The second Cyprus Economy Competitiveness Report was published today, Tuesday, January 25, by the Cyprus Economy and Competitiveness Council (CECC). Since its establishment in 2018, the Cyprus Economy and Competitiveness Council has assumed responsibility for the systematic monitoring of the evolution of the competitiveness of the Cypriot economy and international trends, including the preparation of competitiveness reports for Cyprus. The Competitiveness Reports, issued by the CNAC every two years, are the Council's main analytical tool for the comprehensive identification, assessment and monitoring of the factors affecting the competitiveness of the Cypriot economy. The 2nd Competitiveness Report was prepared on behalf of the CNAC by the University of Cyprus.
The first Competitiveness Report (2019) was submitted by the Minister of Finance to the Council of Ministers, which decided to promote the implementation of the Report's recommendations by the relevant Ministries. In addition, the results of the Report were taken into account in the preparation of the Long-Term Strategy for the Sustainable Development of the Cyprus Economy.
The second Competitiveness Report (2021) updates and extends the analysis and findings of the first Report. It includes an assessment of Cyprus' competitiveness in the context of a broad definition of competitiveness, encompassing the set of institutions, policies and other factors, including social and environmental ones, that support and sustain value creation by businesses and support the improvement of citizens' living standards on a sustainable basis. It identifies the comparative advantages as well as the weaknesses and challenges facing the economy, and provides policy recommendations to address the challenges and enhance the competitiveness of the economy.
The Report also includes a separate section on the economic and social impacts of the pandemic and highlights the need to diversify the economy and enhance its resilience by changing the economic model. The Report stresses the importance of formulating the Long-Term Strategy for the Sustainable Development of the Cypriot economy, which has included reform and investment measures that promote the transition to a green and digital economy, diversify the economy and strengthen its resilience, and a large number of them have been included for funding under the Recovery and Resilience Plan.
The competitiveness performance of the Cypriot economy, both overall and in selected aspects, is very good. More than 150 specific indicators reflecting individual aspects of the competitiveness of the Cypriot economy are also examined and compared with the performance of 12 other selected economies and the EU average. It also provides an overview of the performance of the economy's competitiveness over time.
Recognising on the one hand the significant economic growth progress achieved in the years preceding the health crisis, the generally good regulatory and institutional conditions, but also the good market conditions prevailing in Cyprus, the analysis of the indicators also identifies the following eight areas in which the competitiveness of the Cypriot economy could be further enhanced. According to the Report, in many cases no new policies are required from the government, but more emphasis on the effective implementation and coordination of existing policies.
- Promoting entrepreneurship and enhancing the growth potential of Cypriot enterprises.
- Strengthen linkages and interaction between enterprises, by supporting their integration into supplier networks of international enterprises, as well as cooperation between the business, research and academic communities.
- Boosting the uptake of digital technologies, by incentivising the digitisation of key sectors and strengthening digital skills and productivity-enhancing investments in the ICT sector.
- Improving access to finance by continuing the successful efforts to strengthen the banking system and developing and making available alternative sources of finance.
- Better use of human resources through education and training, by increasing the number of graduates with qualifications in technical and science fields, and by strengthening digital and entrepreneurship skills to meet both current and future demands.
- Strengthening external connectivity through the development of an international transport and connectivity strategy, as well as facilitating interconnection with key international business partners.
- Attracting foreign direct investment by creating an attractive economic environment.
- Diversifying the economy by developing new sectors to complement existing economic activities, and strengthening the resilience of key existing sectors.
The full text of the 2nd Competitiveness Report for Cyprus can be found on the website of the Economic and Competitiveness Council (www.ecompet.cy).
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