Tuesday, September 25, 2012

Cross-border priorities/measures to unleash growth

"Greece 10 years ahead" (GTYA) is the title of a study published by the Athens Office of McKinsey in mid-2011. It outlines a National Growth Model which, the study predicts, would create over 500.000 new jobs and add roughly 50 BEUR to Greece's GDP within a decade. The study consists of 72 pages. I have already explained in a previous post that I will make short posts about each major point of the study for those who prefer not to read 72 pages.

On page 33, GTYA lists 20 priorities/measures which would unleash growth. I will simply list them below without further comment.

1. Introduce the Economic Development & Reform Unit (EDRU) as an institution under the Prime Minister to support the government in coordinating, facilitating and monitoring the implementation of growth reforms.
2. Establish Greece Ten Years Ahead Fund and develop National Growth Funding Program to inject lower cost liquidity into private sector companies.
3. Launch a phased Lean Processes Program to simplify licencing processes and reduce lead times.
4. Remove counter-incentives and barriers to scale (e. g. labor restrictions, SME taxation) and introduce sector output incentives for investments.
5. Re-prioritize public investments and rapidly launch growth-relevant, high domestic GVA infrastructure projects leveraging EU-funds and PPPs.
6. Revise the environmental and zoning framework to better balance growth and environmental priorities.
7. Re-visit the Fast Track for investments using proven Athens Olympics 2004 methods.
8. Re-design the University Business R&D and patenting framework to promote innovation and entrepreneurship.
9. Develop an effective and transparent mechanism to recruit local and international market-sourced talent for contract-based development into pivotel technical and/or managerial positions in the public sector.
10. Consolidate all state sectors' IT architecture design and strategic management into a central IT unit.
11. Expand IPSAS/IFRS double-entry standards across all state entities; establish a financial reporting consolidation system to monitor and manage performance centrally.
12. Broaden scope and goal of the State Assets Management Fund to maximize the impact of the privatization program and return to Greek state as shareholder.
13. Launch Ellada & Ergasia as a cross-ministerial program (see details in report).
14. Revamp technical, undergraduate and graduate education (see details in report).
15. Complete flexibility and efficiency-related labor reforms.
16. Accelerate decision-making in Council of State and earlier degree courts.
17. Consolidate all internal auditing functions of public sector companies into a Central State Auditing Unit.
18. Launch dedicated projects ('SWAT teams') to investigate possible informalities in different fields of economic activity.
19. Further optimize tax evasion counter measures, leveraging international practices in detection, segmentation and contact/collection.
20. Establish a Central Procurement Unit to define procurement strategy, monitor procurement practices and procure major common categories.

Well, the first reaction of a practitioner like myself is that this is a lot of consultants' talk. Indeed, it is. However, at least there is a choice of 20 points to select those from where consultants' talk should be developed into practical action plans.

Previous posts in this series: P1, P2, P3.

1 comment:

  1. This is all well and good, but as a practitioner, Herr Kastner, you are well aware of the dangers.

    With such schemes, it is easy to waste money on hare-brained schemes that produce little result. It is all too easy to imagine the world wants your precious little widget, only to find multinational disinterest.

    Clause 7 mentions the 2004 Olympics. Well the energetic bureaucrats whose activities stretch to staring into space seem to have missed that opportunity in its entirety. Will it be any different this time?

    The problems facing Greece are very, very great. They are a coming together of practically every fault that a modern administration can make. You have already mentioned that it will take a generation to sort out, yet they have only a few years to achieve this.