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Greece (2016)

nternational Business Portfolio- An analysis of Greece’s Economy

Section 1: Basic Facts Of Your IBP Country

 

Item Canada (2016) Greece (2016)
Size(sq.km) 9,984,670 sq.km 131,957 sq.km
World region North America Europe
Capital city Ottawa Athens
Language English, French Greek
Currency CAD Euro
Exchange rate 0.81 US dollar 1.49 CAD
Population 35,623, 680 11, 159,773
Literacy rate 99% 97.7%
Age expectancy 81.9 years 80.7
Climate Temperate in South, artic in North Temperate
Type of government Federal Parliament democracy Parliamentary Republic
Membership in world organization APEC, ASEAN, NAFTA, IMF, NATO EU, NATO, IMF, WORLD BANK
GDP 1.53 trillion USD 194.6 billion USD
GDP per capita $46,400 $26,800
Labor force 19.44 million 4.785 million
Unemployment rate 7% 23.6%
Travel advisory Egypt, Iran, Iraq N/A
Exports $393.5 billion $27 billion
Time zones Eastern standard Time Eastern Europe Time
Major exports Motor vehicles, timber, crude, natural gas Food & beverages, manufactured goods and chemicals
Major exports partners US-76.4%, China-4.1% Italy-11.2%, Germany-7.7%
Major imports Machinery, equipment, motor vehicle, crude Machinery, transport equipment, fuel
Major import partners US, China, Mexico Germany, Italy

 

 

Introduction

Greece is an ancient land with a lot of history surrounding it. The Grecian Empire first come into play at 334 B.C.E when they conquered the Medo-Persian Empire and became the world empire in it’s place. It’s King at that time was Alexander The Great and his empire  from Egypt to as far away as India. Although his empire did not last for long due to his early death, his influence have left a long- lasting impact on this region where their culture, religion, and language quickly takeover and remains to this day.

Geography

Greece (Ελλάδα) is southern European country whose capital city is Athens with a population of 11.1 million people. It is located between Albania and Turkey, in the Mediterranean sea, in the continent of Europe. Greece climate is mostly temperature with hot dry summers and mild, wet winters.

Currency

Greece’s currency is the euro because it is a part of the Eurozone (E.U). Their exchange rate is 1.52 CAD and 1.19 USD. This information may be useful for investors because the Euro is a strong currency that is very static. It is also very easy to convert and is not too high which would be beneficial for exporters whose businesses investors are investing in.

GDP/GDP Per Capita

Greece GDP is $194 billion USD and their GDP Per Capita is $18,103.97 shared in a population of 10.75 million. This means that Greece has a relatively low economy compared to Canada whose GDP is ten times higher and GDP per capita is more than twice the size of Greece. This may be a result of the Greece debt crisis caused by the euro in 2011. From then is GDP kept falling. As a result, people kept losing their jobs (23% of Greece population is unemployed), trade deficit increases, and businesses pull out.

Type of government

Greece is a parliamentary government. The president of Greece is Alexis Tsipras. This information would be useful for investors because it ensures that there is no politically instability happening in Greece because it is not an Autocracy. Their government also tells a lot about their economic system and whether or not it would be easy to do business in. Ex: It will be much easier to do business in a mixed economic which is Greece, than a centrally planned economy.

Section 2: Country Overview

 

Transportation

Greece is situated in the Mediterranean Sea surrounded by strong economic powers like Israel and Italy. Compared to Canada, Greece doesn’t have as many transportation methods as it only has 9 aircraft carriers, 77 airports, 2,548 km of railway (65th in the world), and only four major seaports in Aspropyrgos, Pachi, Piraeus, and Thessaloniki. Canada has 51 air carriers, 1467 (4th in the world), 77,932km of railways (4th in the world) and three major ports in Halifax, New Brunswick, and Vancouver. This is important because it allows for transportation of goods and reduce its cost. Without proper modes of transportation, trade would be very difficult. However, for its size, it’s decent. Greece does have 6 major European routes (Eg: E65, E75) which connects Greece and its major cities to all of Europe. This means that there is freer transportation of goods throughout the European Union. As seen in the map above, the major European routes E75 and E90 runs into among Greece’s favorite export destinations- Bulgaria and Turkey. As a result, Greece was able to export $1.38B to Bulgaria and $1.5B to turkey. This may not seem much, but this more than 10% of their total exports in total compared to the UK’s 4%.

