Background Notes: Cyprus National Trade Data Bank - The Export Connection (R) ITEM ID : ST BNOTES CYPRUS DATE : Feb 28, 1993 AGENCY : U.S. DEPARTMENT OF STATE PROGRAM : BACKGROUND NOTES TITLE : Background Notes - CYPRUS Update sched: Occasionally Data type : TEXT End year : 1992 Country : Country : CYPRUS | US DEPARTMENT OF STATE BACKGROUND NOTES SERIES, CYPRUS, MARCH 1992 PUBLISHED BY THE BUREAU OF PUBLIC AFFAIRS Official Name: Republic of Cyprus1 PROFILE Geography Area: 9,251 sq. km. (3,572 sq. mi.); about the size of Connecticut. Cities: Capital--Nicosia (pop. 164,400). Other cities--Limassol, Larnaca, Famagusta, Kyrenia, Paphos. Terrain: Central plain with mountain ranges to the north and south. Climate: Mediterranean with hot, dry summers and cool, wet winters. People Nationality: Noun and adjective--Cypriot(s). Population (1991): 735,000. Greek area: 565,000; Turkish area: 170,000. Annual growth rate: 1%. Ethnic groups: Greek (78%), Turkish (18%), Armenian and other (4%). Religions: Greek Orthodox, Muslim, Maronite, Roman Catholic, Armenian. Languages: Greek, Turkish, English. Education: Years compulsory-- 6 in elementary; 3 in high school. Attendance--almost 100%. Literacy--about 99%. Health (1990): Infant mortality rate--10/1,000. Life expectancy--73 yrs. males; 78 yrs. females. Work force (1991): Greek area--280,000: trade and tourism-- 24%; industry- 20%; agriculture--15%; public services--6%. Turkish area--74,000: agriculture- 29%; public services--22%; industry--10%; trade and tourism--10%. Figures cited are for the Greek Cypriot Community, unless otherwise noted. Government Type: Republic. Independence: August 16, 1960. Constitution: August 16, 1960. Branches: Executive--president elected to 5-yr. term. Legislative-- unicameral House of Representatives, members elected to 5-yr. terms. Judicial--Supreme Court; six district courts. Administrative subdivisions: six. Political parties: Greek Cypriot Community--Democratic Rally (right); Democratic (center-right); AKEL (communist); EDEK (socialist). Turkish Cypriot Community--National Unity (center-right); Republican Turkish (Marxist); Communal Liberation (left); New Dawn (right); Free Democratic (center); Social Democratic (center-left). Suffrage: Universal at age 18. Central government budget (1991): Total revenue--$1.2 billion; Total expen-diture--$2 billion; Development spending--$206 million. Fiscal deficit reached $285 million (5% of GDP) in 1991. Defense (1991 est.): $379 million (6% of GDP). Flag: Against a white background, island's shape in gold above two crossed olive branches. Economy GNP (1991): $5.9 billion. Per capita income (1991): Greek Cypriots--$9,970; Turkish Cypriots--about $3,500. Natural resources: Pyrites, copper, asbestos, gypsum, lumber, salt, marble, clay, earth pigment. Agriculture (7% of GDP): Products--Potatoes and other vegetables, citrus fruits, olives, grapes, wheat, carob seeds. Industry (18% of GDP): Types--mining, chemicals, non-electric machinery, clothing, footwear, beverages, cement. Services and Tourism (50% of GDP): Trade, restaurants, and hotels 23%; finance, insurance, real estate, and business 15%; transport, storage, and communication 10%. Trade (1991): Exports--$838 million: citrus, grapes, wine, potatoes, clothing, footwear. Major markets--EC (especially the UK), Middle East. Imports-- $2.3 billion: consumer goods, petroleum and lubricants, food and feed grains. Major suppliers--EC (especially the UK), Japan. Exchange Rate: US$2.30=1 Cyprus pound. Fiscal year: Calendar year. OVERVIEW Cyprus has been divided since the Turkish military intervention of 1974, following a coup directed from Greece. Since then, the southern part of the country has been under the control of the Government of Cyprus and the northern part under an autonomous Turkish-Cypriot administration supported by the presence of Turkish troops. In 1983, that administration proclaimed itself the "Turkish Republic of Northern Cyprus," recognized only by Turkey. UN peace-keeping forces maintain a buffer zone between the two sides. PEOPLE AND HISTORY Greek and Turkish Cypriots share many customs but maintain distinct identities based on religion, language, and close ties with their respective motherlands. Greek and Turkish are official languages in their sectors. English is widely used. Cyprus has a well-developed system of primary and secondary education. Cypriots traditionally