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Saturday, January 12, 2013

A debate about Greece's future economic development

In my last post, I had raised - once again - the urgency of developing a long-term economic development plan for Greece. A most interesting debate among two readers with the pseudonyms of Tsigantes and Canutely King ensued. The debate is too interesting to leave it buried in the comments section, which is why I reproduce it below.


Tsigantes
There is no development plan in Greece because of the simple fact that we still have ND and PASOK in power. Please note that, since 1974, neither party has come up, not even once, with a development plan and it is safe to conclude that none of the politicians in these two parties have that competence. Meanwhile, I also believe, with the writing so strongly on the wall considering their future, that beyond what they can pocket from privatizations now in the short term, they have no interest in making a real development plan.

Meanwhile, Mr. Stournaras is up to his ears with the bigger budget and EU / Troika picture and has no time.

It is important to remember that 'elite' parties in Greece - ND and today's PASOK - are not stocked with the best and brightest. The financially elite families in Greece traditionally placed the least clever of their children in politics, i. e. the ones deemed incompetent to run the family business - either for lack of brains or because of character problems.

As for the IT professor who doesn't know about memory sticks.... He is obviously a party man saying what has to be said to support the government's case. No doubt he also received his professorship through the same party channels. Please wake up and stop being so naive about the pitiful ways of Greek 'power'! You can take for granted that nobody in a position of power here academically, judicially, etc. is the best in their field in Greece. All these positions have long been the 'prizes' of the top parties to disburse among its most loyal members.

Meanwhile, Tina Birbili, an engineer in her 30s and Minister of the Environment under the last PASOK government who oversaw various university planning boondoggles of PASOK professors, is today representing Greece, in its moment of greatest crisis outside war, at the OECD. Need I say more?

Of course there are competent IT people here! They are in the private sector! Greek companies have been working for the EU for years and internationally.
 

Canutely King
Tina Birbili, who is a physicist & environmental economist, is 42. That's only 3 years younger than the Dutch Finance Minister Jeroen Dijsselbloem who is tipped to take over from Jean-Claude Juncker as the Euro-Group czar. Dijsselbloem is also an engineer (agricultural), but unlike Ms. Birbili he doesn't have a PhD from Imperial College London or anywhere else.

Unlike most politicians Tina Birbili did have appropriate qualifications for the Minister of the Environment job. Unlike her replacement, Giorgos Papakonstantinou - who has an LSE economics PhD, perhaps that's where he found out how to copy memory sticks.

If I were a Greek then I would not be worrying about whatever Birbili is doing at the OECD - which is just another think tank. I'd be much more concerned about having, as the next Euro-Group czar, an agricultural engineer with no ministerial experience prior to becoming the Netherlands Finance Minister in November 2012!!

If you think Greece is bad in respect of jobs for mates, take a look at the Obama administration, or the one before that (G. W. Bush) or the one before that (Clinton)...

I'll stay out of the memory stick/IT Professor debate; except to say that most IT professors and professionals (of which I am one, of 40 years standing) wouldn't have a clue how to definitively determine when a memory stick was formatted or copied. The people who may know will be found in military intelligence or similar.

Yes Greece is 'bad', but maybe not as bad as we sometimes think. Does any other EU country have a long term economic development plan? The only countries I can think of that might are Poland and Estonia. Cameron commissioned Michael Heseltine (a Europhile and eventually Thatcher's bête noire) to produce one, which he did. It calls for decentralization and 'more Europe' so it is unlikely to be adopted. Britain has spent the last 150 years centralizing and 'more Europe' is blasphemy for many (most?) Brit's.

The main thing the Greek government must do is to create an investment friendly environment (like Ireland did before it went on its property binge) and keep its fingers crossed - and not go on a property binge.

Tsigantes
I agree with you about the investment plan.

I also have no problem with people being young if they are competent. But it is unwise to assume that further degrees describe competence - I say this as a University professor (in Spain, Belgium and before that in the UK, Germany and NL) who sits on the marking board every year, passing students’ extremely mediocre work (most students are mediocre, especially at PHD level, because they tick all the correct boxes). Degrees don't guarantee anything - it is what you do afterwards.