Government

As mentioned before, the type of government that Greece have is a Parliamentary Republic. A parliamentary republic is a form of democracy where the head of states is elected by the parliament. How a parliamentary republic works is that the parliament is the only one who have the right to vote or elect a government. Although it is a democracy, the citizens vote on the President indirectly by voting for which member of the parliament they want, then the parliament represent the voters’ wishes by voting for the head of state. This happens every four years. Although not a full democracy, the economic type that Greece have is a mixed market economic system. A mixed economic system is a type of economic that protect private property and economic freedom but allows the government to interfere in economic decisions. We can see this in Greece’s FDI statistics and how the government interfere with businesses in dealing with the Greece debt crisis. According to the world fact book, Greece has a total 30.8 billion USD of FDI stocks at home and 32 billion USD FDI stocks abroad. This shows that Greece is active in trying to attract FDI by investing in other countries to create more jobs and businesses in return. This high insurge of FDI’s from other countries shows that it’s not so hard to start businesses compared to a centrally planned economy. However, due to their debt crisis, all of that is useless because they have to use the money to pay back creditor countries such as Germany and France. Also, the government efforts to pay back its debt has had an impact on its economy which shows that the government does have control over the economy and is trying to establish policies that may improves the economy. For example: The European bank nicknamed the “Troika” agreed on a loan or a bailout of 110billion euros so that Greece may improves their economy and pay back their debt. However, Greece had to make severity government spending measures so they can get the deal and this include significant spending cuts and they privatization of national industries which is the transferring of property and ownership of businesses to the private sector, all of which that affects businesses.

Education

In 1999, only 38% of adults 25-64 years old had completed upper secondary or post-secondary education. Also, 24% have completed tertiary education. Over the past 10 years, Greece has seen a massive increase of up to 35% of people who completed post-secondary education. Now, up to 75% of adults between 25-64% have attained at least an upper secondary education. As for literacy rate, 97.7% of Greeks are literate. The language of a country or state may have an impact of the literacy rate. For example, countries that have more complicated language may have a lower literacy rate depending on their education system. This is so because more complicated languages like Arabic, Japanese, or Chinese have complicated writing systems such as abjads and character based system and a lot more grammatical features such as noun cases, a different word order (Verb, Subject, Object), verb tenses and agglutination which all have to be memorized and be conscious of when speaking in real time. As for the Greek language, it features an alphabet system like English but it features more grammatical features such noun case and declensions that can take children and learners a longer time to master. So what is Greece educational system like? Greece education system has 5 levels which are Primary, Middle, Secondary, Vocational, and tertiary. Primary education is from grade 1 to 6, Middle education from 7 to 9, Secondary education from 10 to 12, Vocational education from grade 1 to 3 at age 15 to 17, and finally, Tertiary. Is this system effective? Unfortunately, a survey conducted by the U.K research and analysis institution economist intelligence unit found out that Greece’s education is one of the worst in Europe and ranked 33 in the world. This is ironic considering that Greece was the precursor of education and has the best education system in ancient times. The analysis is based on how students performed in their current level and in higher level education using a PISA test which is a international education evaluation program from the OECD. The study finds the Greece performs the worst in Europe. The reason why Greece education system is not good compared to it’s European neighbors is because it is one of the most difficult education system in the world, short supply of teacher, and low government spending by the government. For example, according to NationMaster, primary school students spend up to 40 weeks or per year in class (9th place out of 36 countries), there are only 5.55 primary school teacher per 1000 citizens, and the government only spend 4% of the country’s GDP on students ($2,360 per student). Greece is also lagging behind in terms of Tertiary education graduates by field. According to Eurostat, only 6.6 or of a 1000 students from age 20 to 29 graduated from Tertiary Education (this stat may seem unbelievable but it is reliable according to Eurostat’s principle 12 which states “ 12.1: Source data, intermediate results and statistical outputs are regularly assessed and validated.”). Also, fields that are more important for businesses or development of infrastructure is also low as well at 21.8 (social sciences and journalism, administration, and business) and 12.2 (engineering, manufacturing, and construction). This is in contrast to other European countries which has much higher graduates in these fields such as Germany which has 52.3 out of a 1000 students graduated from Tertiary education, 161.6/1000 students in social sciences, businesses, etc. and 121.7/1000 students in engineering, manufacturing, etc. Also, even countries like Turkey and Poland scored much higher despite not having well known competitive advantages. This shows that Greece does not have are a lot of high skilled laborers and the expectations for these laborers are not high because graduates are scarce.