have received higher education at Greek, Turkish, or British universities. Growing numbers also are being educated in the United States. Separate institutions of higher education on the island have been developed by both the Turkish and Greek communities. Cypriot culture is among the oldest in the Mediterranean. By BC 3700, the island was well inhabited, a crossroads between East and West. The island fell successively under Assyrian, Egyptian, Persian, Greek, and Roman domination. For 800 years, beginning in 364 AD, Cyprus was ruled by Byzantium. After brief possession by Richard the Lion-Hearted, the island came under Frankish control in the late 12th century. It was ceded to the Venetian Republicn 1489 and acquired by the Ottoman Turks in 1571. The Ottomans applied the millet system to Cyprus, under which non-Muslim minorities were governed by their religious authorities. This system reinforced the position of the church and the cohesion of the ethnic Greek population. Most of the Turks who settled on the island during the three centuries of Ottoman rule remained when control of Cyprus, although not sovereignty, was ceded to the United Kingdom in 1878. Many, however, left for Turkey during the 1920s. The island was annexed formally by the UK in 1914 at the outbreak of World War I and became a crown colony in 1925. Cyprus gained its independence from the UK in 1960, after an anti-UK campaign by the Greek Cypriot EOKA (National Organization of Cypriot Fighters), a guerrilla group which desired political union with Greece, in a process known as enosis. Archbishop Makarios, a charismatic religious and political leader, was elected President. Shortly after the founding of the republic, serious differences arose between the two communities over the implementation and interpretation of the constitution. Intercommunal fighting erupted in December 1963, after which Turkish Cypriots, in their view, were forced to withdraw from most national institutions and began to administer their own affairs. UN peacekeepers have been on the island since 1964. In 1974, a military junta in Athens sponsored a coup in Nicosia led by extremist Greek Cypriots supporting union with Greece. The junta had been hostile to Makarios for alleged pro-communist leanings and for what was perceived as President Makarios' abandonment of enosis. Turkey, citing the 1960 Treaty of Guarantee, intervened militarily to protect Turkish Cypriots. In a two-stage offensive, Turkish troops took control of 38% of the island. Many Greek Cypriots fled south while Turkish Cypriots fled north. After a cease-fire was declared, a large-scale population transfer occurred. GOVERNMENT Since 1974, Cyprus has been divided de facto into two areas. The Government of the Republic of Cyprus has continued as the internationally recognized authority, but, in practice, its power extends only to the Greek Cypriot- controlled areas. The 1960 Cypriot Constitution provided for a presidential system of government with independent executive, legislative, and judicial branches, as well as a complex system of checks and balances, including a weighted power-sharing ratio designed to protect the interests of the Turkish Cypriots. The executive, for example, was headed by a Greek Cypriot president and a Turkish Cypriot vice president, elected by their respective communities for 5-year terms and possessing a right of veto over certain types of legislation and executive decisions. Certain provisions of the constitution were never fully implemented. The Greek Cypriots argued that the complex mechanisms introduced to protect Turkish Cypriot interests were obstacles to efficient government. In November 1963, President Makarios advanced a series of constitutional amendments designed to eliminate some of these special provisions. The Turkish Cypriots opposed such changes. The confrontation prompted widespread intercommunal fighting, after which Turkish Cypriot participation ceased in the central government. Following a further outbreak of intercommunal violence in 1967-68, a Turkish Cypriot provisional administration was formed. In February 1975, the Turkish Cypriots formally set up their own government with a popularly elected president and a prime minister responsible to the National Assembly exercising joint executive powers. In 1983, the Turkish Cypriots declared the independence of the "Turkish Republic of Northern