Republic of Cyprus Second Voluntary National Report - Sustainable development goals

23 7. FINANCING DEVELOPMENT STRATEGY The Government Strategy Statement provides the policy direction for the preparation of the 3-year sectoral Strategic Plans by the line Ministries, which underpin the Government’s budget framework. The Government’s investment strategy implemented under the national budget framework aspires towards increasing the growth potential of the economy, improving international competitiveness and safeguarding the long-term sustainability of growth. The utilisation and further development of comparative and competitive advantages, the diversification of the productive base, the enhancement of the competitiveness and extroversion of the Cypriot enterprises and the promotion of economic sectors of high contribution to economic growth and sustainability, as well as social and environmental, remain key objectives over time. The above objectives relate to investments by both the public and private sectors. In order to make Cyprus more attractive to both local and foreign investors, emphasis was placed during the last years on reforms that aim, amongst others, at creating an efficient and growth-enhancing business environment, facilitating investment, streamlining of procedures and introducing institutional and other reforms geared towards increasing the efficiency of the public sector, improving the efficiency of justice delivery, promoting digitalisation and investments in Research and Innovation (R&I). In addition, as from 2019, Cyprus applies a new process for the evaluation and selection of public investment, which has been introduced and is fully operational for projects financed by the national budget. It includes the preparation by the line Ministries of Project Concept Notes (PCNs) and feasibility studies for new public investment projects considered for funding under the three-year budget, in accordance with the guidelines of the Minister of Finance and the manual for the pre-selection and appraisal of public investment projects. The PCNs and the feasibility studies are submitted to the Ministry of Finance for evaluation. This ex-ante evaluation process will be also implemented for all capital investment projects that will be co-financed by EU Funds and the national budget during the period 2021-2027. INVESTMENT PRIORITIES UNDER EUROPEAN STRUCTURAL AND INVESTMENT FUNDS 2021-2027 For the 2021-2027 period, the majority of European Regional Development Fund (ERDF) investments of €1.8 billion will be geared towards a Smarter and a Greener Europe. The sectors of Research/Innovation, Small and Medium-sized Enterprises (SMEs), Energy and Environment will constitute policy investment areas in the forthcoming programming period. In addition, measures to promote social inclusion and activation of vulnerable groups of population who are threatened by increased risk of poverty and social exclusion remain at a high priority level in the context of the country’s social protection policy. With regard to employment a number of measures has been adopted at national level in order to boost growth and tackle the unemployment challenge, especially of youth unemployment. NATIONAL RECOVERY AND RESILIENCE PLAN (NRRP) The NRRP is a key tool to repair, restart and reconfigure Cyprus’ economic and social composition to positively impact the citizens’ well-being, the quality of human capital and the labour force, the efficiency of its institutions and the country’s effective green and digital transition. At the same time, through the NRRP’s holistic approach and support of sustainable development in all its dimensions – economic, social and environmental – the implementation of the measures under the NRRP is expected to contribute to the improvement of our country’s performance of the SDGs. Overall, a total amount of €1.2 billion (~6% of annual GDP) has been budgeted to promote 135 investments/reforms in total in all sectors of the economy. (Details in the Table 1 below).