CUPRINS - Universitatea George Bacovia

EU-Accession Of Cyprus: Implications And Challenges For EnterprisesTable 3Comparative Core Structural IndicatorsEU-15CYPRUS1995 2000 2002 2003 1995 2000 2002 2003General EconomicBackground1. GDP per capita (PPS) 111.8 110.5 110.0 109.5 84.3 84.4 84.2 83.62. Labour productivity 100 100 100 100 59.7 77.9 78.1 78.0Employment3. Employment rate 60.1 63.4 64.3 64.4 65.7 68.6 69.24. Employment rate for older 36.0 37.8 40.1 41.7 49.4 49.4 50.4workersInnovation and Research5. Educational attainment 69.2 73.6 73.8 73.8 83.0 85.3 82.2(20-24 years old)6. Research & Development 1.89 1.95 1.99 0.25 0.32ExpenditureEconomic Reform7. Relative price levels 100 100 100 80.7 81.2 82.88. Business investment 17.2 18.3 17.2 16.7 16.6 14.7 15.8 14.1Social Cohesion9. Long-term unemployment 4.9 3.5 3.1 3.3 1.3 0.8 1.1rateSource: Planning Bureau, Ministry of Finance, Republic of Cyprus, October 2004.As Table 3 shows, many of the structural indicators provide a positivepicture of the growth performance of the Cypriot economy. Besides laborproductivity, which though lower than the EU average it is the highest among thenew member states and is improving, expenditures in research and development (ascontributors to innovation) is still a key weakness in the structure of the Cyprioteconomy. In addition, Cyprus also lags behind the EU in the area of businessinvestment ratios, though the relatively higher growth rates point to a higher capitalproductivity and utilization rates. The proposed structural reforms and themeasures to improve productivity and increase business dynamism as well asmeasures fostering the knowledge-based economy will contribute to narrowing thegap with the EU-15. Due to satisfactory growth rates and other structuralindicators, the comparative position of Cyprus is improving vis-à-vis the EU.Already, there is a relatively high real convergence with the advanced economies(see Appendix 2).203