Shipping accounts for around 7% of Cyprus’ GDP and the island’s fleet of over 1,000 vessels is Europe’s third and the world’s tenth largest.
“We have good international ranking, good infrastructure and taxation and fully-fledged operations so we should be seeing growth. We need a push and the push should be coming from the government,” Thomas Kazakos, Director General of the Cyprus Shipping Chamber told the Cyprus Weekly in an interview.
“The prospects for attracting a lot more companies and physical activities to Cyprus are there, it just needs a bit more political priority given to promotion and attraction,” he added.
Ship management was worth €1.2 billion in 2014. Kazakos said that if revenues from ship owning and shipping related industries were added to the equation the figures would be much higher, possibly accounting for more than 7% of GDP, which would make it surpass tourism as the island’s biggest earner.
He believes prospects for 2015 are for slightly improved results despite volatile oil prices, economic uncertainty in the eurozone over Greece’s bailout package and financial meltdown in Russia.
“Shipping on a global basis has come through the worst, and in Cyprus the industry has stood its ground,” he said, pointing out that even during the 2013 crisis no major Cypriot shipping companies went bust.
Kazakos described the Turkish ban as “the Achilles heel of the Cyprus flag”.
Turkey banned Cypriot ships from its ports in 1987 over the EU’s refusal to recognise the administration in the north, but the on going dispute is hobbling Turkey’s bid to join the EU, which buys a significant proportion of its exports.
“Our stance is very clear, this is an illegal unilaterally imposed measure that affects not only Cyprus shipping, but also EU shipping because 80% of the Cyprus flag belongs to non-EU interests – it’s an issue of basic EU principles,” Kazakos said.
A lifting of the ban would be positive for Turkish traders because Cyprus, being so close to the coast of Turkey, would be the best choice to carry their cargo to and from Europe, according to Kazakos.
He also said a removal of the ban could give a boost to Turkey’s bid to join the EU and be good for EU consumers because it would give Cypriot ships access to one of the region’s big trade niches.
“My feedback is that this is an issue that the government has firmly placed as a top priority,” Kazakos said.
It is highly likely that any resolution of the ports issue would be tied up with the overall political situation, but Kazakos said that for the shipping industry, the ban is a commercial issue and should be treated separately and in parallel with the Cyprus problem.
Talks to resolve the Cyprus problem have been suspended since October last year.
The government needs to reform its structure to support the segments of the economy with the most prospects for growth, according to Kazakos.
This would include a specialised administration to deal with the shipping industry as opposed to the current structure, under which the Department of Merchant Shipping is part of the Ministry of Communications and Works.
“We cannot continue to work with a government structure of the 1960s. If the state really wants to push shipping into the next era now is the time,” Kazakos said.
Source: InCyprus
