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Tuesday, March 27, 2018

Greece - Once Upon A Time There Was A McKinsey Plan...

Once upon a time...

Once upon a time, in mid-2011, McKinsey first published their report "Greece Ten Years Ahead" (GTYA). The report outlined a National Growth Model which, the study predicted, would create over 500.000 new jobs and add roughly 50 BEUR to Greece's GDP within a decade. I had written a total of 14 articles about it at the time.

I found the McKinsey report by googling "greece economic development plan". It is amazing how many different entries from different sources one finds when googling that subject. Including several Greek sources like the think-tank IOBE.

The common thread of all these plans is that "Greece needs to change its growth model to ensure the return of its economy to high growth rates and this model should be based on limiting the importance of consumption spending on economic growth, strengthening the role of business investments and raising "net" contribution of the external sector by boosting exports" - IOBE.

There has been no shortage of proposals as to what needs to be done about Greece's economy. Eight years after the first memorandum, it would be interesting to see a detailed report as to how many of these proposals have actually been implemented and with what degree of success.

15 comments:

  1. It's an old report that needs to be revised. Greece executed the tourism part but also has in energy an enormous field of potential improvement. And as you know exports are at least 25% energy related and based on petroleum products which petroleum Greece does not have so it needs to import in order to re-export. If you want to see dramatic improvements in the Greek GDP then focus on energy. Speaking of, here is a Greek success story rarely talked about:

    https://www.youtube.com/watch?v=eX8BxA7Px3c

    Dean.

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  2. Btw, proffesor Sinn has spoken on Varoufakis and what a revelation!

    https://www.yanisvaroufakis.eu/2018/03/22/hans-werner-sinn-varoufakis-acted-very-prudently-and-wisely-to-defend-greek-interests/

    Dean.

    ReplyDelete
    Replies
    1. You are a Varoufakis fan after all, Dean?

      It felt youwere an esteemed presence and something like a felt constantly present gatekeeper before you posted it here at Varoufakis blog. Sometimes I don't look back, to correct possibly ill-guided assumptions.

      But: I went to Sinn's page and looked at the larger content including an encounter to which he invited Varoufakis, in 2015?, when this entry on his new more polished blog surfaced. No link to check? Curiously enough. Am I mistaken?

      Admittedly after that larger semi-economic experience, to the extend I can grasp economics that is, I tagged his post as one of the many self-celebratory statements by Varoufakis.

      Admittedly I am not an trained economist as you seem to be, but as philologist I am trained on sensibility concerning people's games.
      LeaNder

      Delete
  3. Greece's top 10 tenders for 2018:

    http://www.ypodomes.com/index.php/special-editions/news-in-english/item/46068-greece-s-10-largest-project-tenders-for-2018

    Dean.

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  4. Yes, many proposals by many entities. However never a proposal from a Greek government about what Greece will do.
    But not to worry, according to ERT the mother of all plans will be published 27 April, 2018.
    Lennard.

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    Replies
    1. I think it will be a version of the Greece 2021 masterplan.

      The Greek government has devised a five-year action plan for sustainable economic growth called Greece 2021. It represents the fundamental changes that are being made to the Greek economy, which was historically inefficient and consumption driven. The plan is based on promoting exports and developing high value- added sectors, such as real estate, information and communication technologies, energy, food, agriculture, logistics and life sciences.

      It aims to achieve fair economic growth, by building a productive and specialized economy, widening production range and steering entrepreneurship to create sustainable jobs, according to Christos Staikos, Chairman of Enterprise Greece, the investment and trade promotion body responsible for driving Greece 2021.

      Dean.

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    2. Could be this?

      https://news.gtp.gr/2018/02/15/national-development-plan-set-stimulate-greek-economy/

      Dean

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  5. Kleingut:

    Your frequent visits to Kalamaria are proving to be a welcome boost to the Greek economy :)

    https://news.gtp.gr/2018/03/28/makedonia-airport-ready-take-off-airlines-requesting-slots/

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  6. Could you ask McKinsey to update their report?

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  7. Let's say that Greece faces a familiar predicament called "no particular place to go". It goes like this:

    https://www.youtube.com/watch?v=Yv_vL_SvXik

    Dean.

