What you need to know about Cyprus politics and economy

cyprus politics

What you need to know about Cyprus’ politics and economy

Cyprus achieved a higher standard of living than most of its neighbors between 1960 and 1973 by operating a free-enterprise economy focused on agriculture and trade. Various United Nations (UN) organizations working via the UN Development Program contributed significantly to this progress. The World Bank and the International Monetary Fund provided substantial financial support in the form of loans for particular development projects such as energy supply, port development, and sewage systems.

Individual foreign governments have also assisted Cyprus. Various nations and organizations provided experts to help with economic planning and the start-up of productive initiatives, as well as scholarships and awards for Cypriot specialists in these fields. Agricultural production increased, industrial production and exports of products and services more than quadrupled, and tourism became an important foreign exchange earner during this time.

The takeover of approximately two-fifths of the island by Turkey in 1974, which resulted in the displacement of roughly one-third of the island’s population, inflicted a significant blow to the island’s economic growth. In the Northern parts, Greek Cypriots suffered significant land and personal property losses, as well as the loss of Famagusta, the only deepwater port, and the Nicosia International Airport. Between 1973 and 1975, the Greek Cypriot side’s GDP dropped by around one-third. Cyprus politics and economy have gone through very active periods.

Real growth was re-established in the territory that remained under the jurisdiction of the Republic of Cyprus administration, and from 1975 and 1983, the yearly rate of growth was projected to average over 10 percent. Since 1983, the Greek Cypriot economy has thrived, with unemployment and inflation rates being relatively low.

Tourism has been the primary driver of economic growth, and many places have undergone technological upgrading. Throughout the 1990s, the Greek Cypriot sector evolved as a hub for international transit trade, merchant shipping, banking, and other related services. The republic’s Greek-run administration negotiated special tariff agreements with the European Union and applied for membership in the organization in 1990, with member nations accounting for almost half of the island’s imports. In 2004, the Greek Cypriot part entered the European Union, and in 2008, it adopted the euro as its official currency.

The Turkish-occupied territory, on the other hand, has enjoyed similar success, and the Turkish government has been supporting its economy. Agriculture continues to be a major source of income in the Turkish area. The two economies have been separate since 1974, when trade between them ended. However, the southern zone continues to supply electricity to the northern zone, while the northern zone continues to process the Greek Nicosia’s sewage.

Irrigated land covers more than a third of the island’s arable area, mostly in the Mesaoria Plain and near Paphos in the southwest. About one-fifth of the total land area is covered by woodlands and forests. Under conventional inheritance laws, landholdings are typically small, highly fractured, and dispersed. In 1969, a land consolidation program was enacted; it was greeted with opposition, mainly from Turkish Cypriot landowners, and was only gradually implemented, although it has been quite successful in the Greek Cypriot part.

Grapes, deciduous fruits, potatoes, cereal grains, vegetables, olives, and carobs are among the major crops grown in the Greek Cypriot area. The majority of the country’s citrus fruits, wheat, barley, carrots, tobacco, and green fodder are grown in the Turkish-controlled territory.

Livestock, particularly sheep, goats, pigs, and poultry, make for around one-third of the island’s overall agricultural output. There are also some cattle raised. Cyprus was formerly known for its large woods, but demand for timber for shipbuilding by successive conquerors from the 7th century BC onward, as well as massive harvesting for building and fuel, wiped off the majority of them.

A vigorous policy of conservation and reforestation was pursued under British administration, and the Cyprus Forestry College was established at Prodhromos, on the western slopes of Mount Olympus. The Greek Cypriot government continues to run an ambitious program of forest preservation and development. Forests are predominantly found in the Paphos district and the hilly areas.

Cyprus has been a well-known copper producer for ages. Its mines were being worked as early as 2500 BC. The mines were abandoned for generations when new mineral sources were discovered, until they were reactivated soon before World War I. They were thereafter exploited from 1925 until the Great Depression of the 1930s, when they were closed.

After WWII, production restarted, and copper and other minerals—iron pyrites, asbestos, gypsum, and chrome ore—have helped to boost exports; bentonite (a type of clay), umber, and ocher are also exported. The island’s most important copper mines are in the Turkish-occupied zone of Skouriotissa, but copper ore reserves have decreased significantly. Stone and other building materials are quarried in large quantities for local usage.

Cyprus imports all of the petroleum it need to run cars and generate electricity, which is produced by thermal power plants. In addition, the country is one of the world’s leading solar energy producers. Despite the presence of multiple dams, adequate water supply remains a persistent issue.

