5 percent to 11.6 billion euros, the largest increase since 1990. Despite this, their share of the European Union total fell to 0.47 percent from 0.56 percent in 1994 and 0.66 percent in 1992. Germany and Italy are Greece’s best clients, absorbing respectively 1.4 and 1.1 billion euros’ worth of exports in 2000, which represented a combined total of 21.4 percent – far down from 39.4 percent in 1990. By contrast, the share of Balkan countries rose sharply, from 5.3 percent in 1990 to 14.4 percent last year. The largest group of Greek exports last year was petroleum products (1.7 billion euros or 14.7 percent), the value of which has more than tripled since 1995. Knitwear was in second place (1.1 billion euros or 9.3 percent). In total, in 24 branches (of Intrastat’s 99 standardized product categories) Greek enterprises export more than 100 million euros’ worth of products, representing 83.5 percent of the total. Of these, eight belong to the broader sector of agricultural products, food and beverages, seven to minerals, three to clothing, two to machinery and appliances, and the remaining four to a broad range of chemical and plastic products.