How to ease the impact of the global crisis.Byline: Alexia alexia /alex·ia/ (ah-lek´se-ah) a form of receptive aphasia in which ability to understand written language is lost as a result of a cerebral lesion. Saoulli
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CYPRUS Cyprus (sī`prəs), Gr. Kypros, Turk. Kıbrıs, officially Republic of Cyprus, republic (2005 est. pop. 780,000), 3,578 sq mi (9,267 sq km), an island in the E Mediterranean Sea, c.40 mi (60 km) S of Turkey and c. has so far been mostly unaffected by the global financial crisis that has rocked industrial economies and emerging markets around the world.
Although the island's growth rate could drop down two percentage points to two or 2.5 per cent next year, it still fared much better than dozens of other countries in the EU-27, said Michalis Sarris.
The former Finance Minister and World Bank director was speaking at a public discussion on the 'International Financial Crisis and its Consequences to the Cyprus Economy' on Monday Monday: see week. night. The discussion was organised by the Association of Social Reform and the University of Cyprus' School of Economics and Management.
Sarris' speech focused on how to ensure Cyprus kept the impact as limited as possible in a prudent way.
The fact that Cyprus had full employment and a significant amount of economic migration was a positive start, he said.
Sarris said employers would slow down on employing people from abroad before laying off local labour.
"What is also a saving feature of our economy is that so much of it involves services that we sell abroad," he said.
Clients from Russia, the Ukraine, Romania, Bulgaria and Serbia often used Cyprus' legal and financial expertise.
"Our clients are foreign companies based in all those countries and services are less affected than industrial goods industrial goods npl → bienes mpl de producción when there is a recession," he said.
Although those countries were expected to be hit by the financial crisis, it was expected to be less severe. However, if something were to change and they were to be heavily affected, then this would also have a detrimental det·ri·men·tal
Causing damage or harm; injurious.
detri·men effect on Cyprus.
"If the countries of the ex-Soviet Union and the Balkans suffer a significant recession that means they will buy fewer services from places like Cyprus and we will feel the impact."
Nevertheless businesses would still need to have their accounts published and legal services legal services n. the work performed by a lawyer for a client. so Sarris was optimistic op·ti·mist
1. One who usually expects a favorable outcome.
2. A believer in philosophical optimism.
op that any damage would be limited.
Tourism, however, would not be spared.
"It will clearly be affected from the UK and Russia," he said.
Consumers would cut back on holidays to save money and the government needed to have a clear plan about what markets were most likely to be enticed to come to Cyprus despite the economic situation.
"It's easy to say we're going to spend more on promoting Cyprus, it's harder to see where more promotion will have a positive impact," he said.
"It's good to be sure that the money is used effectively and in ways that can be convincing that will lead to tangible results."
The government recently pledged e1/412 million to support tourism as part of its measures to support the economy.
Construction would also be affected, said Sarris.
"It would be a mistake to encourage more construction because all it will do is to build inventories," he said.
This would happen because as demand dropped, prices would be forced down at a faster rate which could result in the collapse of the housing market.
"Artificial stimulus stimulus /stim·u·lus/ (stim´u-lus) pl. stim´uli [L.] any agent, act, or influence which produces functional or trophic reaction in a receptor or an irritable tissue. shouldn't be given to construction so that people build more houses. It's tempting when there is a slowdown For articles with similar titles, see Slow Down (disambiguation).
A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in construction but you have to think of the problem of building houses that nobody buys," he said.
Horseman skilled at handling cattle in the U.S. West. From c. 1820, cowboys were employed in small numbers on Texas ranches, where they had learned the skills of the vaquero (Spanish: “cowboy”). property developers are already believed to be feeling the pinch pinch,
n a small amount of chewing tobacco (snuff) an individual takes to use the substance for its desired effect. A “pinch” is called a
quid in Britain. , with less established developers likely the first to be weeded out as they have less staying power with their finances and liquidity.
Despite this, Sarris said there was no need for panic or sudden reactions.
"I think there is an adjustment that needs to be made. Like everywhere else, there will have to be a slowdown. There will be a correction everywhere, in the stock market and housing market. We have to monitor the situation," he said.
Any additional spending should be well targeted and temporary so that it wouldn't affect public finances in the long-run, he said. People included in this social expenditure should be from lower income groups such as pensioners and widows.
"This is effective because it encourages people to spend and also helps people who need itC* If you need it you're more likely going to spend it," he said.
The former minister also pointed to Cypriots' tendency for overconsumption.
"There is too much borrowing from private individuals for travelling and other consumer durables Consumer durables
Consumer products that are expected to last three years or more, such as an automobile or a home appliance.
See durable goods. . That ought to be corrected. If done gradually over a number of years that is a good thing and won't cause a recession. People will gradually save more and spend less. Incomes will grow and you will be saving a bigger proportion than before but will still be spending. It will be enough to keep the growth rate at two per cent rather than four per cent," he said.
If banks needed support this could be done by encouraging more deposits with some sort of government guarantee, he said.
Large projects should be scrapped for the time being as they were difficult to start up and implement. Instead smaller amounts of money should be injected in·ject·ed
1. Of or relating to a substance introduced into the body.
2. Of or relating to a blood vessel that is visibly distended with blood.
1. introduced by injection.
2. congested. into communities throughout Cyprus which would allow the money to be more easily spread around.
"Money should be given to community leaders and small town mayors who are able to do small town projects. This is always a good way of encouraging spending and keeping economic activity going through small contractors and keeping employment and construction going, as well as doing projects that are good for the community," he said.
Copyright Cyprus Mail Cyprus Mail is a Cypriot English-language newspaper. It is published daily (except Mondays) and a number of articles are available online. Its current chief editor is Kosta Pavlowitch.
The managing director is Kyriakos Iacovides. 2008
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