A true Greek tragedy: FDI

Just another quick post today, maybe I'm having a laziness relapse lately. 

After trawling through Eurostat data I found some data point that rarely gets mentioned, so I thought that it would be interesting to share.

It is about foreign direct investment (FDI) but not FDI flows but rather FDI stocks. FDI stocks is the total amount of productive assets under foreign ownership in the host country.

source: Eurostat

I plotted data for the three bailed-out EU countries and guess what, Greece is the laggard again. I don't have to spell out what that means. Its implications are obvious both for job creation and as an indicator for our country's institutional quality and its attractiveness from a business environment point of view. It could also have some implications from a geopolitical point of view but I'm not going to go into that either. Well, you could ask, what are you going to go into then? Just presenting the datapoints really, you can blame my inherent laziness, which is compounded by the heat in Athens today...

source: Eurostat

The chart above shows Greece's outward FDI stock. Again the differential from the two other bailed-out countries is embarrasing. Well, why that is so of course is anything but simple (financing, international connections, managerial know-how etc.) but again it speaks volumes about how inward-looking we Greeks are...

P.S. You could think, wait, you are constantly criticizing your fellow Greek people for their many flaws but today's post was rather short and not that illuminating at all, and for that you're blaming your laziness, isn't that overly contradictory? And my answer is; of course it is, but then this just another awfully common Greek trait...

P.S.' I expect that Greek inward FDI stock kept shrinking during 2010 since a lot of foreign companies subsidiaries upped and left. I also wouldn't be surprised if Greece's outward FDI stock shrank during 2010 as well, since some Greek firms had to sell their foreign subsidiaries in a desperate attempt to gather liquidity. I've touched on that before in an older post.

P.S.'' This is the last one I swear. I thought that in order to make up for my laziness before I can do a couple of scatter plots to show the relative positions of the afore-pictured countries compared to their EU counterparts and the large OECD countries (USA, Japan), Turkey and Iceland. The coloured dots are, black for Greece, green for Ireland and red for Portugal.

source: Eurostat

source: Eurostat

I intently chose 2007, when the world economy hadn't entered recession, since FDI tend to be rather cyclical, hence largely affected by the ups and downs of the business cycle, let alone the worst recession/depression the world has witnessed since the Great Depression.