BUSINESSES need open encouragement from both political and business leaders in order to have the courage to do business across the divide, according to new research.
Published by the Cyprus Centre of the International Peace Research Institute, Oslo (PRIO), the research found that intra-island trade was only a tiny proportion of each community’s trade with the rest of the world and that businesses faced psychological barriers in engaging in trade.
The research was done by Mete Hatay, Fiona Mullen and Julia Kalimeri.
The researchers found that the sale of goods across the Green Line has risen from just under €475,000 in 2004 to €4.9 million in 2007, while total transactions across the Green Line including shopping and casino spending amounted to an estimated €31.7 million in 2007.
“In terms of value, the flow of money is in favour of Greek Cypriots but it tips in favour of Turkish Cypriots when estimated remittances of those working in the south are included,” said the report.
With this included, the value of total intra-island business including salaries is estimated at €85.3 million.
This year had seen some acceleration in trade growth in both directions. However, in comparison with other trade, it remains low, the report concludes.
Apart from political and structural impediments to trade, there were also other impediments that could be described as “psychological”, according to the report.
The researchers found that psychological barriers did exist and were reinforced by political leaders and the media.
The main psychological approach among Greek Cypriots was denial. The main psychological approach among Turkish Cypriots was a fear of being treated as inferior.
“Greek Cypriots fear that if they trade, they will be identified and pilloried by their own community, since the produce could involve Greek Cypriot land, which reminds them of the trauma of 1974,” it said.
The researchers found that even those who do conduct business feel compelled to deny the existence of their clients or hide their identity by trading only in non-labelled goods.
“For many Greek Cypriots, therefore, doing business with Turkish Cypriots is taboo,” the research found.
Turkish Cypriots, meanwhile, did not trust that Greek Cypriots were really serious about trade and feared that it was merely a means of controlling them.
“The actual experience at the crossing points has been humiliating, reminding Turkish Cypriots of the traumas of the 1960s, when restrictions, checks and requests for documents made it very difficult for Turkish Cypriots to do business and thus became associated with economic hardship.”
Suggestions to remedy the problem include more encouragement from political and business leaders, lifting telecommunications barriers, and making the crossing points more business-friendly.
