ELKE head gets the sack for blunt talking on FDI barriers

Plain speaking cost the head of the Hellenic Center for Investment (ELKE) his job yesterday. A day after presenting a critical report on the factors holding back foreign direct investments in Greece, the government removed ELKE Chairman Costas Bakouris from his post. Economy and Finance Minister Nikos Christodoulakis yesterday confirmed Bakouris’s dismissal without giving any reasons for the move. He said a replacement would be named shortly. Analysts said Bakouris’s removal contradicts the minister’s avowed mission to promote foreign direct investments in Greece and might even put a brake on the inflow of foreign funds. In his report, the ELKE head lambasted the barriers to foreign direct investments that had made Greece the laggard among developed countries in attracting foreign investors. Of the $706 billion invested globally in 2000, Greece only absorbed $1.1 billion. Last year was equally disappointing. With the exception of the deal involving local insurer Interamerican and pan-European insurance consortium Eureko, Greece had a net outflow of direct investments. The study said counterincentives included Greece’s inadequate infrastructure, wieldy labor regulations, low productivity, a cumbersome fiscal system and the lack of specialized staff at regional level. It also criticized the lack of transparency in dealings between foreign investors and public bodies, with the latter not knowing what their responsibilities are. Salomon Schroder Smith Barney economist Miranda Xafa said Bakouris’s criticism was right on target. «I agree with his assessment of the problems facing foreign investors. Complex and conflicting rules make for corruption,» she pointed out. She was, however, mystified by Christodoulakis’s decision to sack someone for speaking the truth, no matter how painful. «Christodoulakis has said his single most important priority is foreign direct investments,» she said. Proton Investment Bank’s Christos Avramides said Bakouris’s dismissal underscores a government tendency to remove heads of state-controlled organizations who do not toe the official line. More worrying, however, is the impact on foreign investors. Xafa said Bakouris’s removal could send a negative signal to foreign investors. «It will make foreign investors think twice,» Avramides said. Bakouris was appointed ELKE chairman in July 2001 with the task of speeding up foreign investment projects and making ELKE into a one-stop shop for investors. He was also expected to issue recommendations which would be incorporated into the law on foreign investments. He was eminently qualified for the job, as the former managing director of Olympic Games organizers Athens 2004 and prior to that, manager of a foreign multinational company.