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'Reunited, Cyprus would go sky high'

If the island is reunited through a peaceful settlement, "Cyprus would go sky high!" So says Michalis Papapetrou, the government spokesman for the Republic of Cyprus.

His words were echoed again and again in dozens of recent interviews with senior government officials, business leaders and ordinary citizens.

Cyprus has already done extremely well, recovering from a crippling invasion in 1974 to become a prosperous center for business and tourism.

But the "Green Line" diving the Greek from Turkish Cypriots, which runs almost the length of the island, and through the center of the capital, Nicosia, leaves an understandable sense of unease among Cypriots, as it does among expatriates who live and work there.

Despite this scar of division, Cyprus is one of the safest countries in the world, with an extremely low crime rate, encouraging tourists and businessmen to visit without fear.

On the southern side is the Republic of Cyprus, an internationally recognized Greek Cypriot government; on the north is the self-proclaimed "Turkish Republic of Northern Cyprus", a Turkish Cypriot administration which is recognized only by Ankara.

The southern population of 650,000 is almost exclusively Greek Cypriot, and accounts for some 86 percent of the island's native total.

The north is a mixture of Turkish Cypriots and settlers brought in from mainland Turkey to fill a vacuum created by the departure of many Turkish Cypriots due to the poor economic conditions in the north, as well as the exodus of 200,000 Greek Cypriot refugees to the south in 1974.

The United Nations estimates there are 60,000 settlers in the north, among a population of some 210,000, while Greek Cypriot estimates put the settler population as high as 120,000.

Interestingly, although the division of Cyprus in 1974 meant the Greeks lost 75 percent of the island's economy to Turkish control, it is the south that has prospered while the north has limped along economically.

Economic growth in the south has steadily outpaced the north, such that by now the south boasts a GDP per capita ($16,000) that is three times that of the north, according to a study by the Cyprus Planning Bureau, drawn from official statistics, north and south.

A trip across the "Green Line" in Nicosia, something tourists can do without difficulty, immediately reveals the contrast. The northern side is a sleepy place, with few new cars on the roads and few signs of commercial construction and other activity.

The south, by contrast, has for years pursued an aggressive construction program, adding at a fast clip new office buildings, homes, hotels and highways, which are now crowded with late-model cars.

The north has been propped up by Turkey in every way since the invasion. Some 35,000 Turkish troops are estimated to be stationed there, and Ankara has covered most of the northern government's deficits.

The Foreign Ministry in Athens estimates that northern Cyprus costs Turkey some half billion dollars a year, a drain on a very weak economy that Turkey cannot now afford.

This is one of the main forces encouraging Ankara to find a solution, for Turkey holds the key cards. Rauf Denktash, the Turkish Cypriot leader for over four decades, can talk tough, but in the final analysis has no international backing and no soldiers of his own to support him. He cannot survive without Turkey.

National pride will not allow Turkey to retreat from its Cyprus commitments without the excuse of international pressure, say experts on the region. And this pressure is being exerted now, through the proposal submitted to both sides in November last year by Kofi Annan, secretary-general of the United Nations.

The Annan Plan, backed by Washington and the EU, calls for 10 percent of the territory held by the Turks to be returned to the Greek Cypriot side, allowing 85,000 refugees to return to their homes. Other refugees on both sides would be compensated for losses, and in some cases be able to reclaim their lost properties.

Most important in the equation now, however, is Turkey's strong desire to join the European Union, which has been slow to respond to Ankara's courting. Cyprus, however, has been accepted to join.

The Annan plan links EU accession with acceptance of redrawn boundaries of a federal state with national power shared by a presidential council (with rotation between Turk and Greek Cypriot leadership) and a bicameral parliament, with considerable powers residing in the two communal administrations, north and south.

In a referendum on March 30, 2003, both populations will have a chance to vote for EU membership. But the question to be answered then ties that membership to acceptance of the co-presidents, the transition leadership structure envisioned by the Annan plan.

If the Greek Cypriots vote no, they will not only be rejecting the Annan plan, but also EU membership.

According to former president George Vassiliou, who has lead Cyprus' accession negotiations with the EU, this would be a very serious setback, since the Republic of Cyprus has focused its full efforts on joining the Union and was considered the most qualified of the ten candidate countries in the latest round of expansion, agreed in Copenhagen in December 2002.

On March 30, if the Greek Cypriots vote yes, and the Turkish Cypriots do not vote or vote no, only the Greek side of the island will accede to the EU, with the Turkish side having to wait for reunification of the island before they can benefit from EU membership.

So the pressure is now on for both sides to work out their differences before March 30. For Turkey, it is a question of balancing pride against the huge benefits of being given faster access to the EU.

For observers of the Cyprus problem over the past decades, it is evident that many if not most Cypriots on both sides of the line actually prefer the status quo. In 1974 the Turkish Cypriots got their own territory, even if a pseudo state at that, while before they were merely a minority limited to enclaves within Greek-Cypriot controlled territory.

The Greek Cypriots have been free to rule without having to accommodate Turkish Cypriot interests, and they have done extremely well financially. Why rock the boat?

Elpida Nicolaou, a secretary in Nicosia, speaks for most Cypriots when she says simply, "I am in favor of a solution only if it is final and it is secure. Otherwise, it would be better to leave the situation as it is."

If reunited under a workable plan, Cyprus would double its value as a base for business. It would become an ideal regional center, stable and secure, for companies wanting to do business in the Middle East, North Africa, Turkey and Central Asia.

Already, a host of companies engaged in business in the former Soviet bloc make Cyprus their home, taking advantage of modern telecoms and transport infrastructure as well as excellent banking services, a sound legal structure, friendly tax codes and abundant leisure facilities.

And, as a member of the EU, Cyprus becomes an even more attractive base for business.

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