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Cyprus-Tertiary Sector

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Cyprus Index

The tertiary, or service, sector of the Turkish Cypriot economy grew in importance during the 1980s as part of the economy's modernization. The greatest expansion was in trade and tourism; earnings from tourism tripled between 1986 and 1989. Financial, business, and personal services also grew more important to the economy in the 1980s. Government still accounted for too large a share of the Turkish Cypriot economy at the end of the 1980s, but its share was declining. A new development in the late 1980s was the founding of Eastern Mediterranean University in Famagusta. With an enrollment of 3,500 students (2,800 of whom were foreign), it was a valuable new source of employment and foreign exchange, and an example of how the Turkish Cypriot service sector might grow in the future.

Data as of January 1991

BackgroundA former British colony, Cyprus became independent in 1960 following years of resistance to British rule. Tensions between the Greek Cypriot majority and Turkish Cypriot minority came to a head in December 1963, when violence broke out in the capital of Nicosia. Despite the deployment of UN peacekeepers in 1964, sporadic intercommunal violence continued forcing most Turkish Cypriots into enclaves throughout the island. In 1974, a Greek Government-sponsored attempt to seize control of Cyprus was met by military intervention from Turkey, which soon controlled more than a third of the island. In 1983, the Turkish-held area declared itself the "Turkish Republic of Northern Cyprus" ("TRNC"), but it is recognized only by Turkey. The election of a new Cypriot president in 2008 served as the impetus for the UN to encourage both the Turkish and Cypriot Governments to reopen unification negotiations. In September 2008, the leaders of the Greek Cypriot and Turkish Cypriot communities started negotiations under UN auspices aimed at reuniting the divided island. The entire island entered the EU on 1 May 2004, although the EU acquis - the body of common rights and obligations - applies only to the areas under direct government control, and is suspended in the areas administered by Turkish Cypriots. However, individual Turkish Cypriots able to document their eligibility for Republic of Cyprus citizenship legally enjoy the same rights accorded to other citizens of European Union states.
LocationMiddle East, island in the Mediterranean Sea, south of Turkey
Area(sq km)total: 9,251 sq km (of which 3,355 sq km are in north Cyprus)
land: 9,241 sq km
water: 10 sq km
Geographic coordinates35 00 N, 33 00 E
Land boundaries(km)total: 150.4 km (approximately)
border sovereign base areas: Akrotiri 47.4 km, Dhekelia 103 km (approximately)

Coastline(km)648 km

Climatetemperate; Mediterranean with hot, dry summers and cool winters

Elevation extremes(m)lowest point: Mediterranean Sea 0 m
highest point: Mount Olympus 1,951 m
Natural resourcescopper, pyrites, asbestos, gypsum, timber, salt, marble, clay earth pigment
Land use(%)arable land: 10.81%
permanent crops: 4.32%
other: 84.87% (2005)

Irrigated land(sq km)400 sq km (2003)
Total renewable water resources(cu km)0.4 cu km (2005)
Freshwater withdrawal (domestic/industrial/agricultural)total: 0.21 cu km/yr (27%/1%/71%)
per capita: 250 cu m/yr (2000)
Natural hazardsmoderate earthquake activity; droughts
Environment - current issueswater resource problems (no natural reservoir catchments, seasonal disparity in rainfall, sea water intrusion to island's largest aquifer, increased salination in the north); water pollution from sewage and industrial wastes; coastal degradation; loss of wildlife habitats from urbanization
Environment - international agreementsparty to: Air Pollution, Air Pollution-Nitrogen Oxides, Air Pollution-Persistent Organic Pollutants, Air Pollution-Sulfur 94, Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Environmental Modification, Hazardous Wastes, Law of the Sea, Marine Dumping, Ozone Layer Protection, Ship Pollution, Wetlands
signed, but not ratified: none of the selected agreements
Geography - notethe third largest island in the Mediterranean Sea (after Sicily and Sardinia)
Population796,740 (July 2009 est.)
Age structure(%)0-14 years: 19.1% (male 77,959/female 74,591)
15-64 years: 68.5% (male 276,890/female 269,267)
65 years and over: 12.3% (male 42,961/female 55,072) (2009 est.)
Median age(years)total: 35.5 years
male: 34.5 years
female: 36.6 years (2009 est.)
Population growth rate(%)0.519% (2009 est.)
Birth rate(births/1,000 population)12.57 births/1,000 population (2009 est.)
Death rate(deaths/1,000 population)7.8 deaths/1,000 population (July 2009 est.)