Communication

Greece’s communication system is reasonably good and is well developed compared to Canada’s communication system. This is so because almost half of the population have telephone subscriptions. The total figure is at 5.126 million at 29th place in the world, while Canada sits at 14.9 million at 17th place. While at first glance these figures may first seem that Canadian have a lot more telephone subscriptions from different carriers, do bear in mind that this value is larger because Canada has the times the population of Greece. So this means that less than half of Canada’s population also have telephone subscriptions. This is more accurately portrayed by how much people out of a hundred have a subscription. For example, according to world fact-book, 48 out of a 100 person have a subscription in Greece while only 42 per a 100 person have subscription in Canada which shows that Greece has the slight advantage. Another area where Greece is also doing well is in cellphones and Internet connection. According to world fact-book, there is a total of 12.5 million cellphones. It is not known how it distributed among the rich or poor, how this figure is higher than the population of Greece which is 10.75 million compared to Canada which has less cellphones (30.45 million) than there population (36.2 million) This shows that are many people who have two or more cellphones in Greece. As for the internet, 69.1% of the population have internet access (7.4 million users) compared to Canada’s much higher 89.8% with 31.7 million users. Greece’ telephone system is also fairly sophisticated. It has a microwave radio relay trunk system, many open wire connection, and submarine cables which is necessary to connect to the many Islands that Greece’s have (over 6000 islands). Other statistics about Greece’s communication include television (99.5 of household have television), 5 different radio channels, 3 main news agency. From these statistics, it seems like Greece’s communication methods are quite strong. However, is there any suppression of the media, freedom of press or speech? As a democratic nation, Greece has a number of laws that encourages free speech. This is evident in their substitution in article 14 which states “1. Every person may Express and propagate his thoughts orally, in writing and through the press in compliance with the laws of the state. 2. The press is free. Censorship and all other preventative measures are prohibited. 3. The seizure of newspapers and all other publications before or after circulation is prohibited”- Article 14 of the constitution of Greece. It is important to note that such freedom is not unlimited because the law forbids hate crimes and offensive statement towards other religion, race, nationalities, sex, sexual orientation. So how does the law holdup? It hold up well. This is shown from the fact that broadcasting media is predominantly controlled by the private sector (media not controlled by the government) with over 150 private TV channels and only 1 government owned TV channel. However, freedom of speech has faced some challenges because of economic changes the government make as a result of the debt crisis. As a result of the crisis, the government has to make severe government spending cuts, and increases in taxes in order to be approved of getting a bail-out loan from the “troika”. As a result, immediate backslash and protest came from the citizens as it could cause more unemployment. Some of these protest have let to police intervention which sometimes turn violent and targets journalists. In fact, according to world press freedom index, Greece place 88th place. Greece has also faced a massive drop from 33rd to 88th in the world press freedom index due to violence against journalists . However, not all acts against the media are intentional by the government. Due to the spending cuts or austerity measures, media outlets are facing more and more economic pressure. As a result, many has had to shut down.

Section 3-Competitive and Absolute Advantages

            Greece is very limited in geography, and size when it comes high production of minerals and natural resources. However, there are certain advantage they have especially in bauxite production. Some production of natural resources that Greece produce include Crude Oil, Refined Petroleum, and Bauxite. One of the most important natural resources that a country can have is arguably crude oil. However, Greece is very limited in land size and so does their oil. This is shown from the fact that Greece oil production is only 3,172 bbl/day and their reserves is only 10 million bbl. As a result of this low production, almost all of it is exported (3,082 bbl/day) and a lot more is imported (477,400 bbl/day) resulting in a massive trade deficit. Their production is very low compared to Canada which produce 3.6 million bbl/day and has a reserve of 169.7 billion bbl. As for Refined Petroleum, Greece produces 623,000 bbl/day, exported 357,700 bbl/day and imported 181,000 bbl/day. In terms of mineral production, Bauxite is where Greece is one of the most competitive. For example, Greece is the 11th largest producer of bauxite in the world-after Venezuela. Greece produces 1,900,000 metric tons, and exports 450,000 metric tons. This resource is important because aluminum is extracted from this ore is use for creating airplanes and automobiles.

Greece is not known for producing a lot of unique products. However Greece does have competitive advantages in a few product they are well known for. These include olive oil, cottons, and tourism. How do Greece have an absolute advantage in cotton than in Canada? Firstly, Greece alone accounts for almost 80% of the European Union production-followed by Spain’s 20%. Why though, this is because Mediterranean country. Cottons needs very specific climate requirements in order to grow efficiently. These include constant temperature between 18° and 30°, much sunshine and fairy dry condition, and long vegetation period with little frost. Greece’s Mediterranean climate is perfect for those conditions. However, Canada’s very long and cold winters will make it very difficult to grow any cotton at all. As for Tourism, Greece does have a competitive advantage in this industry. Greece is the 14th largest in the tourism industry bringing in 18.2 million people a year. Their tourism industry is so strong because of its rich history and unique architecture in buildings. For example, a popular tourism site because of Its history is the Acropolis is Athens which is a very ancient monument, broken down yet still standing despite being centuries old. It is a sanctuary dedicated to the goddess Athena which was to provide grounds to her worship. Another site is Satorini whose architecture is very exotic and colorful. It’s town literally hangs of cliffs showing a great view of the strikingly blue sea. There are many other great tourism sites known for their historical, geography, and architectural majesty. Greece clearing have a better competitive advantage in this regard because Canada doesn’t have much historical, and beautiful cities with unique architecture. Most of Canada’s cities like Toronto are just urbanized places with tall building which can be found in many other countries.

