Where are the ‘Wise Men’?
Perhaps Finance Minister Charilaos Stavrakis is on a roll, proud of the fact that Cyprus seems to have been spared from the financial meltdown that the U.S. and dependent markets are facing, but the cautions and worries expressed by economic hawks about the viability of the colossal bailout promised by Washington should make us think twice about the over-confidence that has gripped us.
American economists believe that though the Bush Administration may not have had any option but to come up with a quick-fix plan, Congress is right to have its doubts about the long-term effects of the near-trillion dollar bailout. Some even suggest that wrong planning could even backfire and the U.S. could be faced with what is being termed a ‘super subprime crisis’ in a few years.
What economy watchers want to know is not necessarily where George Bush and his government will find the money, but to observe full transparency in the process and to ensure that the rescue plans do not entail multi-million rewards to senior executives of the troubled financial houses.
The U.S., Japan and the U.K. are revising down their economic growth rate figures at a time that Cyprus authorities are confident that we will maintain healthy rates for next year. But what happens two and three years down the line when we will start feeling the pinch from the recession-prone British market, with fewer tourists opting to choose Cyprus for their vacations and other investors down-scaling their exposure and presence on the island.
Unless we start building up a supply store of competitive goods and services, we will face troubled times too, especially when the present administration nears its half-way term of office.
Despite all its faults, the previous administration had a goods thing going with the economic think-tank, that, alas, never got off the ground. Too much attention was paid to other areas and the future of the economy became a secondary priority.
With labour and productivity issues to be among the hottest issues to be discussed as services and leisure companies brace for reduced revenues (and profits), Messrs Christofias and Stavrakis should seriously consider reviving the Wise Men who will be tasked with pondering about what to do next over the short and longer term, maybe even beyond the present administration.
