Resilient economy in Eurozone

Investment, tourism and merchant shipping are buoying growth for the island-nation state

Cyprus has a high-income economy, and despite somersaults after the recent recessionary trends is counted among the most promising growth modules in the region. It is also the emerging destination for businesses and investment at the crossroads of Asia, Europe and Africa. With a per capita income of around $23,400 and a GDP of $19 billion, it is a success story in itself. The present growth rate is projected at 2.8 per cent, and the International Monetary Fund has included Cyprus in the list of advanced economies.
The country's industrial format and innovations in the fields of science and technology act as a magnet for big-ticket projects. Its market economy is dominated by the services sector, which accounts for more than four-fifths of GDP. Tourism, financial services, shipping, and real estate are some of the most important sectors, and in the last two decades have done a roaring business.
Cyprus-based entrepreneurs' and industrialists are quite popular in the European Union and beyond, and products made in the island-state have a competitive mark of their own. Cyprus has a broad market for all kinds of produce from food and beverages to cement, iron ore, light and heavy-duty industry products. Its chemical, electrical and non-organic sector is rated as some of the most sophisticated in the world.
The island-nation state is set to embark on a new era of sustainable economic growth, as the country has won the confidence of international donors and stood fast in times of extreme financial crunch. It has come a long way since it bagged a lifeline of $13 billion bailout in 2013, and successfully merged its banks and other financial entities. Since then there has been no looking back for Nicosia, and last year it successfully completed the ESM-IMF Economic Adjustment Programme, a year ahead of schedule. 
The country's financial discipline, far-sighted strategy and resilience have made it hub for investment and businesses. While unemployment is around 10 per cent, and the country's external debt is accumulating, the positive side of the story is that it is overcoming stagnation. Institutional reforms, on which Cyprus has embarked, are sine qua non for success, and to keep the international community engaged in its progress.
Real estate and tourism are two of the tangible sectors of its economy, which has attracted worldwide attention. Cyprus quest to grant citizenship to promising investors has led to massive inflow of capital, and people from all walks of life are eager to make Cyprus their second home, and grab the benefits of living in the European Union. Also popularly known as 'cash for passports' scheme, it has led to boost in construction and real estate. Moreover, the competitive education sector has acted as a catalyst in seeking students for higher education, by granting them degrees and diplomas that are recognised worldwide.
The island is considered as the perfect holiday destination for a diversity of tastes and interests. The southern-most island in the Eastern Mediterranean offers year-round sunshine, and is famous for its state-of-the-art tourism facilities. It annually attracts more than three million visitors from Asia and neighbouring European states, as it proudly boasts its blue water sandy beaches, pine-forested mountains, picturesque villages and a history dating back 10,000 years. Tourists from Japan and South America take a special interest in its archeological sites, and are fond of its cultural diversity. Tourism, of late, has become one of the major foreign exchange sources for the economy. 
Cyprus is gradually emerging as the hub for investments, especially in the Eurozone, owing to its liberal policies and investor-friendly legislation. Foreign investment - and ownership stakes - is permissible up to 100 per cent in many sectors, as the government acts as custodian in mediatory affairs. So is its tax regime, considered as one of the lowest in the EU. Cyprus has treaties on double taxation with dozens of countries, and, as a member of the Eurozone, has no exchange restrictions, and investors are free to move their profit proceeds out of the country at ease. Despite differences with Turkey, both the neighbours have a harmonious trade relationship with Ankara supplying 55 per cent of imports and absorbing 48 per cent of exports.
The success story of Cyprus will be incomplete without mentioning the merchant shipping. It is one of the largest flagship careers, and berths vessels from all over the world. Maritime business in the region is routed through Cyprus waters and ports, and its time zone and geographical proximity are high in demand. 
The European Commission, which also acts as a watchdog for Cyprus after pumping in billions of dollars, has posted a very positive picture of its economy. It says growth has exceeded expectations in recent quarters, and is expected to 'remain robust' in the next couple of years. It has forecasted a growth rate of 3.5 per cent with unemployment and inflation taking a nosedive. With macroeconomic stability taking roots, Cyprus has a role to play as Europe's next growth engine.
- mehkri@khaleejtimes.com 

• MENA