EITHER THE Cypriot economy modernises or else it will be marginalised, warned Filios Zachariades, president of the Employers and Industrialists Federation (OEV) yesterday.
The business head further noted that the economy and society were paying for the “weak-willed reform” being implemented in the country.
Speaking at OEV’s annual general meeting, Zachariades called for serious reform to curb state expenditure, referring to the state payroll and pension fund.
“A lot has been said about who’s to blame or not to blame for the creation and continuation of the economic crisis. The only sure thing is that Cypriot businesses are not to blame,” said the OEV head.
He highlighted the need to break the vicious circle preventing much-needed reform due to fear of the political cost which condemns the economy to a standstill, with only spasmodic measures introduced.
The necessary reforms, which many are afraid to make because they continue to serve their petty interests, must be implemented, he said.
“It’s clear that the Cyprus economy is at a critical crossroads: either we modernise, or we’ll be marginalised,” said Zachariades
“The economy and society are starting to pay for this weak-spirited reform,” he added.
Zachariades called for more effective public administration with transparency and less bureaucracy, a reduction of administrative costs for businesses, and greater encouragement for entrepreneurial initiatives, instead of making profit look like a bad thing.
The business world boss pointed the finger at the state, saying that over the years, it failed to achieve the required political consensus to correct weaknesses in the economy.
As for the union movement which had offered so much to workers and improved their quality of life, Zachariades blamed unions for sticking to their guns regardless of the price employees ended up paying.
The political parties who took Cyprus from an underdeveloped economy to an equal member of the EU are sticking to positions of “principle”, failing to agree on common measures.
Citizens are now divided into the “privileged” and “average” citizens. An uncertain future has reduced consumption with serious consequences for the economy, he added.
“We must work together to address our common future as a creative challenge not as a pre-emptive threat. In any case, if the ship of the Cyprus economy sinks, we all sink,” said Zachariades.
Addressing the general assembly, President Demetris Christofias pointed to the government’s efforts to overcome the worst crisis in decades. The state spending €500m to prop up various sectors played a “key role” in getting Cyprus out of the recession while helping vulnerable segments of the population, said Christofias.
The European Commission agreed that government’s measures were “timely and targeted”, he noted. While not trying to paint a rosy picture, Christofias argued that giving a distorted picture of the economy only caused harm for the country.
“The uncertainty and panic sown by some has a negative impact on the economy, the market and foreign investments. They damage the country, they damage us all,” he said.
“We do not hide the problems under the carpet. We dare to solve these problems that have done harm to the Cypriot economy and society for decades,” he added, referring to the public pension fund, interchangeability of civil servants, restructuring the Cost of Living Allowance, reducing the number of civil servants, combating tax evasion and town planning reform.
The president said the recent phenomenon of sacking experienced Cypriot workers to employ EU workers under worse labour terms and conditions was “unacceptable”.
The head of the Cyprus Turkish Businessmen’s Association (ISAD), Metin Shadi, also addressed the assembly, highlighting the missed opportunity for enhanced business cooperation across the divide with the opening of the checkpoints.
He blamed “short sightedness and many political hurdles” which prevented this business form of rapprochement from bearing fruit, eventually leading Turkish Cypriot businessmen to focus their interests on Turkey.
Shadi maintained that the key to future prosperity and stability in the area was cooperation across the divide for investment opportunities in neighbouring countries like Turkey.
“We should encourage and warn both leaders that unless they seize this chance by the end of this year, they will be responsible for the future losses of both sides and our island in general,” he said.
