COVID19: Cyprus economy needs radical rethink

2 mins read

The gradual lifting of lockdown measures, at a time when new coronavirus cases keep cropping up daily, albeit in single-digit rates, suggests that the government’s medical advisors succumbed to political pressure.

Instead of turning the crisis into an opportunity, we seem to have taken the well-trodden path of safe decisions that will appease the short-term concerns of some sectors of society.

Nothing new or inspiring was announced by President Anastasiades, indicating that either he has run out of ideas or the administration’s approach is “if it’s not broke, don’t fix it”.

By allowing the construction sector to be the first to get back to work, although, with the lowest risk level as most builders work in the outdoors and can easily maintain social distancing, we do not seem to have learnt from the mistakes of the past, that the return of the citizenship-for-investments scheme is unsustainable.

Furthermore, this decision, that only serves the interests of a few, with ties to politicians in high places, will come back to haunt us very soon, as some crooked lawyers, accountants and developers will take advantage of the urgency to kick-start the economy by revisiting the issuing of passports to dodgy recipients.

The government has already overborrowed, thinking it would be able to cover the immediate needs of subsidies to pay for the furlough of workers forced to stay at home or work remotely.

It miscalculated the complacency of fellow EU member states, some of which are facing the imminent danger of COVID-19 making an ugly comeback, who at first shunned the idea that the virus would turn out to be deadly and stop the EU economy in its tracks.

How wrong they all were, as a result, the European dream for solidarity was sacrificed in an “everyone for himself” race of survival.

At home, the Opposition Akel is keeping a strange sense of distance, not knowing whether to become a harsh critic of the administration’s blundering, while the ruling Disy party’s lack of leadership in times of crisis has left many to wonder if this is a political group that should be taken seriously anymore.

The home learning experiment has failed, mainly because of the easy way out of adopting whatever Greece does, which is not always right, while teacher unions continue to undermine the Minister’s plans to introduce online education, at a time when an 11-year-old knows far better how to set up a teleconference than the teachers who are struggling with the Teams package that was imposed on them (and the taxpayer).

Why has no one come up with a Plan B, that would help us safely exit the corona-crisis and head into the ‘next day’ scenario with fresh ideas?

We need to revive competitiveness, rebuild the economy and explore new areas, while also getting to grips with the new normal, that will ultimately see a snail’s pace return to record tourist arrivals, an undeniable need to embrace the digital age and a return to traditional Cyprus values of hospitality.

The cash-rich banks are announcing losses once again, which shows that their refusal to lend to the real economy has boomeranged, now everyone is calling for them to step in to finance the next re-start.

State spending and budgets will continue to be cut, so we need to learn to live with that reality.

Energy is the commodity of the future and rapidly gaining ground as the European Commission steams ahead with its Green Deal, reminding us of the pledges made in 2013 that the green and blue economies would open up tens of thousands of jobs.

The maritime sector, the first to be hurt from the current crisis, is also the first to come out of the danger zone, which should have made us think of taking the shipping cluster to the next level, not just one of registrations and taxes.

Although Cyprus can no longer compete in agriculture and manufacturing, it was the ingenuity and determination of the 1960s and 1970s generations that drove the ‘economic miracle’.

We need another economic miracle today, but simply returning to the old normal of complacency and busting our brains to find ways to maintain the public sector payroll at the end of the month, is not how Cyprus can recover on a strong footing.