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Greece – India The benefits of reform driven growth

Greece – India The benefits of reform driven growth. Michael Mitsopoulos SEV Hellenic Federation of Enterprises 21 & 22-5-2012. Key structural facts and numbers. Key numbers, Greek corporate sector. Greek economy : Breakdown of GVA.

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Greece – India The benefits of reform driven growth

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  1. Greece – IndiaThe benefits of reform driven growth Michael Mitsopoulos SEV Hellenic Federation of Enterprises 21 & 22-5-2012

  2. Key structural facts and numbers

  3. Key numbers, Greek corporate sector

  4. Greek economy: Breakdown of GVA

  5. Exports of goods as significant as tourism and receipts from shipping!

  6. Indian economy: Breakdown of Net Domestic Product

  7. Key facts about India • Large economy: India has approximately 222 million households • Rural economy: More than 30 per cent of the population living in 5,000 cities and towns, which means the concept of inclusive growth remains central to India‘s development policy. • Young nation: Median age of 25 years, and with a large working population. • Services such as healthcare, education, entertainment, banking and finance are expected to enable growth. • A large discrepancy between demand and supply for infrastructure ensures a significant contribution of to growth from putting the infrastructure in place.

  8. Key macro facts

  9. Growth of GDP – Greece vs India

  10. General government gross debt

  11. Key policy challenges and growth enablers for policy makers

  12. World Economic Forum, Global Competitiveness Report 2011 – 2012(1 lowest - 7 best)

  13. World Bank, Doing Business 2012-RankingIf lower, it is better

  14. Main conclusions of analyzing comparative surveys, business environment: • Points need of attention in India: Infrastructure, increasing access to education (ceveat, the ranking reflects broad access in spite of islands of high excellence), paying taxes. • Points need of attention in Greece: Macroeconomic and financial sector stability. • Both countries need to keep striving to improve institutions and the business environment. Facilitating trade, and exports, simple tasks like starting a business*, getting electricity and registering property stand out as “low hanging fruit”. • Both countries have to gain a lot by focusing on innovation and increasing business sophistication. * Greece is currently trying to improve this

  15. INSEAD, Global Innovation Index (2011) (higher is better)

  16. Main conclusions of analyzing comparative surveys, innovation: • Points need of attention in India: India can built on its strong points, like computer communication and services exports, the quality of its research institutions to make and the development of clusters to make education & innovation more inclusive. • Points need of attention in Greece: The infrastructure in clusters and the expertise of scientific personnel provide building blocks to improve the collaboration between industry and institutions; to make innovation more inclusive; to take advantage of a new law to improve the quality of education institutions and to help in the process innovation driven exports. • Both countries have much to gain by encouraging the financing of innovation from the market, eg through a deepening of the venture capital markets, and to make innovation more inclusive.

  17. Focus on Greece: Pending reforms • Targeted expenditure cuts • The privatization program • Specific structural reforms • Facilitate cooperation of the private sector with research universities and institutions • Increasingly, the need to re-establish macroeconomic and financial soundness

  18. Focus on Greece: Implemented reforms • Tax increases and set-up of fight against tax evasion, with gradual and steady roll out of results • Significant labour market reforms • Public sector wage cuts and pension cuts (private and public sector) • Some structural reforms • Other very important reforms (education)

  19. Focus on Greece: Main implemented labour market reforms • Facilitation of managing working time • Removal of restrictions regarding the use of temporary contracts, fixed-time contracts and part time work • Reduction of notice period for layoffs • Relaxing of layoff limits • Increased wage flexibility • Reform of arbitration mechanism • Reduction of minimum wage and new minimum wage for new job market entrants

  20. Focus on Greece: Indicative list of structural reforms implemented • A significant simplification of process to license a new business establishments. Gradually improvements are already visible on the ground. • Gradually improving one-stop shop for start-ups and business operations. • Abolition of administratively set profit margins in fresh product central markets. • Abolition of some third-party taxes on ship tickets. • Abolition of law that restricts sale of infant baby milk to pharmacies with regulated profit. • Privatization of previously state owned airline. • Lease of the cargo terminal of Piraeus port to a private operator. • Road haulage has been deregulated, and administratively set minimum prices abolished. • Access to the LNG network has been allowed to private users. • Legislation of deregulation of professional services. A gradual implementation is expected. • Unreasonable restrictions to modernize existing productive units in the area of Attica have been lifted. • Removal of key regulatory obstacles to cruise industry, as well as a welcome reform regarding of trainee naval officers in the merchant fleet. • Removal of excessive restrictions for bake-off hot points in supermarkets. • Abolition of requirement to publish annual accounts in newspapers. • Abolition of requirement to hire a lawyer in order to submit an application for a trademark. • Abolition of separate registration in ‘exporters registry’of chambers of commerce • Abolition of requirement to hire, at regulated feed, a lawyer in order to establish a company with a capital below 100.000 Euros. • Numerous measures to accelerate the resolution of cases in Greek courts.

  21. Focus on Greece: Key sectors with concrete growth opportunities, McKinsey and Company study commissioned by SEV and HBAhttp://www.mckinsey.com/locations/athens/GreeceExecutiveSummary_new/pdfs/Executive_summary_English.pdf • Food manufacturing • Energy • Tourism • Agriculture • Retail • Manufacturing of generics pharmaceuticals • Aquaculture • Medical tourism • Elderly care • Regional cargo hub development • Waste management • Specialized food categories • Development of targeted classical education programs

  22. Focus on Greece: Science and business parks

  23. Greek science and business parks • Patras Science Park / University of Patras • Centre for Research and Technology Hellas in Thessaloniki • Thessaloniki ICT Business Park • Foundation for Research and Technology in Crete • Corallia clusters initiative • Scientific and Technological Park of Hepirous / University of Ioannina • Centre for Research and Technology – Thessaly National Centre for Scientific Research (NCSR) / Technology Park of Thessaly • ‘Demokritos’ and Technology & Science Park of Attika "Lefkippos" • Lavrion Technological and Cultural Park / National Technical University of Athens

  24. Thank you for your attention

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