Net migration rate(migrant(s)/1,000 population)0.42 migrant(s)/1,000 population (2009 est.)
Urbanization(%)urban population: 70% of total population (2008)
rate of urbanization: 1.3% annual rate of change (2005-10 est.)
Sex ratio(male(s)/female)at birth: 1.05 male(s)/female
under 15 years: 1.04 male(s)/female
15-64 years: 1.03 male(s)/female
65 years and over: 0.78 male(s)/female
total population: 1 male(s)/female (2009 est.)
Infant mortality rate(deaths/1,000 live births)total: 6.6 deaths/1,000 live births
male: 8.14 deaths/1,000 live births
female: 4.98 deaths/1,000 live births (2009 est.)

Life expectancy at birth(years)total population: 78.33 years
male: 75.91 years
female: 80.86 years (2009 est.)

Total fertility rate(children born/woman)1.77 children born/woman (2009 est.)
Nationalitynoun: Cypriot(s)
adjective: Cypriot
Ethnic groups(%)Greek 77%, Turkish 18%, other 5% (2001)

Religions(%)Greek Orthodox 78%, Muslim 18%, other (includes Maronite and Armenian Apostolic) 4%
Languages(%)Greek, Turkish, English

Country nameconventional long form: Republic of Cyprus
conventional short form: Cyprus
local long form: Kypriaki Dimokratia/Kibris Cumhuriyeti
local short form: Kypros/Kibris
note: the Turkish Cypriot community, which administers the northern part of the island, refers to itself as the "Turkish Republic of Northern Cyprus" ("TRNC")
Government typerepublic
note: a separation of the two ethnic communities inhabiting the island began following the outbreak of communal strife in 1963; this separation was further solidified after the Turkish intervention in July 1974 that followed a Greek junta-supported coup attempt gave the Turkish Cypriots de facto control in the north; Greek Cypriots control the only internationally recognized government; on 15 November 1983 Turkish Cypriot "President" Rauf DENKTASH declared independence and the formation of a "Turkish Republic of Northern Cyprus" ("TRNC"), which is recognized only by Turkey
Capitalname: Nicosia (Lefkosia)
geographic coordinates: 35 10 N, 33 22 E
time difference: UTC+2 (7 hours ahead of Washington, DC during Standard Time)
daylight saving time: +1hr, begins last Sunday in March; ends last Sunday in October
Administrative divisions6 districts; Famagusta, Kyrenia, Larnaca, Limassol, Nicosia, Paphos; note - Turkish Cypriot area's administrative divisions include Kyrenia, all but a small part of Famagusta, and small parts of Nicosia (Lefkosia)
note: from December 1963, the Turkish Cypriots no longer participated in the government; negotiations to create the basis for a new or revised constitution to govern the island and for better relations between Greek and Turkish Cypriots have been held intermittently since the mid-1960s; in 1975, following the 1974 Turkish intervention, Turkish Cypriots created their own constitution and governing bodies within the "Turkish Federated State of Cyprus," which became the "Turkish Republic of Northern Cyprus (TRNC)" when the Turkish Cypriots declared their independence in 1983; a new constitution for the "TRNC" passed by referendum on 5 May 1985, although the "TRNC" remains unrecognized by any country other than Turkey

Legal systembased on English common law, with civil law modifications; accepts compulsory ICJ jurisdiction with reservations