Large reserves of natural gas were first discovered off the coast of Cyprus in 2011, when drilling for natural gas in the eastern Mediterranean took off in the twenty-first century. However, due to persistent tensions between the Greek Cypriot and Turkish Cypriot administrations, the reserves remained mostly unused for the next several years.

The availability of raw resources in Cyprus is limited, and this situation restricts the prospect of industrial activities. Prior to the island’s split, the majority of manufacturing consisted of items produced for the domestic market by small owner-operated plants, and many of these plants were located in the region controlled by the Turks in 1974.

The Republic of Cyprus’ industries were subsequently refocused on export manufacturing, and several factories were erected in the south. The republic’s heavy industries include petroleum refining, cement and asbestos pipe manufacturing, and thermal energy generation, while its light industries include clothes, footwear, drinks, and some machinery and transport equipment. The Greek Cypriot economy benefits from printing and publishing as well.

The Cyprus pound is issued by the Central Bank of Cyprus, while the Turkish lira is used in the Turkish-controlled territory. In 1982, the Republic of Cyprus started expanding its financial services, including offshore banking. The republic’s main exports are light manufactured goods, such as apparel and footwear, and foodstuffs, such as potatoes and citrus fruit.

The main imports are petroleum, petroleum products, groceries, and machinery. Tourist earnings, remittances sent home by expatriate Greek Cypriots, and receipts from British military posts on the island help to counter chronic trade deficits. The main exports of the Turkish sector are citrus fruits, potatoes, carobs, and textiles, while the main imports are foodstuffs, machinery, and transportation equipment.

After 1960, tourism became one of the most important aspects of Cyprus’ economy. The majority of the tourist accommodations, on the other hand, were on the area of the island that the Turks occupied in 1974. The tourist industry in the Greek Cypriot sector quickly recovered after the partition.

To compensate for the loss of Kyrenia and the Famagusta-Varosha area, which had been the leading seaside resorts, the southern coastal towns of Limassol, Larnaca, and Paphos were further developed to accommodate tourists. Tourism has been the major source of foreign income for the Greek Cypriot sector since the mid-1980s.

With the exception of the years immediately after the Turkish invasion, Cyprus has had a low overall level of unemployment and substantial labor union activity, with over two-thirds of Cypriot employees affiliated to unions. Approximately one-fourth of the Cypriot workforce is employed in trade, while the service industry is the second-largest employer, employing more than one-fifth of the workforce, largely in the tourist sector.

Agriculture, which used to be the backbone of the Cypriot economy, now employs fewer than a tenth of the country’s workers. The government of the Republic of Cyprus collects direct taxes, such as an income tax, as well as indirect taxes, such as different excise taxes and a value-added tax, which was implemented in the mid-1990s.

cyprus politics
cyprus politics

Cyprus Politics and Economy – British Carreageway

The island had a well-developed road system in Roman times, but the only carriage route was between Nicosia and Larnaca when the British occupied the island in 1878. Under British authority, a vast new road network was constructed. In the early 1950s, a narrow-gauge public railway proved unprofitable, and inland transport has been solely by road since then. The Greek Cypriot sector is still building and maintaining a vast network of new roadways. In 1994, Nicosia, Anthoupolis, and Kokkini Trimithia were connected by a roadway.

All parts of Europe, the Middle East, and some areas of Africa are connected by international flight services. In 1974, Nicosia International Airport was closed, and a new airport in Larnaca was built to serve the Greek Cypriot community. Paphos’ airport, which handles both domestic and international flights, opened in 1983. Flights to the Turkish-controlled region arrive from or pass through Turkey, landing at the Ercan International Airport.

There is little coastal shipping, and much of the merchant marine registered in Cyprus is held by foreign companies. The vast majority of the island’s foreign trade is still carried by water, and the Greek Cypriot sector’s main ports, Limassol and Larnaca, have been extensively modernized; Vasilikos is a significant industrial port. Famagusta is used by Turkish vessels.

In the 1990s, the Greek Cypriot sector established underwater fiber-optic cables and satellite linkup facilities, transforming it into a major international telecommunications hub.

The island of Cyprus is home to a diverse array of mılıtary forces. The Republic of Cyprus maintains a small national guard made up of volunteers and conscripts, and men aged 18 to 50 are expected to serve in the military for up to 26 months. The Turkısh cyprıot army requires men in the same age group to serve in the military for 24 months.

Both sides have significant military links with their mainland kınsmen; the Republic of Cyprus’ national guard includes a considerable number of officers from the Greek army, and Turkey has a large presence in North Cyprus. In addition, the UN has retained peacekeeping troops in Cyprus (UNFICYP) to police the demilitarized zone that separates the island, and the UK has two sovereign military bases in Cyprus.

