Greece needs now more than ever a stable and clear regulatory investment framework to promoting sustainable growth, UNCTAD’s World Investment Report 2011 said on Monday. The report on Greece underlined the inadequate performance of the country as a destination of Foreign Direct Investments. This year’s report, focusing on NEMs (non-equity modalities), was presented during a news conference in Athens organized by UNCTAD and the American College of Greece.
Foreign direct investments to Greece totaled 2.188 billion US dollars in 2010, from 2.436 billion dollars in 2009, for a decline of around 10 pct, while FDI outflows fell 38 pct totaling 1.269 billion US dollars in 2010, from 2.055 billion in 2009.
Based on its performance, Greece ranked 119th in 2010, from 122 in 2209 and 120 in 2008, in a total of 141 countries, while Greece ranked 43rd in 2009, based on its ability to attract FDIs, down from 48 in 2008.
“UNCTAD’s figures showed that FDIs towards Greece in 2010 remained markedly lower compared with 2008 levels, while Greek direct investments abroad were around 1/3 lower compared with the previous five-years’ levels,” Nikos Christodoulakis, a professor of International and European Economic Studies at the Athens University and a former Economy and Finance Minister, said presenting the report. He attributed this development to a deep recession in the country and to lending limitations by Greek banks. He noted, however, that an encouraging sign was a recovery in Greek exports, while an ambitious privatization program was expected to attract significant capital in the sectors of energy, transport and tourism. “Efforts must focus on attracting FDIs in manufacturing and production,” Christodoulakis said.
Notis Mitarakis, a New Democracy deputy, commenting on the report said creating a stable tax system and a regulatory framework, emphasizing on growth and ensuring social cohesion, was a necessary precondition to attracting investments.
Global FDI flows rose to 1.24 trillion US dollars in 2010, but were 15 pct down from the average level before the economic crisis. UNCTAD noted that global FDI flows will reach pre-crisis levels, around 1.4-1.6 trillion dollars, in 2013. The year 2010 was a landmark year for FDIs, as it was the first time that developing countries absorbed more than 50 pct of total FDI flows, or 642 billion dollars.