It is generally accepted that Greece doesn’t much competitive at all. This may also be a reason why they have fallen into such a deep debt after all. However, understanding that they are limited, how can they provide enough opportunities for Canadian businesses? Starting with Bauxite, Canada doesn’t even come close to Greece terms of bauxite production which placed 11th. According to Statistica, Canada wasn’t even in the list and fall on “other”. This means Canada have to rely heavily on imports. Bauxite is very important because it is the source of a aluminum which is used to build airplanes. Canada is very big in the aerospace industry with regards to Bombardier Inc.  This means there would be a good opportunity for both Greece and Canada if they form a trade deal for Bauxite because aluminum is strong and lightweight which would help in more production of airplanes or the so-called “C-series” jets which are smaller and require less reserves of aluminum. This deal would be a win-win situation for both Greece and Canada. What about Cotton production? Canada have very cold and snowy winters getting as cold as -30° Celsius. It is also very long extending to several months. As a result, Canada has very strong winter coats or jackets industry to keep warm. These coats needs a lot of cottons to trap heat and keep warm. Canada would definitely benefit from these opportunities for Greece has a strong cotton market. Finally, how can tourism create opportunities in Canada? Well, think about how Canada can use this opportunity to invest more Greece and to establish more businesses that are centered in those massive tourism sites. Also, Canada can establish or build more hotels in those areas that can provide a wider range of services that will compelled people to go to.

Section 4: International Organizations

Greece is a part of many international trade organizations. This is so because they want to improve trade relations with many other countries which would ultimately lead to economic growth. Some of these organizations include the World Trade Organization (WTO), Organization For Economic Cooperation and Development (OECD), and the International Monetary Fund. The World Trade Organization is an international trade organization that deals with the regulation of trade rules and trade agreements between nations worldwide. It was established in January 1, 1995 at Uruguay Round Negotiations during 1986-1994. Since then, it has gotten over a 160 members including Greece which joined at the first day it began. Its purpose is to ensure freely, smooth, and predictable global trade so as to not repeat the same mistakes that causes the great depression. They do this by regulating trade agreements (which covers goods, services, and trade barriers), monitoring trade laws and policies, settling trade disputes and fostering trade opportunities. The OECD is a international organizations that provides information on the economy of a country which would foresee potential problems. However that’s not all. It’s purpose is also to the promote policies that that lead to economic prosperity. It was established in September 30, 1961 during the convention on the organization of economic cooperation and development in France, Paris when it initially have 20 members. Now, it have 35 members including Greece which signed in September 27, 1961. Its work is mostly monitoring countries economy including trade policies, GDP growth, etc and then discuss and solve potential problems. They do this by 1) Data Collection. 2) Analysis. 3) Discussion. 4) Decisions. 5) Implementation. 6) Peer Reviews, Multilateral Surveillance. Finally the International Monetary Fund is also a international economic organizations that works to foster global monetary cooperation, facilitates and monster international trade in order to secure economic prosperity. It began in July, 1945 in Brentwood ,New Hampshire, U.S during a UN conference. The organization works by monitoring  the international monetary system which is a system of international payments and exchange rate that enables citizens or countries to transact with each other. The IMF also monitor a county’s economy and analyze a similar operation to the OECD and provide bailouts (loans) to solve economic problems such a recession beforehand. Greece join the organization in December 27, 1945.

Greece have been a part of many trade agreements where multilateral (involving more than 2 countries) or bilateral (involving only 2 countries) in order strengthen trade relations and economic cooperation. As you have seen above, Greece have not hesitated to join these organizations which shows that they are active in fostering trade relations and shows that their goal is economic prosperity. The same is true for trade relations. Such examples includes the UK-Greece Trade Agreement, CETA, and the European Union. The UK-Greece Trade deal is a bilateral agreement. Since then, Greece top exports to the UK have been: Medical and pharmaceutical products, beverages, petroleum and petroleum products, oil, resinoids, and perfume materials. The Comprehensive Economic Trade Agreement (CETA) is multilateral trade agreement between Canada and the European Union which includes Greece . It was signed in 30th of October, 2016 in Brussels, Belgium. This trade is supposed to eliminate up to 98% of tariffs on Canada’s part. Although, it is highly beneficial on Canada’s, the benefits goes equal ways. On Greece’s part, these benefits include up to 98% elimination of tariffs on almost all exports including machinery and electrical equipment (9% tariffs), mineral fuels (including Petroleum) (5% tariffs), and pharmaceuticals. This deal would also greatly benefit Greece’s farming industry which includes 90% elimination of tariffs. All in all, these benefits would lead to freer trade overseas which would help Greece’s current economic situation.

Finally, The European Union is a multilateral trade agreement between most, but not all European countries. The ones not involved include: Albania, Belarus, Iceland, Norway, Russian Federation, etc. The E.U was founded in 1957 at the time which formerly known as European coal and steel community. However, the EU was formed in 1993 with its current name. Greece joined the E.U in 1981, before the EU was called the EU . The history of origins of the E.U is rather a political one because it created to unite Europe and bring an end to frequent and devastating wars throughout the continent. However, now, this is more of a economic deal rather than a political one. This is so because of economic benefits it would bring. This include the adoption of a new and common currency called the Euro, reduction of trade barriers which include freer transportation of goods and reduction of tariffs, and economic cooperation between European countries; all of these benefits which would bleed into Greece.

