Results of the Report "Economic Interdependence in Cyprus"

Results of the Report

Interdependence benefits both economies, more than originally assumed Intra-island transactions reached EUR 300-mln in 2009: The movement of people across the Green Line accounts for 75% of the total intra-island expenditures.

Financial flows across the Green Line were worth EUR 301 million in 2009, according to research by Peace Economics Consortium (PEC) that was jointly commissioned by the Cyprus Chamber of Commerce and Industry (KEBE) and the Turkish Cypriot Chamber of Commerce (KTTO) through the Economic Interdependence Project.  The figure is far more than what is suggested by data on credit card spending on inter-communal trade in goods.The main sectors in both sides benefiting from financial flows across the Green Line were retail and wholesale sector, hotels and restaurants, health and education sectors.

PEC Economists Costas Apostolides and Erdal Güryay presented their Report last Tuesday at an event in the buffer zone in the presence of George Iacovou and Kudret Ozersay, representatives of both Cypriot leaders, as well as Chamber Presidents, economists from both communities, business representatives, representatives from the UN and the EU, and the media.

The main purpose of the study presented on Tuesday was to assess the current state of economic interdependence between Greek Cypriots and Turkish Cypriots and make recommendations for the future under two scenarios: “delayed solution” to the Cyprus problem and a solution.

Individuals are the driving force The total amount of financial flows is far more than the 7 million recorded by trade in goods across the Green Line and the EUR 25 million or so which JCC shows is spent using credit cards. This implies that far more is spent in cash on individual visits.

“The movement of people across the Green Line accounts for 75% of the total intra-island expenditures”, said the authors of the report, who suggested that increased crossing and more crossing points benefit both economies.

Among their many recommendations, they also call on the leaders to encourage intra-island transactions. “The leaders of the GCC and TCC should set out their policies on economic interdependence and should actively support the intra-island trade and economic activity and encourage cooperation between professional organizations” say the authors.

The presidents of the two Chambers, Mr Manthos Mavrommatis and Mr Günay Cerkez, welcomed the results of the report and agreed that economic interdependence is the way to a permanent and sustainable solution on the island. In particular, Mr Mavrommatis on behalf of the CCCI stated that “the results of this report prove that trading across the Green Line has helped bridge some gaps between the two communities and it is our responsibility to further promote its benefits”. On another note, Mr Cerkez stated “we have no luxury to wait for “the day after” but instead much to be done for “the day before”, to prepare us for “the day”

Click here to download the Report.