International Investor Sees Tourism As Greece’s Only Economic Engine

The Greek economy can advance and prosper in the international environment only if it develops itself to cater to up-market tourism and wealthy foreigners wishing to acquire holiday homes, said well-known investor and American fund manager, George Soros, during a recent visit to Athens. “This is virtually the only prospect that could attract foreign investment capital,” he said.

While in Greece, Mr. Soros met with a number of business leaders and exchanged views on the future of the Greek and other Balkan economies. Mr. Soros noted that the Greek economy today lacks the long-term orientation that would give it a distinct position among European markets and mobilize significant resources toward development.

He believes the answer is that Greece must become a pole of attraction for northern Europeans looking for a home in the sun, and must incorporate specific policies regarding the development of infrastructure, education and health services to be built around and converge to this pivotal target.

Mr. Soros predicts that the high income levels in Western Europe and its relatively quickly aging population will induce large numbers of retirees to move to warmer places five or six months of the year. He added that such migratory trends would be accompanied by huge income transfers that would help boost the economy.

Greece’s comparative advantage, Mr. Soros said, is its natural beauty and unique climate. Spain, which is already such a destination, has begun showing signs of saturation and investment in this field will not further expand there. “If certain basic things changed here, I would be prepared to invest. If I am not convinced, the other option may be Morocco,” he said flatly.

The success of such an endeavor, according to Mr. Soros, will necessarily depend on a number of key factors. The first would be considerable improvements in infrastructure networks, particularly as regards transport (except perhaps in Athens which has received the lion’s share of European Union investment subsidies); second, would be upgrading the quality of services at various levels; third, would be the creation of a good system of health services, mostly by the private sector; and fourth, cheaper land in the provinces.

Thus, all policies, from taxes on real estate, for instance, to the channeling of EU investment subsidies to infrastructure, education and health services, must be marshaled around the pivotal model of Greece as an upscale tourism and holiday/residential destination.

This is the strongest concept for the Greek economy, Mr. Soros argued, one that could give it a significant boost in the next 10 years. This in turn would generate new domestic and foreign investment and enable the Greek economy to acquire a stronger foothold in the international division of labor, tap its comparative advantage and significantly increase its national income and employment levels. He cautioned, however, that the development envisioned would be impossible without the full cooperation of the government.