Economy of Northern Cyprus

The economy of Northern Cyprus is dominated by the services sector (69% of GDP in 2007), which includes the public sector, trade, tourism and education. Industry (light manufacturing) contributes 22% of GDP and agriculture 9%.[5] The economy operates on a free-market basis, with a significant portion of administration costs funded by Turkey. The TRNC uses the Turkish lira as its currency, which links its economic situation to the Turkish economy.

As of 2014, the GDP per capita of Northern Cyprus was $15,109, and the GDP was $4.039 billion. The economy grew by 4.9% in 2014 and 2.8% in 2013, meaning that Northern Cyprus is growing faster than the Republic of Cyprus.[1][6] Northern Cyprus has seen economic growth and declining unemployment throughout the 2010s; the unemployment rate in 2015 was at 7.4%,[3] down from 8.3% in 2014.[7] The inflation rate in June 2015 was at 3.18%.[2][7][8]

Economy of Northern Cyprus
North Nicosia central business district
North Nicosia is the economic center of Northern Cyprus
CurrencyTurkish lira (Turkish lira symbol 8x10px.png) (TRY)
Calendar year
Trade organisations
ECO (observer)
Statistics
GDP$4.039 billion (nominal, 2014)[1]
GDP rank157th (nominal, if ranked according to the World Bank)
GDP growth
Increase 4.9% (2014)[1]
GDP per capita
$15,109 (Nominal, 2014)[1]
3.18% (June 2015)[2]
Unemployment7.4% (2015)[3]
Main industries
tourism, education, agriculture
External
ExportsIncrease $131 million (2014)[4]
Export goods
Dairy products, raw and processed citrus, rakı, scrap, chicken, potatoes
Main export partners
 Turkey, Middle Eastern Arab countries
ImportsIncrease$1.512 billion dollars[4]
Main import partners
 Turkey,  European Union

All values, unless otherwise stated, are in US dollars.

Embargo, debt and Turkey's role

EEZ border between North Cyprus and Turkey
The border of the exclusive economic zone between Northern Cyprus and Turkey

Because of its international status and the embargo on its ports, the TRNC is heavily dependent on Turkish military and economic support.[9] All TRNC exports and imports have to take place via Turkey, unless they are produced locally, from materials sourced in the area (or imported via one of the island's recognised ports) when they may be exported via one of the legal ports.

The continuing Cyprus problem adversely affects the economic development of the TRNC. The Republic of Cyprus, as the internationally recognised authority, has declared airports and ports in the area not under its effective control, closed. All UN and EU member countries respect the closure of those ports and airports according to the declaration of the Republic of Cyprus. The Turkish community argues that the Republic of Cyprus has used its international standing to handicap economic relations between TRNC and the rest of the world.[10][11]

There are three-year-long programs of financial and economical cooperation between Turkey and Northern Cyprus.[12] In 2013, Turkey transferred 430 million Turkish liras to the Turkish Cypriot budget, comprising 5.7% of the GNP, and one-seventh of the state budget. The aid from Turkey had decreased from 7.1% of the budget in 2004. In addition, 2013 saw a budget deficit amounting to 7.2% of the GNP, and a credit amounting to 6.6% of the GNP was obtained from Turkey. Between 2004 and 2013, Northern Cyprus constantly had a budget deficit, peaking at 14.0% of the GNP in 2009. This prompted constant borrowing from Turkey, reaching a maximum of 12.2% of the GNP in 2009.[13] In December 2014, Northern Cyprus had a total debt of 23 million Turkish liras, 7.5 million liras being external debt to Turkey. This amounted to 1.5 times the GDP.[14]

Economic growth

TRNC Ministry of Finance
The Ministry of Finance of Northern Cyprus

Despite the constraints imposed by the lack of international recognition, the TRNC economy turned in an impressive performance. The nominal GDP growth rates of the TRNC economy in 2001-2005 were 5.4%, 6.9%, 11.4%, 15.4% and 10.6%, respectively.[15][16] The real GDP growth rate in 2007 is estimated at 2%.[5] This growth has been buoyed by the relative stability of the Turkish Lira and a boom in the education and construction sectors.

The growth was further buoyed by the arrival of North European Home Buyers, investing in holiday villas. Over 10,000 British people, including expatriates purchased holiday villas there to live in permanently, or to visit during the summer months. These settlers generated over $1 Billion between 2003 and 2007.