Suffrage18 years of age; universal
Executive branchchief of state: President Demetris CHRISTOFIAS (since 28 February 2008); note - the president is both the chief of state and head of government; post of vice president is currently vacant; under the 1960 constitution, the post is reserved for a Turkish Cypriot
head of government: President Demetris CHRISTOFIAS (since 28 February 2008)
cabinet: Council of Ministers appointed jointly by the president and vice president
elections: president elected by popular vote for a five-year term; election last held 17 and 24 February 2008 (next to be held in February 2013)
election results: Demetris CHRISTOFIAS elected president; percent of vote (first round) - Ioannis KASOULIDES 33.5%, Demetris CHRISTOFIAS 33.3%, Tassos PAPADOPOULOS 31.8%; (second round) Demetris CHRISTOFIAS 53.4%, Ioannis KASOULIDES 46.6%
note: Mehmet Ali TALAT became "president" of the "TRNC", 24 April 2005, after "presidential" elections on 17 April 2005; results - Mehmet Ali TALAT 55.6%, Dervis EROGLU 22.7%; Ferdi Sabit SOYER is "TRNC prime minister" and heads the Council of Ministers (cabinet) in coalition with "Foreign Minister and Deputy Prime Minister" Turgay AVCI
Legislative branchunicameral - area under government control: House of Representatives or Vouli Antiprosopon (80 seats; 56 assigned to the Greek Cypriots, 24 to Turkish Cypriots; note - only those assigned to Greek Cypriots are filled; members are elected by popular vote to serve five-year terms); area administered by Turkish Cypriots: Assembly of the Republic or Cumhuriyet Meclisi (50 seats; members are elected by popular vote to serve five-year terms)
elections: area under government control: last held 21 May 2006 (next to be held in 2010); area administered by Turkish Cypriots: last held 19 April 2009 (next to be held in 2014)
election results: area under government control: House of Representatives - percent of vote by party - AKEL 31.1%, DISY 30.3%, DIKO 17.9%, EDEK 8.9%, EURO.KO 5.8%, Greens 2.0%; seats by party - AKEL 18, DISY 18, DIKO 11, EDEK 4, EURO.KO 4, Greens 1; area administered by Turkish Cypriots: Assembly of the Republic - percent of vote by party - UBP 44.1%, CTP 29.3%, DP 10.6%, other 16%; seats by party - UBP 26, CTP 15, DP 5, other 4

Judicial branchSupreme Court (judges are appointed jointly by the president and vice president)
note: there is also a Supreme Court in the area administered by Turkish Cypriots

Political pressure groups and leadersConfederation of Cypriot Workers or SEK (pro-West); Confederation of Revolutionary Labor Unions or Dev-Is; Federation of Turkish Cypriot Labor Unions or Turk-Sen; Pan-Cyprian Labor Federation or PEO (Communist controlled)
International organization participationAustralia Group, C, CE, EBRD, EIB, EMU, EU, FAO, IAEA, IBRD, ICAO, ICC, ICCt, IFAD, IFC, IHO, ILO, IMF, IMO, IMSO, Interpol, IOC, IOM, IPU, ISO, ITSO, ITU, ITUC, MIGA, NSG, OAS (observer), OIF (associate member), OPCW, OSCE, PCA, UN, UNCTAD, UNESCO, UNHCR, UNIDO, UNIFIL, UNWTO, UPU, WCL, WCO, WFTU, WHO, WIPO, WMO, WTO
Flag descriptionwhite with a copper-colored silhouette of the island (the name Cyprus is derived from the Greek word for copper) above two green crossed olive branches in the center of the flag; the branches symbolize the hope for peace and reconciliation between the Greek and Turkish communities
note: the "Turkish Republic of Northern Cyprus" flag has a white field with narrow horizontal red stripes positioned a small distance from the top and bottom edges between which is centered a red crescent and a red five-pointed star

Economy - overviewThe area of the Republic of Cyprus under government control has a market economy dominated by the service sector, which accounts for 78% of GDP. Tourism, financial services, and real estate are the most important sectors. Erratic growth rates over the past decade reflect the economy's reliance on tourism, which often fluctuates with political instability in the region and economic conditions in Western Europe. Nevertheless, the economy in the area under government control has grown at a rate well above the EU average since 2000. Cyprus joined the European Exchange Rate Mechanism (ERM2) in May 2005 and adopted the euro as its national currency on 1 January 2008. An aggressive austerity program in the preceding years, aimed at paving the way for the euro, helped turn a soaring fiscal deficit (6.3% in 2003) into a surplus of 1.2% in 2008, and reduced inflation to 5.1%. This prosperity will come under pressure in 2009, as construction and tourism slow in the face of reduced foreign demand triggered by the ongoing global financial crisis. Growth is expected to slow to less than 2%, which would be its lowest level since 2003. As in the area administered by Turkish Cypriots, water shortages are a perennial problem; a few desalination plants have been added to existing plants over the last year and are now on line. After 10 years of drought, the country received substantial rainfall from 2001-04. Since then, rainfall has been well below average, making water rationing a necessity.
GDP (purchasing power parity)$22.76 billion (2008 est.)
$21.94 billion (2007 est.)
$21.02 billion (2006 est.)
note: data are in 2008 US dollars
GDP (official exchange rate)$24.92 billion (2008 est.)
GDP - real growth rate(%)3.7% (2008 est.)
4.4% (2007 est.)
4.1% (2006 est.)
GDP - per capita (PPP)$21,300 (2008 est.)
$20,900 (2007 est.)
$20,400 (2006 est.)
note: data are in 2008 US dollars
GDP - composition by sector(%)agriculture: 2.1%
industry: 19.6%
services: 78.3% (2008 est.)
Labor force397,000 (2008 est.)

