Second session shared experience of rapidly changing Balkan region
The second session, focusing on entrepreneurial experiences, offered plenty of bullishness on the Balkans, with Eugenia Gargana citing «enormous potential» building on 5 percent average growth. Greece is one of three main foreign investors in the region with over 900 business outlets, second only to Austria in terms of bank assets. The area now offers wide spreads and high return on capital. Several relished the opportunity to explode the myth that their companies have ridden export subsidies to wealth. For example, Vassilis Apostolopis said his Athens Medical Group was initially «left to its own devices» by the Greek state. The region, said Grecotel’s Yiannis Daskalonakis, was «terra incognita» 10 years ago but now offers lower tax rates and better returns as well as a «new creative outlet» for skilled Greek personnel. Doros Constantinou of Coca-Cola Hellenic Bottling agreed it was «not easy» at the start, with the company having to operate through Cypriot and Luxembourg bases, while Greek embassies were often unable or unwilling to help. Now things are «changing very fast,» said Viohalco’s Stavros Theodoropoulos, helped by geographical proximity, along with technical and administrative networks often superior to Greece’s. Even difficult operating realities in Greece prepared the company for these regional challenges. The financial sector, said Michalis Madianos of Global Finance, involves «jacks of all trades and masters of none.» The early environment was «very rough, very unstable» with hyperinflation and bankruptcies, but these were outweighed by the «dire need» for new services and lack of competition. Some (Goody’s, Neoset) failed the test but the winners had commitment, heavy investments, and, crucially, strong management teams that blended with the locals in the absence of stock markets and other developed networks. Bulgaria (for example) has a pro-business environment; «nothing like Greece,» he could not resist adding, with half the costs of home. The overall Southeast Europe of 40 million people, he insisted, had emerging market growth (levels) and developed market risk (levels), thus the best of both worlds. Despite the problems, it is «an excellent time for us.» The image lingered of current hopes for the Balkans being sparked by the swashbuckling of early pioneers, like Hellenic Petroleum, in the Wild West that was the Eastern Balkans a decade and more ago. The area may be a one-off case, but their experiences certainly confirmed the old economic adage that accepting high risk produces ample reward.