Cyprus Editorial: New strategy needed for SMEs

26 June, 2014 | Posted By: Financial Mirror

A recent report by the accountants’ body ACCA has confirmed what we and other society-based organisations have been saying all along – there is NO national strategy when it comes to the crucial sector of small to medium-sized enterprises (SMEs).
It’s bad enough that the government is dragging its feet on devising a new model for the shriveled banking sector, there’s no decision on creating up to six deputy cabinet posts to lessen the burden on some ministers, and it is totally confused on a future vision for energy matters. The SMEs should have been the easiest to deal with as all these employers of up to 50 staff want are incentives and a small push to keep their businesses alive. This will allow them to maintain production, retain workers and revive the long lost competitiveness of the Cyprus economy.
Politicians often pander to the SMEs because this sector represents the middle class (or what’s left of it) of businesspeople and taxpayers, who also double up as the main bread-and-butter contributors to party coffers. Well-paid civil servants and bank employees are often apathetic to politics and hardly ever get involved in politics, unless if it concerns the appointment of a relative, or a grant or even relaxation on a permit.
The two main employer groups, too, have kept a moth-eaten opinion of who their ideal members should be, with both OEV and KEVE caring more about the handful of mega-industrialists and hotel-chain operators than the start-ups of young bright minds with a sellable project or owners of small, yet sustainable businesses in eco-tourism, handicrafts and niche services or industries.
The only way for the ‘Cyprus’ brand to make a comeback on the international scene is for SMEs to be competitive enough to challenge their like-sized or even larger rivals broad, primarily within the EU, eastern Europe and the Middle East, where Cypriots still enjoy a good reputation as being reliable, honest and businesslike.
But if the government does not provide the fodder for these small businesses to stand up on their own two feet again, either through easier funding or via a less-rigid government machine, the SME sector will be wiped out for good, any bright minds will become victims of a new cycle of ‘brain drain’ and the Cyprus economy will be dominated by a handful of mega-operators who, in turn, will be hostage to the whims of their international suppliers or buyers.
For once, dear politicians, will you listen to the desperate pleas of the SMEs?