Greece is making a great effort to convert itself into a country whose economy can compete in the fierce international economic environment. It struggles to steer out of a six-year recession, as well as to battle with high levels of unemployment, especially amongst young people. The goal is to boost the Greek economy by creating an investment – friendly environment. One method to achieve this goal is to enhance the logistics sector in Greece. The country’s geostrategic position is such that it can become a great transport hub in the area of South – East Europe, in the same way that the Netherlands is in Northern Europe.
This point of view has been adopted by the World Bank, whose technical assistance and expertise was requested by the Greek Ministry of Development and Competitiveness and the Ministry of Infrastructure, Transport and Networks. On October 2013, the World Bank presented a report which included ways to improve Greece’s business environment as far as it concerns its logistics sector. The report with the title “Greek Logistics: Unlocking Growth through Regulatory Reform and Complementary Measures”, in its first part presented the real situation in Greece regarding the effectiveness of its logistics industry. It also thoroughly explained the reasons why the bad policies of the past had lead Greece to a very low position in the Logistics Performance Index (LPI, ranking 2012).
The second part of the report was devoted to propose reforms that could set Greece a significant player of the regional logistics and trade “game”. These reforms are divided into two basic categories:
- Modernization of the country’s logistics industry
- Improvements on the existing infrastructure (railways, ports and highways).
Greece realized the importance of having an efficient logistics policy that would finally turn the country into a gateway of the greater region. The Greek government exploited all the World Bank’s suggestions and moved forward with the formation of the “Logistics Permanent Committee (LPC)”. This committee was formed on March 2013 and its participants are experts on the logistics industry coming from both the public and the private sector, so that more opinions and views will be incorporated. The main objective of the LPC will be to establish a National Logistics Strategy for Greece (NLS). The LPC is also responsible for making suggestions to improve the steps involved during a logistics process (e.g. licensing and approval procedures for logistic companies) as well as for making suggestions to improve infrastructure performance. The LPC will be the communication channel between the Ministry of Development and the Ministry of Infrastructure and the involved stakeholders belonging in the public sectors. The World Bank will provide its assistance and support, as some of its members will participate in the LPC meetings.
National Logistics Strategy: necessity and benefits for the Greek economy
The international trade has very rapidly developed during the last 20 years, because of the fact the products produced in Asian countries – such as China and India, had to travel to distant markets. As a result of that, the logistics activities have significantly increased. It is calculated that logistics contribute to the world GDP by 5,4 trillion Euros. As mentioned above, the effectiveness of Greece’s logistics is ranked very low compared to other neighbor countries (such as Turkey and Rumania). If this situation would go on like this, then Greece would not be considered as a significant mercantile partner of the wider area. Therefore, it was necessary for a National Logistics Strategy to be established.
Other countries such as Germany, Ireland, and Turkey have successfully implemented similar National Logistics Strategies. In general, a NLS defines a vision and outlines the resources needed to achieve this vision. More specifically for Greece, NLS defines the vision of creating such a logistics industry that could contribute to the economic recovery and growth (nowadays the logistics sectors only contribute to the national GDP by 10%). The NLS outlines one main long term objective: Greece must take advantage of its geographical location in order to become the central transit point of South – East Europe. Other objectives defined by the NLS are:
- Compliance to the national legal framework inside the EU legislation.
- Simplification of all the procedures involved throughout the whole chain supply (licensing of logistics companies, operation of warehouses, procedures concerning customs)
- Modernization of Piraeus and Thessaloniki ports in order to become the gateway ports of Central Europe.
- Encouragement of outsourced logistics activities
- Encouragement of 3rd party logistics activities.
- Promotion of logistics business parks.
- Completion of the on-going infrastructure works.
- Protection of the environment by reducing the emissions of CO2.
Some of the above objectives have a long term span while others have shorter expected that the first results will be visible after a 2-3 years period. The Greek authorities have to overcome structural rigidities that overruled the country’s political life for years. However, the first step was made: a National Logistics established and is implemented. The Greek policymakers are expecting that ultimately the NLS would help to the creation of an “extrovert” environment regarding the logistics sector and to the enhancement of the general idea that Greece is a country interested in foreign investments.
Preparation of a new law regarding the logistics sector in Greece
Already the Greek government is moving towards the preparation of the legislative framework that will strengthen the efforts to boost the logistics sector in Greece even more. In the beginning of March, the Ministers of Development and Competiveness and of Infrastructure and Networks have co-presented a law bill regarding the logistics sector. The law will be voted by the members of the Greek parliament within the next few weeks. The law will provide definitions of all the logistics activities, so that everything is done in a transparent way, reducing the limits for corruption. It will clarify and simplify all the licensing and procedures. Most importantly, the law will set the foundation for logistics companies to develop in Greece accordingly to international standards.
This law is part of the entire continuous effort of Greece to develop its logistics sector (the establishment of the logistics Permanent Committee and the National Logistics Strategy are two other pieces of this attempt). It has become clear by now that any improvement in the logistics sector will automatically lead to the improvement to other sectors of the economy such as the industry, the trade, the agricultural production, the tourism. This is how the Greek economy will become competitive in the near future.
None logistics activity can take place in any country if there is an inadequate and incomplete infrastructure network. The Greek authorities are making efforts to exploit all the available funds in order to modernize the infrastructure (railways, ports, trucking). Due to the economic crisis, the works had severe delays, but the Greek government had taken recently all the necessary actions for the infrastructure works to begin again.