Outgoing Cyprus Chamber of Commerce & Industry (Keve) president Christodoulos Angastiniotis on Monday used his speech at the chamber’s annual general meeting to touch on several issues, including the Cypriot economy, regional developments, as well as the country’s international reputation.

“In order for our economy to maintain its growth rate, we must enhance the international image of our country, which has recently suffered setbacks once again. Recent events, both presently and in the past, shedding light on the breaches of Western sanctions against Russia, particularly concern us,” Angastiniotis said.

“I inform you that many investors already situated in Cyprus are reaching out to the chamber, asking what our state intends to do to safeguard our country’s reputation against the negative publicity generated by these reports,” he added.

He also said that “several foreign entities that recently expressed interest in investing in Cyprus are now expressing reservations due to what’s being published and are hesitant to proceed with their investment plans”.

He said that all of these issues are a matter of concern, saying that the chamber foresees serious risks that could undermine Cyprus’s investment environment.

“Both Keve and other governmental and private bodies in Cyprus, including Invest Cyprus, have worked diligently for many years to promote Cyprus internationally. Keve will not tolerate this defamation any longer,” Angastiniotis said.

“Therefore, we assert unequivocally to everyone that there should be no tolerance for such incidents. Where violations or breaches of sanctions are detected, there should be an immediate response from the state, as well as penalties,” he added.

For these reasons, the Keve president said that the chamber agrees with the government regarding the recommendation to establish a Unified Supervisory Mechanism for the issue of sanctions.

At the same time, apart from prosecuting those who engage in illegal activities, the chamber asked for the launch of a targeted and coordinated awareness campaign abroad aimed at overturning the negative comments and criticisms about Cyprus and its economy.

“We call upon the government, within the framework of economic diplomacy, to engage the embassies, trade centres, and our diaspora abroad,” he said.

“In collaboration with Keve and Invest Cyprus, we must swiftly organise a substantial communication campaign to protect Cyprus’ economic image in foreign markets,” he added.

Angastiniotis said that “it was a massive disappointment” that during a visit to the headquarters of the American Chambers in Washington, “my counterparts were expecting explanations for what was published just 24 hours prior”. This was a reference to the recently published Cyprus Confidential investigation.

“Yes, Mr. President, I’ll say it again. You were right in saying that we must finally put an end to this issue,” Angastiniotis said, addressing President Nikos Christodoulides, who attended the assembly.

“Keve, on its part, declares today that in every new business mission abroad, its priority will be to promote our economy and the image of our country as a serious investment destination,” he stated.

“Our steadfast goal to transform Cyprus into a regional centre for foreign investments remains unchanged,” he added.

Regarding the end of his tenure as Keve president, Angastiniotis said that today was “a moment of mixed emotions, primarily one of gratitude and nostalgia”.

“Keve has been my extended family, my second home. Over the six years at the helm of this esteemed organisation, I’ve lived through exceptional moments and gained invaluable experiences,” he added, noting that this would be the final time he addressed the chamber as president.

Reflecting on the recent challenges, particularly the pandemic, the war in Ukraine, and the current crisis in Israel, Angastiniotis emphasised the collective efforts to shield the economy and support member businesses.

“We fought significant battles, navigating through trying times, striving to safeguard our economy and bolster our member enterprises,” he stated.

Expressing pride in the accomplishments achieved during his tenure, Angastiniotis highlighted the resilience of the business community amid adversity.

“In tumultuous times, where much hung in the balance, we showcased the many strengths of the business community,” he said.

“We’ve faced problems and managed substantial challenges successfully,” he affirmed.

He further conveyed his certainty about Keve’s and the business community’s future resilience, stating that “whatever hurdles lie ahead, I believe Keve, in collaboration with all stakeholders in economic and entrepreneurial affairs, will adeptly confront them”.

Moreover, addressing the attendees, Angastiniotis assured them of the robustness of Keve, pointing out their strong connections with governmental bodies, international institutions, and foreign decision-making centres.

“These affiliations form the arsenal upon which Keve will build its future,” he said.

Acknowledging the presence of esteemed dignitaries, Angastiniotis expressed gratitude for their active involvement, recognising their genuine interest in the affairs of the business world and the country’s entrepreneurship.

“The current global scenario, particularly the events in Ukraine and Israel, brings immense challenges, not just from a humanitarian standpoint but also impacting our national and economic interests,” Angastiniotis remarked, highlighting the uncertainties and liquidity concerns that have unfortunately become synonymous with normalcy in the present times.

“In this peculiar environment, we must continue our efforts to resolve the Cypriot issue, fortify our economy against both clear and less apparent risks, and persist in the battle to modernise our economic structures and bolster our economic model,” he added.

He also noted that the “current conditions and intricate challenges demand that we stay one step ahead of any developments”.

He also touched on the crisis in Israel and its geopolitical implications for Cyprus. He said that this highlights the importance of Cyprus’ strategic geographical position and its role in regional security.

Moreover, Angastiniotis expressed concern about Cyprus’s economy. He highlighted positive aspects, including a surplus in the budget, declining public debt, and increased government revenue. However, he worried about the state’s expanding expenses without assured future income.

Rising social needs due to inflation and increased costs have led the government to support the population, exemplified by recent subsidies for electricity, fuel, and housing loans totalling €196 million.

While acknowledging the necessity of these measures, he emphasised the need for policies addressing inflation and cost-of-living issues to prevent draining public funds.

Angastiniotis stressed the need for the government to reconsider overall expenses, particularly non-productive spending.

He advocated for wage restraint and increased productivity in the public sector, crucial areas historically neglected by governments, despite consuming over 55 per cent of state revenue.

What is more, he criticised recent government decisions, such as increased defence spending, supplementary budgets, and additional personnel recruitment, highlighting the government’s ease in inflating public expenditures.

Keve, he said, disagreed with these measures, urging the government to be more frugal in expanding state expenses.

On a positive note, he noted that Cyprus has maintained unemployment at around 6 per cent, hoping for further reduction through employment market measures, aiming for a 3 per cent unemployment rate, which typically characterises the Cypriot economy.

“The private economy sector performed very well in 2023, especially in its two traditional areas, tourism and real estate. Both sectors saw unexpectedly positive growth, significantly benefiting the economy and bolstering other sectors like trade, industry, agriculture, and services,” he said.

“Undoubtedly, a significant positive aspect for our economy was the recent upgrade of Cyprus by Moody’s, which, after 11 years, restored our economy to investment-grade status. This development will not only aid in attracting foreign investments but also contribute to our efforts to enhance our economy’s image internationally,” he added.

However, Angastiniotis said that despite these positive developments, the chamber is concerned about the forecasts released by both the government and the European Union regarding the decline in the growth rate to 2-2.5 per cent of GDP in 2023.

“While this rate might be satisfactory and notable among EU countries under the current circumstances, compared to the 5.2 per cent achieved in 2022, the contraction is evident,” he stated.

Saying that Keve will continue to emphasise fiscal discipline, Angastiniotis outlined a number of suggestions that aim to assist in this effort.

These recommendations encompass a broad spectrum of strategies for improving various aspects of Cyprus’ public service.

They involve implementing reforms across different sectors of the public service, aiming to enhance its efficiency.

This includes measures to control the public sector wage bill and reduce non-productive expenses.

Additionally, these proposals advocate for streamlining bureaucratic processes within the state and its services, emphasising the need for digitisation to minimise new staff requirements and enhance service delivery to businesses and citizens.