Study shows almost £100m comes from south every year
NEARLY TEN per cent of the north’s GDP this year is expected to be generated from the free areas in one way or another, a private study by a Nicosia-based analyst has revealed.
The survey, carried out by economist Costas Apostolides and a team of associates, suggests that more than £100 million will be channeled from the south to the breakaway regime in 2005, a significant increase on the £65 million figure calculated for last year. Statistical analysis indicates that the rising trend will continue.
In real terms, the north’s economy has grown by approximately 13 per cent over the past year. Some number crunching shows that this is primarily due to the wages earned by Turkish Cypriots employed in the south. Some 7,000 Turkish Cypriots currently work in the south, garnering a total of over £40 million.
But the Turkish Cypriot Chamber of Commerce estimates that 10,000 Turkish Cypriots make their living in the government-controlled areas.
A further breakdown of the figures in Apostolides’ study showed that £8 million went to social insurance, while an additional £12 million is spent by Greek Cypriots visiting the north.
Apostolides said that, following the upping of the purchase limit to 135 euros per visit, Greek Cypriots have been shopping more and more in the occupied territories.
There were two main reasons for this: first, commodities in the north were substantially cheaper (due to the overall lower cost of living); second, Greek Cypriots were lured by great deals on clothing brand names that are in many cases suspected to be imitations.
Moreover, anywhere from six to 10 percent of tourists arriving on the island cross over to the north, where they usually stay for a couple of nights.
But Apostolides’ team also found that trade across the ceasefire line accounted for just £600,000 from August 2004 to the present. It was also stressed that the commerce was one-way, as Greek Cypriot goods were not being “exported” to the north.
Although the calculations are based on figures compiled by the Statistical Service, Apostolides conceded that more data was needed to paint a more accurate picture.
“With these limitations in mind, our estimates and projections were intentionally conservative,” he said.
The study’s results correlated with figures released by the north’s ‘Finance Ministry’ a few months ago showing an unprecedented boom, with hotels full and investors flocking to invest in the north.
The per capita income of Turkish Cypriots was said to be in the range of $10,000, but Apostolides says that did not take into account the rate of inflation, which was around 10 per cent.
Apostolides will be attending a two-day conference organised by the Wolfson College Cyprus Group starting this Friday in the north. The purpose of the conference is to explore convergence of the two communities’ economies.
