Economic foresight

The decision by the Swiss-German Schiesser Pallas underwear manufacturer to shut down Palco, its Greece-based subsidiary, lay off its 500 employees, and shift production to Bulgaria is a cause for serious concern and, once again, underscores the government’s lack of serious, long-term economic planning. The point, of course, is not just whether this decision is justified (given that the company suffered a negligible 4,924-euro loss in 2002, while earning a 1.7 billion euro profit the previous year) nor whether the move is part of the overall downturn in the clothing sector which has forced European factories, for decades now, to move to the Far East or other low-labor cost countries. This case acts as one more reminder that the Greek government must hammer out a viable and more efficient economic strategy in order to meet the challenges of a highly competitive global environment. To be sure, the solution is not to bring local wages down to the level of China’s which are currently about one-15th of the Greek average. However, one cannot help but be skeptical of the wisdom of Greece’s economic policy when one hears that Palco’s closure and its move to Bulgaria is being subsidized under a Greek development law which foresees incentives for domestic production lines that wish to expand into other Balkan countries. The most crucial aspect of the matter is that the rapidly and constantly changing context of the global economy dictates keeping a steady watchful eye on international developments so as to channel the economy and the local labor forces toward the latest and most dynamic activities. What is needed is not the endless subsidizing of decaying sectors but rather the funding and life-long training of workers so as to render them capable of meeting the new market needs. Again the point is not just to train the unemployed. Farsighted economic strategy, above all, means the timely reorientation of professional training in pace with nascent economic trends. This means that one has to continually examine the global economic environment and dominant trends. It means that one has to make decisions coupled with policies to realize these decisions. So far, the government has failed to convince us that it can adequately live up to this challenge.