By July the government plans to have ready a draft national strategy for boosting industrial output in the long term, making the island less reliant on imports, industry minister Giorgos Lakkotrypis said on Monday.
He was speaking after a meeting with a delegation of the Chamber of Commerce and Industry and (Keve), who handed to the minister a report proposing how industry should be reorganised and developed.
Under EU guidelines, industrial output in Cyprus must account for 20 per cent of GDP by 2020. It currently accounts for around 7 per cent of GDP.
Lakkotrypis revealed that a working group has been set up to draft the national strategy. It will include Keve as well as the Employers and Industrialists Federation (OEV).
Boosting industry is expected to have a multiplier effect on the competitiveness of the country, as well as make Cypriot businesses more outward-looking, the minister said.
The Keve report points out that nations with a strong manufacturing basis have better weathered the financial crisis in the EU.
Increasing industrial output would improve the balance of payments and boost foreign currency reserves, as well as create jobs, it notes.
An emphasis on manufacturing would also lead to less dependence on foreign countries.
The report proposes the development of business clusters, bringing together manufacturers and suppliers.
It argues for a greater role to be given to private financing of foreign projects in Cyprus, and places an emphasis on research.
In addition, the state should take steps to unshackle entrepreneurs, for example by cutting the time it takes to issue VAT refunds to businesses.
The report also proposes that Cyprus should get into manufacturing ‘green’ products with a high energy efficiency.