Cyprus" (TRNC) and in 1985 adopted a constitution and held elections; this arrangement is recognized only by Turkey. Principal Government Officials President--George Vassiliou Takis Nemitsas Christofides Foreign Minister--George Iacovou Ambassador to the United States--Michaelis Sherifis Ambassador to the United Nations--Andreas Mavrommatis Cyprus maintains an Embassy in the United States at 2211 R Street NW, Washington, DC 20008 (tel. 202-462-5772). The Cypriot Consulate General is located in New York City and Cypriot Honorary Consuls are in Atlanta, Baton Rouge, Chicago, Fort Wayne, Houston, Los Angeles, Oakland, Philadelphia, Phoenix, Portland, San Francisco, St. Louis, Rochester, MN., and Wellesley, MA. Cyprus also maintains a trade center at 13 East 40th Street, New York, NY 10016 (tel. 212-686-6016). The Turkish Cypriots maintain offices in Washington and at the Turkish Mission to the United Nations in New York. POLITICAL CONDITIONS Both the Republic of Cyprus and the "TRNC" have active multi-party political systems. There are four major Greek Cypriot political parties--the conservative Democratic Rally, the center-right Democratic Party, socialist EDEK, and communist AKEL. None has been able to elect a president by itself or dominate the 56-seat House of Representatives. President Vassiliou, a successful businessman elected in 1988 as an independent with backing from AKEL, faces pressures from the party of former President Spyros Kyprianou and the Socialist party led by Vassos Lyssarides. Both are considered less flexible on settlement issues than the President. The 165,000 Greek Cypriot refugees are also a potent political force, along with the Orthodox Church of Cyprus, an independent branch of Greek Orthodoxy which exercises broad influence in temporal as well as ecclesiastical matters. On the Turkish Cypriot side, the National Unity Party founded by current "TRNC President" Rauf Denktash, controls all but five seats in the assembly. The two main opposition parties--the leftist Republican Turkish Party and the Communal Liberation Party--have boycotted the assembly since they lost a critical general election in May 1990. They contend that election rules were unfair and that the Turkish mainland had intervened unfairly during the campaign. One month earlier, Denktash, running without party affiliation, was re-elected with 67% of the votes. Efforts to develop institutional arrangements acceptable to both communities have been made almost since the founding of the republic. UN-sponsored negotiations began in 1968. Since 1975, there have been several sets of negotiations and other initiatives. Despite setbacks, discussions continue to focus on ways to establish a new constitutional arrangement for the State of Cyprus that will regulate the relations of the two communities on a federal, bicommunal, and bizonal basis. Turkish Cypriots place emphasis on bizonality, security guarantees, and political equality of the two communities. Greek Cypriots emphasize the rights of movement, property, settlement, and the return of territory. Turkish Cypriots favor a federation of two nearly autonomous societies living side by side with limited contact, while Greek Cypriots envision a more integrated structure. Talks between Greek Cypriot President Vassiliou and Turkish Cypriot leader Denktash have taken place since 1988. UN efforts continue, with Security Council Resolutions 649 (1990) and 716 (1991) calling on both communities to negotiate on an equal footing and to complete an overall framework agreement. ECONOMY The economy of the Republic of Cyprus has made a dramatic recovery from the 1974 hostilities which created more than 230,000 jobless and homeless refugees across the island. Cyprus benefited from the mid-1970's economic boom in the Middle East and from its evolution as a substitute base for multinational companies fleeing civil war in Lebanon. Already a signatory of a custom's union agreement with the European Community (EC), which provides for gradual elimination of bilateral customs duties on 82% of goods traded, the government applied for full membership in the EC in 1990. The economy has shifted from agriculture to light manufacturing (especially of clothing and footwear) and services and expanded rapidly in 1990 due to strong growth of domestic demand and tourism. The government is promoting industrial restructuring toward "flexible specialization" aimed