Tina Birbili is known amongst professionals in Greece as having landed a very plush, i. e. wildly overpaid, commission to design bicycle paths at the extremely large main university campus which is off-limits to cars anyway. This was a PASOK appointment and later she received much media attention for her 'green' intervention. I invite you to visit the campus to view these paths. Basically you will wonder where they are. Or even the need, since the campus is crisscrossed with decommissioned roads and is basically one big 'path' and largely empty forest area.

I do question the appointment of an engineer to an economic think tank. Especially now.
There are plenty of highly experienced economists in Greece with far better credentials for this post, and the appropriate skill set (statistics, etc.) - who are presently jobless! Unfortunately for them, they have spent their lives in economics rather than in party politics.

Greece is a small country and so top appointments in all public sector fields are infiltrated by politics. In my view too much, even tragically so. This is not to say all appointments are inappropriate, but that it is political pot luck. For example, Greece's greatest living architect, by staying out of politics, has only been given occasional temporary junior posts as a tutor of the lowest rank at the polytechnic of Athens.

However I saw the same and even worse, especially in Belgium. And as you say, all administrations appoint their friends.

In the Greek universities this has unfortunately led to lower standards. In the Greek hospitals it is different, though departments with corrupt heads tend to be demoralized.

Basically the private sector is where the hope for Greece lies. Our country is NOT rotten from top to bottom; it is only rotten where it meets the state sector.

The best of Greek talent and brains is in the private sector.

For example, Greece until 3 years ago was rated no 5 worldwide in terms of the quality of its doctors, healthcare and access to health care. At least half of Greek doctors train abroad in the highest levels of medical education, mostly privately, or through Onassis scholarships or armed forces funds.

Unfortunately, the private sector is the sector of greatest frustration, since any kind of work that could benefit Greece as a whole comes up against the political favors/kickbacks system and usually fails or is bastardized. This certainly applies to all professions in the engineering and construction sector and science.

However, great strides can be made at the local level, such as when the port of Mytilini installed the newest and greenest sewage disposal system in the late 90s and won a European award. Or when a small town near Veria in northern Greece backed the vision of its trained librarian and has produced probably the most educative, much loved and inspiring library in Europe!

Meanwhile Greece is at the forefront in Europe with alternative medicines and cosmetics, herbal knowledge and medicines, herbs and food products, organic farming and agricultural tourism, pilates, yoga, tai chi centers, green building knowledge... Please note, once again, all businesses that can be kept small & private, flying under the government radar.

The easiest area to succeed in is Import/Export and exporting services. This on the whole can avoid government interference, provided the company stays small! If it grows, it starts attracting the attention of government parasites who act more or less like Mafiosi ‘protection services’. To succeed in Greece, you must be small - or grow so big that you can hire a self-protection department to deal solely with government ministries!

By feeding on the private sector, feeding on its own state commissions in the form of kickbacks, feeding off the money from all the bureaucratic payments & paperwork put in the way of private sector business, feeding on EU business commissions (famously Siemens and defense contracts), the governments of the last 35 years have been so sated with illegal wealth that it actually didn't matter to them that they sacrificed Greece's shipping industry - no 1 in the world and Greece's number one sector - which simply moved its companies out of Greece.

As for large scale investors from outside, most have given up and gone away millions poorer and after 5-7 years, since successive governments quarrel between themselves on who gets the illegal spoils. The same reason applies to European investment funds (highways, etc.) which were infinitely delayed on take-up because of inner kickback fighting. The money was allocated for the Athens metro 25 years before work began! (See Siemens scandals, then .....and now in 2012, when following the decision of the German court that Siemens pay Greece fines of x billion €, Venizelos in the first act of the present government awarded Siemens the contract for the next 2 metro extensions exactly equal to this fine. This was awarded in a contract competition of one aspirant. Which no doubt is a Germy-pleasing EU move, but according to the EU's own competition rules is illegal).

Finally, Greece has numerous Chambers of Commerce and private sector business chambers and committees. But their hands are tied and they are forced to avoid mentioning the elephant in the room for libel reasons and their own survival!

