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Money pouring into the north
By Elias Hazou


SOME £57 million was pumped into the north from the south last year, with most of it coming from wages. The figure is based on estimate released by the Statistics Department and research conducted by a leading Greek Cypriot economist.

Although just an estimate, the figure is considered significant given the size of the Turkish Cypriot economy, which can only be approximated. It also suggests a growing economic interdependence between the north and the south.

A study carried out by economist Costas Apostolides in 2004, broke down the £57 million into three components: wages earned by Turkish Cypriots working in the south, money spent by tourists crossing over and expenses by Greek Cypriots travelling to the north.

The bulk was £40 million paid to Turkish Cypriots employed in the south, but again this is an educated guess at best, as there is no real method of calculating exactly how many people earn a wage in the free areas.

Trade unions say the total number of Turkish Cypriots should be around 4,000, of which only 1,000 are registered with social insurance. Press reports however have spoken of as many as 7,000 working in the south.

The latest census found that the population of the north is 225,000.

Given these difficulties, it’s next to impossible to gauge what percentage of the Turkish Cypriot labour force these workers correspond to. According to Ali Erel, president of the ‘Chamber of Commerce’, the labour force is unknown because of the large number of illegal workers in the north.

The £57 million coming from the south is more then double the approximately £20 million brought in last year from annual exports.

The average earnings of Turkish Cypriots working in the south is around £8,000 per annum. This is significantly higher than the £3,500 average income of people employed in the north, even though salaries there have improved in the past couple of years.

Meanwhile £13 million was spent in the north by visiting Greek Cypriots. The Statistics Department claims that on average a Cypriot will spend about £12 per visit.

Tourist spending accounted for the remaining £4 million.

The £57 million moved around the island does not factor in the cost of free health care enjoyed by Turkish Cypriots in hospitals in the south. According to official statistics, some 12,000 Turkish Cypriots received treatment from January to November 2004, the cost amounting to roughly £1.6 million. Health care costs for 2003 and 2004 totalled £3 million.

Apostolides’ research did not take into account the cash spent by Turkish Cypriots in the south, but it is known that a large number do their shopping and make purchases here.
Because of legal and political complications, it very hard to gather precise data on accounts held by Turkish Cypriots in Greek Cypriot banks.

Police have released statistics on the total traffic of people since the opening of the checkpoints back in April 2003: 2,347,792 Greek Cypriots and 3,595,979 Turkish Cypriots. The latter usually cross over to the south on weekdays, while Greek Cypriots tend to travel north on weekends.

[-mikkie2-]

And who says the green line regulation wasn't working!

[brother]

Retailers play down impact of cheap shopping in north
By Elias Hazou


CONCERNS that retail business may have suffered from competition from cheaper goods in the north may have been exaggerated, as shopkeepers’ associations yesterday played down the impact on the market.

Reports on spending sprees by Greek Cypriots in the occupied areas are not entirely unfounded – at least not in the period immediately following the opening of the checkpoints; but, not to the extent to blame shopping in the north for the downturn in the retail market in the past year or so.

Whatever the true picture, there is one undeniable fact, namely, that a range of goods and services are far cheaper in the north. These include clothing, shoes, cigarettes, hairdressing, restaurants, and even dentists.

For a nation of unrepentant smokers, cigarettes are one of the most popular items sought in the north. And understandably so, as the average price of a pack is £1. No contest here. It is no secret that many people take advantage of this, buying several cartons of cigarettes, far exceeding the quota allowed to brought over to the south.

Developing camera films also pays off, not for the actual service (which will set you back about £4.50), but because you get an extra cartridge, which is considerably more expensive in the south. A Kodak colour plus (36 exposures) sells for £1.75 up north and about £3 down south.

For the ladies, £15 should cover a haircut plus dyeing plus combing, while in the free areas this package would set you back at least £30.

