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to manufacture textiles, plastics and foodstuffs; the Cyprus Turkish Maritime Co. Ltd. provided maritime transport, cargo and passenger services; while the Cyprus Turkish Petroleum Co. Ltd. was responsible for importing and distributing petroleum and petroleum producís; Cyprus Turkish Tobacco Industries Ltd. manufactured, distributed and exported tobáceo and tobáceo producís; while Cyprus Turkish Tourism Management Co. Lid. directly managed hôtels and tourisi development in northern Cyprus; Cypruvex Ltd. marketed and exported citrus and other agricultural producís; EFIK Ltd. provided banking and insurance services; Eti Ltd. was responsible for imporiing and disíribuíing essential foodstuffs; and T.A.S.E.L. Ltd. manufacíured alcoholic beverages 7 . This economic aciivity by the state is on top of what ihe Cyprus Turkish Co-operaiive Central Bank provided through its banking, commercial and industrial divisions and what the religious and cultural foundaíion, Evkaf, funds and manages. There is also the contribution of the independent co-operaiives in ihe spheres of banking, reíail and indusirial produciion. Due to its key role in reactivating the economy, agriculture will be dealt with in deplh in the following chapter. However, it is worth noting here thaï in the agricultural sector there was a significant overlap between the various state sector organisations which provided crédit and inputs and also bought and marketed the output: TÜK (Toprak Ürünleri Kurumu: - Agricultural Products Organisation), the State Production Farms 8 , Cypruvex, the Cyprus Turkish Co-operalive Ceniral Bank (CTCCB), local independent co-operatives, and the Ministry of Settlement and Rehabilitaiion. The CTCCB provided crédit to local independent co-operatives, who in turn made crédit available to their members. The CTCCB also had the monopoly 7 Rustem, K. (ed.) 1987. North Cyprus Almanac. London: Rustem K. & Bro, pp.223-224. 8 Comes directly under the control of the Ministry of Agriculture and runs three to four chicken farms which produce for the poultry counter (eggs and meat). They also provide seeds to cereal producers and the équivalent to poultry producers (chicks imported from England).
of supply, and/or marketing, in key areas of the economy (and not just agriculture). Until about 1986 the CTCCB's Agricultural Supplies División used to import seeds for producers, but after that the main marketing bodies took over supplying seeds to their producers. For example, TÜK functions as the Grain Commission used to; it provided (imported) cereal and potato seeds for producers, purchased the crop and (where appropriate, e.g. potatoes) exported the crop 9 . Cypruvex, another state company, was formed to market and manage the considerable citrus fruit industry located in the north, acting as a marketing board and much more. At the same time the Ministry of Settlement and Rehabilitation made land and grants available for start-up farmers in the north 10 . There is limited access and little publicly available data on the development, scale and performance of the state sector in northern Cyprus. A case study based on a series of interviews with the founder and former director of one such company is therefore instructive 11 . The interview material provides an insight, not only into the development of institutional innovations designed to alleviate strategic market inadequacies, but also, at a more general level, the role of the public sector, 9 Their method of payment appears to be standard, a practice followed by TÜK, State Production Farms, Cypruvex and the CTCCB: they pay the producers a fixed price on or soon after delivery of the crop, after the déductions of credit (in kind or cash, for seeds and inputs) have been made. Just prior to the designated settlement date for accounts (31 July for the CTCCB's Carob Division, 30 September for grain) a premium is paid to the farmers on the basis of the respective P&L (reflecting, amongst other tliings, fluctuating domestic and world market prices). For certain crops such as potatoes and carobs there is usually a surplus, so a premium is regularly paid to the farmers, for other crops, such as cereals which can not be produced economically in northern Cyprus, a certain amount of pooling through the states monopoly buying capacity and budgetary transfers means that the state body simply pays a fixed price for the crop after delivery, and that price includes a price support subsidy, so no premium is paid on settlement of accounts. 10 Grants were mostly in kind, eg. redistributing assets abandoned by Greek Cypriots, such as livestock, seeds, fertilizers, tractors etc., with distributed at the local level being done by Village Coopératives: Morvaridi, B. "Demographic Change, Resettlement and Resource Use", in Dodd 1993. op. cit., p. 224. 11 This is an approach taken by other researchers working in northern Cyprus, see particularly Behrooz Morvaridi: "Demographic Change, Resettlement and Resource Use", "Agriculture and the Environment" and "Social Structure and Social Change", in Dodd 1993. op. cit., pp. 219-268. My interviews with Ozalp Sarica, were carried out in his office, at the EMU, on the 17/3/95, 21/3/95, 24/3/95. 166
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ACKNOWLEDGEMENTS I would like to th
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ABSTRACT This thesis examines the e
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Table Of Contents Page Change in ec
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List Of Figures 2.27 Revenue from t
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List Of Figures 5.25 Main destinati
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List Of Figures 7.8 The degree of o
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List Of Tables 6.7 All island, Gree
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This thesis will examine the econom
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Vassiliou's classic work 5 publishe
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As many questions raised by economi
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Figure 1.1 The structure of recent
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In terms of the topic of this thesi
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political landmark coincides with a
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were the mechanisms which encourage
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however, Chapter 5 concentrates on
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Defining the title The first priori
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such? Is northern Cyprus simply run
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unlike Greece in 1923, were already
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itself as having been literally und
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economic history, Christodoulou's s
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incurred as a resuit of eonfl ict.
