Gold Magazine March - April 2013, Issue 24 | Page 24

SHIPPING

THE CYPRUS FLAG IS THE
10TH LARGEST FLEET IN
THE WORLD AND THE
3RD LARGEST IN EUROPE
Thomas
Kazakos

tor, particularly in these extremely tight financial times, because no charterer who is
going to hire a ship wants it to be subject
to a trade restriction, irrespective of the
fact that it’s illegal, because it might one
day need to go to Turkey. That’s where
the impact of the Turkish ban is felt and
lifting it would be a win-win situation for
everyone. Apart from removing the 15%
effect it has on our registry, it would also
lift a barrier to Turkey’s accession process
and it would benefit EU consumers because we could transport Turkish goods to
Europe very competitively. Don’t forget
also that Cyprus is the only EU-approved
open registry which means that you don’t
have to be a Cypriot national to be able to
register a ship. The Cyprus registry is 8085% is owned by northern European beneficial interests so when we say that Turkey is imposing a ban on a Cyprus-flagged
ship, in effect the Turkish ban is against
the whole of the EU shipping industry.
Gold: What does the shipping industry
contribute to the Cyprus economy?
T.K.: According to the Central Bank’s
latest figures, the shipmanagement sector
– which is only one part of our industry –
showed a small but steady increase to 5%
of GDP in the first quarter of 2012. If we
add the contribution of the shipowning
and the overall shipping sector, at a conservative estimate I am sure it will show
7%-8% by the middle of 2012, which
was one of the worst financial years for
international shipping. So Cyprus has a
vibrant industry and for us to compete
with the biggest international players on
an equal footing shows that the calibre

and the strength of the resident shipping
companies are up there with the very best.
That said, shipping is a cyclical business
and it is inevitably affected by the global
economy. Between 2003 and 2008 we had
fantastically good years. Shipping tends to
have 3-4 good years followed by 1-2 years
of readjustment. Unfortunately, these
have already been extended to 5 years of
extremely bad and unpredictable freight
rates.
Gold: Is there light at the end of the
tunnel?
T.K.: I understand from our members
that we might finally be reaching the end
of this long, protracted d ownturn. And
even during these bad times when every
industry has suffered, we have not lost a
single company. Some have had to restructure their debts from loans taken out for
the building of new ships and some have
gone through a heavy rescheduling of their
day-to-day operations but they are all still
here. They haven’t dismissed people or
closed down or amalgamated. The vast
majority of the shipping companies here
are struggling through and this is reflected
in the fact that the industry’s contribution
to GDP is not going down at a time when
everyone else’s is. I take pride in saying
that this is an industry that doesn’t cost
anything but it makes a huge financial
contribution to the state.
Gold: What are the steps that will ensure a bright future for the Cyprus shipping industry?
T.K.: For the past year we have been
working to convince the politicians that

shipping is an international industry
which needs to move with international
developments – and they can sometimes
take place at the speed of light. When
you have a ministry (Communications &
Works) which is the second most complex
and diversified with nine government
departments, three quasi-government inspection units and two quasi-government
bodies, it is impossible for any Minister
to devote enough time and supervision to
monitoring shipping. Because the industry
is self-regulated and controlled through
the Chamber, we have in a way been victims of our own success because we have
been doing so much for the government
and the administration that the perception
has been that the industry doesn’t need
any help. Constitutionally, until there is a
settlement of the Cyprus issue, new ministers cannot be appointed but we have seen
that it is possible to appoint an UnderSecretary to the President for Merchant
Shipping. All three main candidates in the
recent elections gave a written commitment that they would create this position
which will have direct political supervision
of the Department of Merchant Shipping.
Gold: What else will the Under-Secretary for Shipping do?
T.K.: The appointee will also be responsible for drafting a national shipping policy.
It’s time to adopt a proactive approach
and a long-term vision as to where we go
from here. There’s a lot of business out
there. And we need to bring more in more
companies. We don’t have to go very far
to find them. We have the infrastructure,
the know-how and the quality of service.

24 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

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08/03/2013 09:21