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SPEECH BY THE MINISTER OF COMMERCE INDUSTRY AND TOURISM
2002-06-02 01:44:41

SPEECH BY THE MINISTER OF COMMERCE, INDUSTRY AND TOURISM
Mr NICOS A. ROLANDIS
AT THE OPENING CEREMONY OF THE 27TH CYPRUS INTERNATIONAL FAIR
Friday 24th of May 2002, at 19.30

For the fifth consecutive year since I have taken charge of the Ministry of Commerce, Industry and Tourism, which supervises politically this Fair, I take this forum in a place that symbolizes the achievements of our economy and the vision for progress of Cyprus.

At this time when human rights are being violated everywhere across the planet, very few countries and people live under conditions of efficient development and even fewer are able to dream for a better future. In most cases development was not able to demolish the barriers of poverty and offer the necessities for human survival. In few other cases merely survival was secured with human dignity remaining out of reach. In even fewer cases these is development but it has remained almost at a standstill with unreachable goals.

Our small country with its humble beginnings as an ex-colony, moved quickly through the difficult years especially those after the Turkish invasion and achieved, forty years after Independence, the 16th place internationally according to the classification of the World Bank regarding the adjusted per capita income.

This successful journey is still continuing. Development and vision almost without borders other than the occupation, which must end before it creates more problems for our country and the region in general.

Mr. President,

The Ministry that I am heading covers, inter alia, the key sectors of development of our country such as Commerce, Industry, Tourism, Energy, Technology, Cooperative Movement, Export of Services and Marketing of Agricultural Products. This development is characterized by a pace which is much higher than international and European ones, something that is evident from the relevant table:

----- Cyprus(%)----E U(%)InternationalEconomy(%)
1998------5,0--------2,9--------2,8
1999------4,6--------2,6--------3,6
2000------5,1--------3,3--------4,7
2001------3,7--------1,7--------2,5
Median----4,6--------2,6--------3,4

In other words and according to international statistics Cyprus has a much higher rate of development than the average in the European Union and internationally.

Since I am in the International Fair, which reflects this development, I will briefly present some of my Ministry?s achievements during the past four years that is from 1998 to 2001, in the field of development.

1. Tourism

(a) In the past four years there has been an increase in tourist arrivals by 29.2%, but the most important thing is that we have had an increase in the income arising from tourism by 51,5%. This is something that shows our ability to attract high income tourists, upgrading in this way the quality of our tourism. At the same period of time international tourism showed an increase of 12,7% in arrivals whereas income arising from tourism showed an increase by only 9,2% from 1997 to 2001. Even though there are no international statistics for tourism incomes for 2001 it is evident that the Cyprus tourism develops at a much higher pace than tourism internationally.

(b) More specifically - and in spite of the 11th September tragic events - our revenue from tourism increased from ?843 millions in 1997 to ?1277 millions in 2001, an increase of ?434 millions annually in our tourism revenues, an amount which surpasses the 50% of the total of the past decades.

(c) During the past four years and in cooperation with the Cyprus Tourism Organisation we have achieved, amongst other things, the following: (i) We have funded together with the Ministry of Education and Culture many cultural events increasing their number significantly.

(ii) We have completed the procedure for the six marinas which was pending for many years and we have already entered the tenders procedure.

(iii) We have organized the biggest international event ever held in Cyprus, the Miss Universe 2000 Beauty Pageant, which was televised in 131 countries and was covered by hundreds of journalists from around the world.

(iv) We have almost doubled our capacity in agro tourism from 294 beds to 550.

(v) We have tripled the theme parks from 4 to 12.

(vi) We have contributed to the athletic tourism by almost doubling the football fields from 25 to 46.

(vii) We have created another two golf courses and another four are in the pipeline, despite difficulties arising from the acquits communautaire.

(viii) We have completed the unification of the Tourism Legislation.

(ix) We have taken special measures for winter tourism.

(d) We have worked towards the continuous improvement of the quality of our tourist product.

(e) The incident of the 11th of September and the problems created as a result of that negatively affected international tourism. In Cyprus during the first quarter of 2002 there was a decrease of 7% in arrivals, nevertheless income from tourism rose by 5,5% as compared to the relevant period of last year. Speaking in this way I do not mean to underestimate problems that the international and the Cyprus tourism face. At this stage we cannot make predictions for the whole of the current year which is characterized by a lower level of pre bookings than previous years, which however is counterbalanced by an increased number of delayed bookings and last minute holiday decisions.

It is a difficult situation. For this reason and to alleviate the problem the Government has earmarked an additional amount of approximately ?14 million for advertising and incentives for tourism which is something that other countries have not done to the same extent.

(f) Point of concern: The high cost of our tourist package especially during a period of uncertainty and slow-down during which tourists look for better price than for quality.

There must be a greater effort to keep costs and prices under control in order for our tourism to remain competitive.

