One may recall the fact that, not long-ago, Cyprus was exposed by foreign agencies for specific cases of political corruption on the island through flaws in its Investor Citizenship Scheme. A controversial scheme which had been blooming during the last decade, generating significant revenues for the economy and arguably aiding the efforts towards escaping the negative effects of economic downturn caused by the banking crisis of 2013. Even if corruption has proven lately to constitute a major issue necessary to be addressed urgently by the government, another issue, that of excessive Bureaucracy amongst the various bodies of the state, still comprises another major holdback towards the country’s future social and economic evolution. Indeed, one may wonder why Bureaucracy did not work as a potential “safety control” filter towards the above-mentioned passport scheme, which subsequently benefited the few.
Cases and Examples of Bureaucracy in Cyprus:
It is always wiser to address the source of the problem first when trying to analyse or express an opinion on a specific matter. In the case of Cyprus, Bureaucracy has pretty much existed throughout the entirety of the island’s modern history since its independence in 1960, featuring in various cases and examples: The fact that it took more than 15 years and 3 different Administrations for the National Health System (GeSY) to be established, accompanied by the expenditure of millions of euros on research and analysis from domestic and foreign experts and advisors. The proposal of having State Universities, which begun in the 1960s and took approximately 20 years until 1988 for the first State University Law to be passed (Mallouppas & Stylianides, 2018). The nature of positions such as that of the Auditor General which, in spite of its beneficial overall role, however often leads to delays in the prosecution of various investigations and important political decisions instead of assisting in the speedy and systematic resolution of these cases (amongst many other tasks).
Recalling various recent historical events, in most cases there seems to exist a common element of legalism accompanied by fear, or perhaps the lack of the initiative from the people involved for critical thought and decision-making. The above, as well as many other examples through the years also demonstrate that, if an issue of the State involves a large number of stakeholders and addresses significant economic costs and political interests, then the political elite will rarely be willing to absorb immediate “political cost” in order to bring change. Of course, it is evident that political corruption plays its own role as a major factor (to an extent) for the existence of Bureaucracy and delays in taking important decisions. Indeed, a big part of the Bureaucratic problem lies amongst civil servants and public organisations.
In general, it stands as a very well-known fact that the civil service in Cyprus is commonly a “for life-based” career service. However, it also stands as a fact that the education levels of civil servants in Cyprus are relatively high when compared to other European countries in 2018 (Mallouppas & Stylianides, 2018). Where it all potentially goes “wrong” is in the way in which the system has faced abuse, as well as official (and/or unofficial) modifications through the decades. Public staff appointments and promotions are decided by organisations such as the Public Service Commission (PSC), a body which is appointed by the President for a 6-year term. It includes members who often have political party affiliations, in an environment which lays the grounds for politically influenced interventions, eventually leading to Bureaucratic behaviours stemming from the job “security” provided in most cases. Not to mention appointments at the boards of Semi-Governmental organisations, where these often occur as a result of a give-and-take exercise between various political parties.
Further to cases in the public sector, Bureaucracy also makes its appearance in several private and semi-private institutions. More specifically, the general behaviour of the Banking sector in the years following 2013 provides a typical example. This is due to the fact that the crisis brought about the need for careful and considerate compliance in a sector which fuelled the economic crisis of the island, with pressures for adopting thorough precautionary measures coming in from both the European Union and the State government thereafter. As a result, it is until today that banks in Cyprus maintain a very conservative approach towards providing any form of credit facility to their clients. AML and other KYC procedures often constitute time consuming and repetitive tasks, which may discourage or even restrict some bright and potentially healthy investment decisions of ambitious individuals and companies. However, this is not to mention that compliance procedures are not vital. Indeed, the requirement for such measures has been highlighted more than ever with the flaws in the recent Investor Citizenship Scheme. However, a balance should always exist, whereby such procedures do not build walls and barriers which honest and goodwilled entrepreneurs cannot find ways to overcome.
