Let us assume that the Cyprus Chamber of Commerce vision for Turkey is realised
ΣΧΕΤΙΚΑ ΑΡΘΡΑ
By Dr Aris Petasis*
This critique is a follow-up of my article, “The Cyprus Chamber of Commerce sees phantom economic benefits in an undefined solution to the Cyprus problem” (published in English in several international sites and in “Phileleftheros” newspaper in Greek on 03.12.2013.)
Since then I had occasion to watch the propaganda film of the Cyprus Chamber of Commerce (CCC) and the UNDP (ΟΗΕ) which attempts to convince the viewer that phantom economic benefits will follow an undefined “solution” to Cyprus’ political problem. Below I offer samples of this propaganda exercise that aims to promote an Annan-plan type of solution. The Annan plan was rejected in 2014 by a massive 76% of the electorate.
Propaganda (1): Turkey will set up production facilities in Cyprus which will create thousands of new jobs
Reality: The setting up in Cyprus of operations by Turkish companies will most likely create thousands of jobs. These jobs, however, will be low-paying and will be offered to immigrants from Turkey and third countries. These jobs will for sure not go to Cypriots. Turkey manufactures products, for example clothing, that depend heavily on the work of low-paid staff just as China and India runs similar operations. The average gross salary in Cyprus now stands at US$ 2,865 whilst the corresponding figure for Turkey is US$ 1,151. If Turkey were to offer Cyprus salaries to its factory workers its operations will in no time go to ruin. To succeed, such operations would need to import low-paid labor from Turkey with whatever this means in terms of our national survival. Considering that Turkey now has roughly 3million unemployed (source: Economist) it’s natural that it concern itself with the creation of jobs for its own people rather than for Greek Cypriots. .
Propaganda (2): Many Turkish companies will set up operations in Cyprus and this will greatly benefit the local economy.
Reality: Management decisions to migrate production facilities rest solely on economic arguments and nothing else. Geographic proximity does not usually come into the decision-making process. And this is why we see Italian fashion houses moving production to distant Vietnam and Mexico and not to neighboring Switzerland whose workers enjoy some of the world’s salaries. Turkey’s economy relies heavily on agricultural production (one of the best in the world), clothing, cars and white goods that all depend on low-cost labour. Not a single Turkish company will move its production to Cyprus on grounds of geographic proximity unless this makes economic sense.
Propaganda (3): Turkey will sell water to Cyprus to help it develop local agricultural.
Reality: CCC propaganda flies in the face of reality. Agricultural production succeeds or fails on account of three factors: a.) cheap water, b.) low-paid staff and c.) cheap agricultural land. Turkey meets all three requirements whilst Cyprus meets none. The Cyprus market will simply be flooded by cheap, but high quality, Mediterranean agricultural products that will put an end to Cyprus’ agriculture activities in this way putting thousands on the unemployment rolls. The only people that stand to benefit from CCC’s vision will be the middlemen that stand to earn commissions from the import trade.
Propaganda (4): Construction and real estate will receive a great boost once the property issue (read: occupied land) is “settled.” The foreign-buyer housing market will be invigorated as a result.
Reality: a.) The stolen properties would need to be returned to their rightful owners under a democratic solution. Otherwise, a bogus settlement will mean the pillage of Greek Cypriot property and the selling off of some of these properties to foreigners as per CCC prediction. I can’t see how anyone can benefit from the loss of his/her property as a result of a sham solution, b.) the economic crisis was to a large extent caused by the housing bubble and the unchecked land development. As result thousand of units now remain unsold thus flooding the market. Oversupply is here to stay for many years and little new development will be required until the deck of unsold properties is cleared. Land developers and real estate companies now owe the bank of Cyprus alone €8.5billion (45% of GDP); large sums of these loans will never be repaid. All Cyprus now needs is a pause in development that would allow proper planning of the property market so that in the long-term the real estate market can be restored to health.
Propaganda (5): New markets will be opened up after a “solution” is achieved.
Reality: Cyprus maintains diplomatic and economic relations with practically every recognized country in the world other than Turkey. One wonders which trade barriers a “solution” will lift the moment we now have no such barriers. Even now that we are in the middle of an economic crisis Cyprus boasts the registration of thousands of foreign companies. It’s hard to understand who is waiting for a “solution” before registering a company in Cyprus.
Propaganda (6): Once a “solution” is achieved proper and stable relations with Turkey will ensue leaving us problem-free to enjoy in peace our new-found wealth.
Reality: The test of whether this is a propaganda piece or reality lies in the relations Turkey maintains with its current neighbors. These countries were supposed to have solved their the conflicts with Turkey through international agreements (solutions): a.) Greece, b.) Bulgaria, c.) Syria, d.) Iraq, e.) Armenia, f.) Iran. Nearly all these countries have perennial and on-going problems with Turkey.
In conclusion: propaganda, naïveté and wishful thinking will not save Cyprus’ economy. A fully functioning democratic system that will come about through a true solution is the only guarantee for economic revival and continued growth. A strong economy will benefit Cyprus and all its neighbors without exception.
*Dr Aris Petasis is member of the Board of Trustees, International Fund, Moscow State Aviation University.