Cyprus has good health standards due to its favorable environment and well-organized governmental and private health services. The island has been free of significant illnesses since the elimination of malaria shortly after WWII and, subsequently, echinococcosis (hydatid disease). Men have an average life expectancy of 75 years and women have an average life expectancy of 80 years, with a low infant mortality rate.

Following the Turkish invasion of Cyprus in 1974 and the subsequent displacement and relocation of Greek Cypriots to the southern part of the island, housing became a major concern for the Republic of Cyprus.

The government launched a long-term policy to promote low-cost housing construction, offered low-interest loans to property purchasers, and temporarily accommodated refugees in homes abandoned by Turkish Cypriots who fled to the north during the conflict. Thousands of refugee families have received rent subsidies, while other low-income families have received housing aid from the government.

Children in the Greek Cypriot side get 12 years of free education beginning at the age of five, and schooling is compulsory until the age of fifteen. The final three years might be completed at a technical or vocational school or a lyceum, with the latter offering courses in classical studies, science, or economics. Schools for teacher training, technical teaching, hospitality training, tourism guides, nursing, public health, and police work are among the postsecondary institutions.

The University of Cyprus was founded by Greek Cypriots in 1992; however, many students attend colleges overseas, particularly in Greece, the United Kingdom, and the United States.

The Turkish region’s education system is run independently, and Turkish Cypriots have an outstanding public school system with facilities comparable to those in the Greek part, as well as a number of specialized tertiary educational institutions. Like their like Greek Cypriots counterparts, many Turkish Cypriots pursue tertiary education overseas (the majority in Turkey). Many of the best-qualified Cypriot graduates—both Greek and Turkish—seek jobs overseas, despite the excellent educational possibilities given by both the Greek and Turkish governments.

cyprus politics
cyprus politics

Cyprus Politics and Economy – Culture Divide

Cyprus’ culture is divided between the northern Turkish and southern Greek splits of the island. Northern Cyprus’ Turkish population has developed its own Turkish and Islamic culture since 1974, publishing its own newspapers and journals and changing several place names to Turkish. In the north, the anniversary of the Turkish Republic of Northern Cyprus’ declaration (November 15) is celebrated, as well as customary Muslim festivals.

Greek Cypriots speak a dialect of Greek and maintain an ambivalent relationship with mainland Greeks. Most Greek Cypriots who pursue postsecondary education overseas go to Greece, and these young people participate in Greece’s popular culture, which is becoming increasingly international. Despite this, Greek Cypriots take great effort to maintain their traditional culture and celebrate key festivals such as Easter (including the pre-Easter Carnival) and Anthestiria, a spring flower festival.

Despite years of civil war in the 1950s, 1960s, and 1970s, the younger generation of Greek Cypriots has grown up in a relatively calm, stable, and affluent society that embraces traditional culture while also adopting modern fashion and entertainment trends. These trends were influenced not just by the media, but also by a massive inflow of young travelers, whose presence can now be felt throughout the island in the dance clubs and pubs.

cyprus politics
cyprus politics

Cyprus Politics and Economy – Denktash Period

Clerides and Denktash, who represented the Greek and Turkish Cypriots respectively, began reunification negotiations in 1968. They went on indefinitely until 1974, with the Turks insisting on a bizonal federation with a weak central authority and the Greeks rejecting it. Turkish Cypriots declared the Turkish-occupied region the Turkish Federated State of Cyprus in February 1975 (a body known as the Provisional Cyprus-Turkish Administration has existed among Turkish Cypriots since 1967); Cyprus politics and economy will now walk together with Rauf Denktash.

Denktash said that their goal was federation rather than independence. Under UN auspices, talks were resumed in Vienna in 1975 and 1976, and Makarios and Denktash agreed on acceptable criteria for a bizonal federation in early 1977. Cyprus politics and economy have taken a different path after this period.

Makarios died in August 1977, and Spyros Kyprianou, head of the House of Representatives, was named interim president of the republic. He was elected unopposed for a five-year term in January 1978 and reelected in 1983. Turkish Cypriots did not vote in the 1983 election.

In 1988, Kyprianou lost his campaign for a third term against George Vassiliou, an independent candidate. In 1993, he lost by a thin margin to right-wing Clerides, who was re-elected in 1998. Clerides initially refused to meet with Denktash, the Turkish Cypriot leader, but the two finally met in New York City under UN auspices. In 1990, the government of the Republic of Cyprus (made up entirely of Greek Cypriots) began asking for membership in the European Union (EU), but Turkey and its supporters repeatedly obstructed its admission.

