In search of in­vest­ments – Pa­tience is virtue

Financial Mirror (Cyprus) - - FRONT PAGE -

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.

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