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 I
welcome you all to the 31st Cyprus International Fair.
The Cyprus International Fair is on the fourth decade of a creative course.
With an important contribution to the promotion of Cyprus as an
international business centre, the State Fair is an event showing the
progress and the level of development of Cyprus economy. It reflects the
dynamism and the spirit of innovation and adaptability of Cypriot businesses
in the new international economic environment. Naturally, the opening of the
State Fair has been a suitable forum to make a concise outline of
development policy and the strategy of the government.
I warmly welcome our distinguished guests as well as foreign and Cypriot
exhibitors. I interpret their presence here as a practical recognition of
the multidimensional role of the Fair as well as a demonstration of their
trust in the prospects of the Cypriot economy.
I especially welcome our compatriot Turkish Cypriot businessmen who, for the
second consecutive year, participate in the International Fair. Their
participation gives us great pleasure, because we believe that through
cooperation, better prerequisites and more favorable conditions are being
created for the achievement of a solution which will reunite our country.
Through trade transactions among people of the two communities, common
targets and relations of mutual respect and understanding are being built.
On these relations of trust we can build a free and prosperous Cyprus for
all its inhabitants, a country which is an equal and active member of the
European Union.
The Government will continue to work for the establishment of a two-way
trade. In this way, our Turkish Cypriot compatriots will be able not only to
move their products to the free areas and through the legal ports into the
single market of the European Union, but also to buy products from the free
areas, without the restrictions and prohibitive measures imposed by the
Turkish Cypriot leadership.
Acceptance of the proposal made by the President of the Republic for
returning Famagusta and opening the city’s port, under the joint
management of the Greek and Turkish Cypriots, under the control of the
European Union, will give a new impetus to the commercial relations and
transactions among the people of the two communities.
It is through such initiatives that we may create a new political
environment which will facilitate the efforts for the preparation of new
talks, having the prospect of achieving an agreed solution. Our aim is to
find ways to live together in harmony and not to learn to live separately.
Two years after the accession of our country to the European Union we can
express our satisfaction for the speed with which the public and the private
sector have adapted to the challenges and prospects shaping the new
environment. At the same time, we would like to express the certainty that
thanks to the impetus created, we have new successes and achievements. We
are aware that some sectors and certain productive classes continue to face
adaptation problems. The Government will continue, through various measures
and programs, to support the efforts for their restructuring and for the
modernisation of their productive base. There is no room for regression and
hesitation in the course we have chosen to follow.
Our steady course towards accession to the Economic and Monetary Union and
the introduction on January 1st 2008 of the euro is a proof of the dynamism
of the Cypriot economy.
The high growth rates, the drastic reduction of public debt and fiscal
deficit, the low unemployment rate, the restraining of the inflation rate -
despite the sharp rise in the international price of oil and other fiscal
facts - indicate a healthy economy oriented towards development and
modernization.
The policy which the Government has followed the past three years, proves
that there are ways of improving public finances, without imposing new taxes.
It also proves that when there is correct planning and political will,
fiscal targets can be achieved and social benefits can be improved.
Problems and obstacles will always exist. There are, however, effective,
modern solutions that will allow us to utilize one of the main factors of
the new economic environment: the great and multiple opportunities and
prospects.
The Government, evaluating realistically the International, European and
local situation, has prepared and implemented a new development policy,
characterized by the vision of modernisation and social cohesion.
With the liberalization and globalization of the markets, Cypriot industry
and, by extension, our exports have faced problems of competitiveness and
adaptability to the new conditions and to the more demanding consumer needs.
The answer does not lie in the counter-productive practices of the past, i.e.
export subsidies and protectionism, which used to lead to the preservation
of anachronistic production methods. The answer lies in the improvement of
quality and the technological upgrading of our productive units.
In a short time span, we have achieved to reverse this negative climate, by
taking specific measures and programs. We have achieved this by improving
the business environment and supporting the efforts for the upgrading of the
quality and the production of new products. The stable increase in domestic
exports and re-exports is a proof of the rapid reversal of this climate. In
2004 and 2005 our exports have shown a 10% and 8%, increase while re-exports
have risen by 19% in 2004 and by 48% in 2005.
We have been investing in the development of research and innovation, in the
training and re-training of personnel, in technological upgrading and
improvement of know-how, in taking advantage of modern information systems,
in the mechanism for access to funding and the creation of appropriate
infrastructures and institutions, always in the framework of the acquis
communautaire and taking into account Cypriot realities.