Which of these benefited Greece the most? The European Union. What benefits did Greece temporarily enjoy. As mention before, the EU brings significantly less trade barriers, a more competitive currency. This in turn would lead GDP growth, increase in unemployment, and more trade. Firstly, this can be clearly seen in Greece’s GDP growth in the first chart:


1)


2)


3)

As you can see, since the date or year Greece join the EU they have been experiencing a significant, steady growth. However, at the second graph, you can see Greece’s GDP sharply shot up in 2001. Why? This is because this is the year when Greece adopted the Euro currency. Greece’s GDP rises because of adopting that new currency. By doing this, trade to other big European countries such as Germany and Italy drastically increases which in turn leads to higher GDP growth. The Benefits can also be seen in employment as well as shown in the third graph. Clearly all these are a result of Greece joining the EU and adopting the new currency. However, as in all these graph, there is a sharp dip especially after the year 2008 and they have enjoyed temporary benefits. Why is this? This is when Greece went into a severe recession. Some argue that it is the EU and other trade organization that got them into this situation and others argue that it’s Greece fault because of excessive government spending and borrowing. Who causes it is unknown. But it is evident that the E.U has brought Greece the most benefits of all the other trade organizations and agreements.

Section 5: Managing International Risk

 

Greece is a fairly safe country. According to numbeo.com, Greece placed 23rd (131.10 points) out of 28 in the quality of life index in Europe. However, do not let that deceive you for Greece placed 18th (60.59 points) out of 28 in the safety index in all of Europe-above countries like Italy, France, U.K and even Norway. Even Canada’s travel advisories website comments “take normal security precautions”. However, Greece is by no means perfect for it already has  own problems. Some of these problems include political risk, economic/financial risk, social/cultural risk, natural/physical risk. Political risks- There are many austerity measures the government have been taking to cope with their economic situation. However, these measures have been directly affecting citizens by too much taxes and job losses. As a result, massive protest against these austerity measures are common  especially in the main cities like Thessaloniki and Athens. This is known as the Anti-Austerity movement. These protest can at times be very violent. The last time a protest like this occurred was in May 18, 2017 where up 18,000 took part in protest in Athens and Thessaloniki. 12,000 in Athens and 6000 in Thessaloniki. The violence erupted from the protest when a masked youth shatter a tv van and threw fire bombs at the police. As a result, the police responded with tear gas. The motive for the protest is when the Prime Alexis Tsipras accepted more austerity measures which include pension cuts and less tax breaks. Economic risk- As mentioned in previous sections before, Greece is currently going through a recession cause by their massive debt-otherwise known as the Greek Debt Crisis. How did it began? Firstly, Greece adopted the euro in 2001-a strong currency which it may not be able to handle. However, the mistake that Greece made was that the government  they hid their economic problems from the E.U when they joined. One of the requirements was that a country should not have a budget deficit (when government expenditures exceed revenue) of over 3% of its GDP. A new Prime Minister emerges, called Konstantinos Karamanlis. He ordered a check to their books and found that their budget deficits was not 1.5% as previously thought, but rather 8%-over 5 times more than once though. The Government choose to hid this information possible because Greece was about to host the Olympics in 2004. The Olympics already took a toll on economic however when the global financial crisis sticked, Greece was hit harder than many other European countries. Their debt was and the high budget deficit was discovered as it grew to large and as a result the government started borrowing massive amounts of money to correct the debt but the borrowing spun out of control and the debt grew even larger. Organizations such as the E.U and IMF tried to help but only adds to their debt but lending more money which Greece were not able to pay at the expense of accepting more damaging austerity measures. Since then, the crisis has spun out of control and then it no end in sight. As a result, Greece unemployment risks over 25%. This is very high. To put that into perspective, Germany’s unemployment rate is just under 4% and Canada’s unemployment rate is only 5.9%. SocialCultural risk- Greece has face some social and cultural issues as well. Of these include their refugees crisis and religious intolerance. Greece refugee crisis have been a growing problem because the have over a 160,000 asylum seekers with up to 200 people coming it everyday. These refugees come from mostly war stricken lands such Iraq, Syria, Eritrea, and Afghanistan. Another social risk is when Greek soccer fans attacked a group of Muslims celebrating the prophet Muhammad birthday in Athens. This happened in November 26, 2007 during a riot that broke out in the city. The riot police had to break up attack and responded with teargas and flash grenades. Natural/Physical risk- Canada’s travel advisories website comments that Greece lies in an active seismic zone. This means that there are a high chance of deadly earthquake. Although deadly earthquakes in Greece are not very common, they have faced one recently in July 21, 2017 that claim the lives of two people in the island of Kos which is a tourist attraction. The earthquake took place in both Turkey and Greece and it was magnitude 6.5. This is very powerful and comparable to the one that struck Italy in August, 2016. If it had strucked major cities such as Athens, then there would be more widespread damages or more deaths.

