By ΕΛΛΗΝΙΚΑ (GREEK) TÜRKÇE (TURKISH)
The World Bank’s comprehensive report on the Turkish Cypriot community has, once again, revealed the harrowing picture of the cost of living. We have reached the highest food inflation rate in Europe at 79 per cent.
While this rate was only 2 per cent in the Republic of Cyprus, that is, in the south of the island, the same rate did not exceed 3 per cent in the European Union average.
The World Bank Report was shared with the title, “The Turkish Cypriot Economy: Transforming Opportunities into Shared Prosperity”. It emphasized the concept we feel we lack the most: “Evidence-based Policy Making.”
The need to focus on information, data and science in the governance of the country and economy was underlined.
It was noteworthy that no one from the “UBP-DP-YDP Government” [National Unity Party-Democratic Party-Rebirth Party], neither at the ministerial nor undersecretary level, attended the presentation of the report. The main opposition CTP [Republican Turkish Party], on the other hand, attended the presentation in full cadre, from chairman to executive committee and MPs.
When Selçuk Yürükoğluları, director of the European Union Coordination Centre, said, “We will take the proposed policy changes into account by taking the possibilities of our country into consideration” during the presentation of the report, he could actually realize how lonely he was in terms of government support.
What does the report say?
I carefully followed the presentations of Goran Tinjic, Programme Manager for Southern Europe at the World Bank; Oya Koçak Barçın, Programme Manager at the European Commission, and Natasha Rovo, Senior Economist.
The summary of the report is as follows:
The recovery of the Turkish Cypriot economy in 2023 was stronger than expected, and it rebounded to its pre-pandemic level.
Green Line trade and crossings from the south kept the economy afloat.
Labor market indicators have exceeded pre-pandemic levels, and over 9,600 jobs were created, 44 percent of which were for women.
Europe’s highest food inflation was reached, poverty and inequality increased.
Informality increased along with the availability of employment. Last year, half of the total employment was unregistered.
The report also includes a “Household Budget Survey”.
This analysis draws attention to three important vulnerabilities.
1- Increased inequality.
2- Reduced human capital accumulation (health, education and labour market outcomes).
3- Large differences between poor and non-poor households.
The World Bank’s report on the Turkish Cypriot economy also includes reform proposals.
Leading among these is “emergency support” to the poor and most vulnerable.
Additionally, suggestions such as investment in renewable energy sources and building a more competitive private sector also stand out.
The lifeline of the economy: Green Line
Despite the anti-European Union and anti-Republic of Cyprus rhetoric originating from both the “Government” and the “Presidency”, the Green Line has been the lifeline of the economy. Green Line crossings and trade have been the main driving force of the economy and growth.
Let’s look at the report…
“In 2023, Green Line crossings reached new record highs. In 2023, crossings reached 7.7 million, surpassing the 2019 levels by almost 10 percent. 40 percent of crossings are by Greek Cypriots, 32 percent by Turkish Cypriots, and the remaining 28 percent by citizens of other countries.”
“Green Line trade also reached a new record high, increasing by almost three times since 2019. Green Line trade reached €15.5 million in 2023, almost three times higher than in 2019, when Green Line trade stood at only €5.4 million. On average, monthly Green Line trade transactions amounted to €1.4 million in 2023, up from €0.4 million in 2019.”
Furthermore, halloumi/hellim, which is registered as a “Protected Designation of Origin (PDO)” and expected to become operational this year, has not yet been activated.
“50 TL in my pocket”
Natasha Rovo, Senior Economist, started the presentation of the report with the following words:
“I came to Nicosia after a long time, I had 50 liras in my pocket. I went to a café and I learnt at that moment that I would not be able to buy anything with this money.”
The senior economist describes the crazy rise in the cost of living from her own experience…
50 TL has lost its meaning.
Even 100 TL, if you ask me!
Natasha Rovo explains that the shocks experienced in the Turkish economy affect the Turkish Cypriot economy much more seriously… There is a small economy in the north of the island. Therefore, the troubles in Turkey affect us in a much more staggering way than Turkey.
Despite underlining the depreciation of the Turkish Lira, Senior Economist Natasha Rovo gives the following important message: “We need to focus on what to do about the local causes of the rise in the cost of living.”
TL is not the only source of the rise in the cost of living!
Some people also take refuge behind the “TL” to boost their own profits, fuel the cost of living, and engage in opportunism.
49% of new jobs are unregistered
One of the most striking headings in the World Bank’s report is “informality”.
“Around 4,700 informal jobs were added to the labor market over the past year, corresponding to 49 percent of total new jobs in 2023.”
These are the ones who are excluded from the social insurance system…
One out of every two jobs is unregistered; imagine the lack of supervision, order and control we are surrounded with.
I asked, I questioned, I tried to understand.
This data was retrieved from the “Household Budget Survey”…
Informality is particularly prominent in such service sectors as construction and tourism.
Moreover, these are the poorest segments of the working class…
There is also a serious degree of informality in the agriculture sector, but the situation here is different…
Most of the people engaged in it are civil servants!
It is estimated that one of the reasons for the “unregistered” labour force in tourism is those who come to the island with student permits.
Thus, there is a serious leak in the insurance system; the future of all employees is put at risk, and planning cannot be done.
The data on unregistered employment is really scary!