In sum, there is enormous competency, far-sightedness and energy in the private sector here. But the way forward is always blocked. Greece is much blessed and not a poor country by any means, and there is no reason, given good governance, it could not be the Switzerland of the Mediterranean.

6 comments:

  1. @Tsigantes
    "Our country is NOT rotten from top to bottom; it is only rotten where it meets the state sector."
    >>>It IS rotten, from bottom to top, with MAYBE some exceptions.
    Do you live in Greece? Do you have connections other than colleagues working at universities? Do you know how it works, already for decades, in families, villages, cities, in the micro private sector and how administration looks like there? Banks?
    ALL systems are rotten.
    From bottom to top.
    If you do NOT believe it than you are a dreamer, because you do not study on the university of life. If you heard stories or read them then it depends from who you received the messages, or the webpages. How ell were they informed?
    And: You work abroad. Far away from Greece. Working with theories. Start working on the battle field. Listening to people who ARE on the battle field. Among the people IN Greece. Go around as a Sherlock Holmes and find out that micro and macro are similar. Also in Greece.State and family life. The elephants are everywhere! ....:


    "But their hands are tied and they are forced to avoid mentioning the elephant in the room for libel reasons and their own survival!"
    >>>Be courageous and dare to mention the names who create the elephant.
    THAT is showing love for Greece.
    Dare.


    "Meanwhile Greece is at the forefront in Europe with alternative medicines and cosmetics, herbal knowledge and medicines, herbs and food products, organic farming and agricultural tourism, pilates, yoga, tai chi centers, green building knowledge.."
    >>>Show me the link to the page that shows the list with numbers compared with other countries. Impossible.
    In Greece not any computer works, because they who work with computers are not on the level it should. The European Commission has noticed this and is working at it.
    All is corrupted and of course it is nice to say that they are a leading country in that. It is possible to write it, to broadcast it, but words are just words and I want FACTS.
    Show them. Show links. How else can you KNOW this what you write here?

    Time for a list with what is rotten and what is clean.
    Waiting.
    Names.
    Websites.
    But IF that elephant is everywhere then the list with "clean" will be empty.

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  2. Looking through the list of OECD ambassadors I find most are not economists, e.g. Germany, France, Sweden, New Zealand; although many are career diplomats, not even the Austrian ambassador is an economist! A few are obviously political appointments e.g. Australia, S Korea and Greece. If I were to criticise Birbili's appointment, it would be on the basis that she didn't have sufficient diplomatic experience, not because she's in her 40s, or because she is a physicist/environmental scientist rather than an economist. Many of the people responsible for Crash 2007/8 were economists, not to mention Nobel Prize winners Scholes & Merton of 1998 LTCM infame - which IMO was the harbinger of Crash 2007/8.

    Ambassadors are there to influence the direction of OECD 'projects', lobby on behalf of their country's national interests, and to ensure their government and other institutions are taking full advantage of OECD resources. Is there any evidence that Birbili is not doing that - providing she is talking Greece up rather than down then I wouldn't worry about her?

    Does Greece have any career diplomats who are not party affiliated?

    But what is the OECD anyway - its website says its 'a forum of countries committed to democracy and the free-market economy'

    Its founding members (1961) included Franco's Spain, Salazar's Portugal, Greece (military junta 67-74) Turkey (military rule 1960-61 and several times since). AFAIK no member has ever been suspended from the OECD for not being a democracy or not having a market economy. Is a country that occupies another country's territory a democracy - I'm looking at Turkey and Israel. The OECD is the non-military arm of NATO, and like NATO its arguably reached its used by date. Only 5 of its 34 members are located beyond the North Atlantic or its adjacent seas and they all have economic and military alliances with the USA.

    The OECD has directorates for the Environment, Sustainable Development, Education, Health, Science and Technology etc, it does work in many disciplines - eg the PISA Education Surveys. One would hope that Birbili should be able to better grasp the essence of this recent OECD publication and its relevance to Greece, than most economists, Greek or otherwise - Energy and Climate Policy - Bending the Technological Trajectory

    The OECD doesn't lend money, it doesn't invest, it doesn't forgive debt. So why is Birbili's appointment as the Greek Ambassador to the OECD 'in its moment of greatest crisis outside war' such a big deal. I think you're overrating its importance.

