EDITORIAL
The decision by President Papadopoulos to appoint Michalis Sarris as the new Finance Minister caught everybody by surprise, more so his own party, DIKO, but has been warmly welcomed by technocrats and economists who pin their hopes on Sarris to pull Cyprus out of the current tight economic situation.
The former Finance Minister, Makis Keravnos, certainly won praise for cutting excessive pay and for the ease with which he brought public finances under control.
Keravnos was helped to a large extent by the tax amnesty, which netted the state more than CYP 100 mln in extraordinary revenue and better tax collection, but Keravnos did not manage to craft strategy and give direction as to where the economy should be heading in the years and decades to come.
In our opinion, Keravnos had the relatively easy task of just cutting the excesses that had been built up in the system from previous administrations. The fact that the cost cutting exercise went without major strikes is certainly due to the ability of Keravnos to manoeuvre smoothly but also due to the realisation by the unions that gone are the golden days when they would demand and get anything simply by resorting to strike action.
A classic example is the relatively easy way with which the banks have won concessions from the Bank employees’ union, ETYK, during the negotiation for the renewal of the collection agreement for another three years.
Back to Sarris now. He is probably the most over-qualified person to become Finance Minister of this country. The fact that he served in the research department of the Central Bank, then a short spell at BOC after which he served from 1975 until 2004 at the World Bank and then after his retirement on the Board of Laiki proves our point that Sarris has all the right qualifications.
The fact that he served at the World Bank for so long means that he knows how to manoeuvre through red tape and bureaucracy. At the same time he must have fantastic organisational skills, something which will come to good use to bring discipline to the Finance Ministry which risks becoming a state within a state as the mandarins employed there start thinking and behaving as if they are the bosses of this country.
This must be one element of the cleansing act to which the President made reference.
The fact that Sarris is not a political person (a party member, or taking orders from the party who helped get him the position) is certainly a plus, since he will need to take orders only from the President and is not accountable to others. This means people will need to make solid presentations and prove their point, before a person of the calibre of Sarris decides to support their cause.
His 30-year World Bank work experience and absense from Cyprus also means that Sarris does not think in the usual Cyprus-style narrow minded way, but having the seen the big picture from outside, can bring a new way of thinking to the country.
What to expect from the new man at the Finance Ministry?
First thing that comes to mind is to continue with the task of bringing state finances into order by cutting expenses and raising revenue so that our economic ratios allow us to qualify for euro entry by 2007 or 2008.
We also hope that Sarris will be able to say No to the organised groups asking for money to cover their excesses. Farmers and football clubs should not qualify for easy money at a time when other sectors of the economy are bleeding.
We need a person with vision to tell us where this country should be heading. The sun-sea tourism product has become obsolete. The offshore boom came and went, the shipping sector is running on auto-pilot and most of our industry has closed. The service sector is the only bright spot of the economy, but that is thanks to private initiative rather than government help or strategy.
Being realists, we know that Sarris does not have the luxury of spending millions to implement his vision of where Cyprus should head. But an area which is very promising but long neglected is the medical sector. Cyprus has the knowhow, the finances and the right location to become a medical centre of the region. Just a look at the Neurology, Paraskevaidon and BOC Oncology centres shows that this country can make a difference.
Education is another “low budget” area where this country can make a difference. But here we need firm action and a resolute plan to put ourselves on the map.
The government can help direct more Cypriots to become experts in medicine and education and break the near-hold of the accountancy profession, which flourished because of the offshore and service industry boom. Besides, these are areas that cannot be “stolen” or be penetrated by the Chinese, the Indians and other low cost countries.
Let’s hope that soon, Sarris will be able to put his stamp on the future economic policy of Cyprus and lead us to better days. We wish him all the best at his new job.