Labor force - by occupation(%)agriculture: 8.5%
industry: 20.5%
services: 71% (2006 est.)
Unemployment rate(%)3.6% (2008 est.)
3.9% (2007 est.)
Population below poverty line(%)NA%
Household income or consumption by percentage share(%)lowest 10%: NA%
highest 10%: NA%
Distribution of family income - Gini index29 (2005)
Investment (gross fixed)(% of GDP)23.3% of GDP (2008 est.)
Budgetrevenues:: $11.19 billion
expenditures:: $10.96 billion (2008 est.)
Inflation rate (consumer prices)(%)4.7% (2008 est.)
2.4% (2007 est.)

Stock of money$NA (31 December 2008)
$4.094 billion (31 December 2007)
note: this figure represents the US dollar value of Cypriot pounds in circulation prior to Cyprus joining the Economic and Monetary Union (EMU); see entry for the European Union for money supply in the euro area; the European Central Bank (ECB) controls monetary policy for the 16 members of the EMU; individual members of the EMU do not control the quantity of money and quasi money circulating within their own borders
Stock of quasi money$NA (31 December 2008)
$43.93 billion (31 December 2007)
Stock of domestic credit$80.68 billion (31 December 2008)
$52.09 billion (31 December 2007)
Market value of publicly traded shares$NA (31 December 2008)
$29.48 billion (31 December 2007)
$15.9 billion (31 December 2006)
Economic aid - recipient$15 million (2006)

Public debt(% of GDP)49.1% of GDP (2008 est.)
74.9% of GDP (2004 est.)
Agriculture - productscitrus, vegetables, barley, grapes, olives, vegetables; poultry, pork, lamb; dairy, cheese
Industriestourism, food and beverage processing, cement and gypsum production, ship repair and refurbishment, textiles, light chemicals, metal products, wood, paper, stone, and clay products

Industrial production growth rate(%)4.1% (2008 est.)

Current account balance-$4.479 billion (2008 est.)
-$2.595 billion (2007 est.)
Exports$1.906 billion (2008 est.)
$1.483 billion (2007 est.)

Exports - commodities(%)citrus, potatoes, pharmaceuticals, cement, and clothing
Exports - partners(%)Greece 20.1%, UK 10.8%, Germany 6% (2008)
Imports$10.54 billion (2008 est.)
$7.957 billion (2007 est.)

Imports - commodities(%)consumer goods, petroleum and lubricants, intermediate goods, machinery, transport equipment
Imports - partners(%)Greece 16.9%, Italy 10.7%, UK 8.7%, Germany 8.3%, Israel 8.2%, China 5.3%, Netherlands 4.1%, France 4% (2008)

Reserves of foreign exchange and gold$1.003 billion (31 December 2008 est.)
$6.507 billion (31 December 2007 est.)
Debt - external$32.86 billion (31 December 2008 est.)
$26.97 billion (31 December 2007 est.)

Stock of direct foreign investment - at home$15.69 billion (31 December 2008 est.)
$13.83 billion (31 December 2007 est.)
Stock of direct foreign investment - abroad$7.097 billion (31 December 2008 est.)
$5.591 billion (31 December 2007 est.)
Exchange rateseuros (EUR) per US dollar - 0.6827 (2008 est.), Cypriot pounds (CYP) per US dollar - 0.4286 (2007), 0.4586 (2006), 0.4641 (2005), 0.4686 (2004)

Currency (code)Cypriot pound (CYP); euro (EUR) after 1 January 2008

Telephones - main lines in usearea under government control: 413,300 (2008); area administered by Turkish Cypriots: 86,228 (2002)
Telephones - mobile cellulararea under government control: 1.017 million (2008); area administered by Turkish Cypriots: 147,522 (2002)
Telephone systemgeneral assessment: excellent in both area under government control and area administered by Turkish Cypriots
domestic: open-wire, fiber-optic cable, and microwave radio relay
international: country code - 357 (area administered by Turkish Cypriots uses the country code of Turkey - 90); a number of submarine cables, including the SEA-ME-WE-3, combine to provide connectivity to Western Europe, the Middle East, and Asia; tropospheric scatter; satellite earth stations - 8 (3 Intelsat - 1 Atlantic Ocean and 2 Indian Ocean, 2 Eutelsat, 2 Intersputnik, and 1 Arabsat)
Internet country code.cy
Internet users334,400 (2008)
Airports15 (2009)
Roadways(km)total: 14,630 km (area under government control: 12,280 km; area administered by Turkish Cypriots: 2,350 km)
paved: area under government control: 7,979 km (includes 257 km of expressways); area administered by Turkish Cypriots: 1,370 km
unpaved: area under government control: 4,301 km; area administered by Turkish Cypriots: 980 km (2006)