Between 2002 and 2007, Gross National Product per capita more than tripled (in current US dollars):[17]

  • US$4,409 (2002)
  • US$5,949 (2003)
  • US$8,095 (2004)
  • US$10,567 (2005)
  • US$11,837 (2006)
  • US$14,047 (2007, provisional)

Studies by the World Bank show that the per capita GDP in TRNC grew to 76% of the per capita GDP in the Republic of Cyprus in PPP-adjusted terms in 2004 (US$22,300 for the Republic of Cyprus and US$16,900 for the TRNC).[15][16] Official estimates for the GDP per capita in current US dollars are US$8,095 in 2004 and US$11,837 in 2006.[17]

Development

Lemons North Cyprus
Lemons in Northern Cyprus. Citrus is the good that Northern Cyprus exports the most.
Noah's Ark Hotel in Bafra, Northern Cyprus view
A luxurious hotel in the Bafra Tourism Area, developed in the 2010s.
LTK Bank Headquarters North Nicosia
Headquarters of the Limassol Turkish Cooperative Bank in North Nicosia, the economic hub.

Although the TRNC economy has developed in recent years, it is still dependent on monetary transfers from the Turkish government. Under a July 2006 agreement, Ankara is to provide Northern Cyprus with an economic aid in the amount of $1.3 billion over three years (2006–2008).[5] This is a continuation of ongoing policy under which Turkish government allocates around $400 million annually from its budget to help raise the living standards of the Turkish Cypriots.[18][19][20]

Tourism

The tourism sector of Northern Cyprus has seen high levels of constant growth. 1.23 million tourists visited Northern Cyprus in 2013, 920,000 of these being from Turkey. The number of tourists had doubled since 2006, which saw 570,000 tourists. The revenue from tourism was at $616 million, up from $390 million in 2009 and $288 million in 2004.[8]

The number of tourist beds increased to 17,000 in 2011.[21]

Banking

The Banking sector grew 114% from 2006 to 2011.[21] TRNC Development Bank is a member of Association of Development Financing Institutions in Asia and the Pacific (ADFIAP).[22]

Exports and imports

In 2014, the exports of Northern Cyprus were at $130 million, with an increase of 11.9% from 2013, and the imports were at $1.51 billion, with an increase of 3.6% from 2013. The main trading partner is Turkey, as of 2014, 64.7% of Turkish Cypriot imports are from and 58.5% of Turkish Cypriot exports are to Turkey. Middle Eastern countries are the destination of 30.3% of Turkish Cypriot exports and their share in the exports of Northern Cyprus has greatly increased, being at only 17.8% at 2006. The share of exports to the European Union has greatly decreased from 15.0% in 2006 and as of 2014, stood at 6.2%, while imports from the EU member states were 15.5% of all imports.[4]

The agricultural sector is the source of the vast majority of exported goods. In 2013, 32.4% of exported products were raw agricultural products and 50.8% were processed agricultural products. 8.7% of the exports was minerals, 3.0% clothing and 5.1% other industrial products. Raw citrus by itself constituted 19.1% of all exports.[23] The most important exported products, in order of the revenue they produce, are dairy products, citrus, rakı, scrap, citrus concentrate, chicken and potatoes.[24]

Below is a table showing the distribution of exports of Northern Cyprus by goods:

Distribution of TRNC exports by goods (US dollar)[25]
2007 2008 2009 2010
Citrus 22,692,324 20,502,086 13,910,934 27,166,238
Dairy products 20,650,394 21,628,852 20,074,239 25,836,381
Rakı 4,482,406 6,653,821 8,413,631 7,669,936
Scrap 8,141,653 7,283,664 4,237,831 6,477,316
Ready-made clothing 6,790,020 3,727,264 2,326,900 4,022,957
Citrus concentrate 3,192,255 662,939 1,746,922 3,007,110
Gypsum 1,894,924 3,927,030 2,490,925 1,889,140
Pharmaceuticals 955,693 1,009,966 649,465 1,573,599
Leather products 1,269,816 908,411 594,751 461,562
Other products 8,975,744 6,354,090 9,002,188 12,579,609
Exports to the Republic of Cyprus 4,639,584 11,006,015 7,615,978 5,746,061
Total 83,684,813 83,664,138 71,063,766 96,419,909