The EU offered Cyprus membership in late 2002 on the condition that the reunification discussions be completed by March 2003 (barring reunification, membership would go to the Greek Cypriot portion of the country only). Tassos Papadopoulos defeated Clerides and assumed the presidency of the Republic of Cyprus just weeks before the March deadline, but no agreement was reached. The next month, North Cyprus leaders eased restrictions along the island’s Green Line, allowing Cypriots to travel freely across the country for the first time in over 30 years.

Turkish Cypriots voted in 2004 to adopt a UN-backed reunification proposal, while the Greek Cypriot community, led by Papadopoulos, decisively rejected it. As a consequence, Greek Cyprus was admitted to the EU on its own in May 2004. Despite North Cyprus’ lack of recognition, the EU indicated an interest in reducing its isolation through aid and direct trade after North Cyprus’ affirmative result in the 2004 referendum. In spite of this commitment, however, no such actions were implemented.

Papadopoulos was narrowly defeated in the first round of voting in the country’s presidential elections in early 2008, a move that was seen as an indication of waning Greek Cypriot support for the country’s continuing split. Shortly after, Dimitris Christofias, the leader of Cyprus’ communist party and a proponent of fresh unification efforts, was elected to the presidency. For many, the separation of Ledra Street, which had been in place since 1964, had come to represent the island’s greater division.

Unification discussions between Talat and Christofias were ongoing in subsequent months, although they appeared to be jeopardized in April 2010 when Talat was defeated and Derviş Erolu was elected to the North Cyprus presidency. However, Erolu stated that discussions would continue under his leadership, despite the fact that he had favored independence for North Cyprus over unification.

Cyprus became embroiled in the eurozone debt crisis in early 2011 when Cypriot banks’ large holdings of Greek government bonds rendered borrowing from international markets impossible. The Cypriot government implemented a package of austerity measures to address rising budget deficits, including pay freezes for public-sector workers and cuts to social expenditure. After huge losses inflicted on two of Cyprus’s major banks as a result of an EU-sanctioned restructuring of Greek sovereign debt in June 2012,

Cyprus requested a bailout from the EU and the International Monetary Fund (IMF). However, talks on the terms took a long time since Christofias refused to implement the bank reforms and privatizations demanded by the EU and IMF.

The financial crisis and bailout dominated presidential elections in February 2013. The centre-right candidate, Nicos Anastasiades, promised to seek a swift deal with the EU and IMF, while his main competitor, Stavros Malas, supported the bailout but expressed greater reservations about accepting austerity measures. Anastasiades was elected with 57.5 percent of the vote on February 24. Anastasiades stated in his victory address that completing a bailout accord will be his top priority as president.

Cyprus agreed to terms for a bailout package in March that included €10 billion (roughly $13 billion) in EU and IMF loans, as well as a €7 billion (roughly $9 billion) contribution from Cyprus, which would be raised by restructuring the Cypriot banking sector, raising corporate taxes, and selling gold reserves. Because of the significant amount the beneficiary itself must invest into the bailout package, it is sometimes referred to as a “bail-in.” In April, Cyprus’s overall payment to the bailout grew to €13 billion (about $17 billion). In 2016, Cyprus was able to exit the bailout. Cyprus politics and economy have passed through different cultures and have reached the present day.

Meanwhile, in 2015, Anastasiades reopened discussions with North Cyprus on reunification. Despite their initial promise, the discussions broke down in July 2017 after the two parties were unable to reach an agreement on power-sharing and the security of Turkish Cypriots. Despite this, Anastasiades stated during his election campaign in 2018 that he planned to reopen talks. His election success was attributed to his management of the country’s economic recovery as well as his handling of negotiations with North Cyprus.

Natural gas deposits initially found off the coast in 2011, have become a source of contention between the two sides. Turkish Cypriots felt that without a formal agreement, they would not receive a fair portion of the earnings. Cyprus began allowing Total Group to drill for natural gas just days after discussions with North Cyprus broke down in 2017. When Eni was permitted to start drilling in February 2018, Turkish warships interfered and sent back the company’s ships.

Despite Turkish protests, Exxon Mobil Corporation began drilling later that year. Turkey said in January 2019 that it will begin drilling near Cyprus after the Greek Cypriots failed to reach an agreement with the Turkish Cypriots. By the end of the year, with the Turkish situation showing no signs of improving, Cyprus had reached an agreement to build a natural gas pipeline from Israel to Greece through Cyprus, bypassing the Turkish pipeline. Turkey continued to expand its assessments of the region into 2020, dispatching more vessels in the summer of that year. In short, Cyprus politics and economy have gone through difficult paths.

You can read the other articl e about Cyprus by clicking here.

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