I've been considering the future lives of our two families, the Osmans in the north and the Savvas in the south. Clearly money comes into the equation, along with a multitude of other factors - education, job prospects, health and wellbeing, and, of course, security. However, leaving these latter factors aside for the moment, I found some interesting data available within a publication, 'Economic Growth under Embargoes in North Cyprus: An Input-Output Analysis', I found on the web. I'm not certain of the year this was published, but it is sometime after 2007. The authors are Turkish - Öner GÜNÇAVDI and Suat KÜÇÜKÇIFÇI from the Economic and Social Research Centre (ESRC), Istanbul Technical University, Faculty of Management. The full paper can be accessed from:
http://www.esam.itu.edu.tr/esamRapor200903.pdf
Included in the Introduction is the following information (I've italicised so that it is clear which is the authors' writing and not my own, and also so that YFred can't read it
- for those of you who don't know he admitted yesterday to not being able to read italicised writing!).
The economic performance of the Turkish Cypriot economy has been far from impressive in recent years. Whereas the economy grew, on average, only 7% in the period 1985-1989, the same figure dropped to 2.9 % for the period 1990-1998, and then increased slightly and reached 3.9 % in the period 1999-2003 (see Table 1). The Greek side, on the other hand, performed remarkably well in growth in per capita income from 1988 to 2002, averaging 3 % annually (see Eichengreen et al., 2004, p. 35). Under favourable conditions (namely the presence of a sound policy stance, a substantial increase in physical capital and full membership of the EU etc.) this impressive performance of the economy of the Greek side is expected to continue in the next decade. The present disparity between two sides of the island becomes even more evident when we look at the difference in per capita income. In 2003, Turkish Cypriots achieved only $5,949 per capita income, whereas the Greek side reached to $17,644 per capita in the same year (SPO, 2003). Eichengreen et al., (2004) estimate that per capita income of North Cyprus must grow steadily at around 5% in the next decade in order to catch up to the Greek side. Ayres (2003) is on the other hand presents growth rate estimates which would be sufficient to close the present income gap between two sides of the island. Accordingly, he predicts that within an acceptable period of time, say 15-20 years, the per capita income of the Turkish Cypriot economy has to rise to over 7 per cent per annum. He respectively postulates that the resolution of the political dispute would be beneficial mostly for the Turkish side and with an appropriate macroeconomic policy and, most importantly, the removal of all economic and political embargoes, the Turkish Cypriot economy would be able to generate sufficiently high growth rates in order to eradicate the income disparity between the two sides of the island.
This is clearly an unsustainable income disparity that could afflict a possible long-standing federal settlement of the political dispute between two sides of the island. The elimination of these disparities should therefore be considered as the pre-condition for political stability and a possible future federal settlement in the island.
Now I am not an economist, and this is only an article I found published on the web (I have no idea if it has been subjected to peer review), and by two authors who may have biases and vested interests - in other words I'm not sure if the information provided is accurate. However, it is a basis for discussion in relation to the futures of our two families and their newborn children, Mehmet and Ayse, and Spiros and Androulla.
The fact is - even though these two familes may live only a couple of miles apart, with similar jobs for the parents, the likelihood is that the Savvas family will be more able to provide opportunities and material goods for their chidren than the Osmans. Admittedly the cost of living will be higher for the Savvas family, but I'd bet that overall they will be much better off than the Osmans (and this is not taking into account the other benefits of living in a vibrant economy, and remember the two mothers are both estate agents).
The authors make an interesting point that the reported disparity in per capita incomes between the two communities is an issue regarding any future settlement to the Cyprus problem. I wonder how that might affect our families?
There are other issues within this paper that will impact upon the Osmans and could be considered - the massive levels of spending on (illegally) imported goods compared with export (Figure1), leading inevitably to a huge trade deficit with enormous levels of debt, and the relatively low proportion of TCs within higher education (dominated by Turks rather than TCs, Figure 4).
Overall, Mr and Mrs Osman would find this paper to be gloomy reading when considering the future prospects for their own prosperity and opportunities for their children. It must be galling for them to know that the Savvas family, almost within shouting distance, face a much brighter future..........