at penetrating new markets, especially in Europe. Tourism--which has rebounded after a decline due to the Gulf war--is a vital source of foreign exchange and a strong stimulus to growth. More than 1.5 million touristsvisited Cyprus in 1990. GNP of the government-controlled area grew by 6% in 1990, topping the 5.6% average growth rate during previous decade. Unemployment declined further to 1.8% of the workforce. Severe labor shortages were felt in tourism, industry, and agriculture. Agriculture fell to 6.8% of the GNP in 1990 and accounted for 14% of employment and 26% of total exports. Potatoes and citrus are the principal export crops. Cyprus subsidizes vineyards and winemaking and has an annual glut of unsold wine. The island has few natural resources and must import fuels, most raw materials, heavy machinery, and transportation equipment. A drop in tourist arrivals due to the Gulf war, drought, and the government's failure to enact tax revisions all had a negative impact on state finances in 1990, which saw the deficit rise to 5.1% of GDP--more than double 1990 levels. However, the deficit is forecast to drop to 3.5% of GDP in 1992, well above administration targets. The trade deficit has increased steadily from $281 million in 1973 to $1.5 billion in 1991, but other earnings--mostly from tourism--have kept pace, resulting in a favorable trade balance. Turkish Cypriot Economics The economic disparity between the two communities is pronounced. In 1991, Turkish Cypriot per capita income was about $3,500; for Greek Cypriots it rose to $9,970. The Turkish Cypriot economy suffers from a lack of private and governmental investment, and shortages of skilled labor and experienced managers. The Government of Cyprus has sought, with some success, to limit economic interaction between the Turkish Cypriot sector and the outside world. Agriculture is waning as an economic mainstay. Recent measures have provided subsidized credits for investing in tourism, an area which Turkish Cypriots are working to develop. As in the south, earnings from tourism largely offset the merchandise trade deficit. Four-fifths of visitors to the north are from Turkey. The common unit of account among Turkish Cypriots is the Turkish lira, subject to 70% inflation in 1990. Financial reforms have instituted a free market in foreign exchange and authorized residents to hold foreign-currency denominated bank accounts. This encouraged transfers from Turkish Cypriots abroad, resulting in a construction boom, imports, and customs duties. Local revenues now cover about 80% of current needs of the authorities. Commercial bank credit available to Turkish Cypriots, however, is only 7% of that extended in the Greek Cypriot south. Turkey is the major source of development assistance and of imports; the EC is the primary destination of exports, which consist principally of citrus. DEFENSE Since independence, the Republic of Cyprus has been a neutral country and a member of the Non-aligned Movement. It is not a member of any military alliance. Troops of five official military organizations, however, are based in Cypriot territory: Greek Cypriot, Turkish Cypriot, mainland Greek, mainland Turkish, and the UN Force in Cyprus (UNFICYP). The Greek Cypriot community requires compulsory military service for males following secondary education. The Greek Cypriot National Guard numbers about 10,000, with 65,000 reserves. Many senior officers of the Greek Cypriot National Guard and a number of its personnel are Greek army regulars. A separate mainland Greek military contingent also is stationed in the Republic of Cyprus. A 4,500 troop Turkish Cypriot Security Force, originally designed to protect Turkish Cypriot enclaves before 1974, is also based on compulsory military service for Turkish Cypriot males. In addition to the estimated 30,000 Turkish military forces stationed on Cyprus, Turkish regulars provide a significant portion of the leadership of the Turkish Cypriot Security Force. UNICYP has about 2,200 troops with military contingents from the UK , Canada, Austria, and Denmark, as well as civilian police from Australia and Sweden and smaller units from Finland and Ireland. The UN force patrols the cease-fire buffer zone, known as the "green line," between the two communities. In addition, British forces are stationed at two Sovereign Base Areas on the southern coast of the island. FOREIGN