Ports and terminalsarea under government control: Larnaca, Limassol, Vasilikos;; area administered by Turkish Cypriots: Famagusta, Kyrenia
Military branchesRepublic of Cyprus: Greek Cypriot National Guard (Ethniki Forea, EF; includes naval and air elements); northern Cyprus: Turkish Cypriot Security Force (GKK) (2009)
Military service age and obligation(years of age)Greek Cypriot National Guard (GCNG): 18-50 years of age for compulsory military service for all Greek Cypriot males; 17 years of age for voluntary service; women may volunteer for a 3-year term; length of normal service is 25 months (2009)
Manpower available for military serviceGreek Cypriot National Guard (GCNG):
males age 16-49: 199,767
females age 16-49: 190,665 (2008 est.)
Manpower fit for military serviceGreek Cypriot National Guard (GCNG):
males age 16-49: 165,615
females age 16-49: 159,362 (2009 est.)
Manpower reaching militarily significant age annuallymale: 6,241
female: 5,979 (2009 est.)
Military expenditures(% of GDP)3.8% of GDP (2005 est.)
Disputes - internationalhostilities in 1974 divided the island into two de facto autonomous entities, the internationally recognized Cypriot Government and a Turkish-Cypriot community (north Cyprus); the 1,000-strong UN Peacekeeping Force in Cyprus (UNFICYP) has served in Cyprus since 1964 and maintains the buffer zone between north and south; on 1 May 2004, Cyprus entered the European Union still divided, with the EU's body of legislation and standards (acquis communitaire) suspended in the north; Turkey protests Cypriot Government creating hydrocarbon blocks and maritime boundary with Lebanon in March 2007

Refugees and internally displaced personsIDPs: 210,000 (both Turkish and Greek Cypriots; many displaced for over 30 years) (2007)
Trafficking in personscurrent situation: Cyprus is primarily a destination country for a large number of women trafficked from Eastern and Central Europe, the Philippines, and the Dominican Republic for the purpose of sexual exploitation; traffickers continued to fraudulently recruit victims for work as dancers in cabarets and nightclubs on short-term "artiste" visas, for work in pubs and bars on employment visas, or for illegal work on tourist or student visas
tier rating: Tier 2 Watch List - Cyprus is on the Tier 2 Watch List for a third consecutive year for failure to show evidence of increasing efforts to combat human trafficking during 2007; although Cyprus passed a new trafficking law and opened a government trafficking shelter, these efforts are outweighed by its failure to show tangible and critically needed progress in the areas of law enforcement, victim protection, and the prevention of trafficking (2008)
Electricity - production(kWh)4.502 billion kWh (2007 est.)
Electricity - production by source(%)fossil fuel: 100%
hydro: 0%
nuclear: 0%
other: 0% (2001)
Electricity - consumption(kWh)4.277 billion kWh (2007 est.)
Electricity - exports(kWh)0 kWh (2008 est.)
Electricity - imports(kWh)0 kWh (2008 est.)
Oil - production(bbl/day)0 bbl/day (2008 est.)
Oil - consumption(bbl/day)59,000 bbl/day (2008 est.)
Oil - exports(bbl/day)0 bbl/day (2007 est.)
Oil - imports(bbl/day)58,930 bbl/day (2007 est.)
Economic aid - donor$25.9 million (2006)

Oil - proved reserves(bbl)0 bbl
Natural gas - production(cu m)0 cu m (2008 est.)
Natural gas - consumption(cu m)0 cu m (2008 est.)
Natural gas - exports(cu m)0 cu m (2008)
Natural gas - proved reserves(cu m)0 cu m (1 January 2009 est.)
HIV/AIDS - adult prevalence rate(%)0.1% (2003 est.)
HIV/AIDS - people living with HIV/AIDSfewer than 1,000 (2007 est.)
HIV/AIDS - deathsNA
Literacy(%)definition: age 15 and over can read and write
total population: 97.6%
male: 98.9%
female: 96.3% (2001 census)

School life expectancy (primary to tertiary education)(years)total: 14 years
male: 13 years
female: 14 years (2006)
Education expenditures(% of GDP)6.3% of GDP (2004)

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