Promoting investment is ‘imperative’

WITH Cyprus due to receive a bailout by international lenders, encouraging investment must be a priority, top mandarins told the Cyprus Investment Promotion Agency’s (CIPA) annual general meeting (AGM) yesterday.
“It is imperative we strengthen efforts to encourage and convince foreign businesses and investors to include Cyprus as a possible implementation point in their strategic plans when expanding,” Commerce Minister Neoclis Sylikiotis said.
Referring to negotiations with the troika - the European Commission, the International Monetary Fund and the European Central Bank - Sylikiotis said the EU has learned that any structural changes must take place alongside growth. “Foreign investment movement, especially in strategic sectors of a country, is an important factor in financial growth especially at a time when because of the financial crisis there is a substantial reduction,” Sylikiotis said.
Cyprus asked for help in June after its two largest banks turned to the government for aid because of their exposure to Greek debt. The government had already been shut out of capital markets for over a year, and asked for a comprehensive bailout for its banks and its state fiscal deficit.
President Demetris Christofias - who also addressed the AGM yesterday - said that Cyprus’ role in the debt crisis stems from its banks’ exposure to the Greek economy.
“Left out of the so-called markets and without loan prospects, we were forced to go to the EU’s stability mechanism,” Christofias said. He denied any government responsibility “for any supposed measures the government should have taken and did not”.
“We went to the mechanism to cover the billions the banking system needs,” Christofias said adding that Cyprus hydrocarbons reserves and “balanced measures” could pull the island out of the crisis.
The state-funded CIPA - set up in 2007 to attract foreign investment - can help promote Cyprus as an attractive investment spot, improve the business environment and help out foreign investors, Christofias said.
He said this included the sectors of finance, shipping, education, medical tourism and energy. Christofias said Cyprus was honoured that CIPA was ranked fifth among 189 organisations from across the world for the promotion of foreign investments in a 2012 World Bank report on investment promotion benchmarking.
“During these hard times we absolutely need to attract capital and create new jobs,” he said.
Sylikiotis said that Cyprus could respond to competition by using its natural gas finds, networking with other countries and organisations, and by offering competitive services such as double taxation agreements and low corporate tax rates.
CIPA can help with its network of businesses in Cyprus and abroad, Sylikiotis said.