Structural reforms act as a catalyst for the credibility of the economy and investor confidence, Undersecretary to the President Constantinos Petrides said on Thursday.
Petrides who is also in charge of public sector reform said: “We are midway through transforming Cyprus”.
Addressing the 6th Alpha Bank Economic Congress, in Nicosia, Petrides said the crisis of March 2013 exposed the structural weaknesses of the Cypriot economy.
“When the easy credit ended, the lack of productive sectors and exports that could balance out the shock became evident,” he added.
According to Petrides there is only one cure to address the economic ills that create bubbles “which at some point burst”, leading the economy into recession, rising unemployment, diminishing incomes, and lowering the living standard of the society as whole. This cure, he added is “structural reform.”
Petrides said the government, has had from the outset, an ambitious structural reform agenda and referred to those changes already in place, including public financial management reform, tax administration reform, pension reform and welfare reform.
“Other reforms are underway but not complete, such as a comprehensive local government reform, a bold civil service reform, a privatisation programme, education reform, plans to improve active labour market policies, an e-government,” he said.
He said progress had been made in the reform of the public procurement system, which “has been a massive source of corruption in the past.”
More reforms, such as judicial reform, institutional reform, tax reform and comprehensive reform of the tourist industry are “in the pipeline”, he added.
At the same time Petrides said that Cyprus was an economy in transition and still had a long way to go to become “a modern and competitive economy.”
“We are midway in transforming Cyprus. We are aware that the full benefits of structural reforms will be reaped in the long-run, and as far as Cyprus is concerned, well after the term of this government.”
But, added: “They are also important in the short run for one single reason; They act as a catalyst for the credibility of the economy and investor confidence.”
He reiterated the government`s determination to continue and said that what was needed was an equally determined Parliament which would transpose the proposals into legislation. (CNA)