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the period (1960-73), the différence between total Government revenue and
Government expenditure on ordinary and development budgets, was an almost
insignificant 0.4% of GDP 21 . Its level of total external public debt in the 1960s
compares favourably with économies that looked fairly similar to Cyprus 22 . Matsis
& Charalambous 23 have seen the formai adoption of economie planning as both a
realistic appraisal of structural constraints and the démonstration of independence,
in line with the then contemporary thinking.
The new Republic had invited in foreign experts to assist in the development of a
planning mechanism designed to diversify the economy away from the insecurity of
dependence on a very few foreign exchange earners: minerais, citrus and invisibles
derived mainly from the stationing of foreign troops on the island. Too small to
pervasively adopt the import substitution stratégies followed by many newly
independent nations, Cyprus, perhaps inadvertently, almost certainly of necessity,
defied many fellow "Non-aligned" states by following a path of export led growth.
Foreign trade first followed the colonial routes, still being dominated by the
extractive industry. Throughout the I960's food exports (mainly citrus) took over
from minerais as the key export sector, to be overtaken in the 1970's by the
manufacturing sector and finally in the 1980's by services, predominanti tourism.
21 This aggregate figure masks a possible negative trend that the war effectively accelerated, see Bank
of Cyprus Group, (December) 1974 Bulletin. Nicosia: Bank of Cyprus, Research and Development
División. In 1973 public finances had been in déficit for three years when that déficit reached 3.2%
of GDP. (The GDP comparison has been calculated from: Republic of Cyprus, 1992. 1960-1990
Time Series Data. Nicosia, p.ll & Republic of Cyprus, 1994. Statistical Abstract 1992. Nicosia,
p.295.)
22 The economies referred to here, that looked similar to Cyprus in 1960, were either small, open
economies, with populations below 1 million and similar per capita incomes, like Barbados,
Mauritius, Trinidad and Tobago, Malta and Fiji, or members of the World Bank's "More Developed
Mediterranean" category (IBRD. 1982/3 World Debt Report. Washington.) : Greece, Israel, Malta,
Turkey, Yugoslavia (and Cyprus). See Chapter 6 for a more in-depth discussion of the selection
process. In terms of the average external public debt as a % of GNP (at factor costs), 1961-67, Cyprus
was the second lowest debtor out of the 10 economies for which there was data. The earliest period for
which there is comparable data on debt to exports is 1967-70. By this measure and in this period
Cyprus ranked 3rd lowest out of the 11 economies (Source: IBRD: World Tables 1971 & 1976).
23 Matsis S. and Charalambous A. (Autumn) 1989. "Development Planning in Cyprus", The Cyprus
Review. Vol. 1, No.2, pp.30.
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