Cyprus[/B] has a new growth model that can adapt to changing conditions, Finance Minister Constantinos Petrides said.
Petrides was speaking on Monday evening at the event "Cyprus Vision 2035: The path to Growth", organised by the Cyprus-American Chamber of Commerce (AmCham Cyprus) at the Chateau Status in Nicosia.
The event was addressed by the Minister of Finance, the Deputy Minister of Research, Innovation and Digital Policy, Kyriakos Kokkinos, Andreas Assiotis, Vice President of the Cyprus Economy and Competitiveness Council and Phoebus Stasopoulos, Senior Banking Manager, Hellenic Bank.
Petrides said that the economy is a very dynamic phenomenon and it is good to have a plan. Everything was taken for granted a few decades ago, he said, but today we are in 2022 and we are already under a second crisis, a global economic crisis. With these facts, he said, all strategies and all development models have to be readjusted.
"We are entering a new period that no one expected a few years ago, with new features," he said. One of these features, he continued, is the end of the era of "cheap money", another is that there is no more cheap energy, and a third is the end of cheap labour. There is a shortage of human capital, he noted, globally and in critical services directly related to the growth of many economies.
The fourth feature, the Finance Minister noted, is the greater importance of fiscal sustainability. I believe, he said, that over the next few years this sustainability will have a very important role and that the combination of the end of the era of cheap money and risky public finances and the fact that ongoing crises require fiscal buffers that we should expect an extreme reaction from markets when it comes to fiscal sustainability, and we saw this with the example of the UK.
We have this new economic period and it is not just about having visions, but having the right economic policy, strength and rationality to move forward, he noted.
Cyprus, Petrides said, has a new growth model that can adapt according to changing circumstances. "We have proven the resilience of the economy when during the pandemic I insisted that the solution is growth," he said. Nothing was accidental, he stressed, because there was a plan. "We have a plan, we have the financial capacity and we have fiscal buffers," he said. He added that the economy has diversified and we have investments from the US in the energy, tourism, education, health and shipping sectors and this was no accident.
For his part, Kokkinos said Vision 2035 is a different strategic plan, which has an implementation roadmap with practical actions. The vision, he said, is a future-ready society with a knowledge-based economy enabled by digital and emerging technologies that will lead to sustainable growth, social well-being and competitiveness.
These, he said, will come through the digitisation of public services, which has already begun, through secure and stable digital infrastructure, through the digital transition of businesses, and through a digitally literate population of highly skilled digital professionals.
In just two years, the foundations for holistic change across government, industry and society have been laid, he said. Challenges caused by Covid-19 were managed and "we launched the gov.cy portal with over 350 digital services with navigation being based on everyday life or business situations," he said.
The Deputy Minister of Research, Innovation and Digital Policy noted that there is an action plan to strengthen digital capacity with programmes for all levels of society, including remote areas and vulnerable groups. At the same time, he added that in the European Innovation Performance Scoreboard for 2022, Cyprus skyrocketed by entering the "strong innovators" category.
For his part, Assiotis, who also coordinated the event, spoke about the Council for Economy and Competitiveness's "Vision 2035" and said that once the Council was appointed the first thing they thought should be done was to create a long-term strategy for Cyprus.
The first time there had been a strategic plan for Cyprus, he said, was after the Turkish invasion in 1974, when the World Bank came to Cyprus and presented a strategic plan. With the support of the government and the Minister of Finance, it was possible not only to complete the strategic plan, but also to link this plan with the Recovery and Resilience Plan. Assiotis is not just the product of the Economic Council or a group of individuals, but to formulate the strategy, over 200 stakeholder interviews, over 5 workshops with the involvement and feedback of political parties, meetings with the executive directors of the largest companies in Cyprus and discussions with all ministries until the goal is achieved.
He noted that it is not a theoretical study, but a study which is related to practical recommendations.
He noted that it is not a theoretical study, but a study which is related to practical recommendations. It is, he said, an ambitious, realistic and comprehensive plan that takes into account current challenges and is linked to money. For the first time, he said, "we are linking this effort with money, with money from the Recovery and Resilience Fund, from the structural funds or linked to the budget." He noted that 92 of the 240 actions have already been integrated into the budget.
In his own intervention, Stasopoulos explained how the banking sector can support the growth of the economy, given the challenges that exist. He stated that the banking sector contributes to growth, with lending for 2016 to 2020 reaching around 14 billion. He noted that the success and growth of the Cypriot economy lies largely in the banking sector. He added that Russia's invasion of Ukraine created inflationary trends in the energy sector, as well as in goods and services. He said that inflation had already started to show downward trends recently. For a resilient economy in Cyprus, he noted, we need a long-term strategy.
Source: CNA
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