ATHENS – For about two and a half years now, the current Greek government – still close to the start of its mandate – has formally integrated economic diplomacy into its arsenal for the general economic development of the country, and this move seems to have already started to bear its fruits. fruits, even creating a lot of hope for the future. Kostas Frangogiannis, Deputy Foreign Minister for Economic Diplomacy and Extraversion, spoke to The National Herald about how diplomacy marries economics.
The National Herald: Diplomacy is indeed a means of economic development. Are we in Greece late to realize this?
Kostas Frangogiannis: Highlighting the importance of the role of economic diplomacy in Greece’s overall effort to broaden its horizons and promote a new model of the country’s development was a vision of the government and Prime Minister Kyriakos Mitsotakis as early as the first moment he was elected in July 2019. Today, two and a half years later, I dare say that it has become common sense that foreign policy today is not limited to national issues, but extends to many areas, to education, culture, tourism, gastronomy and, of course, the economy.
The decision to include all productive public actors involved in the extroversion of the economy in the country’s official international relations management body, within the Ministry of Foreign Affairs, was a catalytic reform whose tangible results are result in increased exports, increased foreign investment, but also in the dramatic improvement of Greece’s image as an investment destination.
This is the first time that we as a country have a comprehensive program for our international economic relations, the National Strategic Plan for Extraversion, which is prepared by the General Secretariat for International Economic Relations of the Ministry of Foreign Affairs, using the network of the Overseas Economic and Trade Affairs Bureau. Within the framework of the National Strategic Plan for Extraversion, the actions of all the productive ministries in terms of commercial relations and investments are developed in a coordinated and targeted manner, by geographical area.
And to give you some figures on the evolution of exports and investments over the past two years, I should point out that the total value of exports reached, over the period January-November 2021, 36.3 billion euros, i.e. an increase of 30.8%. In addition, in the first half of 2021 alone, net foreign direct investment inflows amounted to €2.31 billion, up 34% compared to the corresponding period of 2020.
At this point, I would also like to highlight the beneficial role of economic diplomacy in easing tensions between neighboring countries on issues of traditional diplomacy. The so-called positive agenda initiative with Turkey, which we have adopted at the Ministry of Foreign Affairs, has exactly this objective. That is to say the active promotion of bilateral economic relations which can only be mutually beneficial, without touching on the sensitive issues of our relations. It is an undiplomatic agreement between the two countries which, whatever their geopolitical problems, must act for the good of their peoples without cutting the bridges of communication. This positive agenda is developing around sectors such as transport, environment, tourism, small and medium-sized enterprises. We are developing a similar approach in our relations with the countries of the Western Balkans, where we constantly seek a dynamic return and presence both at the geopolitical level and at the commercial and business level. And we see that this policy is working.
TNH: How high is foreign direct investment relative to GDP in Greece and what is your ambition for the foreseeable future at least?
KF: As I mentioned before, foreign direct investment increased in 2021, compared to 2020, by 34%. In particular, with regard to strategic investments, accelerated investments that are implemented through Enterprise Greece, I mention, as an indication, that if from 2015 to 2019 the country had reached 1.6 billion euros of strategic investments, the corresponding amount for 2020 reached 2.8 billion and for 2021, 3 billion. In two and a half years of government, we have exceeded 7 billion in strategic investments and companies that are global giants like Microsoft, Pfizer, Amazon, Google, JP Morgan and Cisco. Two points are of particular interest here, firstly that these investments were made despite the negative impact on the global economy caused by the COVID-19 pandemic, a fact which clearly proves that the global investment community now has confidence in Greece . And secondly, that there is a change in the qualitative composition of investments, with the participation of low value-added activities – such as sales and marketing – reduced, but with an increase in investments in research centers and development and industry. It is obvious that the profile of the country has now changed, Greece is perceived as a modern and developed Western power, in a geographical area at the heart of global interests, as a bridge between three continents, Europe, Asia and the ‘Africa.