References

  1. ^ a b c d "KKTC" (in Turkish). Turkish Ministry of Economy. Retrieved 28 July 2015.
  2. ^ a b "2008=100 TEMEL YILI TÜKETİCİ FİYATLARI ENDEKSİNİN 2015 HAZİRAN AYI SONUÇLARI" (PDF). State Planning Organization. Retrieved 29 July 2015.
  3. ^ a b "KKTC'de işsizlik %7.4". Kıbrıs. Retrieved 6 June 2016.
  4. ^ a b c "KKTC Merkez Bankası 2014 IV. Çeyrek Raporu" (PDF) (in Turkish). TRNC Central Bank. pp. 9–10. Retrieved 29 July 2015.
  5. ^ a b c CIA - The World Factbook - Cyprus: scroll down to section entitled Economy of the area administered by Turkish Cypriots
  6. ^ "Political deal may boost Cypriot economy". Daily Sabah. Retrieved 28 July 2015.
  7. ^ a b "En yüksek işsizlik oranı Güzelyurt'ta" (in Turkish). Kıbrıs Postası. Retrieved 29 July 2015.
  8. ^ a b Economic and Social Indicators 2013. TRNC State Planning Organization. pp. 2–3.
  9. ^ Universities: Little accord on the island - Higher, Education - The Independent
  10. ^ "Foreign aid fungibility and military spending: The case of North Cyprus". Defence and Peace Economics. 25: 499–508. doi:10.1080/10242694.2013.763628.
  11. ^ "The Impact of Military Spending on Economic Growth: The Case of North Cyprus". Defence and Peace Economics. 22: 555–562. doi:10.1080/10242694.2011.562370.
  12. ^ "Türkiye'den KKTC'ye 2015'in ilk üç ayında ne kadar yardım gitti?" (in Turkish). T24. Retrieved 28 July 2015.
  13. ^ Economic and Social Indicators 2013. TRNC State Planning Organization. pp. 21–23.
  14. ^ "Maliye Bakanı Mungan bütçeyi sundu" (in Turkish). Yeni Düzen. 8 December 2014. Retrieved 28 July 2015.
  15. ^ a b Cyprus after Accession: Thinking Outside the Box – Background Documents, University of Oxford, European Studies Centre, Workshop on Cyprus 10–11 March 2006
  16. ^ a b General information about North Cyprus: Economy, web site of Unistar Investments Ltd., Bellapais, North Cyprus
  17. ^ a b Economic and Social Indicators 1977-2007, TRNC State Planning Organization, February 2008
  18. ^ Turkey, N. Cyprus sign economic development deal, Hurriyet Turkish Daily News, 4 May 2007.
  19. ^ Feridun, Mete (2014) Foreign aid fungibility and military spending: the case of North Cyprus. Defence and Peace Economics, 25 (5). pp. 499-508. ISSN 1024-2694 (Print), 1476-8267 (Online) (doi:10.1080/10242694.2013.763628)
  20. ^ Feridun, Mete, Sawhney, Bansi and Shahbaz, Muhammad (2011) The impact of military spending on economic growth: the case of North Cyprus. Defence and Peace Economics, 22 (5). pp. 555-562. ISSN 1024-2694 (print), 1476-8267 (online) (doi:10.1080/10242694.2011.562370)
  21. ^ a b Zaman Newspaper 01 Sept 2011 Archived November 7, 2013, at the Wayback Machine
  22. ^ ADFIAP Northern Cyprus DB is a member
  23. ^ Economic and Social Indicators 2013. TRNC State Planning Organization. p. 27.
  24. ^ "Dış Ticaret" (in Turkish). Turkish Ministry of Economy. Retrieved 29 July 2015.
  25. ^ TRNC Ministry of Economy and Energy, Department of Trade. Dış Ticaret İthalat ve İhracat İstatistikleri 2010, p. VI.
Bedrettin Demirel Avenue

Bedrettin Demirel Avenue (Turkish: Bedrettin Demirel Caddesi) is an avenue in North Nicosia. It is one of the busiest avenues in the northern part of the city.The avenue was known as "Hilarion Avenue" during the British rule. It was widened in time and several tall buildings ("tall" in local standards) were built alongside it. The headquarters of the Yüksel Ahmet Raşit Group, located on the avenue, was the tallest building in North Nicosia until it was surpassed by the Merit Hotel next to it in the early 2010s.The Assembly of the Republic, TRNC Ministry of Health, Embassy of Turkey to the TRNC, Turkish Cypriot Electrical Corporation (KIB-TEK) headquarters, Turkish Cypriot Chamber of Commerce headquarters and many businesses are located on the avenue. It intersects with Mehmet Akif Avenue and Selçuklu Avenue at the Junction of the Prime Ministry.

Central Bank of the Turkish Republic of Northern Cyprus

The Central Bank of the Turkish Republic of Northern Cyprus (Turkish: Kuzey Kıbrıs Türk Cumhuriyeti Merkez Bankası), is the central bank of Northern Cyprus. It was established on 16 May 1983.

