AN INDEPENDENT American report has cited economic growth, better employment opportunities and Turkish Cypriot prosperity in a post-solution Cyprus as powerful incentives to concluding a settlement.
It predicts rapid private sector growth in tourism, finance and construction, accompanied by a shrinking public administration, manufacturing and agriculture, all over Cyprus.
Economic projections were worked out on the basis of interviews with policy experts, civil servants, financiers, businessmen and academics from the north and south.
Resolutely non-political, the report leaves the details of the settlement vague, other than pointing to a bi-zonal solution under a unitary state.
By the report’s admittance, the predictions are “rough” and calculations of economic growth range from the “conservative to the dramatic”.
For example, real GDP could increase from 60 to 150 per cent among Turkish Cypriots, and between five and 20 per cent amongst wealthier Greek Cypriots.
They pitch employment growth in the south 25 per cent higher with a settlement than without, with comparable growth between 1.6 and three per cent on the Turkish Cypriot side.
Given its heavy basis in assumption, the report leaves more questions unanswered than it solves.
Although a solution is likely to see one Central Bank, a single currency and central air and shipping controls, it is not clear what level of economic activity will be planned and conditioned at community rather than national level.
The report points out that to make central economic policy work, it must be influenced primarily by economic rather than political considerations – potentially an extremely difficult feat to achieve.
The economists also predict Turkey will play a huge role in the Cyprus economy post-unification.
They see Turkey and Greece as natural trading partners and sources of private investment, skilled and unskilled labour to Cyprus – issues that are likely to be met with staunch political objections.
European Union accession is mentioned, but its tremendous input and spin-off benefits have not been factored into the statistics.
The report, begun in 1999, assumes that a solution will predate EU membership, whereas Cyprus is now faced with the prospect of EU membership, eventually followed by a solution.
Turkish Cypriots fear that could plunge their economy into yet more misery and postpone the chances of reaching a solution in the near future.
The other major question mark, which could jeopardise prosperity, is the transition period likely to be attached to any settlement package, which would restrict the free flow of labour, capital, goods and services, as well as contribute to a period of unease.
The two-year project was carried out by Nathan Association Inc and funded by the US Agency for International Development (USAID).
The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.
