By Hamza Hendawi
USING old phrases in a new sales pitch, President Glafcos Clerides and Co. yesterday sought to drum up business in London, telling British businessmen and captains of industry of the wonders of the island’s economy.
They bragged about an impressive array of macroeconomic indicators that most West European governments would simply kill for, but appeared unable to resist the temptation to use abused clichés.
Clerides mentioned the island’s “strategic geographical location at the crossroads of three continents.” In a near-identical part, Commerce and Tourism Minister Nicos Rolandis spoke of “Cyprus’ strategic location at the crossroads of three continents and its close proximity to the busy trade routes linking Europe with the Middle East, Russia, Central Asia and the Far East…”
Even the title of the London conference which Clerides, Rolandis and Central Bank Governor Afxentis Afxentiou addressed yesterday – “Cyprus: A Regional Business Centre” – was hardly original.
Still, there was enough there to impress and cheer about.
Clerides and Afxentiou spoke of the island’s 16th place in world rankings for per capita income, with the latter saying that the “World Development Indicators” of the World Bank had put it at an impressive $20,500.
This, Afxentiou proudly pointed out, put Cyprus ahead of eight of the European Union’s 15 existing members.
GDP growth, the Central Bank boss continued, averaged a whopping 6.1 per cent per year throughout the 1980s and a decent 4.4 per cent in the 1990-98 period.
Afxentiou, like Rolandis, also spoke of full employment conditions and an inflation rate that is forecast to dip to as low as 2.5 per cent this year, from 3.6 per cent in 1997.
The Central Bank Governor, however, admitted that not all was well with the Cyprus economy, giving the gaping fiscal deficit a brief mention.
“There is a clear divergence as regards the fiscal deficit, which stands for this year at an estimated level of 5.7 per cent of GDP, in relation to the 3.0 per cent of GDP level prescribed by the relevant (EU convergence) criterion.
“To rectify this situation, the government intends to take appropriate measures and, to that effect, a package of tax measures is pending before the House of Representatives,” he said.
Afxentiou, however, revealed that the total removal of exchange control on capital movements would not be complete before the island’s accession to the European Union, an event that is not expected before January 1, 2003 at the earliest.
After giving his listeners a brief account of how Cypriots had rebuilt their economy from the ashes of the 1974 Turkish invasion, Clerides declared his government’s unwavering commitment to enhancing the island’s role as a business centre.
“The government of Cyprus is committed to providing the required assistance and support,” Clerides, widely seen as a business-friendly president, told the London meeting, organised by the Cyprus Chamber of Commerce and the powerful Confederation of British Industries.
Back in Cyprus, the Department of Statistics and Research said the trade deficit in the January-September period reached £967.9 million, compared to £932.6 million in the corresponding period last year.
The deficit increase appeared to reflect in large part a hike in imports for home consumption. These reached £1.15 billion in the first nine months of 1998, compared to £1.11 billion in the January-September period of 1997.
