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Greek-Cypriot Spending Propping Up Occupied Turkish-Cypriot Side

NICOSIA – While politicians on both sides are arguing about how – or if – to reunify the island split by two unlawful Turkish invasions in 1974 that saw the northern third occupied since then, Greek-Cypriots visiting the other side are spending so much there it’s helping the economy.

That’s vital as the Turkish-Cypriot side, isolated in the world and unaccepted by other countries apart from Turkey, is going through one of its worst economic crises in decades, and is also largely dependent on Turkey.

For some businesses such as restaurants, the income from Greek Cypriots has meant that they could hang on in otherwise dire straits, The Cyprus Mail said in a report about the occupied side’s dilemma.

“In the past year, it has been the Greek- Cypriots, who have made it possible for the food sector to survive,” the head of the Turkish Cypriot Restaurant Owners Association, Salih Kayım. “Turkish-Cypriots cannot not afford to go to restaurants anymore,” he told The Cyprus Mail.

With the lira falling 44 percent in 2021 and another 22 percent in 2022, everyday items are becoming unaffordable during Turkish President Recep Tayyip Erdogan’s increasingly eccentric reign as he exercises economic control.

That has seen prices rising out of sight for most people and households, but curiously he still enjoys enormous support for his autocratic regime as he is seeking re-election in 2023. Inflation has hit 120.32 percent.

Although the official currency in the north is the Turkish lira and people’s salaries are also paid in lira, many expenses like rent and school fees are in foreign currencies, which has lowered the quality of life, the report noted.

But the decline in the lira has raised the purchasing power on the occupied side for Greek-Cypriots who use the powerful euro, the legitimate government being a member of the European Union that Turkey has been trying to join since 2005.

That, the paper said, has seen Greek-Cypriots lining up in their cars at crossing points to fill up their cars with gasoline and buy everything from drugs to clothes and going to hairdressers and providers of medical services including dentists.

Republican Turkish Party CTP head Tufan Erhürman said that, ironically, “we have come to a point where the Turkish-Cypriots are watching while the (Greek Cypriots) are shopping,” – the Turks can only watch.

For the first time since the crossing points opened in 2003, there are now more Greek-Cypriot crossings than Turkish-Cypriot crossings, some 1,833,000 to the north in the first eight months of 2022.

INVISIBLE BENEFITS VISIBLE

During the same period, Greek Cypriots spent almost 30 million euros ($29.16 million) just with their credit cards, no numbers available for cash, which could raise the total dramatically as it’s unaccounted for.

The Turkish-Cypriot Chamber of Commerce, Turkish-Cypriot Chamber of Industry, the Turkish-Cypriot Travel Agencies Association, the Turkish-Cypriot Chamber of Shopkeepers and Artisans, Turkish-Cypriot Restaurant Owners Association, and Turkish-Cypriot Hoteliers Association are calling on the Turkish- Cypriot administration to ease the crossings and open up even more.

“The only reason there is some life out there on the market is because of the money flowing from the south,” Chairman Ali Ardıç of the board of the Chamber of Shopkeepers and Artisans told the newspaper.

“If this stops, businesses would go bankrupt. We have to understand this… the faster the crossings are, the better for us… This should be a priority because many sectors are kept alive only because of the crossings,” he said.

Economist Merkan Hamit said that trade in which Turkish-Cypriots sell only certain goods to Greek-Cypriot has generated 8 million euros ($7.78 million) alone so far in 2022.

Boosted by the devaluation of the Turkish lira, sales through Green Line trade are expected to double compared with last year and reach 12 million euros by the end of the year, the report noted.

That would be the highest in 18 years, according to İzzet Adiloğlu, Deputy Secretary-General of the Turkish-Cypriot Chamber of Commerce, the economy on the occupied side also benefiting from Turkish-Cypriots working on the Greek-Cypriot sides.

Although their official number is around 3,000, the real number is believed to be around 6,000, which means a minimum of 50 million euros ($48.6 million) more in contributions to the Turkish-Cypriot side, said Hamit.

“This is the invisible services export between the north and the south,” he said, estimating sales to Greek-Cypriots and money earned by Turkish-Cypriots on the Greek-Cypriot side produces at least 200 million euros ($194.42 million).

That accounts for as much as 12 percent of the Turkish-Cypriot side’s annual Gross Domestic Product (GDP), at least half of which comes from gasoline sales.

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