The second Competitiveness Report of the Cypriot Economy was published today by the Cyprus Economy and Competitiveness Council (SOAK).
Since its establishment in 2018, the Cyprus Economy and Competitiveness Council has taken responsibility for systematically monitoring the development of the competitiveness of the Cypriot economy and international trends, including the preparation of competitiveness reports for Cyprus.
The competitiveness reports, published by SOAK every two years, are the main analytical tool of the Council for the comprehensive identification, evaluation and monitoring of the factors that affect the competitiveness of the Cypriot economy. The 2nd Competitiveness Report was prepared by SOAK from the University of Cyprus.
The first Competitiveness Report (2019) was submitted by the Minister of Finance to the Council of Ministers, which decided to promote the implementation of the recommendations of the Report by the competent Ministries. In addition, the results of the Report were taken into account in the preparation of the Long-Term Strategy for the Sustainable Development of the Cypriot Economy.
Updates and expands the analysis and findings of the first report
The Second Competitiveness Report (2021) updates and extends the analysis and findings of the first Report. It includes the assessment of the competitiveness of Cyprus in the context of a broad definition of the term competitiveness, which includes all institutions, policies and other factors, including social and environmental, that support and maintain business value creation and support the improvement of living standards. of citizens on a sustainable basis. It records the comparative advantages but also the weaknesses and challenges faced by the economy, and provides policy recommendations to address the challenges and strengthen the competitiveness of the economy.
Economic and social consequences of the pandemic
The Report also includes a separate section on the economic and social effects of the pandemic and emphasizes the need to diversify the economy and strengthen its resilience by changing our economic model. The Report emphasizes the importance of formulating the Long-Term Strategy for the Sustainable Development of the Cypriot economy, which includes measures of reforms and investments that promote the transition to a green and digital economy, the diversification of the economy and the strengthening of its resilience, while a large a number of them have been included for funding from the Recovery and Sustainability Plan.
The competitiveness performance of the Cypriot economy, both overall and in selected aspects, is recorded in the Report on the basis of internationally recognized indicators and methodologies, which are used in widespread benchmarking frameworks, such as the World Competitiveness Report of the International Economic and Financial World Bank. More than 150 specialized indicators that reflect individual aspects of the competitiveness of the Cypriot economy are also examined and compared with the respective performances of 12 other selected economies and the EU average. The performance of the competitiveness of the economy is also reviewed over time.
Recognizing on the one hand the significant progress of economic growth that had been achieved in the years before the health crisis, the generally good regulatory and institutional conditions but also the good market conditions prevailing in Cyprus, the analysis of the indicators identifies the following eight areas in which The competitiveness of the Cypriot economy could be further enhanced.
Greater emphasis on effective implementation
According to the Report, in many cases no new policies are required from the government but more emphasis on the effective implementation and coordination of existing policies.
Promoting entrepreneurship and strengthening the dynamic development of Cypriot companies. Strengthening interconnections and interaction between companies, supporting their integration into networks of international business providers as well as cooperation between the business, research and academic community. Enhancing the adoption of digital technologies, by providing incentives for the digitization of important sectors as well as the strengthening of digital skills and investments that enhance productivity in Information and Communication Technologies. Improving access to finance by continuing successful efforts to strengthen the banking system, but also by developing and allocating alternative sources of funding. Better utilization of human resources through education and training, by increasing graduates with qualifications in technical and natural sciences, as well as by enhancing digital skills and entrepreneurial skills, so that they respond to both current and future future requirements. Strengthen external connectivity by formulating a strategy for international transport and connectivity, as well as facilitating interconnection with key international business partners. Attracting foreign direct investment through the formation of an attractive economic environment. Diversifying the economy through the development of new sectors that will complement existing economic activities, and enhancing the resilience of key existing sectors.
The full text of the 2nd Competitiveness Report for Cyprus can be found on the website of the Economic and Competitiveness Council (www.ecompet.cy)