Greece has a historic relationship of friendship with the Arab world. This positive spirit extends also to the economic field. Saudi Arabia has for a very long time been one of the top markets for Greek products in the Middle East region, and over the years there has been a high level of cooperation between the governments and the business communities of Greece and of the Kingdom. With their hard work and entrepreneurial spirit, the Greeks tried their best to contribute to the development of this country. In the 1970’s and 1980’s, Greek construction companies were instrumental in the rapid infrastructure development of the Kingdom.
Over 90 percent of the trade volume between the two countries consists of Greek imports of oil and oil products from the Kingdom. Greece is a promising market to Saudi businesses, as well as a gateway for their entry into the European and, more specifically, Balkan markets.
Greek exports to the Kingdom mainly consist of aluminum products (representing 18 percent of the total value in 2003), foodstuffs (15 percent), electrical material (7 percent), plastics (6 percent), home appliances and components (6 percent), marble (6 percent), steel and other metal products (6 percent), cosmetics (4 percent), machinery and related components (4 percent), footwear and apparel (7 percent), cottonseed (4 percent), paints and varnishes (2 percent), pharmaceuticals (2 percent), ceramics (1.5 percent) and furniture (1 percent).
On the investment front, the most remarkable achievement remains the Saudi Aramco joint venture with a major Greek oil refinery in 1996. Moreover, numerous Saudi business groups from the top-100 list maintain major operations in Greece. The prospects for further strengthening the existing trade, investment and economic ties in general, between the two countries are very encouraging. The Greek and Saudi sides are in the process of working jointly on a number of initiatives for enhancing contacts and cooperation between the two countries’ business communities. The two governments have been negotiating an agreement for the mutual protection of investments, which, combined with a future agreement on the avoidance of double taxation, will certainly increase mutual investment flows.
The Greek Economy Grows 3.7% in 2004
Greece’s economic policy has contributed to the development of the country, mainly by constantly improving the macroeconomic indicators over the past years. Moreover, the Greek government has been implementing a policy of privatizing major public enterprises, with significant revenues for the state treasury and a remarkable rise in efficiency. As a result of this successful economic policy, Greece has been a member of the European Monetary Union since Jan. 1, 2001.
GDP growth rate in 2004 was 3.7 percent. Investment expenditure also increased by 5.8 percent, while private consumption growth remained robust in 2004, reaching 3.6 percent.
As far as the commercial balance is concerned, exports and imports increased in real terms by 7.3 percent and by 8.3 percent respectively. In the labor market, the unemployment rate is estimated at around 11 percent. In the area of public finances, the general government deficit outturn is 5.3 percent and the general government debt at 112.1 percent of GDP. These high figures are mainly due to the impact of the statistical revisions and an overshooting of expenditure related to the Olympic Games.
Furthermore, recent reforms cover a wide spectrum of areas, such as the streamlining and the simplification of the tax system, the rules of controlling public expenditure, the continuation of the privatization of state owned assets, the further rationalization of public administration and the passing of a new investment law.
These reforms are expected to have a positive impact on the performance of both the private and the public sectors and to further enhance the productive potential of the Greek economy.
More specifically concerning investment, the Hellenic Center for Investment (ELKE) is a one-stop-shop agency, aiming at attracting, promoting and facilitating foreign investment in Greece (similar to the Saudi Arabian General Investment Authority). All interested parties may visit ELKE’ s website, at http://www.elke.gr.
They can also contact the Greek Commercial Office in Jeddah on Tel. 02-669-0824 or Fax: 02-669-2644.
