It is indeed a great pleasure for me to be here today in Moscow to attend and address this seminar. I would like to take this opportunity to express my sincere thanks to the Russian Association for Engineering Education and the people from my Ministry for their wholehearted support and co-operation for the organisation of this seminar in Moscow and their efforts towards the promotion of high technology industries in Cyprus. I would also like to thank all participants for their presence here and their interest in the topic of the seminar.

Cyprus is the third largest island in the Mediterranean Sea. Cyprus΄ strategic location at the centre of three continents and its close proximity to the busy trade routes linking Europe with the Arab World and the Far East has been a major factor shaping its history throughout the centuries. In recent years this strategic location together with the excellent political and economic relations with our neighbours, our highly developed socioeconomic infrastructure, excellent telecommunications, a sophisticated banking system, a wide range of high quality professional services and a favourable economic and business environment, make Cyprus an ideal Centre for business activities.

The island has a record of successful economic performance, reflected in rapid growth, full employment conditions and external and internal stability, almost throughout the post-Independence period. The underdeveloped economy, inherited from Colonial Rule in 1960, has been transformed into a modern economy, with dynamic services, industrial and agricultural sectors and advanced physical and social infrastructure. In terms of per capita income, currently estimated at US $15.000, Cyprus is classified among the high-income countries.

These achievements appear all the more striking, bearing in mind the severe economic and social dislocation created by the Turkish invasion of 1974 and the continuing occupation of the northern part of the island by Turkey.

The success of Cyprus in the economic sphere is attributed, inter alia, to the adoption of a market oriented economic system, the pursuance of sound macroeconomic policies by the government as well as the existence of dynamic and flexible entrepreneurs and a highly educated labour force. Moreover, the economy benefited from the close co-operation between the public sector and the social partners.

During the last decade, the Cyprus economy has intensified its links to Europe. The European Union is the largest trading partner of Cyprus. Trade barriers between Cyprus and Europe have by now been completely dismantled on all but a handful of industrial products.

The high level of development of Cyprus has been a significant factor in the decision of the European Union to include Cyprus in the group of the first six countries with which it has started accession negotiations in 1998. Apart from its paramount political significance, accession to the EU will have widespread economic and social ramifications. We are currently in the middle of a complete overhaul of our legislation and institutional structures, in the context of harmonisation with the respective legislation and institutions of the EU.

The sector of manufacturing has contributed its share to the development of the economy of Cyprus and it continues to be important to the economy accounting for about 11% of GDP and 14% of employment. However, the sector had serious problems in recent years, experiencing at times a fall in the growth of production, exports and employment. This development has been the result of an erosion in our competitiveness, both abroad and in the local market, due to rising costs of production and insufficient productivity gains, at a time of increasingly intensified international competition. At the root of these problems lie the structural weaknesses of the sector, the inadequate utilisation of new technology, and to some extent outdated methods of management.

Taking into account the forthcoming challenges, stemming from the globalisation of the economies, the liberalisation of trade, the rapid technological changes, as well as the envisaged accession of Cyprus to the EU, the Ministry of Commerce, Industry and Tourism has proposed a New Industrial Policy, which was approved by the Council of Ministers last June.

The New Industrial Policy consists of twelve chapters. The first two refer to the promotion of high technology in Cyprus through the establishment of incubators and the creation of a Center for carrying out applied research and technological development in high technology fields. The government of Cyprus will provide partial financing for projects aiming at the development of new high technology products which will be approved to enter the incubator, up to a period of two years. Applications for such projects may involve the participation of non-Cypriot inventors or scientists.

For the promotion of these new institutions in Cyprus, a Technical Committee has been appointed to study the experiences of other countries that have successfully introduced them and make recommendations to the government.

The main objectives of the seminar are:

• to provide information to interested groups in Russia (researchers and educational institutions) on the policy of Cyprus concerning the development of high technology industry in Cyprus

• to provide information to representatives of interested parties of Cyprus on the Russian innovation potential

• to exchange views on possible forms of cooperation between the two countries in the development of new high technology industries.

I am sure the main speakers of this seminar will elaborate more on these subjects and will give us later the opportunity to discuss in detail the possible forms of cooperation between Cyprus and Russia in the context of the the New Industrial Policy of Cyprus for the development of high technology industries.

The Government of Cyprus assigns great importance to this cooperation with Russia and is interested in financing scientific projects, the success of which will benefit both countries. During this seminar in Moscow, where Cypriot businessmen and Russian scientists participate, representatives of the Ministry of Commerce, Industry and Tourism of Cyprus will explain further the terms of the above co-operation.

Bearing in mind that Cyprus has wide experience in the mechanisms of the market economy and extensive ties with the outside world and that Russia has very highly developed research infrastructure and world class expertise in many scientific and technological areas, cooperation between the two countries in the promotion of new high technology industries, through the incubator that will be established in Cyprus, can be of mutual benefit.

In concluding, I would like to call upon the Federal Government of Russia, the Russian Academy of Science, the Association of Technical Universities of Russia the Association of Engineering Education and any other Scientists Associations to support our efforts to promote high technology in Cyprus.

I would like to express again my sincere thanks and appreciation to all those who with their efforts made this seminar possible as well as to all participants who have taken valuable time to attend it and wish it every success.