The world economic crisis continues to affect Cyprus and as a result in 2009 the rate of growth showed a negative trend of 1,7% in comparison to 3,6% in 2008, President of the Cyprus Employers and Industrialists Federation (OEB) Andreas Pittas has said.
Addressing on Thursday OEB’s Annual General Meeting (AGM) in Nicosia, Pittas said that in 2009 the harmonized inflation rate reached the lowest level since 1965, reaching 0,2% in comparison to 4,7% in 2008.
Referring to unemployment, he said it reached more than 6% of the active population, which he described as a record high after 1974 when Turkish troops invaded Cyprus. In 2008, he added, unemployment was 3,9%.
Pitttas said that the only sectors of the economy which recorded positive growth during 2009 have to do with the wider sector of services.
As regards tourism, he said that in 2009 there was a fall in tourist arrivals of 10,9 %, mainly from the UK and Russia.
Revenue from tourism in 2009 dropped to 1.493,2 million euro, in comparison to 1.792,8 in 2008 or by 16,7%.
Meanwhile, speaking at the gala dinner held Wednesday in Nicosia, Pittas said that
the global financial crisis and its aftermath have created an enormous tremor nearly everywhere.
He added “it appears that the effects of this colossal crisis will resonate for some time to come with governments being increasingly tempted to further tax businesses, directly or indirectly, in order to resolve fiscal problems of their own creation”.
Pittas said that unemployment is soaring and public finances are worsening.
“If there was ever a time that employers had to speak with one voice, it is now. If there was ever a time businesses had to stand united against measures which increase unemployment and curtail productivity, discourage entrepreneurship and decrease growth, it is now”, he stressed.
Addressing the AGM, Minister of Communication and Works Erato Kozakou Markoullis, in her capacity as Acting Minister of Labour and Social Insurance, said that the government looks forward to the further enhancement of the “successful model of labour relations we have in Cyprus”.
Our objective, she added, is to find that framework which will address the challenges of modern times to the degree they have affected the Cypriot labour market.
“The stance so far of the social partners gives us hope that we will be able to agree on the introduction of such regulations that would prove to be beneficial for all concerned”, she noted.
Markoullis said that given the constructive cooperation among social partners, she believes that OEB will continue playing a leading role in the continuous efforts to reverse the trend and bring back positive growth rates to overcome the soonest possible and with the less painful way possible, the consequences of the financial crisis”.
“A financial crisis, which unfortunately, has affected to a great extent key sectors of our economy and has led to the worsening of our fiscal problems”, she concluded.
The AGM was also addressed by President of the Turkish Cypriot Businessmen’s Association, Metin Yalcin, who said that due to Greece's “unsustainable current transactions and budget deficit, the after-shocks of the 2009 financial crisis has started impacting the rest of the EU”.
“At a time when there was a big problem in a member state that worsened each day due to lack of urgent intervention, time was being lost in the political arena with unpleasant disputes which amounted at times to reciprocal accusations. This was observed mainly by the candidate countries, and those outside the EU like us, who are just looking through the door gap, with serious apprehension and despair”, he continued.
Yalcin expressed conviction that despite all the above, the EU will come out of the crisis as an even stronger block.
Referring to Cyprus, he said that “instead of putting the Turkish Cypriot side’s economic development under pressure through isolations, contributing to the economic development of the Turkish Cypriot side would have facilitated a permanent solution was ignored”.
“Also ignored”, he added, “was the fact that contributing to the economic development of the Turkish Cypriot side would maintain people’s support for a solution and at the same time reduce the financial cost of solution, which is a frequent issue of complaint”.
Yalcin said that during the past year, the good-willed cooperation between the businesses of two sides continued by adding on new rings.
“Even though not a single product of ours has been placed on the shelves in the markets here, even though not a single newspaper advertisement of ours has been published, and even though there are attempts to block the sale of our products produced by hundred percent local value added through a court decision, the continuation of these good-willed cooperation efforts is admirable. The businessmen, who are discouraged with politics, should be praised for their efforts in this area, even though there have not yet been any concrete results”, he added.
He expressed the view that “if we really want to live in peace, we have to somehow learn doing business with each other and living together”.
Yalcin thanked the Cyprus Employers and Industrialists Federation, the Cyprus Chamber of Commerce and Industry and the Turkish Cypriot Chamber of Commerce and all other establishments “within or outside the business world that are making efforts to this effect”.
