Ομιλία του Υφυπουργού παρά τω Προέδρω στο Συνέδριο ''Best Invest Cyprus'', στη Λεμεσό, στις 16-17 Οκτωβρίου 2016 (στην αγγλική γλώσσα)
A very good morning to you all. Let me welcome you to this important conference and exhibition event and let me add that I am delighted to address such a distinguished audience.
Allow me to congratulate the organisers, the SUCCESSFUL BUSINESS magazine for their initiative, and all the sponsors and supporters of the conference such as the Cyprus Chamber of Commerce, the Cyprus International Business Association, and the Association of Russian Business in Cyprus, whom I consider to be valued partners of the Government in our effort for growth and prosperity. Our aim is common and this is why we have been working together in the past three years.
Ladies and Gentlemen,
I recall attending conferences in 2013, during the time that an unprecedented crisis had shook the foundations of our economy.
At the time, the message I was delivering was clear. It was the determination of the government, of the Cypriot business community and the Cypriots in general to do whatever it was possible to restore the soundness and the credibility of our economy.
Three and a half years later, I stand before you saying that Cyprus has already been through a phase of economic transformation.
In the past three and a half years we worked hard to consolidate our public finances. We have been able to completely eliminate the deficit, to operate with a balanced budget, with a good primary surplus.
Having focused on the expenditure side, mainly through the decrease of the wage-bill by 21% and the consolidation of the welfare spending, we succeeded to reach this balanced budget without raising the level of a single tax and thus, without eroding our competitiveness. Maintaining the attractiveness of our tax regime was a conscious decision, which was transposed into a very specific policy on public finances, the success of which has recently allowed us to even submit proposal for business friendly tax-cuts.
Let me also refer to the Banking Sector which was at the heart of the crisis in 2013. The banking sector is now completely reformed. Smaller, but better capitalized, better managed and under the direct supervision of the European Central Bank, something which adds confidence and credibility. The overall solvency ratio currently exceeds 16% while the Emergency Liquidity Assistance (ELA) has effectively been eliminated. From 11.5 billion Euros in 2012 it is currently less than 1.5 billion. 90% decrease. The NPLs are also on a downward trend, currently 4 billion euros less than last year.
Focusing on the Public Finances and the Financial Sector reform was not however the only important policies undertaken in the past years. We also had to focus on improving the conditions in the real economy, in proceeding with market oriented reforms to increase our competitiveness.
That’s why we have been promoting the much needed structural reform and we shall continue to do so in order to ensure that our public institutions and procedures become more business friendly, leaner, less costly and more efficient.
It is in this context that we initiated an ambitious structural reform program which upon its completion will totally transform Cyprus. A structural reform program which includes:
- A wide ranging civil service reform including a reform of the wage-bill of the civil servants.
- The privatization of the Port
- An institutional reform including the establishment of 3 major Deputy Ministries directly attached to the Presidency and accountable only to the President. For Growth and Investments, Tourism and Shipping.
- A wide ranging Tourist sector reform, including a new comprehensive Tourist Strategy which if implemented will lead to doubling the real Revenue from Tourism by 2030.
- A new Funds policy framework including legislative acts which will further enhance the Cyprus Funds frameworks.
- An e-government reform and efforts to tackle bureaucracy.
- A local government reform.
Challenges remain high but we can already see our efforts bearing fruit and Cyprus been included in the top ten performers of the World Bank competitiveness indicators for 2015.
At the same time are promoting big projects such as the completion of an Integrated Casino Resort, the creation of Marinas, other investments in the tourist and commercial sector, and we believe that soon we will be ready to attract foreign investors or developing the Troodos Area.
In short, we want investments. And every policy we followed until now was to restore the investors’ confidence. That’s why we saw crisis as an opportunity. We have not shied away from the problems, but instead we have chosen to move on all fronts. Results so far have been positive.
With the real economy rebounding strongly, growing 1.6% in 2015, we are expecting to grow this year by around 3% of the GDP, a rate significantly higher than the EU average.
The unemployment rate is still high but 5% less than its peak in 2013 and even lower than its pre-crisis level in 2012.
Ladies and gentlemen,
Cyprus of Today is not Cyprus of Yesterday. And Cyprus of Tomorrow will be even better than Cyprus of Today. The transformation is ongoing.
Nevertheless, Cyprus has and will always be a small, flexible economy, with proven resilience and adaptability. And this is particularly important for all investors, all important business and services.
Cyprus is and will always be a common law-country within the EU and the Eurozone, with a stable and attractive tax regime, with world-class support services be it legal or accounting, with a strategic location and with quality of life and safety for professionals to invest, work and prosper.
These are our country’s comparative advantages and they are here to stay. But those comparative advantages will only be enhanced if the ongoing negotiations for the solution of the Cyprus Problem are successfully concluded.
And I am not just talking about the benefits of the exploitation of the hydrocarbons. We know that the reserves are there, we do know that they are important, and you all know how important are the geopolitical factors for the optimal exploitation of any resources, of any economic activity.
I am talking about the economic benefits and investment opportunities that will arise by applying the four basic freedoms for the whole of the island, but also the prospects or Cyprus in a region where markets like Turkey, Israel, Cyprus and Greece, cooperate and complement each other in a mutually beneficial way through trade. The prospects for Shipping, trade, tourism, energy, you name it. Studies do suggest that a solution would boost GDP by several percentage points but they are just stating the obvious.
I do not belong to the category of politicians who express optimism or pessimism. I am just stating that the prospect is there and is real.
There is a very serious ongoing negotiation, in the context of which significant progress has been made. There are big and credible international organizations like the IMF and the World Bank facilitating the effort through technical analysis about the economic aspects of the solution.
Yes there are obstacles and problems but I assure you that President Anastasiades has both the vision and the determination to exhaust all possibilities for reaching a viable solution to the Cyprus Problem.
Ladies and Gentlemen, let me conclude by saying that Cyprus is a business friendly jurisdiction operating with transparency and restored reputation. We are a credible member of the European Union and the Eurozone. And as such it can indeed act as a gateway for the Russian or any other business community. You are all welcome to Cyprus.
Thank you for your attention.