NORTH CYPRUS ECONOMY AND FINANCE
Liberal economic system has been adopted in the Turkish Republic
of Northern Cyprus. Under this system the promotion of the private
sector with limited government intervention, the rational use of
natural resources, the encouragement of investments that generate
high value added and employment preserve their priority and importance.
The Gross National Product has been 651,380,055 million TL (1,039.9
US$ million) at current prices of 2000. In terms of their contribution
to GNP the four most important sectors are public services, trade-tourism,
transport- communication and industry. The shares of these sectors
in GDP have been 16.4%, 16.4%, 12.3% and 12.2% respectively in the
year 2000. The share of agriculture was 7.9% for the same year.
GNP per capita has been 4,978 US$ in 2000 which indicates that
the Turkish Republic of Northern Cyprus is in the category of middle
income country group.
The Turkish Republic of Northern Cyprus has a well trained work
force. The educational system of high standarts in the Turkish Republic
of Northern Cyprus aims to develop the abilities of all individuals.
There are 13 technical and vocational high schools and 8 higher
education institutions. Five of these higher education institutions
offer instruction in English. The working population was 89,327
in 2000 which constituted 42.7% of the total population. According
to the sectoral distribution of the working population, public services
occupied the biggest share which was 20.2% of the total employment
in 2000. The share of the other sectors in total employment in 2000
were as follows; agriculture 17.1%, construction 15.8%, business
and personal services 14.6%, trade-tourism 10.8%, industry 9.7%,
transport-communication 9.1% and financial institutions 2.7%. There
isn’t acute unemployment in the Turkish Republic of Northern
Cyprus. The official unemployment rate has been 1.6% for the year
The rate of inflation in the Turkish Republic of Northern Cyprus
is measured by the Retail Price Index which is based on the results
of Household Consumption Expenditure Survey. The last survey was
conducted in the years 1998-1999 and was introduced as from January
2001. Changes in the indices show that a high rate of inflation
has been prevailing in the Turkish Republic of Northern Cyprus.
The changes in Retail Price Index for the years 1998, 1999 and 2000
have been 66.5%, 55.3% and 53.2% respectively.
The economy of the Turkish Republic of Northern Cyprus has the
peculiarities of an island economy with limited resources so foreign
trade emerges as the major sector of the economy. The Turkish Republic
of Northern Cyprus has adopted a liberal trade policy and practices
no discrimination against any foreign country. She has established
trade relations with more than 60 countries all over the world.
The volume of foreign trade has been 475.3 million US$ of which
89.4% constituted the total imports in the year 2000. Export earnings
met only 11.9% of the total imports and the trade deficit realized
as 374.5 million US$ in 2000.
The export shares of the main groups in total exports are as follows:
ready- made clothing 38.3%; citrus fruit 26.6%; processed agricultural
products 24.2%. The import shares of the leading groups in total
are as follows: machinery and transport equipment 29.6%; manufactured
goods classified mainly by materials 21.4%; food and live animals
14.3%; mineral fuels, lubricants and related materials 10.5%; chemicals
Encouragement of foreign investment is among the primary objectives
of the Turkish Republic of Northern Cyprus` development policy.
Consequently those wishing to invest in the Turkish Republic of
Northern Cyprus can be sure of a positive Government attitude.
In accordance with its development policy Northern Cyprus is giving
preferential treatment to export-oriented industries. Due to its
small domestic market the Turkish Republic of Northern Cyprus authorities
geared to export markets and they readily grant approval for foreign
investment of such kind. Government policy also encourages capital
/ technology - intensive projects. Priority is given to those projects
that facilitate transfer of modern technology, know-how and new
management techniques into the Turkish Republic of Northern Cyprus.
Co-operation between local and foreign firms in the form of joint
ventures is actively promoted, and Northern Cyprus offers numerous
advantages and incentives to the foreign investor including full
protection of his property rights. Nationalization has never been
part of government policy nor is it contemplated in the future.
The Constitution of the Turkish Republic of Northern Cyprus guarantees
the right of private property while it does not discriminate between
citizens and aliens
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