Brave Cypriots tackle financial crisis head on; but what does the future hold for them?

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I have been working in the world of global professional education for the past seven years, developing new markets to enhance the level of professional skills in Asia and Europe. The results have been impressive and it is encouraging to see the growing appetite for these skills as the need for transparency and accountability has become so crucial in today’s global economy. Our student population has been growing worldwide at a healthy pace, but of all the markets I have worked in from Pakistan to Luxembourg, the place which has most impressed me has been Cyprus. The well-educated professional class is now going to play a vital part in helping Cyprus recover from its current economic crisis.

Often holiday destinations don’t turn out to be the easiest places to do business; however this is not the case in Cyprus. This beautiful and extremely hospitable Mediterranean island has seen enormous growth in its financial services sector over the past decade and its ability to support this has been due to investment in professional skills and the creation of a formidable professional workforce. Added to this, Cyprus had an attractive tax regime for foreign investors with 10% corporation tax, which made the island appealing to many international organisations. In particular there has been enormous Russian investment over the past few years and Limassol now boasts a significant Russian community, which sits alongside a stable tourist industry. This has produced an unexpected cultural alliance in the current financial climate: both nations value close knit communities, share the Orthodox religion and are driven financially. The attractions of Cyprus as a financial centre were significant for the Russians. Business was booming until the current global economic crisis started to affect Cyprus, culminating in the move to ask the EU for a bailout in June 2012 and resulting in the financial chaos seen in recent weeks.

Cyprus is now in financial meltdown, facing its worst economic crisis in recent history, since the events of 1974. As the latest in the series of countries that have applied for a bailout from the EuroGroup, the Cypriot government have made a bold and brave move in trying to address the severe financial situation they find themselves in. A serious banking crisis caused by exposure to Greek government bonds and poorly managed public finances, have reportedly created a black hole of up to €16bn. To help solve the crisis, Brussels is prepared to release a loan of €10bn, but only if Cyprus agrees to raise €5.8bn themselves. This radical  approach has put the nerves of many Europeans on edge and the Cypriots are in shock. Unemployment is now at an all-time high of 11%, with over 30% unemployment among the 18-25 age group. How the Cypriots respond will be an enormous cultural test and so far I have been impressed by their ability to tackle the problem professionally, intelligently and with dignity.

The recently elected 66 year-old lawyer, President Nicos Anastasiades, is clearly determined to face these issues head on to ensure confidence is restored, but he has a mighty challenge ahead. He and his government have been embroiled in talks with the EU and to a similar degree with the Russians, trying to find a financial rescue package for the island nation.

The political and economic situation in Cyprus is clearly in the European spotlight as its credibility as a financial centre is under the microscope. Culturally too, the Cypriots are in the media gaze as they deal with the shocking news of how bad the crisis is and what the implications might be for them. Understandably they are very angry. The future direction of the economy hinges on the success of the government’s austerity measures, measures for economic growth, the effective capitalisation of newly-found gas reserves and further developments in Greece and the Eurozone.

By nature Cypriots are conservative and hard-working so austerity measures will come as a real blow to the overwhelming majority of the population, who have played by the rules and may now incur additional taxes. As a nation where family loyalty and protection is paramount, they will see this as a collective challenge.

In spite of these difficulties, the Cypriots are well placed to fight back with their well-educated and professionally trained workforce and they have come back from crises in the past. None more famously than in 1974 when the conflict with the Turkish Cypriots reached a climax and resulted in a divided territory. This split resulted in two communities: the Green Line separating the Greek Cypriot-controlled south from the Turkish Cypriot-controlled north. This dispute led to many Cypriots losing their properties overnight and inevitably the effects of this are still felt.

The direct result of this affected their approach to education. The Greek Cypriots took the view that whatever life throws at you and in particular the loss of material wealth, the one thing you cannot take away is education. This approach has now passed through generations as Cypriot families have worked hard to give their children the best education. More often than not this has meant sending them to excellent universities worldwide and in particular in the UK and US.

In return their children have not let them down. They haven’t taken this privilege for granted, they have worked hard and performed to the highest level in a second language, rising to the challenge and seeking out opportunities. Cypriot students haven’t been satisfied with just passing exams, they have wanted to be the best, often pursing professional qualifications and MBAs after their first degrees. In the Institute of Chartered Accountants in England & Wales (ICAEW) Professional Stage exams in 2012, 4 out of the 5 overall winners were Cypriots from over 1,300 students and nearly 8,000 exams taken from around the world.

The professional reputation of Cyprus is all the more important in this economic climate, where high ethical and professional standards are essential for steering a path to recovery and securing its long term future as a successful financial centre. It is also important to remember these are not challenges faced by Cyprus alone, as similar questions are being asked in the UK and the rest of Europe. Those in prominent roles such as the regulators, law enforcement agencies and other government bodies are being forced to instigate and influence positive change. A cultural shift is taking place in professional behaviour throughout Europe.

In this climate of austerity where job security is fragile, students are doing everything not only to secure their own futures but also that of their country. By maximising their professional potential and performing at the top of their game, they are doing everything possible to ensure that Cyprus will recover from this economic crisis and that it will be in very good hands in the future to come. Collectively the Cypriots will fight back, overcome these challenges and strive to re-build a brighter future. Without doubt they will also remember who was there in their hour of need and this will inevitably shape the cultural alliances of the future.

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