ECONOMY

Globalization may seem like tidal wave but it brings many benefits

Irini Liveri lives with her daughter, a law student, in a 56 sq.m. apartment in Exarchia, close to the city center, which like most Athens neighborhoods these days also hosts quite a few immigrants. Fortunately, Liveri owns the apartment, for her only other income is the monthly pension of her late husband, 784 euros, and a small quantity of olive oil from the family farm in the Peloponnese. What is interesting in this quite typical one-parent Greek family, is that both mother and daughter miss no opportunity to stand up for their immigrant neighbors whenever Greeks come up with racist comments. Indeed, they go so far as to argue that, thanks to foreigners, our own living standards have risen. «Some will say that the Chinese, Indians and Pakistanis come here and take jobs from the Greeks. What I can say is that without their inexpensive products, my daughter and I would go hungry. I buy clothes, food and household goods for a third or even a quarter of the price that Greek products cost,» she said forcefully. If we think that the living standard of every family is ultimately the sum of goods and services that it buys with its available income, then Liveri speaks like an economist, whereas those who complain at the influx of cheap foreign products tend to speak with the heart rather than the brain. Quite like Don Quixote, they battle against imaginary foes. Whether we like it or not, the rapid changes which the liberalization of world trade brings are like a giant tsunami that every national economy either manages to ride out and survive or is drowned by. Liveri’s argument received unwitting support from Bank of England Governor Mervyn King, who, in a press briefing last week, cited a wealth of data to prove that Britons’ living standards have considerably improved in the last few years thanks to the imports of cheap products and raw materials, particularly from China and the countries of the Commonwealth. Liveri is surely not alone in her views in Greece. In Macedonia, the same people who complain at the hundreds of manufacturing units that have immigrated to neighboring Bulgaria or the Former Yugoslav Republic of Macedonia, leaving behind them thousands of unemployed, every weekend cross the border and return with cheap clothes and food. Hundreds of others go to Bulgarian doctors or dentists. Islanders from Mytilene, Chios or Samos take the boat to shop in Turkey. Besides, cheap foreign food is the same thing as the low wages of Albanians who pick our olives, the Poles on the building sites or the Filipino domestic helpers. Within the framework of globalization, and despite the losses in Greek industries and jobs, the country’s membership in the eurozone has secured it part of the surplus value which, through trade, is transferred from developing to developed economies. Of course, in order to continue gaining from cheap imports, we must have the necessary foreign exchange to pay for them. Which means that we must increase our exports in the sectors in which we have comparative advantages, such as tourism, merchant shipping and high-quality farm products.