The bank's headquarters are located in North Nicosia, the capital of Northern Cyprus.

Central Bank of the Turkish Republic of Northern Cyprus is a member of IFSB (Islamic Financial Services Board).

Dereboyu Avenue

Dereboyu Avenue (Turkish: Dereboyu Caddesi), also known simply as Dereboyu and officially as Mehmet Akif Avenue (Turkish: Mehmet Akif Caddesi), is the busiest avenue in North Nicosia, as well as its centre of entertainment. The term "Dereboyu" means "alongside the river", and although in the traditional sense this is only used for Mehmet Akif Avenue running alongside the Pedieos river, the term has expanded in meaning to denote a region extending to the neighbouring Osman Paşa Avenue.The avenue extends into the Green Line along a northwest to south axis. The part of it under Turkish Cypriot control has a length of 1,500-1,600 metres.

Embargo against Northern Cyprus

An international embargo against Northern Cyprus is currently in place in several areas. The embargo is supported by the policy of the United Nations and its application by the European Union is in line with a European Court of Justice (ECJ) decision taken in 1994.Northern Cyprus has been under severe embargoes since its unilateral declaration of independence in 1983, and the embargoes are actively promoted by a Greek Cypriot campaign. Among the institutions that refuse to deal with the Turkish Cypriot community are the Universal Postal Union, the International Civil Aviation Organization and the International Air Transport Association. The economic embargo was greatly exacerbated upon the ruling of the ECJ in 1994, when the food certificates issued by Northern Cyprus were deemed unacceptable for the European Union. Exports and flights from Northern Cyprus take place through Turkey, with direct flights being banned internationally. Turkish Cypriots face embargoes in the areas of sports and culture as well; Turkish Cypriot teams cannot play international matches, Turkish Cypriot athletes may not compete internationally unless they represent another country and some concerts by international musicians or bands in Northern Cyprus have been blocked.

Index of Cyprus-related articles

This page list topics related to Cyprus.

List of banks in the Turkish Republic of Northern Cyprus

This is a list of banks operating in Turkish Republic of Northern Cyprus..

All banks, including branches of foreign banks, private banks and International Banking Units are governed by the established Central Bank of Turkish Republic of Northern Cyprus. This organization audits and controls all these banks under international banking laws. All banks are compliant to strictly follow KYC and AML laws, are regulated by Ministry of Economy and Energy, and are supervised by the Central Bank.

List of supermarket chains in Northern Cyprus

This is a list of supermarket chains in Northern Cyprus.

E Lasertek

Lemar is a supermarket chain which operates in Northern Cyprus. Lemar is one of the only supermarket chains in Northern Cyprus, and it is the largest one. As of January 2015, Lemar has 15 stores in Cyprus. Lemar was established in August 1997 in Lefkoşa, Northern Cyprus. Competitors include supermarkets such as Tempo, Supreme and Starling. Fresh fruit and vegetables are sold, which are sourced from local farms. The subsidiaries of Lemar are Lemar Cineplex, Lemar Café and Burger City. Burger City is a fast food hamburger restaurant chain that has seven stores in Northern Cyprus.

Supreme

Tempo

Northern Cyprus

Northern Cyprus (Turkish: Kuzey Kıbrıs), officially the Turkish Republic of Northern Cyprus (TRNC; Turkish: Kuzey Kıbrıs Türk Cumhuriyeti), is a de facto state that comprises the northeastern portion of the island of Cyprus. Recognised only by Turkey, Northern Cyprus is considered by the international community to be part of the Republic of Cyprus.

Northern Cyprus extends from the tip of the Karpass Peninsula in the northeast to Morphou Bay, Cape Kormakitis and its westernmost point, the Kokkina exclave in the west. Its southernmost point is the village of Louroujina. A buffer zone under the control of the United Nations stretches between Northern Cyprus and the rest of the island and divides Nicosia, the island's largest city and capital of both sides.

