Gold Magazine May - June 2013, Issue 26 | Página 36

PROFILE

Sometimes people
in order to react
Shiapanis does not agree with those who say that, if more of the
country’s tourism product is geared towards Russian visitors, there
is a risk of alienating those from what is still the main market for
Cyprus – the UK.
“I have had discussions with hotel owners about this and
whether the influx of Russians will cause the British to go elsewhere,” he says. “Our conclusion is that British and Russian
holidaymakers will find a common language. The British see the
Russians as something different but I don’t think that this is going
to drive them away. And when there are a million Russians here,
there should be over three million tourists in total, so we need to
improve what we offer all our visitors. Many hotels in Cyprus are
of a very high standard but there are still lots that are not good
enough.”
As someone with many Russian and Ukrainian friends, clients
and associates, Markos Shiapanis is in an excellent position to have
an insider’s view of how the banking crisis in Cyprus has already
affected and will affect foreign residents and business people here
in the future. He admits that many of them are worried:
“Even those who haven’t lost money are worried because they
never expected such a situation to arise in Cyprus,” he says. “I am
pleased to say that, so far, there has been no change on the part of
the people I work with. None of the Russians and Ukrainians who
have businesses and residences here has indicated an intention to
leave Cyprus. Some even see this as an opportunity but they are
starting to question things and to wonder if their associates here
are capable of continuing in the same way as before and of taking good care of their money. I can’t estimate the damage that
has been done so far but there is no doubt that damage has been
done. It’s good that deposits under €100,000 have been protected
because the majority of Russians – maybe 95% – have less than
€100,000 in their accounts which tends to be for living expenses,
credit card payments, etc. So perhaps 5% are those with larger
amounts and, of course, whether they have lost a sizeable amount
of their funds depends on which bank they were using.”
Shiapanis believes that one effect of the shake-up in the banking
sector will be seen in the way Russians, in particular, will henceforth do business in Cyprus. Until now, they had a tendency to
pay everything in advance and in full. “Some of the people who
have lost money put the full amount of their property purchase in
a deposit account,” he explains. “They paid 40% to the developer
and took out a 5-year loan using the remaining 60% as cash collateral. They were paying their instalments and they still have to pay
off the loan but they have lost their money due to the haircut. This
is ridiculous!”
Despite its apparent bad timing, the MIBS Group held a successful Business Forum in Kiev at the end of March, when most
details of the bailout deal were already known. Had Shiapanis considered canceling the event?

36 Gold the international investment, finance & professional services magazine of cyprus

“No,” he says firmly. “I didn’t even think about it. A couple of
people suggested that due to the crisis in Cyprus we should perhaps not go ahead but we stayed and, in fact, we had more people
there than we expected, despite the extremely bad weather.”
So what should Cyprus be doing in order to restore Cyprus’
reputation?
“Restart and rebrand,” he says without hesitation. “And this is
not an easy task. It takes time. Whether it takes one year or five
years depends on us understanding how much damage has been
done to the banking system and on the trust that we have built up
over the years. And it is also time the Cypriots learned to abandon
their traditional ‘slowly slowly’ approach to business. They all have
to change the speed of their operations, from the biggest company
to the smallest. They cannot work as Cypriots when they are being
paid to work as Europeans. There’s a difference!”
So the bailout and its consequences are going to bring about a
change of mentality? Shiapanis believes they will.
“Our mentality is a result of our circumstances. The Cypriots
have never been in a hurry because they have always felt confident
that they will be paid but it won’t last. Very few businesses, if any,
closed on March 25 but some did on April 1 and by June there
will be a lot more closures. And when people see businesses going
bankrupt, when they see how many shops are closing, then they
will soon realise that there is a crisis and that they need to cut their
expenditure. Sometimes people need a shock in order to react.”
Regarding foreign investors, Shiapanis says that it is now imperative to make even greater efforts to ensure that they stay on the
island. “We need to make them feel welcome, we need to reduce
bureaucracy…” He gives an example of what he means: “I have
been waiting for a simple document for a registered Cyprus company which I need to take to Moscow for one month now! In another country I would have had it within a day. We have to change
our speed of living and working. The whole system needs changing. We have to restart and rebrand the country. We need to become a place where things are done quickly and pr