Thomas Kazakos: What will strengthen Cyprus’ image as an attractive shipping centre
08:36 - 15 January 2024
Cypriot shipping aims to continue its dynamic course in 2024, states the Director General of the Cyprus Shipping Chamber Thomas Kazakos, pointing out, however, that a necessary condition for its further development is the ongoing, practical participation of the Shipping Chamber in government agencies’ maritime policy decision-making.
In an interview with InBusinessNews, in the context of "IN Business Forecasting 2024," Kazakos points out that the course of Cypriot shipping for 2024 promises interesting developments, but also challenges.
Emphasising that Cypriot shipping has remained important for the Cypriot economy for decades, the Director General of the Cyprus Shipping Chamber indicates that, for this reason, further political support of the shipping industry is necessary for the even more dynamic promotion of Cyprus' advantages as a competitive shipping centre.
In this context, he lists a series of issues that need immediate political support and a quick solution to immediately strengthen the image of Cyprus as an attractive shipping centre and attract/establish new shipping companies.
According to Thomas Kazakos, in order for Cypriot shipping to remain sustainable and competitive, for the benefit of its member-companies and the Cypriot economy, vigilance, flexibility and targeted support are required in resilient sectors, which present comparative advantages and can give impetus to the wider economic and social development of Cyprus.
How do you see the economic environment shaping up in 2024, in light of inflationary pressures, high interest rates and unpredictable ever-changing geopolitical developments?
For the very reasons and challenges that the question suggests, the economic environment in early 2024 does indeed look uncertain today.
However, taking into account the generally positive path that the Cypriot economy has followed in recent years, if one specifically looks at the fiscal surplus or the public debt at the same time, and if a number of specific targeted measures are taken and given that the global economy is not irreparably affected by destabilising factors like the unfortunately ongoing wars in the Ukraine and the Middle East, as a natural and “salaried” optimist, I look forward to the new year with a positive disposition to face these undoubtedly expected difficulties looming on the horizon.
The biggest and most difficult challenges
What do you consider to be the biggest and most difficult challenges that the Cypriot economy will have to face?
Although there has been a noticeable reduction compared to the previous year, inflation continues to erode the competitiveness of businesses and the purchasing power of consumers.
With all due respect for their significant economic contribution, the heavy dependence of the economy on specific (relatively vulnerable) sectors, such as tourism and the real estate market, must be addressed by the state by extending support to other equally productive and for many years, "traditional" sectors, as well as new/emerging sectors that will attract reliable and sustainable investors in Cyprus.
There is also an urgent need for the rapid implementation of reforms in all sectors that will support the further development of "business" in Cyprus, from matters of finding the required additional human resources, to judicial reforms, as well as the technological infrastructure of the state service, with the help of the Recovery and Resilience Fund of the European Union.
Finally, in order to achieve a durable and sustainable economy over time, there is a need for closer and more sincere cooperation between the public and private sectors and the involvement of the business community of our country, specialised in diverse know-how, in the planning and implementation of the necessary "Action Plans" for each productive sector of Cyprus, through our Professional Associations.
Would you say that, taking into account the latest upgrades, the Cyprus economy is now well on its way to growth?
The decisions and economic policies that have been adopted seem to have contributed to a more favorable environment for business and investment.
However, despite this positive trend, caution must remain high as economies are subject to various influences and challenges, especially from recent geopolitical developments.
Ensuring sustainability and stability at the international level remain critical parameters for the successful course of the Cypriot economy.
Promising course of shipping
What do you think will be the course of the sector in which you operate in 2024?
The course of Cypriot shipping for 2024 promises interesting developments, but also challenges. The sector is expected to benefit from the recovery of the global economy, with increased demand for shipping services.
The Cypriot fleet, with its large number of modern and high-tech ships, is expected to play an important role in the global maritime scene.
Trends towards digital technology, such as the use of automated systems and applications, are expected to further improve ship management and the safety of shipping activities.
At the same time, the need for sustainable solutions to shipping's environmental challenges and adaptation to upcoming environmental regulations are expected to accelerate the further adoption of green practices in the sector.
At the same time, dealing with geopolitical challenges and managing potential crises in the region may put pressure on Cypriot shipping, although professional management and the resilience of the sector are likely to prove decisive.
Cypriot shipping aims to continue its dynamic course in 2024. A necessary condition for its further development, however, is the continuous practical participation of the Chamber of Shipping, with the accumulated and diverse specialised know-how of its more than 200 shipping and shipping-related member companies, with the 80,000 "experts" employed at sea and on land, in the decision-making of maritime policy by government agencies to maintain its existing successes and implement new improvement measures.
In order to ensure a fairly promising future with stable, transparent and positive growth prospects for Cypriot shipping.
What are the biggest industry trends/changes you anticipate in 2024?
The shipping sector is already experiencing a period of pivotal change and is constantly evolving and adapting in order to achieve full decarbonisation and sustainably implement increasing environmental regulations.