A coup d'état in 1974, performed as part of an attempt to annex the island to Greece, prompted the Turkish invasion of Cyprus. This resulted in the eviction of much of the north's Greek Cypriot population, the flight of Turkish Cypriots from the south, and the partitioning of the island, leading to a unilateral declaration of independence by the North in 1983. Due to its lack of recognition, Northern Cyprus is heavily dependent on Turkey for economic, political and military support.Attempts to reach a solution to the Cyprus dispute have been unsuccessful. The Turkish Army maintains a large force in Northern Cyprus. While its presence is supported and approved by the TRNC government, the Republic of Cyprus and the international community regard it as an occupation force, and its presence has been denounced in several United Nations Security Council resolutions.Northern Cyprus is a semi-presidential, democratic republic with a cultural heritage incorporating various influences and an economy that is dominated by the services sector. The economy has seen growth through the 2000s and 2010s, with the GNP per capita more than tripling in the 2000s, but is held back by an international embargo due to the official closure of the ports in Northern Cyprus by the Republic of Cyprus. The official language is Turkish, with a distinct local dialect being spoken. The vast majority of the population consists of Sunni Muslims, while religious attitudes are mostly moderate and secular. Northern Cyprus is an observer of the OIC and ECO, and has observer status in the PACE under the title "Turkish Cypriot Community".

Outline of Northern Cyprus

The following outline is provided as an overview of and topical guide to Northern Cyprus:

Northern Cyprus – de facto independent republic on the Mediterranean island of Cyprus. Officially it is the northern territory of the Republic of Cyprus. The territory includes the Kokkina exclave, a pene-enclave "of" the rest of Cyprus, partly surrounded by sea.

The TRNC declared independence in 1983, nine years after a Greek Cypriot coup attempting to annex the island to Greece triggered an invasion by Turkey. It has received diplomatic recognition only from Turkey, on which it is dependent for economic, political and military support. The rest of the international community, including the United Nations and European Union, recognises the sovereignty of the Republic of Cyprus over the whole island.

Revaluation of the Turkish Lira

The new Turkish lira (Turkish: Yeni Türk Lirası) was the currency of Turkey and the de facto independent state of the Turkish Republic of Northern Cyprus between 1 January 2005 and 31 December 2008 which was a transition period for the removal of six zeroes from the currency. The new lira was subdivided into 100 new kurush (yeni kuruş). The symbol was YTL and the ISO 4217 code was TRY.

Revenue stamps of Northern Cyprus

Turkish Cypriots first issued revenue stamps in 1962 as part of Cyprus; after 1983 of the UDI of Northern Cyprus, the country has continued to issue the stamps to this day.

Toumazou v. Republic of Turkey

Toumazou et al. v. Republic of Turkey et al., was a class action suit by Greek Cypriots and others against the TRNC Representative Offices in the United States and HSBC Bank USA. Turkey was dropped as defendant on 16 February 2010 and the lawsuit name was subsequently revised to Toumazou et al. v. Turkish Republic of Northern Cyprus. The TRNC Representative Offices are a commercial entity because the United States does not formally recognise the Turkish Republic of Northern Cyprus. The staff of the Representative Offices do not have diplomatic visas and only operate within the United States using business visas. Tsimpedes Law in Washington DC sued for "the denial of access to and enjoyment of land and property held in the north". The lawsuit, originally initiated by Cypriots displaced during the Turkish invasion of Cyprus in 1974, was joined by non-Cypriots who paid for but have never been given legal title to properties that they have purchased.

Tourism in Northern Cyprus

Tourism has affected the development of Northern Cyprus. Its share of the GDP of Northern Cyprus is significant.

Turkish currency and debt crisis, 2018

The Turkish currency and debt crisis of 2018 (Turkish: Türkiye döviz ve borç krizi) was a financial and economic crisis in Turkey. It was characterized by the Turkish lira (TRY) plunging in value, high inflation, rising borrowing costs, and correspondingly rising loan defaults. The crisis was caused by the Turkish economy's excessive current account deficit and large amounts of private foreign-currency denominated debt, in combination with President Recep Tayyip Erdoğan's increasing authoritarianism and his unorthodox ideas about interest rate policy. Some analysts also stress the leveraging effects of the geopolitical frictions with the United States and recently enforced tariffs by the Trump administration on some Turkish products such as steel and aluminum.While the crisis was prominent for waves of major devaluation of the currency, later stages were characterised by corporate debt defaults and finally by contraction of economic growth. With the inflation rate stuck in the double digits, stagflation ensued. The crisis ended a period of overheating economic growth under Erdoğan-led governments, built largely on a construction boom fueled by foreign borrowing, easy credit, and government spending.

Turkish lira

The Turkish lira (Turkish: Türk lirası; sign: ₺; code: TRY; usually abbreviated as TL) is the currency of Turkey and the self-declared Turkish Republic of Northern Cyprus.

Northern Cyprus articles
History
Geography
Foreign relations
Politics
Economy
Society
Sovereign states
States with limited
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