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1991 World Development Report middle income economy ceiling of $6,000 110 .
Seemingly, Cyprus has done this by exploiting its comparative advantage in natural
resources, initially minerais: copper, pyrites and asbestos, then its climate, first to
grow citrus and early new potatoes (mostly for the British market) and subsequently
to attract foreign tourists. With a loss of nearly 40% of territory, the Republic's
economy had to do otherwise than simply rely on the exploitation of natural
resources.
In the south, the loss of agricultural land led to much modernisation in the
agricultural sector and the economy more generally. Agricultural productivity
increased rapidly and was said to be over three times higher by the 1980s 111 , than it
was in the north, where the most productive agricultural land used to be 112 . The loss
of the most intensively farmed agricultural land led to the release of much underemployed
rural labour, increasing productivity generally, temporarily removing the
labour supply constraint and producing little inflationary impact at a time of high
global inflationary pressure. This type of economic modernisation has proved
politically difficult in most European économies, with low productivity agriculture
receiving, or at least being the target for the bulk of direct EU subsidies.
110 The $6,000 ceiling relates to a per capita GNP two years prior to publication, given for Cyprus
(World Tables 1992. World Bank Publication. Baltimore: John Hopkins University, p.209) as
US$6,450 in 1988, relating to World Development Report 1990 (World Bank Publications, New
York: OUP) and US$7,230 in 1989, relating to the World Development Report 1991. Dollar
estimâtes in Officiai Cypriot statistics put per capita income somewhat higher at US$7,754 and
US$8,136 respectively. Seemingly the différence represents exchange rate fluctuations and a
relatively strong Cyprus Pound. The Governor of the Central Bank of Cyprus, Mr A.C. Afxentiou,
speaking in London, revealed that recent calculations show that per capita income has practically
doubled in Dollar terms since 1988. In his introductory address to the Cyprus British Chamber of
Commerce and Industry on the 8th April 1994, he estimated that in 1993 per capita income had
reached US$12,000 per annum.
ni Dodd, C.H. (ed.) 1993. The Politicai. Social and Economic Development of Northern Cyprus.
Huntingdon, Eothen Press, p.300.
112 The 37% of the island north of the UN Buffer Zone accounted 46% of plant production in 1972
(79% of citrus, 68% ofcereals, 45% of olives, 25% of potatoes, 100% of tobacco, 86% of carrots,
32% of other vegetables, 65% of green fodder, 30% of carobs) and 47% of livestock. Republic of
Cyprus, Aprii 1975. (Unpublished - i.e. "Restricted") "Economic Conséquences of the Turkish
Invasion and Future Prospects of the Cyprus Economy." Nicosia: The Planning Bureau, pp. 3-4.
121