Greece was ranked 43 (out of 44) in Europe and 127 in the world on the world economic freedom index at a 55.0 points. Greece was categorized under “mostly unfree”. There are 4 criteria for the index: the rule of law, government size, regulatory efficiency, and open markets. The rule of law- Greece scored 52.5, 41.3, and 56.1 (avg-49.9) in property rights, government integrity and judicial effectiveness respectively. In regulatory efficiency, Greece scored 74.3, 51.0, 78.2 (avg-67.8) in business freedom, labor freedom, and monetary freedom respectively. In government size, Greece scored 5.4, 61.1 and 58.1 (avg- 41.5) in government spending, tax burden and fiscal health respectively. In open markets, Greece scored 82.0, 60.0, and 40.0 (avg-60.66) in trade freedom, investments freedom, and financial freedom respectively. As shown in the above date Greece scored the highest in regulatory efficiency with an average of 67.8 points. Is this an impressive mark, not really. This is so because efforts to improve the business environment by the government have been rather sporadic and without commitment by the government. The index comments that labor regulations are very restrictive and lack labor mobility which refers to how adaptable laborers are to different economies. The lowest scored category is government size with an average of 41.3 points. Probably the most appalling score of this category is government spending- only 5.4 points compared the Switzerland’s 67.5 points. Greece received this low because government spending is about 56% of their GDP. This along with and incredibly high tax burden of 35.9% of the total domestic income and a massive public debt of 178.4% of it’s GDP make up for it very low government size (government expenditures) score.

All in all, on a scale of 1 to 10, I would rank Greece as a six as a “risky” country. How would I rank it? I would examine these criteria: crime rate, economic conditions, social/political issues. The reason I rank it as a six is because Greece has far too many issues to be ranked in the middle (5) because the bad slightly outweighs the good in my eyes. Although, Greece has all these issues such as debt crisis, or violent protest, the only reason it’s not a 7 or a 8 is because of the high safety rating. Greece crime rate is 39.4 according to numbeo-even lower than the U.K. So going to Greece would be relatively safe. However, due to it’s very severe economic problem which sees no end in sight, living in Greece permanently would offer no benefits as making a living there would be very difficult.

Section 6: Global Business Ethics and Social Responsibility

Business Environment

         Business environment means all internal and external factors that affects how business functions including employees, customers, management, and businesses regulations.  As mention before, Greece is not perfect and they already have a number of international risks most notably their economic situation. However, with an economy in shambles, there may or not be ethical and social responsibility issues in businesses. However, to know about Greece business environment, we need to answer what is doing business in Greece like. Doing businesses in Greece can be very difficult during this financial crisis and the ease of doing has been at its lowest rate in since the past six years. However, it is improving. For example, in 2014 and 2015, it was 58 at its lowest but in 2016 to 2017, it has risen to 62 to 67. However, this figure is far from excellent. Greece has a ease of doing business of 72 points and place 114th in the world. Why is it so hard? It is because it very difficult to setup a business as it involves many procedures to register (4- compared to New Zealand’s 1), a much longer time to register a business and property (12.5 & 10 days). It is also difficult is paying taxes and trade because total taxes and contribution rate is 51.7 of profits.

Workplace safety

             Workplace incidents have been reduced drastically over past decade. For example, in 2008, there have been 23,134 (7.7 per thousand employees)  but in 2014, it had decreased to 3,152 (1.4 per 1000 employees). That have been a 152.2% increase since 2008. However, although accidents have drastically decreased, the severity of them seem to be increasing. Also, By law, all employers are obligated to conduct a written risk assessment about the workplace and this includes a safety inspections, safety risk, or any workplace related accident.  However, according to Eurofound, this may be a result of the lower unemployment rate and jobs losses that is responsible for lower  work related incidents and not the government stepping up to improve it.

Human rights

            As mention before, Greece has had serious problem with Islamophobia as shown on in the attack on Muslims when they was celebrating the prophet Muhammad birthday.  Greece also have a big problem with homophobia as well to the point they was condemned by the European Court of human rights. Since 2012, there have been over 400 incidents of racially motivated homophobic assault. One 39 year old man commented “a group of between 12 and 15 men with shaved heads and black shirts came and put the bucket over my head and started punching and kicking us. It went on for about 10 minutes…”. They did this simple because he was gay and received multiple injuries. Despite rise in homophobic, racist and other racist. The government have yet to pass a new law to combat such issues. Have discrimination bled into the workplace? Yes. According to Eurofound, there have been 97 complaints of discrimination in the workplace. This still happens despite Greece’s condemnation of discrimination in article 5 in the constitution.

Bribes/corruption

Greece have a huge corruption problem. In fact, Greece placed 69th (2016) in the world corruption index even behind Saudi Arabia which is always criticized of human rights issues and corruption. A common form of corruption in Greece is know as φακελάκι (Fakelaki) which means “little envelope”. It refers to paying bribes in order to speed up or skip services. It is a common practices or tradition in Greece that has been said to aid in their current economic situation. Such Fakelaki have been very influential in Greek hospitals were people pay bribes so that they can see a doctor faster. This practice have also said to affect many families whose member is sick with a terminal illness. Although ordinary Greeks are now combating the practice by reporting it on a website, the practice still remains strong even though it is illegal. This practice is also believed to be in their judiciary system because many citizens, according to a survey believes corruption is very much a part of the judicial system and they are slow in dealing with it.