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Christodoulou has concentrated his
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any credit for successful economic
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anking technology, administrative c
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(which usually has a regressive imp
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contribution did labour remittances
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having been inspired by Zetter's in
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econstruction also provided a means
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Conclusion In analysing the extent
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he drew distinct analogies with the
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in Cyprus. The main objective is a
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The war proved a watershed in many
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Uruguay, Japan, Trinidad and Tobago
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financial, property and business se
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By 1960 exports represented over 20
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Table 2.1 Domestic Exports FOB in 1
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the period (1960-73), the différen
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Figure 2.4 Principal exports as a p
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producing 12% of GDP. Tourism (rest
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considerably more than Turkey, whos
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income. Mining and quarrying (now m
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Figure 2.10 Principal exports as a
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Figure 2.12 The Destination of the
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Figure 2.14 Ambiguous indicators: T
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Figure 2.15 Sìze of manufacturing
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By 1980 the economy of the Republic
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The scale of the disruption in the
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Whether taking the optimists approa
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financing from financial markets pi
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grew rapidly. In the immediate afte
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One of the major problems facing th
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coming, only concerning policy make
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with particular bottlenecks affecti
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"We attributed this finding to the
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aiding the recovery from the coup a
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employment: rapidly rising real ear
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Until the intervention of public fi
Page 115 and 116: to pick the Republic of Cyprus as t
Page 117 and 118: of offshore companies registered in
Page 119 and 120: Figure 2.27 Revenue from the offsho
Page 121 and 122: Figure 2.29 The changing compositio
Page 123 and 124: The structure of the economy, the c
Page 125 and 126: CHAPTER 3. The foundations of Takis
Page 127 and 128: Famagusta enclaves would be over-ru
Page 129 and 130: The historical context of separate
Page 131 and 132: generally concentrated in the lower
Page 133 and 134: agreed Constitution. Seemingly Clar
Page 135 and 136: séparation of the communities bega
Page 137 and 138: UN. 37 Some additional supplies mus
Page 139 and 140: Seemingly, by 1970 the Nicosia encl
Page 141 and 142: was made on the basis of a fixed in
Page 143 and 144: derived from Turkish transfer payme
Page 145 and 146: Patrick has offered a more complica
Page 147 and 148: spare parts and maintenance materia
Page 149 and 150: Emphasising the growing divisions b
Page 151 and 152: Chamber, Rauf Denktash, said people
Page 153 and 154: Figure 3.2 Thepossible economic eff
Page 155 and 156: produced by them rises significantl
Page 157 and 158: Committee" was the area military co
Page 159 and 160: February 1975 the latter bodies set
Page 161 and 162: The first five-year pian, published
Page 163 and 164: CHAPTER 4. The construction of a Tu
Page 165: Whilst the Turkish-Cypriot leadersh
Page 169 and 170: shipment of 2000 tons of foodstuffs
Page 171 and 172: Eti still operateci out of Nicosia,
Page 173 and 174: institutions in northern Cyprus amo
Page 175 and 176: with multipurpose co-operatives, a
Page 177 and 178: A few new co-operatives were formed
Page 179 and 180: loans. Savings Banks do have access
Page 181 and 182: espectively. The Famagusta branch w
Page 183 and 184: Cypriot) Government in the 1960s, t
Page 185 and 186: increasing costs 31 . This is perha
Page 187 and 188: packages imported raffinate, supply
Page 189 and 190: a monopoly respectively. Where ther
Page 191 and 192: Evkaf is an Islamic organisation fo
Page 193 and 194: Evkaf had a largely obscure economi
Page 195 and 196: Meanwhile a little noticed phenomen
Page 197 and 198: After the summer of 1974, the Turki
Page 199 and 200: monitored Ledra Place check-point,
Page 201 and 202: the early eighties, when Turkish ar
Page 203 and 204: Figure 4.3 Number of tourists from
Page 205 and 206: the situation that had existed prio
Page 207 and 208: stay arrivais or diminish with the
Page 209 and 210: competing with the longer establish
Page 211 and 212: flexibility of family business stru
Page 213 and 214: Ltd., Turkish-Cypriots eventually g
Page 215 and 216: dominateci by: textiles, footwear a
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force of national cohésion, change
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Figure 4.9 Main Citrus Exporters in
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Ismail Bozkurt (who secured 32.1% o
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Table 4.9 Citrus exports from north
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Ultimately the failure to act on pr
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CHAFTER 5: Re-establishing economic
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prospects of their respective de fa
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Figure 5.1 Change in Cypriot GDP as
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{0 perceive the de facto situation
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Turkey maintains that her objective
