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Economy

Tourist-Reliant Greece Advised Other Revenue Sources Critical

Greece must develop sectors other than tourism – the country’s biggest revenue provider – as it became vulnerable during the COVID-19 Coronavirus outbreaks around the world, bringing fears businesses dependent on foreign visitors will take a big hit this year.

That was the view of analysts and experts who spoke the Chinese news agency Xinhua, with China blamed for being the source of the virus and Greece temporarily halting visas for Chinese tourists, whose numbers were growing rapidly.

"Greece is heavily reliant on tourism, with 20 percent of the economy depending on it directly or indirectly," Nikolina Kosteletou, an economics professor at the University of Athens, told the news agency.

That represents up to 37 billion euros ($40.06 billion) and with the country enjoying a record run of years, luring nearly 33 million people in 2019 and set to do it again this year before COVID-19 hit.

To diversify, the economy needs to expand into more manufacturing, new technologies and renewable energy, was the advice although Theoharis earlier said part of the plan for tourism was to make the country a year-round destination, not just for the summer.

Under Prime Minister and New Democracy leader Kyriakos Mitsotakis, Greece was beginning to accelerate a slow recovery from a near decade-long economic and austerity crisis after the Aug. 20, 2018 end of three international bailouts of 326 billion euros ($352.92 billion,) and enticing foreign investors.

Growth had been projected to be as high as 3 percent this year after the economy shrank 25 percent during the crisis but the effect of COVID-19 will bring at least a 9.7 percent contraction, the European Commission said.

The government had put the estimates at 4.7-7.9 percent while the Bank of Greece said it would be 10 percent and the unknown factor is whether tourists will come this year as lockdowns aimed at preventing the spread of the virus begin being lifted.

In 2019, Greece's tourism revenues totaled 18.17 billion euros ($20.25 billion) almost 10 percent of the GDP but there are indirect revenues that spill down as well across a range of other sectors and suppliers and workers.

"The country has relied too heavily on tourism. This is a good opportunity to consider other ways for the economy to recover, and above all manufacturing," Dimitris Keridis, a Member of Parliament for New Democracy and Professor of International Relations at Panteion University in Athens, told Xinhua.

NEW ENVELOPES

"Outside of fuel products, Greece's exports are very small, and this has to change now. Manufacturing can also cooperate with the primary sector and in combination with the tourism product to be at the forefront of the economy," he said.

He said the eight percent share of GDP that Greece's manufactured agricultural products represent is one of the lowest among the Organization for Economic Cooperation and Development (OECD) states.

Besides manufacturing, he advised, Greece "ought to develop further the sectors of logistics and technology startups," to take advantage of its world-class field of scientists and entrepreneurs, many of whom fled to other countries during the crisis.

Kosteletou agreed that, "We need to diversify our offerings," pointing out how fast the government went digital with public services that had routinely seen people queue in long lines to perform.

"There is therefore a great opportunity for the country's digitalization," said the professor.

Dimitris Kenourgios, an Assistant Professor of Economics at the University of Athens had other ideas for diversification. 

"After all, the ongoing health crisis has highlighted scientific research as a public good," he added.

Energy is another opportunity, said Keridis, as it’s already drawing big investments while 

George Peristeris, head of the Greek Association of Renewable Energy Sources (RES) Electricity Producers, told the general meeting of Athens-listed company Terna Energy that in the next three years the RES sector in Greece will see investments of 10-11 billion ($10.83-$11.91 billion) to increase production and storage capacity.

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