Economy gets less and less competitive
Yet another international study has found Greece’s competitiveness to have declined over the past year. Two weeks after the World Economic Forum, also known for the annual meetings it holds at Davos, Switzerland, and lately in New York, published its own survey, another Swiss-based institution, the Institute for Management Development, yesterday published its annual World Competitiveness Yearbook, in which Greece has slipped from 30th to 36th place among the 49 economies studied. Greece’s slippage in competitiveness is among the worst, together with Israel’s, Taiwan’s and Argentina’s. It is now in the bottom position among European Union countries, since both Italy and Portugal have overtaken it. The IMD survey examines a total of 286 parameters which it groups into four input factors: economic performance, government efficiency, business efficiency and infrastructure. Of these four factors, Greece has slipped badly in three. In government efficiency (which includes the areas of public finance, fiscal policy, institutional and business frameworks and education), it has fallen from 33rd to 40th place; in business efficiency (productivity, labor market, financial markets, management practices and the impact of globalization) from 26th to 32nd; and in infrastructure (basic, technological and scientific infrastructure, health and environment and the prevalent value system) from 26th to 33rd. A slight improvement, from 39th to 38th place, in economic performance (domestic economy, international trade, international investment, employment and prices) does not compensate for the ground lost elsewhere. The main weaknesses of the Greek economy include low foreign investment, an ongoing precipitous decline in exports, a decline in indirect tax revenue, the continuing high lending rates, the lack of performance incentives for employees, a lack of specialized people in the workforce, and the delay in adopting new technologies. These are well-known Greek deficiencies and to those one must add an overly rigid and protected labor market. However, the results should be taken with a pinch of salt. For example, in the domestic economy category, Turkey, with over 70 percent inflation and whose economy shrank 9.4 percent in 2001, is ranked higher than Greece. An example which somehow blurs IMDs vision of a successful economy.
