Transcript presentation

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
Mil. Euro. ICAP data, SEV analysis.
2007
2008
2009
2010
2011
GDP
228.180 239.141 235.017 230.173 215.249
Sales of NF companies
198.888 216.400 188.532 178.451
Gross profit
58.734 57.060 53.886 48.511
Net profit BT
10.462
4.519
3.595 -6.602
Income of financial companies
25.293 32.428 26.723 22.747
Net profit BT
5.133
2.134
793 -2.188
Data on 30.000+ companies annually with published accounts
Greek economy: Breakdown of GVA
2010. Greece National Accounts by 21 branches - aggregates at current prices, GVA, Eurostat.
Real estate activities
12,9%
Wholesale and retail trade; repair of motor vehicles and motorcycles
12,5%
Manufacturing
10,0%
Public administration and defence; compulsory social security
9,2%
Transportation and storage
7,3%
Accommodation and food service activities
6,8%
Education
5,5%
Construction
5,3%
Information and communication
5,2%
Financial and insurance activities
4,4%
Human health and social work activities
3,9%
Professional, scientific and technical activities
3,5%
Agriculture, forestry and fishing
3,1%
Other service activities
2,6%
Electricity, gas, steam and air conditioning supply
2,0%
Arts, entertainment and recreation
1,9%
Administrative and support service activities
1,7%
Water supply; sewerage, waste management and remediation activities
1,1%
Activities of households as employers; undifferentiated goods- and services-producing
activities of households for own use
0,8%
Mining and quarrying
0,4%
Exports of goods as significant as
tourism and receipts from shipping!
Billion euros. BoG.
Exports of fuel
Exports of goods except fuel and ships
Receipts from travel
Receipts from transport services
Current account deficit
2011
6,2
13,3
10,5
14,1
-21,1
Indian economy: Breakdown of Net
Domestic Product
2008/2009. India. Net domestic product, by economic activity. Current prices.
Agriculture, forestry & fishing
17,8%
Trade
16,6%
Manufacturing
13,7%
Real estate, ownership of dwellings & business services
10,1%
Construction
9,2%
Other services
8,2%
Transport & storage
6,5%
Banking & insurance
6,3%
Public administration & defence
5,8%
Mining & quarrying
2,3%
Hotels & restaurants
1,6%
Communication
1,4%
Electricity, gas & water supply
0,5%
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.
Key macro facts
Growth of GDP – Greece vs India
General government gross debt
Key policy challenges and growth
enablers for policy makers
World Economic Forum, Global Competitiveness
Report 2011 – 2012
(1 lowest - 7 best)
Institutions
7
Innovation
6
Infrastructure
5
Business sophistication
Macroeconomic Stability
4
3
2
Market size
Health and Primary education
1
Technological readiness
Higher education and training
Financial market sophistication
Goods market efficiency
Labor market efficiency
India
Greece
United States
World Bank, Doing Business 2012-Ranking
If lower, it is better
Starting a Business
200
Resolving insolvency
Dealing with Construction
Permits
150
100
Enforcing Contracts
Getting electricity
50
0
Trading Across Borders
Registering Property
Paying Taxes
Getting Credit
Protecting Investors
Greece
India
US
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
INSEAD, Global Innovation Index (2011)
(higher is better)
Venture capital deals 1
101
Joint ventures / strategic
ICT access 11
81
alliances deals 4
High-tech exports 7
61
41
Computer and
communications service
exports 8
Computer software spending
6
Gross expenditure on R&D
(GERD) 9
21
1
GERD financed by business
enterprise 2
University/industry
collaboration on R&D 3
Quality of research institutions
State of cluster development 3
10
Scientific and technical journal
articles 5
India
Greece
United States
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.
Focus on Greece: Pending reforms
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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
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)
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
Focus on Greece: Indicative list of structural reforms
implemented
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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.
Focus on Greece: Key sectors with concrete
growth opportunities, McKinsey and Company
study commissioned by SEV and HBA
http://www.mckinsey.com/locations/athens/GreeceExecutiveSummary_new/pdfs/Executive_summary_English.pdf
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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
Focus on Greece:
Science and business parks
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
Thank you for your attention