THE Chairman of the Turkish Cypriot Chamber of Commerce, Ali Erel, said yesterday the implementation of the Annan Plan would have major economic benefits for both communities on the island that would far outweigh the social and economic costs of failure to see its implementation.
“Whether it’s going to cost half a billion or two billion, it makes no difference. We have to pay it. It’s a bitter pill, and whether or not the patient wants it, he has to take it,” he told the Cyprus Mail, adding that “a settlement is going to make the cake bigger in both the north and south.
Erel dismissed Rauf Denktash’s stance that the Turkish Cypriot constituent state would need permanent derogations from EU law in order to protect the Turkish Cypriot economy from the richer Greek Cypriots: “We need a transitional period, but whatever we do we must not make the transitional period any longer than necessary”.
Erel believes long-term derogations are unnecessary, as measures built into the EU’s acquis communautaire provide sufficient safeguards against the domination of one economy over the other.
“The Annan Plan talks about a two-year transition period to protect the northern economy. But even ordinary EU members can have this protection. Through negotiations with the European Commission you can always protect certain sectors of the economy. This is in the acquis itself, so you do not need to put such things in the Annan Plan,” he said, adding it should be kept in mind that one of the basic principles of the EU is to eradicate economic disparities between regions.
Erel strongly supports a solution to the Cyprus problem based on the Annan Plan, but believes that after May 1 there will be a single market for tourism in Cyprus, irrespective of whether there is a solution.
“Even if there is no solution, it will be very difficult for the Greek Cypriots to stop EU citizens from visiting the north after May 1 as it would constitute discrimination between one type of EU citizen and another. If they say a Greek Cypriot can go to the north but an Italian cannot, they will be breaking EU law,” he insisted, adding that tourists would be able to fly to Larnaca and holiday in Kyrenia if they wanted.
However, Erel said he did not think the north would be able to compete with Greek Cypriot tour operators unless internal laws were changed in order to attract tourists to cross the Green Line, citing high income taxes, excessive import duties and fuel as the main reasons for its lack of competitiveness.
“Even Turkish Cypriots prefer to shop in the south because it’s cheaper,” he said.
Erel also saw major benefits for the construction industry in the north, but only in the case of a solution.
“The construction sector capacity can currently supply annually 500 new homes. The Annan Plan foresees the building of 10-12,000 new homes within a three-year period. This will lead to a major boom that will require a workforce of between 30-40,000,” he said.
Asked who would foot the bill for such a vast construction project, Erel conceded the Annan Plan was not clear on who would pay, but echoed a call from a bicommunal group of 16 Turkish and Greek Cypriot political parties requesting that an international donors’ conference for the settlement be held before, rather than after, referenda on the Annan Plan.
Looking ahead to May 1 when Cyprus joins the EU, Erel said businessmen in Turkey would be clamouring to invest in the north – something they had previously shied away from doing because of the lack of stability on the island.
“Turkey is ready. Its export capacity is good – at around 40 billion euros per year, which means they can compete in a single market, including on Cyprus,” he said, adding that already “thousands of contacts” had already been established between mainland Turkish and Greek Cypriot businessmen.
He warned Turkish Cypriot businessmen not to be slow off the mark to take advantage of such contacts, saying: “Unless we take steps quickly, these two dynamics are going to find each other, which is why I say that the transition period should be as short as possible,” but added: We [Turkish Cypriots] have an advantage. We know the language and culture of the Turkish businessmen and can deal with them better than the Greek Cypriots can. Therefore, we can create a bridge between the two countries”.
Asked whether the Turkish Cypriot constituent state should take measures to stop Greek Cypriots investing in the north, Erel said: “It would be crazy for any country to prevent investment in its economy. We must not see attracting investment as selling the economy, or selling the country.
“How could you stop a Greek Cypriot, as an EU citizen from investing in the Kyrenia?” he said, adding: “You cannot have an ethnically cleansed state. That was Hitler’s ideal and it is completely against the ideals of the EU. The age of the nation state is over. It is the age of integration”.
Erel believes it is now Turkish Cypriot politicians’ duty to start preparing for the implementation of a free market economy in the north.
“This is a must, even if there is no Cyprus solution,” he said.
Erel believes it will take five to 10 years for economic parity between the north and the south, but that all depended on whether the Turkish Cypriot businessmen had the confidence to implement a truly free market system in the north.
“Unfortunately, our mentality so far has been ‘let it be small but mine’. But the mentality now has to be ‘let it be big, and let me have a part of it’. We need to change our mentality,” he insisted.
Erel, who is a long-time supporter of EU involvement on Cyprus, warned that Denktash’s saw himself as a bulwark against the EU in the region.
“Denktash’s stance is part of a joint project between anti-EU forces in Turkey and himself not to solve the Cyprus problem and to keep Turkey out of the EU,” he said.