RELATIONS The Government of Cyprus follows a non-aligned foreign policy, although it identifies with the West in its cultural affinities and trade patterns and maintains close relations with Greece. Turkey does not recognize the Government of Cyprus. Since 1974, the foreign policy of the Government of Cyprus has sought the withdrawal of Turkish forces and the most favorable constitutional and territorial settlement possible. This campaign has been pursued primarily through international forums such as the United Nations and the Non-aligned Movement. In 1990, Greek Cypriot popular and political support for membership in the European Community spurred the government to make a formal application to the EC--despite bitter objections from the Turkish Cypriots, who argued that such a move required their consent. US-CYPRIOT RELATIONS The United States regards the status quo on Cyprus as unacceptable. Successive US Administrations have viewed UN-led intercommunal negotiations as the best means to achieve a lasting settlement. The United States will continue actively to support and aid the UN Security Council's efforts. Since 1981, the United States has had a Special Cyprus Coordinator--currently Ambassador Nelson Ledsky. The United States has channeled $260 million in assistance to the two communities through the UN High Commissioner for Refugees and the Cyprus Red Cross since the mid-1970s. The United States now provides $15 million annually to promote bicommunal projects and finance scholarships for Cypriot students. The United States has been the largest financial contributor to UNFICYP since the creation of the force in 1964. By November 1990, the US had contributed 48%--$203 million out of a total $424 million--to the UNFICYP account. Principal US Officials Ambassador--Robert E. Lamb Deputy Chief of Mission Carolyn R. Huggins Chief Political Officer--Donald Braum Economic/Commercial Officer--Trevor Evans Defense Attache--Lt. Col. Thomas Haase Public Affairs Officer-- Marcelle Wahba Consular Officer--Cynthia Stockbridge The US Embassy in Cyprus is located at Therissos Street and Dositheos Street, Nicosia; US mailing address: PSC 815, FPO-AE 09836-0001. Tel. [357] (2) 465151 through 465155; Telex 4160 AMEMY CY ; Fax: [357] (2) 459-571. Travel Notes Climate and customs: Climate is comparable to the southern Atlantic states. Clothing and shoe requirements are similar to those in Washington, DC. December through March are rainy; summer temperatures often exceed 380C (1000F) with low humidity. Americans do not need a visa to enter Cyprus. Health: Medical facilities are available. Tapwater is safe. Telecommunications: Telephone and telegraph communications within Cyprus and to international points are good. There are few telephone links between north and south Cyprus. Nicosia is seven time zones ahead of eastern standard time. Transportation: Larnaca International and Paphos International Airports, and the ports of Limassol, Larnaca, and Paphos are the only legal ports of entry and exit to the Republic of Cyprus. Ships carrying cargo and passengers call regularly at Larnaca and Limassol, the principal southern ports. Ercan and Gecitkale Airports in the Turkish Cypriot area are served by Turkish Airlines but are not recognized by the International Civil Aviation Organization. Visitors arriving in the north are not permitted to visit the Republic of Cyprus in the south. Visitors arriving in the south from abroad can often obtain permission from the Government of Cyprus and from Turkish Cypriot officials to visit the north, but travelers with luggage and those suspected of intending to depart Cyprus from the north probably will be prohibited from crossing. The American Embassy in Nicosia is able to advise travelers of current requirements. Buses and taxis are the only forms of local public transportation. There are no trains on the island. In Nicosia, good taxi service is always available at moderate prices. Published by the United States Department of State Bureau of Public Affairs Office of Public Communication Washington, DC March 1992 Editor: Deborah Guido-O'Grady Department of State Publication 7932 -- Background Notes Series -- This material is in the public domain and may be reprinted without permission; citation of this source is appreciated. For sale by the Superintendent of Documents, US Government Printing Office, Washington, DC 20402.(###)