Cyprus country brief
Introduction/Overview
Relations between Australia and the Republic of Cyprus are friendly and underpinned by strong people-to-people links. The essence of the relationship stems from the ties developed by Cypriot migration to Australia, common British institutional inheritances, joint membership of the Commonwealth and Australia's long standing support of United Nations efforts to find a just and permanent solution to the Cyprus dispute.
Australia supports the sovereignty and territorial integrity of the Republic of Cyprus and recognises the Republic as the only legitimate authority on the island. The Australian Government urges all parties to continue constructive efforts aimed at resolving the Cyprus dispute.
The Australian Government has maintained a Special Representative for Cyprus since 1998. The present Special Representative, Ambassador to France, David Ritchie, was appointed in July 2008. Mr Ritchie visited Cyprus in September and October 2008 and has undertaken a series of international consultations in support of efforts to secure a lasting solution to the Cyprus dispute.
Since 1964, Australian police officers have served continually as part of the United Nations Peace-keeping Force in Cyprus (UNFICYP), making a valuable contribution to the maintenance of peace and stability on the island. There are currently 15 Australian Federal Police officers serving with UNFICYP.
Political overview
The government of the Republic of Cyprus comprises an executive President - who is directly elected for a five-year term - and a unicameral legislative arm, the House of Representatives. The current President, Mr Demitris Christofias, was elected in February 2008. The President appoints the Council of Ministers, who may not be members of the House of Representatives.
The House of Representatives consists of 80 members, elected by a form of proportional representation for a five year term. Fifty-six seats are occupied by Greek Cypriots, with the remaining 24 reserved for representatives of the Turkish Cypriot community (although not occupied since 1963). Elections held in February 2008 saw the left-wing Party of the Progressive Working People (AKEL - formerly known as the Communist Party) and the opposition Democratic Rally Party (DISY) emerge as the largest parties with 18 seats each, and the centre-right Democratic Party (DIKO) securing 11seats. The Social Democrats (EDEK) won 5 seats, the European Party (EVROKO) 3 seats and the Ecologists and Environmentalists (Greens) 1 seat.
The island of Cyprus entered the European Union (EU) on 1 May 2004 with the EU acquis communautaire suspended in the area administered by the Turkish Cypriots.
The Cyprus Dispute
The final period of British rule in Cyprus saw a bitter deterioration in relations between the Greek Cypriot and Turkish Cypriot communities. In 1960 the Republic of Cyprus became independent under a Constitution which provided for a power sharing arrangement between Greek Cypriots and Turkish Cypriots. Britain, Greece and Turkey became the guarantors of Cyprus' independence and territorial integrity. Friction between Greek Cypriots and Turkish Cypriots intensified in 1963 after President Makarios, claiming Turkish Cypriot obstructionism, sought to amend the Constitution. This was viewed by the Turkish Cypriots as an attempt to destroy their guaranteed community rights and they withdrew from the government. Intercommunal fighting broke out and the Turkish Cypriots withdrew to segregated enclaves after many deaths on both sides. An uneasy truce was maintained by the establishment in 1964 of a UN Peacekeeping Force in Cyprus (UNFICYP).
The succeeding years saw little decrease in tensions. A coup against President Makarios on 15 July 1974 organised by the Greek military junta, aimed at uniting Cyprus with Greece, was the trigger for Turkish troops to land in Cyprus and occupy the northern part of the island (37 per cent) where Turkish Cypriots were living. The island has remained divided ever since. In 1975 Turkish Cypriot authorities unilaterally declared the so-called "Turkish Federated State of Cyprus". This was renamed in November 1983 the "Turkish Republic of Northern Cyprus (TRNC)".
The United Nations made extensive efforts over the intervening years to develop institutional arrangements acceptable to both communities. Several sets of negotiations have been attempted but have failed to reunite the island. The election of President Christofias in February 2008 served as the impetus for the UN to encourage both parties to reopen unification negotiations, which began again on 3 September 2008. Conducted under the auspices of the UN Special Adviser for Cyprus, the Honourable Alexander Downer, the negotiations aim to find a mutually acceptable solution which will safeguard the fundamental and legitimate rights and interests of both communities.
Economic overview
Cyprus has a population of 800,000, GDP of US$21.3 billion and an estimated GDP per capita of US$27,047 (2007 estimates). Principal export destinations are Greece, the UK and Germany, while the main import sources are Greece, Italy and the UK (see Cyprus - Fact Sheet). Economic policy is dominated by efforts to align the economy with those of other EU members and the longer term Lisbon Agenda to improve competitiveness. Cyprus joined the Eurozone on 1 January 2008.
Since 1990, the Republic of Cyprus economy has sustained strong growth through the expansion of labour intensive industries, tourism, construction and maritime and other business/financial services. Economic growth averaged over 4 per cent each year since 2004. The Cyprus Government has forecast that growth is expected to fall to 2.1 per cent in 2009, however, as tourism and construction decline sharply as a result of the global economic crisis.