Our objectives and aspirations for the immediate future are the continuation of the increase of investments at very high rates for the next two years, so that in the horizon of a decade, we can achieve the doubling of investments in terms of of GDP, from the current 11%, to 21%, which is the EU average. The reforms that we continue to make to our legislative framework, in combination with the rich and targeted action plan foreseen in the National Strategic Plan for Extraversion, will play a catalytic role in the implementation of this ambitious objective.
Our objectives are obviously to increase exports of goods and services, which should be significant in 2022 and 2023, as the international environment will improve in the post-COVID era and international supply chains will be restored.
TNH: Certainly the economic climate in Greece has changed recently, despite the pandemic and all the problems it has brought. However, can we say that Greece has become an investment destination or do we still have a long way to go?
KF: I have already given you a picture of the dramatic change that has taken place in the image of Greece as an investment destination. It is now a fact that much of the “repositioning of Greece” has been achieved and the hostile investment climate of previous years has been abandoned. Greece is seen everywhere as a safe investment destination and a reliable partner. This has been reflected in recent surveys, such as the Ernst & Young survey, where Greece is ranked among the 10 most attractive European investment destinations, while 75% of companies believe that Greece’s attractiveness will improve even more in the next three years. After all, the vote of confidence the country has received internationally is reflected in the significant investments from the global giants I mentioned above.
Of course, we still have a long way to go. And, of course, we continue the efforts at an intensive pace. To that end, we have launched travel/business missions to Libya and Saudi Arabia over the next quarter, and my visit to the tech mecca, San Francisco/Silicon Valley, is scheduled for March 26, postponed to last December, due to health restrictions. .
It is a trip that I look forward to and, I admit, with great expectations, since the main purpose of my visit is to meet people and contacts with large companies potentially interested in investing in our country.
TNH: After seeing investments from giants like Pfizer, JP Morgan, can we expect other similar investments?
KF: That’s definitely our goal. And I believe that we have laid a solid foundation that makes our country an attractive destination and a regional center for research and development in critical areas such as energy and technology, and, of course, in our traditional industry, tourism. With significant new tax incentives for research and development spending, with new institutional frameworks for technologists, and with the high mobility of economic diplomats, both at the level of political leaders and at the level of service officers, I firmly believe that the conditions are now ripe in Greece to attract and launch even more dynamic and innovative companies.
In the near future, and through the promotion of our energy cooperation with the countries of the Middle East and North Africa, we are planning investments in the fields of green energy and renewable energy sources, in order to facilitate our country’s clean energy transition.
In addition, we are planning investments in mature projects in our country in the field of tourism but also in the field of digital interconnection with Southeast Asia and Europe, a project that will strengthen the position of the Greece as a regional digital hub.
TNH: What would you say to Greeks living abroad who wish to invest in Greece?
KF: A few weeks ago, I had the pleasure of participating in a hybrid event on the Greek Diaspora as a business network, an event organized by AHEPA and PADEE at the Athens War Museum . There is no doubt that such a network is of enormous value and importance, with our Greeks abroad seeking out and highlighting mutually beneficial issues both for their country and for Greece.
Until today, this network was more active for the promotion of Greek issues and rights. However, the Greek diaspora can now play an equally mutually beneficial role in economic diplomacy.
There are countless Greeks running either [companies] or hold high-ranking positions abroad. Many of these companies are already active in Greece and others are looking for attractive investment destinations.
At the Ministry of Foreign Affairs, we use this data in our planning and strategy, hoping that our Greek diaspora has regained confidence in our country and will prefer it not only for their holidays, but also for their investments.
One initiative we are launching, which I will be able to tell you more about after my trip to San Francisco, is the creation of the Silicon Valley Greek Hub, modeled on similar initiatives in many European countries and beyond, to support Greeks and the diaspora who develop innovation actions and are active in the field of start-ups. Furthermore, we are promoting legislation that supports and attracts “digital nomads”, we have created a favorable environment for taxation and investment incentives, while we hope that making it easier for Greeks to vote abroad is a another step in developing a different relationship between the Greek state and the Diaspora that is mutually beneficial for all of us.