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Far Away, So Close? Examining the Growth Potential of Greece Through the Lens of New Zealand’s Paradigm

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Abstract

The purpose of this comparative case analysis is to illustrate how macroeconomic policy and management can count for substantial difference between sustainable vs. unsustainable growth. The article focuses on the Agri-Food sector due to the interesting geomorphological and economic similarities between two countries; Greece and New Zealand. At the same time we point out a critical point for policy design: an economic crisis no matter how severe it may be it can always present an opportunity for a paradigm shift, for a deep change of unsustainable – and ultimately irresponsible – growth models. New Zealand suffered from such a crisis back in 1984–1995 which called for drastic reforms in its growth policy design. Infusing transparency, accountability and more competition in all (public and private) organizations New Zealand managed to transform its national economy and eventually to become a highly competitive and powerful player in the international market of agricultural products. With this in mind, focusing on the agricultural sector and given that the two countries share an array of resembling characteristics, we aim to illustrate lessons learned from the New Zealand case that could prove to be useful for the upturn of the Greek economy.

Keywords

  • Total Export
  • Common Agricultural Policy
  • Import Tariff
  • Greek Economy
  • Greek State

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Notes

  1. 1.

    It is worth mentioning that Mpourdaras (2005) in his thorough empirical study estimates the level of farmer’s support in Greece for the period 1989–1997. His conclusion is that the support is 40.2 % of the total Ag Sector value or 51.2 % of the total Ag Sector’s value added.

  2. 2.

    ‘Creative accounting’ is not a new concept neither a ‘privilege’ of the Greek government. It is true that Greece made excessive use of creative accounting and the term ‘Greek Statistics’ was consequently coined to describe this practice in the international terrain. Still, creative statistics has always been a common practice for anyone (individuals, organizations or governmental bodies) who has a strong incentive to conceal aspects of negative performance.

  3. 3.

    For more information on how agri-food exports have evolved during the last few years see Chymis (2013). Despite the late increase of the share of total exports on GDP and, specifically, agri-food exports’ share on GDP and total exports, there is much untapped potential for the Greek economy in general, and for the agri-food sector in particular, to further boost exports.

  4. 4.

    For a comprehensive review of the New Institutional Economics literature see Furubotn and Richter (2005).

  5. 5.

    The OECD lists 185 countries (as of 2012) and categorizes them in seven large groups with respect to income and region. These are: East Asia and the Pacific, Eastern Europe and Central Asia, OECD high-income, Latin America and the Caribbean, Middle East and North Africa, South Asia and, Sub-Saharan Africa. The OECD high-income category (31 countries) contains most of the richest countries in the world.

  6. 6.

    See Skouloudis et al. (forthcoming).

  7. 7.

    According to the Hellenic Statistical Authority (ELSTAT), in 2012, and following a revision of previous years’ data, exports have reached 14 % of GDP.

  8. 8.

    According to recent data from ELSTAT, Greece has a significant amount of Bauxite (two million tons/year, Europe’s first and world’s 12th producer), Bentonite (one million tons –crude and processed, 9 % of world production), Gypsum (800,000 t), Kaolin (20,000 t), Lignite (65 million tons, Europe’s 2nd and world’s 6th producer), Marble (250,000 m3), Perlite (850,000 t, world’s first producer), Pozzuolana (Theraic earth – 1.5 million tons), Pumice stone (1.3 million tons, world’s third producer), as well as sea salt (200,000 t), not to mention gold reserves that are estimated at $25 billion and hydrocarbons (gas and oil) that are under exploration.

  9. 9.

    http://www.climatedata.eu/continent.php?cid=150&lang=en

  10. 10.

    http://www.e-geoponoi.gr/2010-03-20-19-19-06/2012-01-15-07-26-07/8176--a-.html (in Greek).

  11. 11.

    Up from 25.4 % in the year 2000.

  12. 12.

    http://www.greekwaterbuffalo.gr/vouvali/galaktoparagwgh.html (in Greek).

  13. 13.

    Personal correspondence June, 2013.

  14. 14.

    For more details regarding Greek Ag Sector potential, we refer the reader to past issues of Greek Economic Outlook (e.g.: Chymis, issue 18, pp. 53–56 and Chymis and Konstantakopoulou, issue 19, 2012, pp. 63–75) available on-line at http://www.kepe.gr/EN_Pages/outlook_en.htm.

  15. 15.

    For a detailed elaboration on the farmer’s cooperatives weaknesses in Greece see Iliopoulos and Valentinov (2012).

  16. 16.

    http://www.fonterra.com/global/en/Financial/Fonterras+Place

  17. 17.

    Although a large part of olive oil is domestically consumed (57 %), the quantity exported receives very low (if any) processing and is exported in bulk mainly to Italy, thus missing the value added of the processing industry.

  18. 18.

    Specifically, in 2012 the export value was around €375 million out of the €800 million total farm gate production value. This export value can be at least tripled if the olive oil sector follows a similar to Fonterra paradigm, without any increase in quantity exported.

  19. 19.

    http://ec.europa.eu/agriculture/policy-perspectives/policy-briefs/05_en.pdf

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Chymis, A., Skouloudis, A. (2015). Far Away, So Close? Examining the Growth Potential of Greece Through the Lens of New Zealand’s Paradigm. In: Di Bitetto, M., Chymis, A., D'Anselmi, P. (eds) Public Management as Corporate Social Responsibility. CSR, Sustainability, Ethics & Governance. Springer, Cham. https://doi.org/10.1007/978-3-319-07037-7_5

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