The challenges of doing business in the borderlands
Loukia Saranti, head of Greek Industrial Association, laments lack of infrastructure and political will in developing economic activity near Greece-Turkey divide
We had just begun our conversation with Loukia Saranti when a Thessaloniki MP known for his outgoing manner dropped by, prompting me to introduce my guest. “You think I don’t know the iron lady of industry?” he responded, exchanging greetings with Saranti.
The head of the Greek Industrial Association (SVE), the first woman to hold the post, did not react to the moniker, but I felt compelled to ask, “Is the suggestion that you run a tight ship flattering?”
“I couldn’t care less and, anyway, it’s not the first time I’m hearing it. Kathimerini first gave me the title, in fact, in an interview in 1994, when [my family’s wood-processing company Akritas] ranked among the country’s 100 most profitable. There weren’t many women industrialists back then,” Saranti responded.
I had asked Saranti to lunch at a Thessaloniki restaurant so we could discuss her work at SVE but mainly the challenges of doing business in Greece’s borderlands, and particularly in Thrace, where Akritas, the firm founded by her father and now run by her, is located, just a few meters from the Evros River and the Turkish border. “Living and working in these areas is an act of self-denial,” she says.
So why would anyone invest in Evros, Komotini or Florina, instead of choosing Athens or Thessaloniki? “The answer right now is ‘No reason,’” she says. “There are no incentives to draw investors; or, rather, there are serious inherent difficulties. Let’s take infrastructure: Industry cannot grow without a port and the port of Alexandroupoli, for example, is basic. The means of loading and unloading are the companies’ – and cost extra – and there is no railway. There used to be. So, there is no trade at the port.”
The problem with the railway also extends to passenger traffic, she adds, saying that the rail connection to Thrace has stopped. “The area is far away, so the cost of transport by truck is prohibitive. A railway and a port are essential for a business, because it needs to be competitive, and on a global scale, too. If you’re not competitive, there’s no reason to carry on,” says the industrialist.
‘A railway and a port are essential for a business, because it needs to be competitive, and on a global scale, too. If you’re not competitive, there’s no reason to carry on’
Saranti’s father started the business in 1978, using his own money and with enormous exposure, because he “loved Evros and industry,” she says, adding that his family also had roots in Eastern Thrace, hailing from Asia Minor. “He believed that the best way to protect the border is through economic activity. That’s what he named the company Akritas,” she says, referring to the Byzantine frontier soldiers known as akritai. Since that time, only a handful of the businesses that followed suit survived. “The issue is not subsidies or financial incentives; it’s the challenges of doing business in these borderlands.”
Having Turkey just a stone’s throw away and the constant turbulence in Greek-Turkish relations does not seem to affect morale, but it is another obstacle. “Neither the locals nor those of us who work there have such a fear. We’ve become accustomed to the idea. That said, being in such an area means having a much harder start. Apart from transport costs, all the decision making is centered in Athens. And, allow me to say, this only becomes more intense as the years go by. No business can survive without a branch in Athens, no matter how well it’s doing, and that’s an additional cost and an additional difficulty,” explains Saranti.
The dwindling population is another big problem, as young people and couples look elsewhere to build their futures. “If you don’t cultivate a culture, an attractive environment, an ecosystem that will make them want to live there, they will leave. For them to stay, we need to have a very good university, a good healthcare system and, of course, businesses that will employ them,” says Saranti.
She also thinks it is important to cultivate a different public perception of industry. “You know, when I was in my 20s, I didn’t dare to say I was an industrialist. I was afraid my friends would say it was bad, that I was sucking the blood of the people. I don’t think that has changed much. I believe that society, young people, must embrace industry, understand that it gives us things nothing else can. It absorbs research and technology from universities and research centers and can drive attractive growth. We all need to work together to reverse the climate, that of the ‘bad industrialist, who sucks the people’s lifeblood,’ which still exists,” she says.
Regarding promises in Athens for a plan to bolster Thrace and a recent cross-party committee convened to that end, she is guardedly optimistic. “The institutional players and the companies sat down together and what needs to be done was very well laid out,” she says, adding that the most recent proposal bears a lot of similarities to an older one carried out in 1992. “Proposals are all well and good, but they flag when it comes to implementation. Now we’re waiting for something to get done,” says Saranti.
“The problem is political,” according to the SVE head. “The state needs to make an effort to implement them by using the right people, people from Thrace, and they, in turn, need to want to step up. Be it the university, the community, the associations, the businesses, we all need to come together, because a proposal is a proposal; it is not an action plan.”
Describing the locals as “small heroes,” Saranti stresses Thrace’s enormous natural resources and human capital.
Akritas’ workforce, she goes on to explain, is 95% local, with the remaining 5% being in the offices in Athens and Thessaloniki. “The human factor matters a lot to us, their ethos, and from then on it depends on their specialization. We need more specialized technicians. Efforts are being made by SVE in this direction, with vocational training and orientation, as well as by elevating the status of specialized fields in industry.”