Reasons and Explanations for the existence of Bureaucracy in Cyprus:
There are numerous reasons and justifications for the escalation of the Bureaucratic problem in Cyprus via its political system. One potential dilemma which arises is whether the fact that Cyprus adopting a democratic institution from the beginning was indeed the best possible option, thus setting the question of whether democracy constitutes the best welfare and meritocratic political system available. However, as most fellow European countries are characterised by democratic institutions and yet do not experience as near the levels of Bureaucracy which exist in Cyprus, this removes weight from the consideration of blaming democracy for the current situation. It could rather be the claim that we are just a very young self-governing state which is required by nature to go through the motions of maturing, thus experiencing such typical complex situations. Additionally, it could be the way in which the culture of the people of Cyprus affects the country’s institution and economy. Indeed, it is obvious that, despite their own disadvantages and limitations, many other European countries respect their institutions and apply rules and regulations with much greater reverence. Cyprus is a small country with a heavily centralised government, a conservative society which keeps hold of long-term traditions and even nepotism, and a state which counts on numerous outdated policies since the 1960’s and in need of vital administrative reforms. Moreover, the island’s Banking sector has held close ties with the political environment throughout the years. Therefore, it is quite normal that “the slow take-up of new ideas” exists (Mallouppas & Stylianides, 2018). Furthermore, there is often a general lack of coordination between the different departments of the government, as well as a lack of transparency and open political discussions on various matters. On top of this sit the powerful trade unions and other associations and bodies which impose excessive pressure and often ill influence on decisions regarding public employment.
Can change occur?
What can truly be done in order to bring substantial changes? This is a very challenging question to answer, especially when we consider that the answer may be lying in actually having to alter the nature of our approach towards politics and civil services as a nation. It is probably one of the most complicated tasks to accomplish, and to do so successfully might mean aiming for small and consistent goals, at the pace of one step at a time. Forming their own KPIs (Key Performance Indicators) and always keeping on track with their targets might be a good first start for the ministries of the government. However, they should always be kept liable to another independent body which would have to check whether these performance targets are met, in order for the whole project to work. The key lies in introducing the need, the urgency and the incentive for the employees and civil servants to strive and perform well in their professional environment. It is also important that the people who remain effortless in their professional environment are not simply maintained at the same guaranteed level/position, but rather face specifically designed “consequences”. Further measures may include a new staff promotion system, which would remove weight from promotions by seniority and incorporate performance in the equation. Moreover, modern methods of interviewing and evaluating candidates and staff to promote higher levels of efficiency and productivity are necessary. Lastly, it may be best if the Banking sector evaluates its approach towards the modern financial era and engage in the effort of finding the appropriate methods of distinguishing and responding to healthy clients in a faster and more welfare-promoting manner.
There are various methods to promote efficiency in the economy and improve the country’s public and semi-public sectors, but for this to take place, the most important element required is a genuine tolerance, as well as desire in some cases, for change. As the country’s President, Mr. Anastasiades, stated in an interview in 2018, Cyprus may have managed to foster economic growth to some extend following the crisis, but it has been unsuccessful in reducing “red tape” (Financial Mirror, 2018). This change is still pending in 2021. Reforms need to be prioritized, because being empowered by an efficient public sector which can compete, communicate and keep on track with rapid changes in the private sector, is one of the most essential indicators of development in modern global economies.
Bibliography:
Financial Mirror. (2018, November). Retrieved from Cyprus: Bureaucracy is the economy’s biggest problem says the President: https://www.financialmirror.com/2018/11/28/cyprus-bureaucracy-is-the-economys-biggest-problem-says-president/
Mallouppas, A., & Stylianides, T. (2018, April). Public administration characteristics and performance in EU28: Cyprus. Retrieved from Europa.eu here.
“THE REVITA TEAM”
Σημείωση: Τα άρθρα και τα δημοσιεύματα της εταιρείας μας, σκοπό έχουν να παραθέσουν στοιχεία για συγκεκριμένα θέματα καθώς και απόψεις που βασίζονται σε εμπειρία και γνώση που έχει αποκτηθεί. Απώτερος σκοπός μας είναι η επιμόρφωση των αναγνωστών στο σύνολο τους και όχι η παροχή συμβουλών για συγκεκριμένες περιπτώσεις. Για όλα τα προηγούμενα άρθρα της εταιρείας μας, μπορείτε να επισκεφτείτε την σελίδα μας στο Facebook, https://www.facebook.com/revitaconsult όπως και το blog στην ιστοσελίδα μας.
