Jeffrey Sachs defines Greek economists as orthodox and conservative, and recommends financial engineering to them

02 October 2013 / 14:10:17 GRReporter

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Maria S. Topalova
    American economist Jeffrey Sachs, who was invited by the Greek Alumni Harvard Business School to present his vision for the future of the European Union after the elections in Germany, suggests an optimistic vision for the development of the Greek economy. "Greece can do many things to achieve economic growth but suffers from a functional disorder and a lack of any strategic vision for the future," notes the professor, who currently heads the Earth Institute at Columbia University in New York and is an adviser on sustainable development to UN Secretary General Ban Ki-moon.
    In his opinion Greece is doing nothing at present; it is just waiting to see what government will be formed in Germany, which is a mistake. He believes that if Greece fails to renegotiate and reduce the interest rates on its loans, if it achieves economic growth and a budget surplus, it will be able to serve its foreign debt. His calculations show that at present the country's debt constitutes 160 % of its GDP and, if Greece fails to renegotiate the interest rates on its loans, keeping their levels higher than the interest rates on the money lent by Germany for example, but reasonable, in the range of about 2%, this would greatly facilitate the payment of the debt. He predicts that, by 2030, Greece’s external debt as a percentage of GDP could reach half of its current value and a quarter of it by 2040.
    "I am not talking about cancellation of the debt but about reducing its interest rates to reasonable levels. Renegotiating them will not be easy, but it is not impossible," says Sachs. The economist, who was included twice in the ranking of the 100 most influential people in the world in 2004 and 2005 by "Time" magazine, forecasts that there will not be another financial crisis in the world, although "the Congress of the USA is working in this direction", as he jokingly added, referring to its inability to vote on the budget of the USA. "We are not living in a period of global depression; on the contrary, the world is experiencing economic growth and Greece should take advantage of this fact," is his advice.
    According to him, the most significant factor to achieve growth is exports because "no one will stimulate the increase of domestic consumption. You must seek new markets." However, the government is doing nothing precisely in this direction and there is a total lack of activity on the part of the government for the promotion of exports. He recommends that the government should organize trade missions in various countries at least once a month where businessmen will be able to present their products and policymakers to negotiate the best terms for trade.

The economist defines tourism, agriculture, renewable energy, healthcare, IT industry, international education services and shipping as the most attractive sectors for export. "My favourite picture is School of Athens by Raphael. Here is a brand name of your international education services which you can use. You have the most popular diet in the world, namely the Mediterranean one. Use this too. You have a unique heritage - use it. You have a unique climate which allows you to export sun," he advises.