ECONOMY

Uncompetitive Greece left behind in rise of world trade

The competitiveness of Greek exports continued to decline in 2004, indicating the need for improving their mix, officials said yesterday. «We need to develop new products, and therefore the emphasis on competitiveness must be placed inside rather than outside the borders,» Christina Sakellaridi, president of the Panhellenic Exporters’ Association (PSE). told the agency’s general assembly. «Promotion in foreign markets is not sufficient, as it is limited to existing products, some of which have completed their life cycle,» she said. Data show Greek exports rose 3.3 percent to a new high of 12.2 billion euros in 2004. For the first time, this represented under 30 percent of the value of imports, against 45 percent 10 years ago and 50 percent in 1986. Imports rose at double the pace of exports, reaching 42.4 billion euros. This made Greece’s trade deficit 8.5 percent larger. World trade grew 21 percent last year. Greek farm product exports continued their slide to 2.4 billion euros from 2.6 billion in 2003, coming to represent less than 20 percent of the total for the first time. «Greek (farm) production covers an increasingly smaller percentage of domestic requirements. Exports fell but imports climbed to 4.7 billion euros, up 6 percent from 2003, to almost double of exports,» Sakellaridi said. The rest of the European Union absorbed 47.7 percent of Greek exports, up 2.1 percent in 2004, while imports from the country’s partners increased 10.1 percent. Greece’s five biggest clients – Germany, Italy, the UK, Bulgaria and the USA – received 42.5 percent of Greek exports, worth 5.2 billion euros. The only encouraging sign is that in the first two months of 2005, exports rose 8.2 percent, while imports fell a slight 1.3 percent. Competitiveness lag Greece has fallen another six places to 50th this year on the World Competitiveness Yearbook of 60 countries, which the International Institute for Management Development (IMD) has compiled since 1989. The data come from a study by IMD, released by the Federation of Industries of Northern Greece (SVVE). The study also shows that Greece rose from 39th to 37th place in 2004 in the infrastructures category. The top 10 competitive countries are the US, Hong-Kong, Singapore, Iceland, Canada, Finland, Denmark, Switzerland, Australia and Luxembourg. SVVE evaluated the countries on four category criteria: economic performance, government efficiency, business efficiency and infrastructure. Overall, Greece fell from 34th in 2000 to 44th in 2004 and 50th in 2005. It fell from 45th to 49th in economic performance, from 49th to 52nd in government efficiency, and from 39th to 49th in business efficiency. There is some good news. For instance, tourism is expected to improve economic performance in the services sector. In government efficiency, grants to the private and public sectors as a percentage of GDP have upped Greece two spots in the study’s performance scale, from 10th to eighth place. Greece has a rank of eight in student-teacher ratios in primary and secondary education. It has also risen from 58th to 34th in rank in terms of quality of roads, railways, airports and energy facilities.