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parliament during the unstable peri
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case study, he argues that given en
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Specifically, it is analysis of nat
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imports (Figure 5.5). The extent to
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(which includes the increasingly im
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If "a leading sector in the process
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Just to put minds at rest that manu
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encouraged private sector action, t
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Figure 5.13 Gross domestic fixed ca
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major economic force, one that was
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they account for around a third of
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dominates international transfer pa
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a "development resource" 54 , rathe
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able to spearhead a revival aided,
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path, policy objectives moved to co
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overwhelming dependence on a genera
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In the difficult times that followe
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independence from total Turkish fin
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Figure 5.20 Orange production as a
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e exchanged for new "TRNC" (or, as
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Unlike the vineyards where most of
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Although not important in the initi
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Having said this, constant improvem
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compensation arrangements in the no
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some of the labour intensive stages
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Figure 5.24 Proportion of citrus ex
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to treat exports from the whole of
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seem more politically motivateci an
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Figure 6.1 Percentage change in GNP
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initially. The more immediate probl
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historical phenomena (large externa
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It has been argued that if politics
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share of National Income to somethi
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Figure 6.6 Communal income in 1980,
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Selecting peers as proxies for pan-
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growth potential to Cyprus in 1960,
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was that compatible data should be
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Figure 6.9 Micro Economies; average
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Figure 6.11 Micro Economies; averag
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Figure 6.13 The level of government
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Figure 6.14 "More Developed Medìte
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Figure 6.17 "More DevelopedMediterr
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Cypriot growth rate, should not dis
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Figure 6.22 Structure of production
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Figure 6.26 Degree of openness in t
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economic growth 49 (variables 6-9:
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implication, developmental différe
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spectrum in 1980 at 38%. Perhaps le
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namely investment rates 54 (in phys
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instruments, the justification for
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Figure 6.28 Average annual growth i
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Figure 6.29 How Cyprusfared in 1980
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Figure 6.30 Total Cypriot income 19
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o.zö; may reveai someimng 01 ine e
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developments elsewhere. The relativ
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unified economy) of 1963, Cyprus is
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CHAPTER 7. Conclusion 348 Comparati
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Turkish-Cypriot economy stagnateci.
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So it is worth looking again at the
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stand out however, revealing enough
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Figure 7.3 Gross domestic investmen
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Figure 7.5 "TRNC netforeign trade a
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Figure 7.8 The degree of openness i
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control. There seems to be ampie ex
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The role of tourism in the economic
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seem to be able to grow in line wit
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Comparisons throughout this thesis
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The Cyprus Mail Hellenic Group. Nic
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I.M.F. International Financial Stat
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1982. Fourth Emergency Economic Act
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"Turkish Federated State of Kibris"
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leadership of the two communities o
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"administrations" and key economic
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Bicak, H.A. (June) 1990. "The Impac
Page 385 and 386:
Hudson, J. and Dyniotou-Jensen M. 1
Page 387 and 388:
Mcdonald, R. 1989. The Problem of C
Page 389 and 390:
Solsten, E. (ed.) 1993. Cvprus: A c
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