A report of The Economy and Competitiveness Council, in a report, the first of its kind, has made six key recommendations on the steps that need to be taken in order for the Cypriot economy’s competitiveness to improve.
The report, numbering 179 pages, was presented today in a press conference by Council President Takis Clerides after it was handed over to Finance Minister Harris Georgiades.
The report recommends that in order to enhance competitiveness Cyprus should promote entrepreneurship and firm dynamism, developing a holistic approach that acknowledges the interaction of entrepreneurship with other policy areas, such as access to finance, education, business linkages and external connectivity.
It also proposes that the country should strengthen business linkages and interaction, supporting the integration of Cypriot firms in the supplier networks of large international companies, and further enhancing connectedness and collaboration between the business community and tertiary-level education and research.
It also recommends that it ought to boost the adoption of digital technologies, providing digitalisation incentives for key sectors of the economy, strengthening education and training for digital skills, and incentivizing productivity-enhancing investments, especially for ICT assets.
Cyprus, the Competitiveness Report says, should also improve access to finance, continuing the successful efforts to strengthen the banking system, but also improving access to, and the availability of, alternative sources of finance.
It should also “future-proof” the availability of skills and human capital, raising the number of graduates with technical and natural-science qualifications and strengthening education and training for digital skills and entrepreneurship.
It is also recommended that Cyprus should strengthen its external connectivity, formulating an international transportation and connectivity strategy and assessing options to incentivise international connectivity to business partner locations.
“In addition to addressing competitiveness weaknesses, a long-term vision and strategy for competitiveness is required,” the report reads.
This strategy should focus on the opportunities and strengths that Cyprus can build on, so that it can continue to transform its economy towards high growth and high value-add sectors.
“Opportunities and threats to both ‘traditional’ and emerging sectors also need to be systemically identified and monitored,” it notes.
“This continuous appraisal of developments inside and outside Cyprus against long-term strategic objectives would be particularly helpful for identifying promising sectors and activities, as well as for formulating policies that support and promote these promising sectors and activities,” it says.
In his statements Clerides acknowledged that strong growth rates have been observed after the economic crisis, that fiscal finances are healthy and that steps have been taken contributing to enhancing competitiveness, improving entrepreneurship and diversifying the economy.
At the same time, he pointed out that “it is imperative that their effectiveness is continuously strengthened.”
In general, Clerides said, the institutional and regulatory framework and market conditions are at a good level, adding however that there are challenges in particular sectors which have weaknesses affecting the economy’s competitiveness.
Replying to a question about Cyprus’ investment programme, he said that it helped economic growth to a great extent after the crisis, together with other sectors, noting that the matter should be reviewed in depth as it touches upon many areas, including the government, licensing and businessmen.
“It is something which should be closely monitored so that we don’t reach a point when we are faced with difficulties,” he added.