    But I would worry about someone with as few credentials as Dijsselbloem has, taking over as Eurogroup czar. It probably means Merkel gets her wish - Wolfie will be even more so the de-facto Eurogroup Kaiser. Not necessarily a bad thing, but surely far more relevant to Greece at the time of its greatest crisis since whenever, than who its Ambassador to the OECD happens to be. But I'm probably overrating the importance of the Eurogroup Presidency :wink:

    CK - 2 b continued

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    Replies
    1. Part 1.

      "But I would worry about someone with as few credentials as Dijsselbloem has, taking over as Eurogroup czar."

      >>>Here to add some information that explains why he has the job that you suggest it is not clever.

      With how you think about all, you suggest that people in the Netherlands, in the European Commission, are stupid. You say it, in a way.
      Well, I do NOT like it that you only heard the word "agriculture" when there was news about Dijsselbloem. Obviously you did not take any time to search for more. So, your idea about newspapers and broadcasters is that they are well informed and say all what has to be, needs to be said to create a complete view?

      I searched it for you, so here you are, all of you. I am Dutch and I feel accused to be stupid. Maybe I am, but I dare to show that also professors are not so clever as they think they are. Too many professors are overvalued by a system, worldwide, that puts them on a too high level in the society. A lot do not belong on the university, are the children of too rich parents who want to see their lovely child on a glorious throne. Like a King ruling the world with his title.

      ----

      From the official website of the Dutch governement about Dijsselbloem:
      http://www.rijksoverheid.nl/regering/bewindspersonen/jeroen-dijsselbloem/cv
      Education/training/study
      "Agrarian economy, towards economics, agricultural policy and socio-economic history at Wageningen University (1985-1991)
      Doctoral Research Economics, University College Cork, Ireland (1991)"

      Website Wageningen University:
      http://www.wageningenur.nl/en/wageningen-university.htm

      Carreer:
      Jeroen Dijsselbloem is from 1992 employee of the Labour Euro Delegation in the European Parliament in Brussels. From 1993 he spent three years Spatial Policy Policy (environment / agriculture / nature) of the Second Chamber of the Labour Party in The Hague.

      He is from 1994 to 1997 working as councilor in Wageningen.
      In 1996 he spent two years political-administrative assistant Minister Van Aartsen at the Ministry of Agriculture, Nature and Food Quality in The Hague. Then he holds until 2000 as the post of Deputy Chief Staff Office.

      Jeroen Dijsselbloem is a member of the Lower House from 28 March 2000 to 22 May 2002 and from 19 November 2002 till his minister-ship. He is responsible as the spokesperson for youth-care, fitting- and special education, teacher policy and inspection of Education. From 25 April 2007 to 22 December 2008, he is the Chairman of the Parliamentary Committee for Research Education Innovations.
      Ir. J.R.V.A. Dijsselbloem is Minister of Finance in the Rutte-Asscher-government, from November 5, 2012.

      Political parties and other positions
      Since 1985 Jeroen Dijsselbloem is a member of the Labour Party. Since May 2008 he is Vice Chairman of the Labour party in the Lower House. In 2010 he is member of the program committee of the party and since May 2012 of the Labour Party election program 2012.

      ----

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    2. Part 2.

      WHEN you, CK, dare to suggest that he will be the czar in the position you mentioned, you sound very cynical. That is a negative humiliating sound. With this cynicism you suggest that those who asked him for this job are not intelligent. That they are not wise. Not knowing what they are doing. Not making any research, not only in what is there in his CV, but also by not even asking people about his way of working. THAT is what you say between the lines.

      You should apologize.
      You declare the Dutch as simple.
      YOUR too early and cheap conclusion is too simple to get the reward of being published here. That I, as a not professor say things that are not so clever, okay (that may be forgiven), but you, as a professor, should talk different.
      I expected at least some common sense, decency, >respect< and ratio.

