Greece has once again thrust itself into the headlines as the new Syriza government led by Alexis Tspiras pledged to go back to the drawing board and renegotiate with the nation’s creditors.
Unfortunately, Greece is becoming more and more like a developing country. Its economy is increasingly reliant on the export of raw materials rather than on capital-intensive and high technology goods. Minerals now represent almost 40 percent of Greek exports, a significant jump since the start of the crisis.
The absence of a strong tradable sector rendered exports unable to substitute domestic demand. Clearly, a major shift in the Greek business model is needed for a country that must seek sources of growth from exports rather than its still weak domestic market.