It is of some interest to still read editorials that appear in Cypriot newspapers that support a right wing approach to running the Economy.
I am of Greek Cypriot descent and live and work in New Zealand, a richly resourced South Pacific country. Known as the pioneering marketer of the “Kiwi-fruit ”, New Zealand is inhabited by 3.4 million people and over 20 million sheep.
As a survivor of Rogernomics the New Zealand development of Thatcherism, (which is to Capitalism what Lenism or Maoism was to Communism), I would like to add some caution to such blind experimentation.
I can understand Cypriots wanting to reform their inefficient Public Service where as an English expatriate pithy commentator said to me “one's retirement begins on the day of one's appointment”. The same situation existed in New Zealand and was brilliantly satirized by New Zealand playwright Roger Hall in his play “Glide Time” which when adapted to the English Stage was an instant success. The reason for this success was that the British to their delight could see their Public Service's stereotypes in it.
Ironically the radical restructuring of the New Zealand economy was carried out by a left wing Labour Party government lead by the caustic and charismatic David Lange, whose independent foreign policy attracted the ire and retribution of the US and France. This was the government that Ann Hercus the current United Nations envoy to Cyprus served as Police Minister.
The high interest rates that were used by the reformists to curtail spending in order to bring the country's budget deficits under control and the subsequent collapse of an over confident stock market, that produced the yuppies with their live for today life style, send a lot of farmers and industries into bankruptcy.
Millionaires ended up as paupers, many facing criminal charges for fraud, as they tried desperately to cling to their exorbitant life styles.
Shoe and shirt making factories which could not compete against cheap Asian imports closed down.
New Zealand's unemployment skyrocketed as interest rates hit 20% and inflation went into double figures.
Very quickly, the country responded to the promise that a more efficient economy would produce more jobs. The Labour Government was re-elected only to be thrown out three years later. David Lange resigned after he recognized the devastating impact of his government's reforms and called for a “ cup of tea ” in order re appraise the direction of his Government. Because of that he fell out with Roger Douglas his Finance Minister.
Douglas had been given a free hand to implement his radical ideas which exposed the New Zealand economy to the rigors of an open market.
All subsities to farmers were eliminated overnight.
This was possible only becauseRobert Muldoon, the Leader of the right of center “National Party” continued the Socialist panacea of the 1950's and 60's (which had given New Zealand the highest standard of living in the world) despite the fact that the country could not afford it, by backing several “Think Big” energy projects through a series of international loans. However the high interest rates of those and previous loans, (taken to insulate the economy from the oil shock of the 70's) drove the New Zealand economy to the edge of bankruptcy.
Although the reforms produced an efficient public service and manufacturing sector there was also a devastating downside. The new National Government continued the reforms attacking the Union movement which with the reduction of membership due to unemployment became very weak. Their power was irreversibly broken when compulsory unionism was abolished. Furthermore this lead to Employers driving down salaries and exploiting vulnerable workers by taking away many cherished hard fought rights like the forty hour week.
New Zealand's once free Education system was also opened to the rigors of competition. All schools and Universities begun to compete for “clients” and have now become factories producing worker units for industry.
The study of the Arts and European languages were discouraged and Asian languages gained prominence as New Zealand was driven to see itself as part of Asia and was promised once more that if it changed the “ trickle down ” effect of lower personal taxes would produce a stronger economy and more jobs.
This of course did not happen. Unprotected the New Zealand economy was raided left, right and center by international corporations which bought it's forests, real estate, its national telephone company and airline, its power-plants even its golf-courses sometimes at bargain prices.
Crime soared as unemployment began to produce like in Britain a generation of people who had not worked. The Maori, the indigenous people of New Zealand suffered very much featuring disproportionately in the unemployment and prison statistics. A Civil War was averted by the Lange Government introducing the laudable, “ Waitangi Tribunal ” which set out to address the injustices done to the Maori by the British when they colonized New Zealand. It compensated them for their lost lands and gave them an economic base for form of economic self determination.
Bank robberies, rapes and murder became everyday news as people squeezed by interest rates and the realities of unemployment cracked and losing any stake that they had in their society and the New Zealand ethos of giving people a “fair go” and proting the weak, became a self serving consumerist American clone.
The change was so rapid when the bubble burst, that the use of Valium increased dramatically and mental asylums filled with patients, people who cracked under the stress. Those patients were turned out on the streets in the name of efficiency, very much the same way that they were turned onto the streets of US and Britain by Reagan and Thatcher.