      YOUR CV is very clear to me.
      What has been written here, in this post, in this blog, in the comments, will be copied an pasted today and sent to the EU.
      I want to let them know also about that Elephant (Tsigantes), and about your accusations.
      So that they know how professors think about EU and what is going on in Greece behind the curtains of the society.

      Then they have at least a possibility to react, to make themselves clear.
      As soon I get an answer I will publish it here.
      The sooner this accusation, and the elephant gets out of the world the better.

      Delete
  3. A number of years ago the Australian government decided to subsidise ethanol produced from grain. One of the major beneficiaries was the company that made the ethanol - a major shareholder of which was the then prime minister's brother. A number of Australian Wheat Board (AWB was an Aussie SOE) executives got kickbacks from Saddam Hussein for sanction busting wheat sales. Some Australian Reserve Bank (yes - the national central bank) Note Printing branch executives paid bribes to foreign officials who agreed to recommend using Australia's plastic banknote technology. No one has gone to gaol, the former PM won the next election, the AWB execs got shoved sideways and AFAIK the ARB guys are still doing their jobs, or perhaps they've been suspended on full pay.

    Yet, Australia ranks #7 in Transparency International's Corruption Perception Index (TI-CPI). Oh, really! But wait, who exactly has the perception that Australia is not corrupt. Obviously the people that TI surveys - and who are they - Australians of course! There is very little fakelaki style corruption in Australia, so if Greece wants to climb the TI-CPI ladder perhaps it should focus its efforts on eliminating low level corruption. I could write similar things about Singapore which ranks #5 in the TI-CPI Survey.

    As an infrequent visitor to Greece over several decades, I experienced fakelaki and petty extortion on every occasion I went there. I've been to Austria a bit more often. According to Klaus, Austria has some similar issues to Greece in its governance and jobs for political party lackeys. But no Austrian ever asked for 'a little extra for me' or threatened with me with violence 'if you don't pay up'. Vienna was always my preferred entry point to Europe - full of polite, civilised people - which after places like Bangkok, Mumbai or even Singapore was a delight.
    ==========================

    According to Rewheel, Greece has the second highest mobile phone costs in the EU, Czeska is higher. There's an Indian mobile phone company operating in 17 sub-Saharan African countries called Airtel-Africa. Apparently subscribers can roam around those countries without having to pay roaming charges. I read somewhere that Airtel would not be allowed to operate a similar service in the EU Single Market due to EU regulations - maybe it should be called the EU Swindle Market. :sigh:
    ==========================

    I mentioned the other day that Michael Heseltine wrote, at Cameron's request, an economic development plan for the UK. This blog often laments the lack of such a thing for Greece, so here is Heseltine's report - No Stone Unturned. On page 202 you'll find a Summary of Recommendations, there are 89 of them - some of them are UK specific (many in fact are England specific) but some may be applicable to Greece. As I already said the report is unlikely to be treated seriously, at best the government will cherry-pick a few items, pat itself on the back, and blame Heseltine for any failures. You may wonder what a LEP might be, it's a Local Enterprise Partnership - Public/Private Partnership for a given geographic area - see page 34.

    CK

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  4. Sorry I forgot to post the last part

    I find the notion of Greece becoming the Switzerland of the Mediterranean fanciful... to say the least. Greece will not get out trouble until it faces reality rather than wallowing in ancient myths and/or indulging in modern fantasies.

    Amongst other things, Fotis Kouvelis, the leader of Democratic Left, has told Sunday’s Kathimerini - The most important thing we agreed to in the policy program was for the country to stand on its own feet, to safeguard its place in the eurozone

    I'm not sure I agree 100% with the eurozone part, but I agree 200% with the 'standing on its own feet' part. The rest of the world does not owe Greece a living, its been saved too many times already.

    A more realistic aspiration for Greece would be that it become the Mediterranean Taiwan. I can just about imagine a Greek robotised Foxconn, or a Greek Evergreen-Marine. But a Greek Nestle, a Greek Hoffmann-La Roche are way beyond my imagination, let alone a Greek UBS or Greek Re.

    CK

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