The Government, implementing the principle of democratic participation, has
set up the Competitiveness Council and the Council for Industrial
Development, with the participation of all the social partners and experts.
The Government’s aim is the participation of all, not only at the level of
implementation of policies, but also at the level of designing policies and
support programs for businesses.
I would especially like to mention at this point, that a private law
Organization, which will be responsible for attracting foreign investments
to Cyprus, and at a later stage it will undertake the promotion of our
exports will start working very soon. In this way, the Government using the
flexibility and the advantages of the organization of the private sector,
will give added dynamism in the presence of Cyprus in other markets.
At the same time, a dialogue is in progress with our businessmen, for the
simplification of procedures and laws, with the aim of reducing the
operational cost of small and medium-size businesses. In the coming weeks,
the Council of Ministers is expected to take a decision on the creation of a
comprehensive Investor Service Centre, having very broad responsibilities.
Through the Investor Service Centres, the Government will offer businessmen
the possibility of having quick service from a one-stop-shop, avoiding in
this way bureaucracy and going from one government service to another.
At this point, I would like to stress, that the Government policy for
supporting the industrial sector and exports, cannot, on its own, achieve
the desired results. Our businessmen are the ones who should give industry
an export oriented and dynamic character, shedding any introversion and
adopting modern and aggressive business practices. We expect our business
world to set quality as a firm aim which will give us competitive advantages,
freeing us from the strategy of relying only on price competition.
Research and innovation can greatly help us in achieving the aim of
increased competitiveness.
Innovative activities, based on new technologies, rapidly create new or
improved products and services, which are knowledge-intensive not labour
intensive and contribute to the reorganization of the productive structure
of economy.
This is why the Government is stepping up its efforts to turn Cyprus into a
Regional Research and Technology Centre, exploiting the advantages of our
geographical position, our accession to the European Union and our qualified
manpower. If we succeed in this sector, we will create the basis for a new
model of economic growth, capable of meeting the requirements and challenges
of the 21st century.
For a more effective policy in this important sector, the Government is
pushing ahead with the integration of all state agencies and services which
are involved in Research and Pro-competitive Growth. Our aim is to create in
Cyprus the necessary infrastructure for investments in research by Cypriot
businesses, but also for attracting foreign investments and businesses.
The Government policy for attaining this aim is based on three pillars:
First: The creation of the Science and Technology Park, which will
constitute the infrastructure for the development of research and the place
which will host the planned research centres, business incubators and the
innovative rapid growth businesses. According to the plan, the Technology
Park will be able to host the first Research Centres and the first high
technology units in 2008.
Second: The creation of research centres which constitutes the necessary
infrastructure for hosting and utilising research programs. In addition to
the cooperation between the Government of Cyprus and the University of
Harvard, an International Institute created by the Cyprus Development Bank
and a large group of scientists of international renown is underway, while
the Government is studying other interesting proposals which have been
submitted.
Third: The creation and attraction to Cyprus of high tech and innovation
businesses producing high added value products where demand is quality
sensitive not price sensitive.
With the same philosophy and care, the Government is also planning, on the
basis of a study by experts, its policy for further development of the
sector of Services. Our sector of Services has already become a dynamic
sector of high professional quality. For years, we have cultivated the idea
of exploiting our geographical position with the aim of establishing Cyprus
as a Regional Services Centre. The Government has transformed this vision,
which for years remained unreachable into a concrete strategy, with a
specific action plan and programs. Following the adoption of the Law on
Private Universities, the Government is preparing a package of incentives so
as to turn Cyprus into a Regional Educational Centre. A similar effort is
made in the field of provision of medical services.
For these two sectors, where Cyprus can distinguish itself, we have begun a
productive dialogue with the Cyprus Chamber of Commerce and Industry and all
the parties involved and soon the Council of Ministers will take a decision
on specific incentives. In the framework of developing new business
activities, the Government has put together and it will soon announce, a
comprehensive policy for the development of the sector of film production,
as well as for the development of electronic trade. Meanwhile our national
strategy for the information society will also soon be completed.
It is with such specific policies of incentives that we aim to create the
necessary attractive business environment in order to turn our vision into a
living reality.
This is the same concept with which we have planned the Tourist Development
Strategy. The field of tourism is rightly characterized as one of linchpins
of our economic progress.