2. Commerce

During the last four years there has been a continuous upward trend in our commercial exchanges which increased from ?2,54 billion in 1997 to ?3,16 billion in 2001, that is an increase of 24,3%.

Special emphasis was given in the field of domestic exports ? with the intense activity of our Trade Centres abroad-which despite the loss of competitiveness had the following performance:

Year Domestic Exports? millions

1997---- 220
1998---- 221
1999---- 215
2000---- 241
2001---- 247

During the past four years there has been an increase in domestic exports by 12,3%. Point of focus: Exports of halloumi cheese increased from ?5,2 millions in 1997 to ?7,7 millions in 2001, which means an increase of 48%.

3. Services

Even if there are no accurate numbers for the exports of services, the legal, accounting, financial, banking, educational, medical etc. services that we offer increase year after year and contribute significantly to the Cyprus economy.

4. Industry

This sector has faced problems for the past 20 years mainly because of high labour costs and low productivity.

We have done our utmost for the improvement of the productivity through the New Industrial Policy which was approved by the Council of Ministers in June 1999. The following programmes, on the basis of which many industries received financial aid, improve productivity.

(i) Subsidization for upgrading of machinery.
(ii) Incentives for mergers.
(iii) Subsidization for laboratory equipment.
(iv) Subsidization for the use of consultants.
(v) Subsidization for energy conservation.
(vi) Incentives for the promotion of industrial exports.
(vii) Granting of Government guarantees for loans to small-medium enterprises from commercial banks.

In spite of problems, especially in certain industrial sectors, the industrial output of Cyprus increases albeit slowly. The following table is indicative of the industrial output during 1997-2001.

Year-----Industrial Added Value? millions
1997----- 492
1998----- 509
1999----- 527
2000----- 557
2001----- 555


Special care was placed on quality. In 1997 there were 25 ISO 9000 companies whereas in 2001 there were 157.

5. Women in Business

The Council of Ministers has already approved a grant of ?15.000 to ?25.000 per industrial unit headed by a woman. This scheme is already in force.

6. High Technology

Our Ministry began its efforts in the sphere of High Technology in 1998. We have followed the models of other countries for the creation of High Technology Incubators and to this end we are in close contact with foreign governments, Technology and Research Centres, Universities and Academies and Techno parks around the world.

We have already signed a contract for the creation of the first High Technology Incubator and there is already a declared interest from another ten companies for the creation of four more by the end of this summer.

Our goal is the creation of companies in the field of high technology and information systems, which could drastically change the industrial scene of Cyprus.

At this stage we have promoted the signing of contracts for technological co-operation with the Governments of Russia and India and also with the Universities of Albany and Southern California of the United States. We have also signed a relevant protocol with the Government of Greece.

In this very important sector we are working very closely with the University of Cyprus, the Cyprus Chamber of Commerce and Industry, the Planning Bureau and the Employers and Industrialists Federation.

7. Research and Development

With the assistance of University of Cyprus we have already started the project for the creation of a Research and Development Centre in Cyprus. When the project is completed it will be submitted to the Council of Ministers for approval.

8. Energy

(a) An agreement was signed for the relocation by the year 2010 of the Distillery Plant from Larnaca to Vasilico.

(b) We have prepared and submitted to the Council of Ministers for approval a complete project for significant grants in the field of Renewable Sources of Energy, that is for:

(i) Photovoltaic electricity generated from the sun.

(ii) Wind turbines which generate electricity from the wind.

(iii) Biomass for the production of electricity from organic waste.

(iv) Replacement of the existing solar heaters.

With the aim at least doubling in eight years the production of energy from renewable sources,
(c) We are working closely with the Ministry of Interior for the creation of a unit for producing energy from solid waste.

9. Natural Gas

Since 1998 we have started implementing the idea for supplying Cyprus with natural gas, which is lower in cost and more environment friendly. We are examining:
(i) The possibility of transporting natural gas through underwater pipe from the port of Banias in Syria. For sufficient quantities Egyptian natural gas must also be transported to the port of Banias.
(ii) Alternatively, the supply of Liquefied Natural Gas.

For this reason the Ministers responsible for Energy matters of Egypt, Syria, Lebanon, Jordan and Cyprus are working on this closely. The creation of a Natural Gas Centre in the region is under consideration.
10. Deposits of Oil and Natural Gas

We have started studying this important matter three years ago. I shall not be making any further comments on the subject at this stage.

Mr President, Ladies and gentlemen,

I would like to thank and congratulate the President and the members of the Board of Directors as well as the staff of the Cyprus State Fairs Authority for the excellent job they have done.

The next two years 2002-2003 are the most important after the independence of our country. The President, the Government and the House of Representatives are handling the two issues that will mark Cyprus forever: Resolution of the Cyprus problem and accession to the European Union.

We need a lot of prudence, vision and the correct decisions to achieve the above goals, to get rid of the occupation and have better days in Cyprus. As Aeschylus also wrote: "Happiness is born of a sound mind". _________________

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