Bilateral relationship
The Minister for Foreign Affairs, the Hon Stephen Smith MP, visited Cyprus in October 2008. The Hon Mike Rann MP, Premier of South Australia visited in May 2007 and a parliamentary delegation led by Senator George Brandis visited in July 2006. Then Ministers for Justice and Customs, Senator Hon Chris Ellison and Senator Hon Amanda Vanstone visited in April 2003 and April 2000 respectively.
The Minister of Foreign Affairs, HE Mr Markos Kyprianou, visited Australia in March 2009. President Christofias, in his former position as Speaker of the House of Representatives, visited Australia in March 2005 at the invitation of the Australian Parliament Presiding Officers. The late Mr Pefkios Georgiades (Minister for Education and Culture) led the Cyprus delegation to the Melbourne Commonwealth Games in March 2006. Mr Ioannis Kasoulides, then Republic of Cyprus Foreign Minister, visited Australia in March 2002 for the Coolum Commonwealth Heads of Government Meeting.
The Cypriot community in Australia is the second largest outside Cyprus after the United Kingdom. The 2006 census recorded 18,381 Cyprus-born people in Australia, concentrated predominantly in Victoria and NSW. Greek Cypriots migrated to Australia in three waves: during the nineteenth century gold rushes; between 1924 and 1964; and after the 1974 Turkish intervention. Turkish Cypriot migration to Australia began in the mid-twentieth century.
Bilateral economic and trade relationship
Trade between Australia and Cyprus is small, due to a combination of distance, lack of direct freight linkages, and the small size of the Cypriot market. Cyprus" accession to the EU also resulted in loss of markets for lamb and beef. However, Australia has successfully established a foothold in such niche markets as wine, processed foodstuffs and pharmaceuticals.
In 2008, the value of Australian exports was A$11.5 million, while Cypriot exports to Australia were worth A$11.1 million. Australia"s trade in services with Cyprus is negligible. In recent years, our largest export items have been medicaments, optical goods, and machinery and parts. Major Cypriot exports to Australia are pharmaceutical goods, medicaments and cheese and curd products.
Bilateral investment is also small, with the principal areas of activity being mining and banking. The Mafin Popular Bank Group and the Bank of Cyprus have established branches in Australia.
The "Turkish Republic of Northern Cyprus (TRNC)" - Political Overview
The "Turkish Republic of Northern Cyprus" is a mixed presidential/parliamentary system with political power shared between the "President" and "Prime Minister". The "President" is elected for a five-year term and has the power to propose legislation or return it to the 50-seat "National Assembly". The current "TRNC" President" is Mehmet Ali Talat, elected in April 2005.
The ‘TRNC elections’ held on 19 April 2009 confirmed that the National Unity Party (UBP) won 26 seats in the NationalAssembly. The Republican Turkish Party (CTP) won 15 seats, the Democratic Party (DP) 5, the Freedom and Reform Party (ORP) 2 and the Social Democracy Party (TDP) 2 seats. The UBP should be able to form a government in its own right, with UBP leader, Dervi_ Ero_lu, expected to be sworn in as the next ‘Prime Minister’ of the ‘TRNC’ in May 2009.
For much of its existence, the "TRNC's" principal foreign policy objective has been to secure international recognition as a sovereign state, and to consolidate ties with Turkey (which is the only country to accord diplomatic recognition). Under "President" Talat, the regime has declared its support for reunification and a solution of the Cyprus problem, subject to the political equality and separation of the two major communities. The "TRNC" has embarked on an active campaign to develop its ties with the outside world, and has established representative trade and/or tourism offices in a number of countries, including Brussels, London and New York. It has observer status at the Organisation of the Islamic Conference (OIC) and sends two observers to meetings of the Parliamentary Assembly meetings of the Council of Europe (PACE).
The "Turkish Republic of Northern Cyprus (TRNC)" - Economic Overview
The "TRNC" economy is much smaller and more narrowly based than its southern counterpart. Economic growth tends to be volatile, given the north's relative isolation, bloated public sector, reliance on the Turkish lira, and small market size. Agriculture and services together employ more than half of the work force. Per capita incomes in the north are, on average, 50 per cent less than those in the south.
The "TRNC" is heavily dependent on Turkey for credits, grants and trade, and to fund a range of subsidies that are needed as a result of external sanctions. Reliance on the Turkish Lira also means there is no effective local control over monetary policy. The economy is therefore vulnerable to currency shocks from Turkey and imports Turkish inflation. Exports are thin, and likely to remain so due to limited direct trade with the EU and other markets. As well as fiscal transfers from Turkey, the economy has been sustained by a real estate and construction boom, tertiary education services, tourism, gambling and related services. The local authorities see tourism development as a major hope, but the lack of direct airlinks to potential markets is a major constraint and tourist numbers are quite low.
Updated date: 1 May 2009