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  8. This is very interesting. According to the link below, 2016 and 2017 were record FDI years for Greece and much better than the 2013 and 2014 FDI performance from the previous government.

    The other surprising stat is that France has been the largest FDI investor in Greece for the decade 2006-2016.

    https://www.enterprisegreece.gov.gr/en/greece-today/why-greece/foreign-direct-investment

    I am not a political expert but this performance solidifies my belief that if Syriza achieves an o.k economic performance for 2018 and 2019 they will be re-elected despite the wide belief that ND is a "shoe-in" for the next election.

    Again please do not mistake my observations as sympathy for leftist ideologies, but numbers tell us that the "amateurs of Syriza" seem to be performing above expectations at the great surprise of many. I mean these guys from being framed as a "total disaster" are showing results after all. Despite the impatient opposition - I might add - which thinks that winning the next election is some sort of God-given right of sorts.

    This is quite interesting in the broader scheme of things. Who knew that the country mouse was smarter than the city mouse?

    Dean.

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    Replies
    1. I share your view that a change of government at the next election is far from being a done deal. While Mitsotakis gives marvellous interviews in perfect English to the international media, I haven't really seen any domestic footprints from him. Anyone, like myself, who thinks that the present government is ill suited to lead Greece towards a better economic future would expect the major opposition party to campaign on the basis of a new plan, a new vision for Greece. A 'long-term economic development plan' à la McKinsey would be a platform to campaign on. If ND has such a plan or vision, it hasn't come to my attention yet. In fact, I see in ND as a party which hasn't even been able to admit its own responsibility in the Greek misery. If you can't even come up with a diagnosis, I wonder how they will come up with solutions.

      I don't think that we will see a lot new firepower from ND until the next election (they seem to have shot everything they have already) whereas SYRIZA hasn't even started yet to use its firepower and, just like you argue, I think SYRIZA will come up with a lot of powerful firepower by then.

      Regardless of current polls, the election will probably be decided in the last 2-3 months prior to it and my 6th sense tells me that SYRIZA will use those 2-3 months more effectively than ND.

      Delete
    2. Kleingut:

      If I were ND, I would be bringing new FDI in Greece through my connections and let everyone know that I (ND) am the procuring cause for people to give proper credit. I wouldn't wait for a change of government to execute my nebulous plan towards recovery.

      During the past two years, all the arguments were about reforms. The ND narrative was that the government was not doing enough even though ND's own reform record was far worse. Now that we reached a point of eurogroup meetings normalcy, with regular disbursements and without rocking the markets, ND is trying to play its other card: foreign policy.

      The funny thing is that in foreign policy ND outcompetes with its own splinter group the Independent Greeks on who is the most conservative and more patriotic of the two. This, in turn, is pushing Syriza towards a natural alliance with the remnants of Pasok where most of Syriza supporters are coming from. So, if during the next elections both ND and Independent Greeks find themselves out of government then the defeat for conservative forces will be even more pronounced.

      Unfortunately, all I see is a lethargic ND which is counting on a win based on polling with 23% yet undefined voters.

      Dean.

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    3. Kleingut:

      The latest research poll by Kapa Research shows the ND lead cut down to 4.4% over Syriza.

      "The difference between the first two parties appears to be significantly lower compared to the previous survey of the same company.

      Specifically, NR. accounted for 21.6% of the vote intention against 17.2% of the ruling party.

      They are followed by the Change Movement and the Golden Dawn in the third place with 7.8%, while the KKE is 6.3%.

      Below the 3% threshold, according to the poll, ANEL 2.5%, the Centralization Union 2.3%, the Popular Unity 1.5%, the Greek Resolution 1.7%, the 1.4% Cruise Freedom and LAOS, 1.2% MRA25 and ANTARSYA.

      In the question of who is the most suitable prime minister, 28.5% choose Kyriakos Mitsotakis, 22.5% Alexis Tsipras and 47.5% answer "none of the two".

      Finally, 8 out of 10 Greeks are worried about the future of the country, with only 19% saying optimistic."

      http://www.thebest.gr/news/index/viewStory/481996

      Dean.

      Delete
  9. Finally, 8 out of 10 Greeks are worried about the future of the country, with only 19% saying optimistic.

    Well, in other words they may not be that different from other "national units". Are they?

    ReplyDelete