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Figure 6.10 Degree ofopenness in the Micro Economies; Imports & exports as
a percentage of GDP, 1951-60.
Malta Trinidad Barbados Fiji* Mauritius Cyprus
Sauree: IBRD, "World Tables 1971".
&
Tobago
*I'ijian data from 1931-3 only
Of the policy indicators, investment rates have long been pereeived in varying
degrees to be strongly correlated with economic growth 41 . In Figure 6.11 below,
which as far as possible uses Summers and Heston's "Penn World Tables", Cyprus
is seen to have the highest investment Ievels of ali the Micro Economies analysed
here. Much of this investment may have had less direct economic potential than
investment elsewhere, as this was the period when Britain built two large bases in
Cyprus to conform with its policy reversai of a "base in Cyprus rather than Cyprus
as a base". However all things being equal, the higher the level of investment, the
higher future growth and, given the fact that some of the investment during the
period contributed to Cypriot economic development, and that Cyprus had
investment levels that compare favourably with this group of peers, future growth
should be as fast as the group's mean growth rate.
41 The World Bank's cross-economy regression results showed investment in physical capital to be the
single strongest policy indicator effecting growth. For every 10% points of GDP of increased
investment, the economy grew by 0.5 %, compared with the second highest single factor, primary
and secondary enrolment rates, where the increase was 0.3 % on the same basis. ("Evidence from
Cross-Economy Regressions of per capita income growth", IBRD. 1993. The Ëast Asian Miracle:
Economic Growth and Public Policv. NY: OUP. pp. 48-54).
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