As said there is no doubt that the changes did produce a more efficient and innovative public and private sector although some would argue to the contrary. Interest rates floated around 9% and now because of the stagnant economy caused by the Asian crisis are down to 6% , inflation is on 2% and unemployment on 6% but because of what happened in Asia is also rising.
Most New Zealanders though now acknowledge that the price for this was too high.
The lesson in this for Cyprus is very important. By entering the EEC and the protective barriers that have protected the economy for the last thirty years Cypriots and their standard of living will come under attack. The protected monopolies of consumer products, doctors, the building and insurance industries, banks and the state airline will go. Either those sectors become efficient and competitive by downgrading their operations and cutting staff or they will been taken over or forced to close down.
The public sector will also have to become more efficient and highly productive. Public servants will be made to realize that they are the employees of the Cypriot taxpayer. Teachers will have to do their jobs and restructure their curriculum. They will be forced to teach and give up their perks the most despicable been “the frontistirio”.
Unions which are doing what they are paid to do, that is protect the interests of their members, (and although in Cyprus they are competitive) they will also have to become move proactive and protect their members by been move realistic with their demands or also be downgraded.
Cyprus Airways will probably be taken over by a European airline and as a subsidiary will probably keep it's name but find that no employee, like a lot of other public servants, will anymore will be able to also have another job, as in the drive for efficiency and profit working conditions will be reduced.
The police will continue to be depoliticised as the EEC will demand that they meet their standards.
High interest rates will see a lot of foreclosures on loans, unpaid cars and houses coming onto the market and sold to the highest bidder. For a while people will tighten their belts and learn to live within their means, but it is very important that the Cypriot Government protect its citizens and its essential services e.g. water, telephones lines, electricity e.t.c.
They should recognize their poets writers, artists, thinkers and foster their talents through fellowships and direct grants. Finance research scientists, environmentalists and innovative farmers and see them as a tremendous important asset and promote them both here and overseas.
Bring the Israelite water drip feed technology to conserve water and learn by studying the techniques of ancient South America to collect rain water and store them in underground cisterns. Imagine how much water is lost off the roof of houses.
Introduce a safe and efficient public transport system to compete against the private sector by maybe introducing a railway line that can link Nicosia and Pathos to take some trucks and cars off the road but the trains should be run by private companies.
A referendum could give Cypriots an efficient, quality, but free, Health System but they must be prepared to pay for it. In New Zealand an experiment to make hospitals turn a profit failed. Learn from that. Hospitals should be rewarded for preventive work they undertake in the community and like all public sectors be made accountable.
The Inland Revenue Department must step up their efforts to become more efficient in stopping tax avoidance.
The manufacturing sector must be protected as no-one can compete against China for cheap labour but just enough to encourage the production of quality goods.
Stop the visual pollution of the countryside by controlling house and industrial development and restrict it within village and city perimeters. Tourists do not want to see new English like brick houses on the top of a barren picturesque mountain ridge. They do though want to breath pollution free air and enjoy the silence that they do not have in many of their cities.
So, it is important that the press publicize and the Government protect the tourist consumer from been exploited. Introduce some tough laws if the Tourist Industry does not voluntarily control itself. Maybe put a ceiling on the number of tourists that the environment can cope with as Norfolk Island in the Pacific has done. Then force the hotels, restaurants to compete for those tourists by offering a quality service. Competition will also drive prices down.
Introduce tough warrant of fitness laws for cars and trucks that will put inefficient cars off the road. Encourage the use of bicycles for urban transport by introducing cycle-lanes. Make sure that current traffic laws are fairly enforced. Educate Cypriots the same way they were educated to clean up the roads and country-side to the amazement of mainland Greeks, to correctly park their cars and obey the rules of the road. Start this by sending Traffic Police to talk to students from the youngest levels.
Re-skill the workforce by introducing a Polytechnic tertiary level to supplement the local University and offer subsidies for attendance to re-skilling courses.
Ensure, like the French who have protected their film industry from Hollywood, that Cyprus protects it's culture from the consumerist culture that is colonizing the world. Cypriots should cling onto their state Radio and Television the telephone lines, roads, water and other essential services.
Make “ rusfeti ” illegal with mandatory imprisonment to deter this form of corruption.
More importantly, learn from the mistakes of others such as New Zealand and demand safeguards when entering the EEC. Re-focus on the things that make Cypriots different then other Europeans, cling to and develop those differences, be proud of who they are and ensure that everyone including the Turkish Cypriots have a stake in their Society.
Copyright © C.E.G.Moisa All rights reserved 2000