Are growing economic ties sealing the division?
By Elias Hazou
THE extraordinary growth of the north’s economy since the opening of the checkpoints may be heavily dependent on transactions with the Republic, but are the two communities really coming closer together or are they going their separate ways?
Daily Politis yesterday carried a report in which it asked analysts to gauge how far the dealings between the two economies on the island promoted the cause of reunification and coexistence. Under the title “The cost of a non-solution in numbers,” the article concluded there was a risk the current state of affairs, far from creating a common interest, could in the long run cause the two sides to drift further apart.
The income earned by Turkish Cypriots employed in the south (estimates speak of £85 million for this year alone) has been powering the breakaway regime’s economy for the past two years. Statistical data suggest that up to 10,000 Turkish Cypriots earn their living in the free areas, their average monthly wages being around £700.
Although this entails a convergence of the standard of living on the two sides of the divide, there is strong suspicion that it may involve a number of adverse effects. For example, part of the money flowing into the north is thought to be behind the construction boom on land belonging to displaced Greek Cypriots. Moreover, the flourishing business inevitably leads to greater demand for construction workers. But as the latter are typically settlers from mainland Turkey, this raises serious concerns about the political future of Cyprus. Some sources speak of as many as 40,000 seasonal workers arriving in the north from Turkey.
Another disconcerting trend is that Turkish Cypriots and their employers in the south have so far not been contributing their share to the social insurance fund and medical health care despite reaping the benefits of both. Moreover, very few Turkish Cypriots are members of trade unions.
There is also a deficit in spending; Greek Cypriots are more prone to buying cheaper goods (and services) in the north. And with the new Green Line regulations, it is now possible to spend as much as £75 per visit.
More discrepancies are evident in trade between the two communities. Past studies have 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.
And the CTO (Cyprus Tourism Organization) estimates that 13 per cent of tourists arriving on the island via legal ports cross over to the north, increasing the regime’s reserves of foreign currency. Again, this represents a clear loss of income for the free areas, and the situation is most likely to deteriorate (for the south), as hotels and tourist resorts are springing up everywhere in the north.
According to economist Costas Apostolides, the increased contact between the two communities is positive but could also turn out to be a double-edged sword. He explained that if a political settlement takes too long in coming, people could get accustomed to this limited co-operation and neglect full reunification.
Apostolides said that in a couple of years’ time Turkish Cypriots’ income would approach that of the Greek Cypriots, and that consequently the incentives for a solution would be diminished.
“Nevertheless, there will always be a need for interdependence between the two communities, as especially businessmen in the north realise that unhindered trade is what really improves a community’s standard of living.”
“You just can’t rely on income generated from employment,” he added.
Now this report makes a lot of sense to me, as time goes by people will start to see the way things are the norm. time is our biggest enemy but it takes the two regimes to notice this not just us the concerned public