Another cause for concern for Greek Cypriot shopkeepers is the availability of fake brand names in clothing. In a story it ran yesterday, Politis interviewed several people who freely admitted doing their shopping in the north. While aware they are allowed only an £18 duty free limit, they said a shopping sortie to the occupied part of Nicosia could save them up to hundreds of pounds. The duty free limit imposed on Turkish Cypriots by the breakaway regime is 50 euros (£28).

Customs controls at the various checkpoints are random, encouraging many Greek Cypriots to take the risk and become small-time smugglers. A few people the Cyprus Mail spoke to said they have never been stopped by customs officers.

Ever since April 2003, Greek Cypriots have also been able to satiate their proclivity for brand name clothing, available for a fraction of the normal price. The fact that many of these are fakes does not seem to deter those who travel to the north on a mission. According to Politis, 99 per cent of clothing and footware bought are fakes.

On the other hand, the thousands of Turkish Cypriots crossing over each day also engage in some shopping of their own, although research has suggested they go for mainly groceries. Foodstuffs, baby care products and alcohol are usually on their list, as these are more expensive in the occupied areas. Still, Turkish Cypriots perusing the shops in Ledra Street and downtown Nicosia are not an uncommon phenomenon.

Overall, though, the situation has not had cataclysmic effects on business. At least this is what POVEK (small shopkeepers association) claims. The association’s general-secretary Melios Georgiou told the Cyprus Mail there may have been consequences on small shops in Nicosia, but these should not be blown out of proportion.

[brother]

More goods allowed across?
By Simon Bahceli


EU’s proposal hopes to let more money flow north

GREEK Cypriots and other EU citizens may soon be allowed to bring over up to 175 euros worth of produce from the north, tax free – if an EU Commission proposal is implemented, sources both sides of the Green Line said yesterday.

At present, those travelling from the north are allowed to bring a mere 30 euros worth of shopping from the north and are subject to strict restrictions on the import of cigarettes, alcohol and a number of other goods. Now the Commission say they want to up the tax-free limit to help lift the Turkish Cypriot community out of economic isolation.

The move comes after pressure from the Cyprus government forced the EU to freeze Commission proposals for direct trade and aid to the north, planned in the wake of the Turkish Cypriot backing of the Annan plan.

That the proposal may be nearing implementation came to light in media reports over the weekend. However, an EU press spokesperson in Nicosia said yesterday it was not still clear if or when the proposal would be implemented.

“This is the Commission’s proposal, but it will be a compromise in the end,” the spokesperson said, adding that EU officials would be on the island next week to hold discussions with both Turkish and Greek Cypriot parties regarding the issue.

“Clearly, it will be a compromise between what the Commission wants and what the Cyprus government is willing to accept,” she added.

The Cyprus government yesterday signalled it would not seek to block the increase in the tax-free allowance, with Foreign Minister George Iacovou claiming the rise in the allowance originated from a proposal put to the Commission by the Greek Cypriot government. That proposal also included, according to Iacovou, an extension of the list of products the Cyprus government would allow across the Green Line.

“We want to be flexible,” Iacovou insisted yesterday.

By setting the value of permissible tax-free imports at 175 euros per person, the proposal will effectively put the north on a similar footing to that of any non-EU state from where EU citizens are exempt from paying import duties on imports valued at less than 175 euros.

Talking to the Cyprus Mail yesterday, Turkish Cypriot Chamber of Commerce head Ali Erel said the Commission’s proposal had yet to become official, and that raising the limit to 175 euros was just one of 11 suggestions put forward by the Commission.

“Consultations are set for next week with officials from the Commission. As far as we are concerned, we agree with the proposals,” he said, describing them as a “positive step”.

He added, however, that the Green Line regulation, even with amendments, would never be enough to truly open up the Turkish Cypriot economy to international markets.

“It [the Green Line regulation] will never be enough because of the psychological barriers that exist between the two communities. But this is not a reason to reject such proposals”.