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The structure of the economy, the composition of employment, the composition of
GDP and the relative contributions to national income of the main sectors of the
economy changed little during the first decade of independence. Where successful
economic development was plainly visible, was in the growth in real per capita
incomes. 1974 provided the decisive break, in which the structure of employment
and the composition of GDP changed fundamentally. The composition and direction
of exports also changed significantly after 1974. Though at a cost, the Republic of
Cyprus shifted from having low external debts to high external debts, a low tax
bürden to a much higher one. Seemingly, many of the financial costs of
restructuring were borne by a combination of foreign aid and the world's money
markets, but also by the domestic tax payer. War had briefly shocked the economy,
with a massive increase in unemployment, which in turn had briefly reduced the
labour supply constraint, but also caused an upsurge in out migration. The role of
women in the formal labour market increased, though not as dramatically as some
commentators suggested. The role of organised labour, the co-operative movement,
the formal consultative process inherent in the planning process, contributed to the
rapid recovery, but so also did a decline in politically motivated violence.
Following de facto division in 1974, the tourist industry began increasingly to
dominate the Greek-Cypriot economy, becoming increasingly responsible for much
economic growth that took place after the initial recovery had restored confidence.
Subséquent efforts to diversify export oriented services, have had limited effect.
But what of developments in the Turkish-Cypriot economy? After 1974, per capita
income began the period of regionally distinct economic development looking fairly
similar on both sides of the UN Buffer Zone (see Figure 7.1). Another period of
inter-communal redistribution 1974/75 had seen Turkish-Cypriot total income rise
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