ECONOMY

Competitiveness of Greek economy rebounds strongly

Greece’s standing in the world competitiveness table rebounded last year for the first time since 2001, the International Institute for Management Development’s (IMD) says in its World Competitiveness Yearbook 2006. Among the 61 countries and regions included in the survey, Greece climbed eight spots to 42 in 2005, from 50 in 2004 An upbeat Development Minister Dimitris Sioufas claimed credit for the government at the report’s presentation in Thessaloniki yesterday. «This year’s IMD report is the first based on data exclusively concerning a period during which this government has been in office,» he said, noting that Greece overtook competitors like Portugal and Turkey. Greece also showed the third-best improvement in the overall ranking after China and India, which moved up 12 and 10 positions respectively. Moving up the scale was the result of improvement in the component indicators of efficiency in governance (from a rank of 52 to 46), business efficiency (from 49 to 47) and infrastructures (from 37 to 33). But Greece showed no improvement in the economic efficiency indicator, keeping its rank of 49. IMD said tourism, services (particularly shipping) and foreign investment in securities are Greece’s strong cards as regards economic performance. In terms of contributions to gross domestic product, the country ranks eighth in tourism, ninth in the exportation of services (transport and travel), and 15th in foreign investment in stocks. In contrast, Greece remained among the laggards in the exports of goods (dropping from a rank of 59 to 60) and in unemployment as a percentage of the total workforce (49). In terms of particular components of governmental efficiency, Greece moved up one place to rank seventh in government support and two places to rank 13th for improving the government’s external debt position. In contrast, conditions continue to be difficult for those wishing to start a business (ranking 59), and the country suffers from considerable bureaucracy (ranking 54), a high public debt as a percentage of GDP (53) and a high deficit (51). Greece ranked 26th in terms of remunerations for senior management (down from 23rd) and fell to 29th from 25th place in terms of the real increase in productivity. Businesses continue neglecting worker training (dropping in rank from 54 to 58), the country is not an attractive destination for foreign specialized human resources (at a rank of 56) and has a high level of corporate debt (at a rank of 51). Greece only performs well in some indicators in the infrastructure category. It ranks second and ninth in the ratios of students to teachers in the secondary and elementary education sectors, respectively, ninth in the area of young people’s interest in science and technology and ninth in terms of total spending on health as part of GDP. However, Greece spends little on education as a whole (at a rank of 51) and on research, both private and public (at a rank of 50). Giorgos Mylonas, the president of the Association of Industries of Northern Greece (SVVE), who presented the report, said he is optimistic the country can further improve its competitiveness on certain conditions. These would include an intensification of efforts to attract foreign investment, particularly to the regions, as well as incentives and government support to encourage an outward-looking attitude among firms. Mylonas also said the Greek education system needed to be transformed to produce qualified business executives, as today’s college graduates are not up to par.