In 2024, it is expected to continue its important efforts, as it will have to adapt its activities to new technologies and systems in the search for sustainable solutions to the challenges it faces.
In addition, developments in the fuel sector are expected to play a key role, with the transition to more sustainable alternative energy sources and the application of green technologies. The use of LNG (liquefied natural gas) and the development of battery technology for electric propulsion are expected to become widespread.
At the same time, digital technology and Internet of Things (IoT) applications will enhance ship connectivity and management, improving the efficiency of port facilities and supply chain management.
The most important problems
What are the most important problems that are plaguing your sector today and the resolution of which you consider to be a priority in view of the new year?
The following issues need immediate political support and quick resolution to immediately strengthen the image of Cyprus as an attractive shipping center and attract/establish new shipping companies:
It is important that the specialised system of taxation of shipping companies, the well-known ‘Cyprus Capacity Tax System,’ remains unaffected by the imminent implementation of the new OECD rules through the relevant European Directive.
Ship owning and ship management have unique characteristics and we must be careful not to jeopardise what we have built over 40 years.
Geopolitical developments, with the war in Ukraine continuing and the new front in the Middle East, bring uncertainty to the fore and possible effects on the price of oil and the price of freight.
The most important problem, however, is the attacks, by paramilitary forces in Yemen, on commercial ships passing through the Red Sea and the Gulf of Aden.
These incidents endanger international shipping and safety at sea and violate international law and relevant maritime regulations.
Finally, Cypriot shipowners do not have access to substantial financing in Cyprus in the form of financial lending, which is deemed necessary especially now that it is in the process of "green transformation," based on international and European regulatory and contractual obligations.
The existing lending structure from the Cypriot banks cannot cover the very large needs of providing operational liquidity to the ship-owning companies, it is expected that the Government, in close cooperation with the Shipping Industry, will seriously consider the creation of a Specialised Financial Organisation in the Shipping sector and more broadly of Transport.
If you could ask the Government to take specific measures or formulate policies to support/strengthen your sector, what would they be?
Cypriot shipping has remained important for the Cypriot economy for decades and for this reason further political support of the shipping industry is necessary for the even more dynamic promotion of Cyprus' advantages as a competitive shipping centre.
Therefore, we are optimistic that with the implementation of effective structural measures, the foreign and local investment of the shipping industry in the Cypriot economy can be maintained and strengthened even more if the following recommendations/requests of the Chamber of Shipping are implemented:
- Further development of the recently created One-Stop-Shipping-Centre at the Deputy Ministry of Shipping,
- Immediate creation of a "Limited Liability Shipping Company"
- Direct Digitisation / Automation of the services of the Deputy Ministry of Shipping to Shipping Companies
- Creation of a Specialised Financial Organisation for Shipping / Transport, supporting the "Green" Transformation of the Sector
We believe that the implementation of these actions will have a very positive impact on Cypriot shipping, but also on European shipping, which will provide much more political influence at a regional and global level in matters related to shipping with significant benefits in the labor market for all seafarers. sectors.
In order for Cypriot shipping to remain sustainable and competitive, for the benefit of its member-companies and the Cypriot economy, vigilance, flexibility and targeted support are required in resilient sectors, which present comparative advantages and can give impetus to the wider economic and social development of Cyprus.
The main objectives of the Chamber
What are the plans/strategy of the Cyprus Chamber of Shipping for 2024?
The main objectives of the Chamber, which, although modified according to the existing international and local geo-strategic and political-economic developments, remain essentially unchanged until today, are the promotion of the interests of Cypriot shipping, the upgrading of the prestige of the Cypriot flag, and at the same time the defense of the interests of its members, through its active and long-term cooperation with the Cypriot Government and the House of Representatives, and other professional organizations, for the continuous upgrading of the maritime infrastructure in Cyprus.
At the same time, it aims to further expand the involvement of the Chamber in international maritime organisations, and its continuous involvement in local and international maritime events.
2024 also marks 35 years since the establishment of the Chamber in 1989 and is an important milestone in its long history and multifaceted contribution to Cypriot shipping, the economy and society in general.
Therefore, it will hold various professional, social and philanthropic events, in which it is expected to host important presences of domestic and international shipping, thus promoting both the recognition received by Cypriot shipping at a local and international level, but also its significant contribution of the Cypriot shipping industry in the Cypriot economy and society, which stands united and loyal to Cyprus and the Cypriot flag, as it has done for decades now.
Shipping and the technology factor
What role does technology, such as artificial intelligence, play and what changes is it expected to bring about in your field?
Artificial intelligence has the potential to bring about significant changes to the shipping industry in terms of efficiency, automation of ship and port operations, safety and sustainability while saving time and cost.
However, the successful implementation of any technology requires careful planning, access to investment and adaptation to evolving technologies and regulations.
While AI offers numerous opportunities for the digital transformation of the shipping industry, it also comes with challenges, such as data privacy concerns, cyber security risks and the need for a good talent pool to develop and maintain AI systems.
In addition, regulatory and legal frameworks need to be developed to address the use of artificial intelligence in the maritime sector.