POLITICALLY motivated over-employment and early retirement in the public sector is still wrecking chances of economic growth in the north, union and business leaders said yesterday.
The comments came after figures released by Cyprus Turkish Civil Servants Union (KTAMS) revealed that the number of retirement pensions paid by the ‘government’ was all but equal to the number of worker salaries paid.
While just over 14,000 people collect administration salaries each month, 11,600-odd receive pensions, the figures said.
“The ratio of workers to retired people should be four to one. But is it barely two to one,” Turkish Cypriot trades unionist Ozay Andic said, adding that while governments can usually expect to pay pensions for 10 to 12 years after a person retires, in north Cyprus they were commonly being paid for up to 30 years.
“In a country where 80 to 85 per cent of locally collected taxes go towards paying state salaries and pensions, it is unavoidable that this will create problems, because nothing is then left to invest in projects that would create real employment,” Andic added.
Fellow unionist Mehmet Ozkardas, head of the Civil Sevants Union (KAMU-SEN), said part of the blame rested with previous leaderships that had used employment as a way of maintaining political power “by allowing people to draw pensions after working for just five years in the state sector”.
The economic implications of the policy, he added, were that those retiring early had then taken up jobs in the private sector, effectively earning two salaries and blocking positions that might have been taken up by the genuinely unemployed.
But while changes in the law now make it more difficult for public sector employees to retire under the age of 55, over-employment and under production in the public sector remained a major obstacle for development of the private sector, Ozkardas said.
Head of north Nicosia-based Toros Trading’s Fikri Tosos agreed, telling the Cyprus Mail, “If you have a job that requires 10 people, and you employ 50 people to do it, you can guarantee that it won’t get done.”
Over-employment in the public sector also meant that very little cash was left over for investment in the infrastructure – something that further inhibited development of a healthy private sector.
Over-employment, Toros said, stemmed from the practice of providing jobs in return for political support. He gave the example of ‘state’-run Cyprus Turkish Airlines, (CTA), which he said was currently in the process of employing 1,200 new staff.
“The number should not exceed 400. After all, they only have five planes,” Toros said, adding: “Offering jobs is a tremendous way to attract votes”.
Toros also pointed to another practice whereby those in the higher echelons of power within public corporations were laid off, but continued receiving their salaries, when the administration that employed them was voted out of office. An example he gave was the ‘state’ broadcaster BRT.
“There are 800 people working for BRT, but only around 600 go to work.”
The remaining 200, he said, were employed by the previous administration and now get paid their full salaries to stay at home.
The Nicosia businessman believes that far from tackling the problem of an over-inflated public sector, the current administration has been either unable or unwilling to tackle an economic reality that it knows is at the heart of north Cyprus’ enfeebled economy.
“For five months of the year, civil servants work for just half a day.
“Teachers teach privately in the afternoons; others work on farms or in shops. This is totally illegal and none of these earnings are declared, but everyone turns a blind eye”.
