In Lisbon, an executive of an American corporation, an entrepreneur with an idea and money from Australia, a technocrat from Japan, can enter the doors of one moderately imposing building, talk to one government central agency, obtain all the information needed on laws and licenses, incentives and taxes, regulations and finances or anything appe-taining to opening and running a business in Portugal, efficiently and with a smile. Portugal wants your business and will bend over backwards to get it.
So? So in Athens the same international investors will walk along the streets of Athens from the Ministry of National Economy, very helpful but for that you will have to talk to the Ministry of Finance who want desperately to please but for this you will have to talk to the Ministry of Commerce (not the Ministry of Trade) who will do anything to take your money but unfortunately these matters are in the purview of the Ministry of National Economy. So turns the great wheel of government.
An exaggeration? Not really. The Greek Government, unlike the Portuguese , does little to get business started. There is no One-stop-shopping’ for potential investors, just a morass of ministries. Result: new investments in Portugal (so similar in size and ‘starting economy base’ to Greece) shooting up, new investments in Greece stagnant.
Don’t count the Greek companies like Metaxas bought out by foreigners British Grand Metropolitan/IDV and Pavlides by American Phillip Morris / Suchard; they were just picked up as cheap assets to fit into the buyers’ overall marketing plans. But starting new enterprises in order to increase Greece’s economy and improve her foreign currency balance? A big zilch compared to her European Community partner on the Atlantic.
Of course a potential investor in Greece can go to one of the several consulting firms who will answer all questions (they are doing a job by default; a job that the government should be straining to do) but investors usually like to know it first hand and the government is bereft of much early investment information.
But don’t get the idea that the Greek Government is not trying. In the Ministry of National Economy, Dr Nikos Stathopoulos is trying to get private business working. Today the economy is much better organized and, maybe more important, much more sympathetic to private business than during the years of PASOK.
One company that has the brief to do something about this state of affairs is HBDIC (Hellenic Business Development and Investment Company). This is a Greek investment firm incorporated in Athens on 12 June 1988 as part of the offset program stemming from the sale to Greece of 40 F16 fighter aircraft. Its objective, under its articles of association, is to invest in Greek business that are either export oriented or, by import substitution, increase the earnings of foreign currency.
It is funded to the tune of 50 million US dollars which is paid in over a period of years by its shareholders (General Dynamics, General Electric and Westinghouse). The Ministry of National Economy representing the Greek Government received gratis five percent of the capital stock. The board of directors consists of four from General Dynamics, one each from General Electric and Westinghouse and two from the Greek State; all investment decisions must be unanimous. Up to April 199U (new government elected under Constantine Mitsotakis) the political climate did little to encourage foreign investment, particularly American.
Nevertheless, some projects were initiated by HBDIC: CSTE: Started in April 1990 making custom software for the financial services industry. Sales are made to the Middle East and Europe. Now diversifying into software for medical systems and other business applications.
FORSOL: Expects to start production in September 91 with deliveries in early 1992. Manufacturer of electric power capacitors for export.
HELLENIC DECORATIVE ROCKS: Production starting in September 91; makes finished marble products for export.
INTERNATIONAL CLOTHING: Expansion of a 1975 factory in Kalamata. Very successful; exports to Europe and Japan.
ERGON: Started in 1988 in a garage. Local invention of numerical-controlled machines for wire bending – bedsprings to construction – 99 percent exported. Capital being injected for expansion and management help.
CANARD DORE: New venture (part of Global Transport). Food processing started in 1988. Injected capital for both increased management efficiency and production. 100 percent export.
DIEL SA: Started in 1990 making coated abrasives. Extra capital needed to expand. Has recently concluded agreement with FELDMUHLE in Germany to take over distribution.
Two new projects: ALUMINA, making aluminium ware for hospitals and ships, has been in existence for 30years. It exports most of its products and needs capital for expansion. CLAUSS, the wine makers, want capital and expertise in marketing outside Greece.
Another promising new project is the HCI Hellas state-of-the-art Diagnostic Center with a laboratory set up by Medscan (Malmo, Sweden). If it receives the necessary licenses, this project will provide a facility so far unknown to Greece: it will save untold amounts of foreign currency spent on specialist treatment abroad and will attract income from other countries in the region. The government is behind the project but bureaucracy is still bureaucracy.
Ten years ago a 220-room hospital was donated to the Greek government. Private money built the hospital and ordered medical equipment from abroad. The equipment could not be installed because one government department insisted that duty must be paid. The donor rightly said that he had already spent 10 million US dollars on this hospital as a gift to the country and he refused to pay duty on the medical equipment, also donated to the country. Three years later, the various government departments sorted out their differences; the equipment was installed; the hospital will be handed over to the government in September 1991. Patients only had to wait three years. Many other fruitful enterprises have been dropped the same way, many due to problems inside Greek ministries. Available for investment also are many government-owned businesses that are due to be privatized. Except for a few that are viable, investors will wait until these overmanned underutilised leviathans are closed down. They will be by the end of 1991 (under the terms of a recent EC loan to Greece) and then assets can be picked up at knockdown prices.
EC funds to Greece go mainly to the public sector into infrastructure development. Now the EC auditors are examining more carefully the end-result of their funded programs. Because this flow is from institution to institution the need for investment companies such as HBDIC is essential; firstly to encourage the small and medium business and secondly, to improve management techniques, efficiency and competitiveness.
It would be wonderful of course if Prime Minister Mitsotakis had the will and the political ability to cut through the red tape. Then, walking along the streets of Athens would be just for pleasure.
