What is your assessment of the island’s newly discovered hydrocarbons in its Exclusive Economic Zone?
The discovery of important quantities of hydrocarbons in Cyprus’ Exclusive Economic Zone (EEZ), as well as the prospect of further new discoveries, have renewed and strengthened the strategic importance of the Eastern Mediterranean, both economically and politically.
Our vision, Cyprus’ vision, is that these discoveries will contribute towards the transformation of the Eastern Mediterranean into an area of sustainable economic development, enhancing political stability and improving bilateral relations through synergies emerging from the exploitation of hydrocarbons. Hydrocarbons could serve as a means to strengthen regional energy security, attract foreign investments and boost the economies of the countries of the region to the benefit and the well-being of their people.
Our vision is also to transform Cyprus into an energy center in the Eastern Mediterranean. Our strategic location, stable legal and financial environment and our traditionally excellent relations with our neighbors, create the best conditions possible for the realization of our vision. We are in the process of exchanging ideas and plans with our neighboring countries such as Egypt, Israel, Jordan and others, and setting up the necessary legal and political framework for this to work.
Our natural resources in hydrocarbons, the investments put or to be put into their exploration, exploitation, development and commercialization, as well as the proceeds from the export of natural gas, could undoubtedly strengthen the economy of the country and put it on new sound foundations.
Furthermore, oil and gas services and operations companies, such as Schlumberger and Halliburton, have established their regional offices in Cyprus providing services to oil and gas operators in Cyprus and the wider region. Jobs are being created and new expertise acquired by Cypriots engaged in these activities; expertise that at some stage could be exported to other countries again benefiting the economy of the island.
What makes Cyprus special and appealing to overseas investors?
Cyprus’ economy is entering a new era of recovery and growth, an era where large investment projects of the private sector play a crucial role in the country’s economic development.
The financial sector has been adequately restructured and recapitalised and the credit institutions have successfully passed the European stress tests. Fiscal imbalances have been addressed and important structural reforms are well underway to make Cyprus a renewed investment destination.
The positive signs of recovery are reflected in the number and size of foreign investments that the country has witnessed over the past 12 months, reminding everyone that Cyprus can not only stand on its own two feet but has journeyed far along the path of recovery, leading to a bright and prosperous future.
Having maintained a stable and investment-friendly tax regime, the Government is developing a comprehensive growth reform strategy, limiting bureaucracy, simplifying procedures and creating a friendlier business and investment environment.
My Government’s objective is to boost the country’s international competitiveness, confirming its reputation as a centre of excellence for international investment and business activity. Furthermore, our aim is to make Cyprus one of the optimal places globally to start and grow a business.
Tangible opportunities exist in numerous economic sectors; shipping, privatization of ports, electricity and telecommunications, marinas, golf courses, medical and health centres, rehabilitation centres, theme parks, tourism and the hospitality industry, land development, information and communication technologies, education, professional services, and of course, the energy sector including renewable energy as well as the hydrocarbons industry.
Main economic opportunities.
As you know Cyprus finds itself currently in a macroeconomic adjustment program, expected to be completed in 2016. We have remained fully committed towards the implementation of this programme, and so far we managed to successfully complete seven positive reviews.
Our emphasis is now placed towards advancing on our structural reform agenda, notably on tax administration, the management of fiscal risks and public administration reform. Critical growth-enhancing reforms, including the public administration reform and a privatizations’ roadmap, have already been initiated.
The focus of the government is on administrative structural reforms with the overall aim of setting the foundations for sustainable growth in the long run, attracting foreign direct investment and eventually creating a new economic model for the country.
Of course it must be mentioned that Cyprus remains a resilient international business center that relies on a well balanced portfolio of services. These are just a few of the competitive advantages of Cyprus:
- A competitive tax regime, based on a broad tax base and low tax rates.
- Its unique geographical location, coupled with well-developed ties with the Middle East, Central and Eastern Europe
- A highly qualified work force
- A high quality of professional services such as legal and accounting
The combination of the dynamic structural reform program with the comparative advantages of the Cypriot economy will create optimal conditions for business and investment in Cyprus. As such, the further development of existing sectors of economic activity, as well as the emergence of new sectors relating for instance to tourism, professional services, the funds industry, education, R&D, ICT and of course the energy sector offer many exciting economic opportunities. The energy sector is expected to prove a major FDI attraction for Cyprus as the country could grow into the Eastern Mediterranean’s energy hub following the confirmation of significant hydrocarbon reserves in Cyprus’ Exclusive Economic Zone. At the same time I need to point out that there is also growing interest in renewable energy projects with solar energy related projects leading the pack as one might expect.
Assessment on possible re-unification of Cyprus.
As you are well aware, Cyprus remains divided for over 40 years as a consequence of the 1974 Turkish invasion of Cyprus and its continuing occupation. Given developments in our region, as well as world events, it is really time to do away with the artificial complacency related with the current status quo in Cyprus and finally negotiate a lasting a solution which of course would be to the benefit of all Cypriots, Turkey, our immediate region, and, evidently, the international community.
I believe that the time is right, and I believe that it has already been too long without a solution of the Cyprus problem. I believe that the new negotiating process we have entered this past spring is on the right track. What we aim to achieve the soonest possible is a comprehensive, viable and fair settlement of the Cyprus problem, based on a bi-communal, bi-zonal federation with political equality, as set out in the relevant Security Council Resolutions, the High Level Agreements and the Joint Declaration of February 2014, with a single international legal personality, a single sovereignty and a single citizenship. Furthermore, we need to safeguard for Cyprus and all Cypriots the principles upon which the European Union is founded.
On my part, I am wholeheartedly committed to work tirelessly to this end. Cyprus can become a model for its wider region, and the solution of the Cyprus problem may very well have positive ripple effects to our conflict-ridden neighbourhood. Furthermore, the reunification of the island, can unleash a great economic potential both for the local economy.