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Victoria Mindova

Recession and the lack of available funds in Greece last year seriously reduced domestic consumption in the country. A whole bunch of small and medium-sized enterprises proved to be deadlocked as they have planned their output based on the data on the domestic market before the height of the crisis, before the Memorandum of financial support, before revealing the full effect of the 'rescue' program which ruined the domestic consumption.

The only way out for these entrepreneurs not to suffer significant losses was to sell their goods abroad. This led to a significant increase in exports compared with the expected levels, and the PASOK government even tried to explain it as its own achievement and the result of the policies it implemented.
 
In essence, this was the result known from the tale of the two brothers and the Anguish. While the business was waiting for the situation in the country to improve it has found a way to survive and redirect its goods from domestic consumption to export markets. The increase in revenue in the treasury due to exports is not the result of targeted domestic policies but a favourable side-effect of positive influence. It depends only on the exporters themselves whether this trend will continue.

After GRReporter presented the theory of the Harvard Professor of Economic Development Ricardo Hausmann to you, which states that the only way to economic growth in Greece is through exports, we decided to find out if the Greek export companies agree with this view. It was also interesting to understand how the exporters can bear the burden of economic recovery in a growing recession alone. The Chairwoman of the Panhellenic Association of Exporters Christina Sakellaridis kindly answered our questions and left the impression that things for exporters are far more difficult than it seems at first, but they are optimists.

Some economists believe that the increase in Greek exports would be the only way out of the crisis for the country. Do you agree with this opinion?

A recent economic report by one of the largest Greek banks, Eurobank EFG, has shown that an increase by 4% in Total Greek Exports leads to an increase of 1% for the country’s GDP. That alone can verify the contribution of Greece’s external trade in the way out of the crisis and the recession. Taking into account the rapid growth of Greek exports in 2010, we all agree that the recession in Greece would have been deeper than 4.5% of the GDP. So exports for Greece are both a restrain of recession and a factor of economic growth.

Do you think that the institutions in the country are ready to support the exporting companies?

The positive aspect is that there is a great consensus in Greece, that the extroversion of the economy will be the key factor for its rebound and for a more sustainable growth the years to come. Tradesmen, enterprises, organizations and the State have realized that growth will come from a new model of the Greek economy, in the center of which lies the increase of Greek Exports and not the support of domestic consumption.

The low domestic demand has driven more and more enterprises, even Small and Medium sized ones, to attempt – for the first time – exporting their products abroad. Their efforts proved to be successful and the last year results have shown that.  

What are the most competitive Greek goods most in demand on foreign markets in your opinion?

Greece is often mistaken as a country that exports mainly agricultural products but this is not true. As a matter of fact, agriculture’s share in Total Greek Exports is below 25% and the trend is decreasing. Instead, industrial products’ share is increasing nearly 60% of Total Greek Exports. On the one hand are the products, such as agricultural, food, raw materials, that are unique in the world and of higher value than the competitive ones and on the other hand are the products of added value that incorporate innovation, know-how, high-tech and quality.

A recent research of the Panhellenic Exporters Association on the TOP 100 most exported products of Greece, has shown that food comes first, thanks to the contribution of aquaculture fisheries, fruits-vegetables, cheese and olive-oil, followed by construction materials, pharmaceuticals-cosmetics, machinery and chemicals-plastic products.

What are the target markets of the Greek exports?

I should mention that Greek products are mainly exported to developed markets, such as EU, US, OECD members etc. Markets that have high standards of quality, value for money and safety.

Which sectors of the domestic industry do you believe could be developed further so as to contribute to increased exports and hence to recovery of the local economy?

For the 1st Quarter of 2011 the Panhellenic Exporters Association has recorded an increase by over 30% of Total Greek Exports. OECD has updated its estimates for the annual increase from 6% to 9,4%. PEA’s estimates show an increase over 10%.