Treatment of labor

               The minimum wage in Greece is 683.76 euros (1021.73 CAD) a have remained the same for the past 5 years. Is this sufficient? Not really. This is shown from the fact that over 3000 Athenians protested a raise in minimum wage. One protester comments “Our salaries have been cut, and all governments since 2010 have contributed in dismantling our collective agreements,” Vangelis Kyrkos. Clearly from this workers are not being treated well wage wise because die to the current economic situation, many people are getting laid off and minimum wage is not because price are too high. Other workers problems are the gender wage gap in which women are paid into 15% less than men and poor working conditions. In Greece, it is reported that half a million people are working in poverty making less that 376 euros a month dispute many have Tertiary or university degrees but are unable to find work. In fact, a recent article in the German der Spiegel claims that Greece has one of the highest number of poor or underpaid workers in Europe. However, many people would prefer underpaid jobs than being unemployed.

Christian beliefs

               Although I’m not a Catholic (I am becoming one of Jehovah’s witnesses), there are many ethical issues in Greece today that that violates my Christian beliefs. The more I learn about God (יהוה- Jehovah) and his personality, the more I see that he is a lover of Justice and righteousness. He wants us to imitate him and also his son Jesus by reflecting those qualities in our daily lives- Ephesian 5:1. 3500 years ago when God establish Israel as a nation, Jehovah uttered this law “You must not pervert justice, show partiality, or accept a bribe, for the bribe blinds the eyes of the wise and distorts the words of the righteous”- Deuteronomy 16:19. Greece’s corruption problems violates my Christian beliefs one of which is based on this scripture. This law was not soft as it is in Greece as it was strictly enforced not only by the Mosaic Law but also by Jehovah himself. Israel once faced destruction and calamity because the whole nation relapse into serious unfaithfulness to God and abandon his ways. As a result, the nation became rampant in injustice and they face the consequences by God. It only goes to show us how much God hates injustice and corruption to the point he took action (Micah 6:8). So how can we apply this principle in our lives? By following this principle “guard against every sort of greed, because even when a person has an abundance, his life does not result from the things he possesses”- (Luke 12:15). We have to go every thing we can to get rid of every greedy desires in our mind like getting rich etc. or else we may stumble to collecting or giving bribes. If we want to please God, we can do this living in a way that pleases God by following all of Bible principles. Another ethical issues in Greece that violates my Christian believes are social issues such as homophobia, religious intolerance and or in general any form of discrimination. Admittedly, the Bible tells us that things like homosexuality, thousands of different religions and many other things practice today are not apart of God’s original purpose for humans, as many people things that the Bible was written at a time when people was narrow minded which is not true. But it by no means encourages any form of discrimination that has been done so many times in the name of Christianity. The Bible say “If possible, as far as it depends on you, be peaceable with all men”. This means we must not discriminate anyone regarding of their race, religion, or the sexual lifestyle that one chooses because Jehovah shows partiality to no one (Deuteronomy 10:17).  But if one wants to please God, it also encourages us not to absorb every form of thinking the world throw at us.