The government, recognizing the great importance of this field for Cyprus
and its people, has set tourism high in the list of its priorities. The
Tourist Development Strategy 2003-2010 is being implemented very rapidly. In
just 2,5 years since its approval, much has been done and surely much more
will follow. Indicatively, I would like to mention that we have taken
important steps in fields like golf, naval, sports, conference and cultural
tourism. Bold steps have also been taken in the fields of upgrading the
quality of services as well as tourist lodgings.
This ambitious seven-year program of tourist development is the result of
creative cooperation among all interested parties in the tourist field and
hence the responsibility as well as the challenge for its realization falls
on the shoulders of all concerned. At a time when competition becomes harder
and more intensive, the upgrading and enrichment of our tourist product
becomes even more urgent. Only in this way we shall be able to avoid the
hunt for a larger number of tourist arrivals and attract higher income
tourists. Only in such a way we shall be able to overcome the long standing
problem of seasonality.
The signing of the agreement for the development and management of the new
and modern airports at Larnaka and Paphos will give new impetus to
transforming Cyprus into a regional communications hub, with multiple
benefits.
In the prevailing conditions internationally, the implementation of a
comprehensive energy policy constitutes the key for high rates of economic
development on a stable and long-term basis. Such a policy guarantees secure
energy supplies, safeguards energy sufficiency for the country and is
related to great investment initiatives.
Within this framework, the creation of the Energy Centre in the area of
Vasilikos is under way and will be completed in 2010.
The planned importation of natural gas that will be primarily used for
electricity generation, is expected to contribute to the increase of the
competitiveness of Cypriot products, given the fact that the electricity
costs will be reduced.
At the same time, the Government exercising its sovereign rights, proceeded
to explore possible hydrocarbon deposits in the sea area of Cyprus with the
aim of exploiting them.
The Government is committed to the protection of the environment as part of
its policy for upgrading of the quality of life of Cypriots. We protect the
environment by adopting regulations that prohibit pollution, but also by
promoting clean technologies for energy generation. Of great importance for
the future is the new legislative framework the Government has submitted to
the House of Representatives in order to set mandatory standards for energy
efficiency of buildings.
Since 2003, the Government has been implementing a series of programs to
encourage and promote the use of Renewable Energy Sources, as well as
conserving energy. We are encouraged by the fact that these programs were
well received and are being utilized by the Cypriot society. The fact that
the number of applications submitted in 2005, increased by 180% compared to
2004, is also encouraging. On instructions from the President of the
Republic, the Ministry of Commerce, Industry and Commerce and the Ministry
of Finance are working on ways of strengthening the Renewable Energy Sources
Fund, so as to broaden the aid programs and make them even more generous.
Cyprus has a strong and healthy economy and a modern system of social care.
On all these successes we are building and plan the future with vision and
dynamism. The Government's model of economic development is not limited to
the reconstruction of the economy and the achieving of healthy economic
indicators. The economic vision of the Government is interwoven with its
social vision. Our aim is economic progress to be accompanied by social
progress. To walk hand in hand with the strengthening of the social web and
creation of conditions for the fair participation of all social classes in
the national wealth produced. A strong society constitutes the best basis
for the growth of a strong economy.
We believe that social expenditures do not take away resources from
development expenditures, or vice versa. These are policies that supplement
and reinforce each other, so as to achieve a model of economic growth with a
human face.
With such a policy and with the contribution and cooperation of all social
partners I am confident that Cyprus will soon take the place it deserves on
the world’s economic and social map.
Summing up the philosophy and the vision of the governmental development
policy, I would say that it is characterized by the fiscal cleansing and
effective management of the public sector. By the balanced development of
all sectors of economy, with such a geographical distribution of investments,
so as to encourage rural development. By the respect for the environment and
the upgrading of the quality of life. By the strengthening of social
coherence and the respect for the citizens and their rights. By the greatest
possible protection of consumers and the provision of useful information to
them. By the modernization and restructuring of the state machinery as well
as the structures of economy in order to achieve a higher efficiency and
improve our competitiveness.
In conclusion, I express my deep appreciation and warm congratulations to
the President and the Members of the Board of the State Fairs’ Authority
for their excellent work. I also congratulate the management and the staff
of the Authority as well as everyone who has contributed to this year’s
excellent organization of the State Fair.
To all the exhibitors I wish every success in their business activities.
Thank you for your attention.
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