Cyprus President Christofias has been basking in the joy that while he and his cabinet have often been described as the ‘only communist government in Europe’, the traditional free-economy markets of the West are the ones that are on the brink of collapse and nationalising their great capitalistic institutions in order to rescue the failed economies.
While he may be partially right, it is not the economic system that caused the recent meltdown, but rather the lack of proper regulation and controls, something for which the communist regimes of the past century are not really renowned for.
Officials in the present administration were also courageous to admit that the previous coalition government had backed down on many development contracts and defense contracts, thus showing a robust public purse. In fact, the present administration will have to pay for those mistakes by pressing ahead with new projects, in particular as regards infrastructure and utilities.
A mini-poll conducted among Financial Mirror readers suggested that the government is best geared to avoid the world economic crisis primarily by cutting down the state payroll. This should be translated into a freeze on the rate of increase of new hirings by the state and, as has been suggested before, newcomers should be employed on fresh terms, not as generous as the terms for the present civil servants.
Furthermore, our mini-poll suggests that we raise productivity, in order to yield more from the private and public sectors, while diverting tourism away from the traditional U.K. market is considered as a lesser important solution. Finally, focusing more on the shipping and services sectors is seen as an alternative suggestion.
In fact, these suggestions underline the need for new development projects, with the state undertaking new contracts on its own or through contractors, both of which will indirectly bring a new momentum in the lagging construction sector, while B-O-T projects in the form of private-public partnerships should top the agenda.
The opposition even suggested that the government relax some of its harsh criteria for new projects, particularly in the tourism sector, that often deter corporations from investing. Perhaps, the government should retire the 10-year tourism plan and opt for a case-by-case study of every new project, keeping to the basic principles of development.
President Christofias should also get tough on stricter measures to help save the environment and encourage more investment in alternative sources of energy.
If he does all the above and implements most of these measures through the next few Budgets, then the state will proper and the people will benefit in the long term. It’s just a matter of getting his house in order.
October 16, 2008 – Financial Mirror
The Cyprus government aims to further support the growth of the financial services sector by further bolstering the regulatory framework,...Read more