Ocean Shipping: By Far the Best Growth Model for Greece

Abstract

1. Introduction (2) Mutatis mutandis, the damages that Germany sustained during the Second World War were far greater than those suffered by Greece. Yet presently Germany and Greece find themselves in completely disparate circumstances. After the war Germany rebuilt its economy by combining a relatively small and efficient state sector with a relatively large and vibrant private sector. As a result, now it stands once again as the powerhouse of Europe. On the contrary, after two decades of spectacular economic growth (1954-1974), Greece entered a phase of long term decline that gave way to an unprecedented reversal of fortunes and more recently to great hardships for the Greek people. The striking difference in the outcomes that Germany and Greece experienced is due neither to the difference in the size of the two countries, nor to differences in their natural resources, the climate, or any other physical parameters. To my mind, the root cause is that the politicians and economists who rebuilt and led Germany in the postwar period believed in the virtues of democracy and free market economy, whereas the high priests and fellow travelers of the Socialist Union of Greece, who shaped the country's postwar institutional and economic order, promoted a relatively large and inefficient state sector in conjunction with a relatively small, inward looking, and predominantly state-controlled private sector. (3) No wonder therefore that Greece went bankrupt in 2009, losing its sovereignty and succumbing to the control of its international creditors (4). Now everyone agrees that the production model in Greece must change. But Greeks are very confused about the direction of the necessary changes. For, as the recent elections revealed, the vast majority of citizens have been brainwashed into believing outrageous promises about what the Greek leviathan state can do for them. Hence, the situation may be expected to worsen, unless Greeks start soon to realize: first, that the bastard model of centrally planned economy that we inherited from the past has failed us miserably; and, secondly, that it must be replaced by a new model based on the flexibility of competitive markets and export oriented policies and entrepreneurship. If and when this change of mind and heart takes effect, and I hope that it happens sooner than later in order to avoid a humanitarian crisis of major proportions, the answer to the question "which growth model is best for Greece" will become self-evident. In particular, it will emerge that, while a small group of dynamic Greek entrepreneurs excel in ocean shipping across the world, organized political and economic minorities in Greece keep the country in the role of an undignified global beggar (Thalassinos et al., 2012). The aim of this paper is to document that the model of ocean shipping industry, in which Greeks dominate for centuries, offers by far the most promising growth model, because it can get us out of our present impasse quickly. 2. Indices of global leadership and potential benefits for the Greek economy One does not need a lot of numbers to establish that the Greek owned fleet of ocean going vessels stands at the top of this international industry. Nor is it necessary to resort to complicated arguments to establish that it holds tremendous direct and indirect benefits for Greece. So, the following brief remarks should suffice. According to the newspaper Naftemporiki, (5) by the end of April 2014, the ranking of the Top-5 world powers on the basis of the transport capacity of their fleets, measured in Dead-weight-tons (Dwt), was as depicted below: From this it follows that the Greek-owned fleet ranked first in the world. Additionally, according to the same source, the reported transport capacity of the Greek fleet represented more than 15% of the world tonnage. Of particular significance is also to note that the Greek-owned fleet has held the lead in world rankings even in the face of the following challenging developments in recent years: * The transport capacity of the world fleet has been growing at a robust pace * World trade has been slowing. …