Section 7: Conclusion

In conclusion to this portfolio, it is evident that the Greece has it’s own problem just as any other country. Although I have shown many issues, the country is not apocalyptic as it may sound. Greece has a rich history, culture, and many traditions that unites people including Carnivals, Clean day or lent Monday in which people celebrates by going on picnics in the countryside, and also the many other Christian Orthodox customs such as Easter, Christmas, etc. No doubt that in the heart, Greeks are great people. Now as review of all the sections; section 1- Greece is parliamentary Republic government which very different from the kind of government Canada has which is a Federal parliamentary system under a constitutional monarchy. Their GDP is 194 billion dollars which is just a small fraction of Canada’s GDP, but their GDP per capita is $18,103.97 (USD) which is respectable when compared to Russia or China which has GDP per capita of around $8000. Greece currency is the Euro because they are a part of the EU. It is a very strong currency which is worth about 1.49 Canadian dollar. Section 2- Greece has sophisticated transportation system which includes many aircraft carriers (9), airports (77), railways (2,548 km), major seaports (4),and major European routes that contents them to many other European countries. Education in Greece is also complete and there has been an increase of the amount (35%) of people who are completing Secondary and tertiary education despite Greece’s education system being ranked as one of the worst in Europe. Greece communication system is also will developed as many people have television, Cellphones, and connection to the Internet. Their telephone or signal system is also good as uses the relay trunk system and submarines to connect to the many Islands that Greece has. Despite their good communication system, Greece had have problem with freedom of speech and the press as it placed 88th in the freedom of press index due to the violence against journalists and media outlets shuting down. Section 3- Greece has a competitive advantage in many things but not absolute advantages. They have a competitive advantage in bauxite which is a natural resource. They are the 11th largest producer of bauxite in the world. They also have competence advantage in certain products as well such as olive oil, cotton, and tourism. Greece’s cotton account’s for 80% of Europe and they they the 14th largest in tourism. Section 4- Greece is apart of some of the most important trade organization in the world. This include the IMF, WTO, and the OECD. These are important in many sure that member countries not fall into a calamitous economic situations which has happen to Greece. Also, Greece have also had trade agreements which include the EU, CETA, and the UK-Greece trade agreement. The one that I find that have help Greece free most is the EU especially after they have adopted the euro, Greece GDP shot up as well as employment (before the financial crisis happen in 2008). Section 5- when it comes to political risk, the Greek government have been stable, the the decisions that the Prime Minister Alexis Tsipras make have been very damaging to the economy and have been causing widespread protest throughout the country- know as the anti-austerity movement. The are other issues as well such as the Greek debt crisis, social risks such as Islamophobia, refugees crisis and natural risks (Greece lies on a active seismic zone and have been very prone to earthquake such as the one that has a 6.5 magnitude on the richter scale that struck in the island of Kos in both Turkey and Greece. Greek was ranked 127 in the world economic freedom index with 55.0 points. Finally, section 6- Greece has proven to not be so for their ethical issues. These include: business environment-it is difficult to establish a business in Greece as it place 114th in the ease of doing business index due to high taxes and many steps to register business and property. Workplace place safety have been reduced as well. There is only a small amount of work related accident per thousand people. And that figure kept decreasing most likely due to the rising unemployment rate. Human right issues have been a problem as well as there have been many instances of homophobic violence and complaints in the workplace. Corruption and bribes taking is very common as well to the point it have been imbedded in their tradition know as “Fakelaki”. Corruption has been believed to be very much apart of the judicial system although it is not proven thoroughly. Greece place 69th in the world corruption index. Finally, treatment of labour have been very poor due to the very high unemployment rate, low minimum wage, and high amount of below minimum wage. Now, can Canada do business with Greece? The economic crisis alone world make Canada away from going business with Greece. But there way Canada can do business with Greece and that is by investing in Greece’s strongest industries. As mention before, Greece has a strong industry in tourism, Bauxite production, and cotton. Canada’s growing aerospace industry would need more aluminum. Although Greece aluminum production is not as high as there bauxite production, and Canada is already one of the highest aluminum producer (3rd-3,250 thousand tonnes), Canada can invest in equipments extracting aluminum in Greece. By doing that export in aluminum would increase which would help in developing airplanes or other aluminum made products such as cars and cellphones. airplanes or other aluminum made products such as cars and cellphones. Tourism could also be an opportunity for Canadian to invest in as well. Canada could invest those industries so that they can establish headquarters near those tourism sites and also spa and. Massages businesses. Now finally, Cotton. As mentioned before, Greece’s Mediterranean climate is more suitable in growing cotton and as a result, Greece is the 10th largest producer of cotton and accounts for 80% of the industry in Europe. Canada’s climate will continue to get colder as our is currently and cotton would be much needed to make more sweaters. In conclusion, There is not really much things that Greece have that Canada doesn’t have and even if there was, Canada could easily get it from a different country where a certain products production is much higher. However, if Canada want to do business with Greece, they must do so without the expectation of getting back something significant in return like they would from the US or China. Also much preparation would be needed to know how they would deal with the economic crisis so as to establish businesses easier and to not more add to their debt. However, due to Canada’s open policy, nothing is impossible for them to do business no matter how difficult the circumstances are.

References- Section 1

  • Greece, Greeks – Watchtower ONLINE LIBRARY, wol.jw.org/en/wol/d/r1/1p-e/1200001765
  • “Greece GDP per capita 1960-2018 | Data| Chart | Calender | Forecast.” Greece GDP per capita | 1980-2018| Data | Chart | Calender | Forecast, tradingeconomics.com/greece/gdp-per-capita.

References- Section 2

  • “The World Factbook: Greece.” Central Intelligence Agency, Central Intelligence Agency, 3 Jan. 2018, www.cia.gov/library/publications/the-world-factbook/geos/great.html.
  • “Government and Politics.” Government and Politics – About Greece,www.mfa.gr/usa/en/about-greece/government-and-politics/.
  • “Konstantinos Menzel.” News from Greece, 8 May 2014, greece.greekreporter.com/2014/05/08/survey-finds-greeces-education-system-the-worst-in-europe.
  •  “NationMaster: Country Profiles.” NationMaster.com, NationMaster, www.nationmaster.com/country-info/profiles.
  • Greece: Freedom of expression takes a beating – Index on …www.bing.com/cr?IG=9F8EB70BDC304737ABF98ED54742CC9E&CID=2571B56A544D66F22A5EBE1855E267E8&rd=1&h=5mvR2hipaWBou8CZI1YGD32wEWcy3mI7j8FE1is0TPs&v=1&r=https%3a%2f%2fwww.indexoncensorship.org%2f2013%2f12%2fgreece-freedom-of-speech-in-a-critical-status%2f&p=DevEx,5070.1.
  • “Greece Media Stats.” NationMaster.com, NationMaster, www.nationmaster.com/country-info/profiles/Greece/Media.
  • “The World Factbook: GREECE.” Central Intelligence Agency, Central Intelligence Agency, 3 Jan. 2018, www.cia.gov/library/publications/the-world-factbook/geos/gr.html.
  • “Greece : Continued disappointment | Reporters without borders.” RSF, rsf.org/en/greece.

References- Section 3

References- Section 4

References- Section 5

References- Section 6

References- Section 7



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