EDITORIAL: Does Cyprus need skilled labour migration?

The European Commission has wisely adopted two legislative proposals in order to attract highly qualified migrants – the EU Blue Card and a simple procedure for a single residence and work permit, attached to a common set of rights for third-country workers.

While labour migration will boost competitiveness and economic growth, in addition to greater contribution to state coffers, it could also help tackle demographic problems resulting from an ageing population, an issue of growing concern in Cyprus.

Commission executives, headed by its president, want Europe to become as attractive for migration as Australia, Canada and the US by trying to change the perception that Europe‘s labour market is governed by inconsistent admission procedures. Failing this, Europe will continue to receive low-skilled and medium-skilled migrants only.

That is exactly the case in Cyprus where admission procedures are mediaeval, to say the least, despite the volumes of reformed and progressive EU laws on migration that have been introduced in recent years.

With foreign workers in Cyprus contributing just over CYP 37.5 mln in 2005 to the Social Insurance Fund, and a further CYP 17.5 mln collected from other EU nationals, in other words just over 11% of all contributions to the Fund, the concept of the Blue Card and the single residency/work permit should be implemented in Cyprus as soon as possible.

Beyond the obvious benefit that the annual CYP 55 mln will have to the near-bankrupt Social Insurance Fund, attracting highly skilled workers will benefit many sectors of the island’s economy, as well as drastically boost contributions to the Fund if higher-earning skilled workers are employed.

In other words, foreign workers will help us save enough in order to keep the SIF afloat in 20-30 years’ time, when the retirement and pensionable age will have increased to 65 and beyond and will ensure that the young and aspiring professional of today will have a pension to look forward to by then.

The introduction of a “one-stop-shop” system to simplify and accelerate the procedure both for the employer and for the immigrant will guarantee basic socio-economic rights on an equal footing with native and other EU nationals, in particular as regards working conditions and pay, education, trade union’s rights and other benefits. These are the reasons multi-nationals avoid setting up shop in Cyprus, because the local/foreign labour mix is more of a headache than a service.

Until then, Cyprus will only attract unskilled workers as housemaids or on farms, while other EU states will get to choose the best foreign workers in the market. Ironically, these are also the foreign workers in Europe who will probably save enough to spend their holidays in other competitive holiday destinations, as opposed to Cyprus.