Cyprus Mail

A larger population can cure Cyprus’ economic woes

By Joel Bainerman

MORE THAN twenty years ago when the first immigrants from the former Soviet Union began arriving in Israel- economists were thrilled. They realized that by increasing the local consumer market by 20% over the course of just a few short years- the economic benefits would continue for decades to come. All of a sudden, Israel enjoyed a “local consumer market” of respectable size. It now made sense to think in terms of earning wealth from the local consumer market- not from export or tourism.

Cyprus government planners might learn a lesson from the Israeli experience. While Cyprus is the same size of Israel (minus the Negev Desert) it has just one tenth of the population. The island is woefully unpopulated- and as a result, it’s local economy provides few jobs or economic stimulation. It’s urban centres have huge areas of empty land for growth to house newcomers.

What Cyprus needs to jumpstart its national economy is a hundred thousand or so new immigrants who are granted permanent residency status to anyone who can show they would not be an economic and/or social burden to the Cypriot taxpayer.

As none of these new immigrants would be looking for employment locally they would not compete with locals for jobs.

Most will be retired or otherwise self-sufficient- which would be a huge boast to the national economy- particularly in the real estate market in urban centres.

The reality will be that not all of the newcomers will be retirees. A high portion of them will still active in their field and productive- which will add to the quality of live in the country as well as the national economy. There are huge economic advantages by having a person in your country that has wealth- access to wealth, and/or special skills that can benefit Cypriot society and the quality of the life in the country.

Unlike Israel’s situation which had to absorb 1.2 million newcomers with assistance for housing and create jobs and additional infrastructure costs, Cyprus would not have that burden. The ultimate goal is to encourage them to at the very least to purchase a dwelling.

The cost of such a program will be the total cost of a worldwide social media campaign by the Cypriot government to have anyone who would consider living in Cyprus (permanently or part-time) to introduce themselves to register and receive more information. The search for new immigrants can be directed at certain countries- such as Anglo-speaking world- where Cyprus’s English language base is a good starting point.

Cyprus is a great place. Once a person looks at what the country offers- to many segments of the population such as retirees or people who can work from home or economically self-contained people who will not compete with locals for jobs. As the economy grows- those with skills that are lacking in Cyprus can contribute to the national economy and society. They will bring knowledge, know-how, culture, new ways of doing things- not just stimulate the economy with their consumer spending. They will enrich Cyprus and the Cypriot people will receive a huge benefit from the presence of a half a million educated, productive, and innovative people from abroad.

All it takes for this to take place is for the Cypriot government to extend an invitation.

Joel Bainerman is a veteran business and finance journalist

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