Economy and Finance

During the period between 1963 and 1974 the Turkish Cypriot economy exhibited most of the symptoms of the economic underdevelopment. The principal reason for this condition was the economic blockade faced and the fact that the productive base of the country was inadequate. Ongoing economic activities were dependent upon unstable factors which made development difficult.

During the period that followed with the help of new administrations and up to date methods these problems were surpassed and a more stable and healthy economy was attained.

Development planning primarily had focused on reactivating the manufacturing and tourism industries while expanding agricultural exports. These efforts have been successful to a certain degree, and following a period of rapid economic growth, the economy has settled to a more modest and sustainable growth rate.

During the seven year period from 1977 until 1984 GNP increased 19.6% at constant prices of 1977 and reached 4,559.3 million (representing 68,854.3 million TL at current prices). Agriculture still occupies a prime position in the North Cyprus economy where the main products are citrus fruits, grapes and vine products, potatoes, and other vegetables. Manufacturing, construction, distribution and other services are the major employers. Tourism is the main growth industry producing the lifeblood of the economy, foreign exchange. Plans to establish an industrial free zone in Famagusta to attract foreign investment for exportable commodities have been implemented and are working successfully.

Regarding the foreign trade, two countries place prominently, Britain and Turkey. Britain is still the most important trading partner of North Cyprus taking some 17% of its exports in 1985 and supplying nearly 14% of its imports. North Cyprus is also seeking to diversify its export markets and now sells almost half its exports to the Middle East. The trading account continues in deficit and is offset by invisible earnings, mainly from tourism, foreign aid and development loans (mainly from Turkey), capital inflow, and income derived from the Sovereign Base Areas and the U.N. personnel.

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