In search of investments – Patience is virtue
It is obvious that the government’s efforts to attract foreign investors in Cyprus and the president’s travels (but not with his entire family) are proving helpful.
However, an obvious observation keep on getting from different investors is that “we hear about attracting foreign investors, but we never see anything,” which is why I would like to submit the following:
• The 2013 haircut of deposits is still fresh in our minds, as is the persistence of the international media about the tragic situation of the Cyprus economy. Who, then, can be attracted with all these facts?
• Bureaucracy still rules and requests for investments take years to be considered and processed, particularly in the property sector. A project for an international standard rehabilitation centre has yet to be reviewed, despite having submitted three months ago, while a Swedish bank took two years to get a permit.
• The increase in the construction coefficient rate of 20% in tourist areas has hit a brick wall over the consultations by entire government departments and in the end a potential investor may settle for a factor increase of just 10%.
• The oncology centre in Limassol has been dragging on for too long and the generous offer of Mr. G. Mouskis made ten years ago to become the benefactor seems to have been withdrawn because of the unnecessary delays.
• Several other large-scale projects by local and foreign investors, such as the technology park in Pentakomo, as well as the convention centre with the ‘Business Angel’ from a Russian company, would have been an ideal conference venue that Limassol needed, but it seems the project had an “optical” problem and did not “beld in” with the surrounding environment.
• Various other large-scale projects by private investors are also being held back, such as the relaxation of state land for use by golf courses, the prime state-owned that remain unsold but are being rented, new concepts such as the crocodile and dolphin parks, have been getting some bad publicity, and even the Ayia Napa marina almost never got off the ground because some wise guy mentioned the “possibility” of antiquities in the sea, stirring up similar reactions to what was said about the Limassol Marina at the time, which, fortunately, were not heeded.
• As regards the Limni near Polis Chrysochous, there seems to be rabid reaction from the so-called environmentalists, while the Photiades proposal for Akamas has not even been discussed although it is a brilliant project. And let’s not forget the Chinese investor who was interest to build a mall at the old Larnaca airport and so many more ideas that were never implemented because of some noise or unnecessary reactions.
So, why should a foreign or even a local investor choose Cyprus when he is being begged by other government agencies or ventures to invest in that country? Bulgaria dynamically entered the game to attract foreign investors, as did other more remote countries such as Azerbaijan, Armenia, etc.
Attracting foreign investors under the current circumstances is not an easy task, while the time to implement such projects is far too long, as the time between the expression of interest and the final execution of the venture. Until the investor investigates various aspects of the deal through a due diligence, and the public service department decides if and when the relevant license will be granted, we have lost the golden opportunity, as has already been declared by Christodoulos Angastiniotis, the Chairman of the Cyprus Investment Promotion Agency tasked with attracting these investors and then trying to keep them here.
And then there is our ‘wise’ House of Representatives – where members think they are above us all and generally live in a different world – grappling with anything other than the economy, while we have not seen any MP who declared the “heroic NO” during the initial days of the crisis provide us with any apology; they seem to keep to their own tune and there is obviously no real concern on their part to attract foreign investors, but only the need to criticise anything and everything.
Despite all this, there is some initial interest and solid examples are the banking sector, investor interest to buy offices for rent, investment in major department stores by foreign funds and demand for high cost housing on the rise at rates of EUR 10,000 / sq.m., mainly in Limassol.
On the other hand, a senior executive at a Russian multinational company was seen sitting in the waiting room of the relevant government office together with other “artistes” in order to get the necessary work visa and permit. How insulting for the calibre of people we want to attract to live here and spend their earnings by investing on this island.
The various announcements by the President on his policy to attract investors may sound nice, but the rest of us it seems need to be more patient if we ever want to see things getting done.