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National Trade Data Bank
ITEM ID     : ST BNOTES CYPRUS
DATE        : Oct 28, 1994

AGENCY      : U.S. DEPARTMENT OF STATE
PROGRAM     : BACKGROUND NOTES
TITLE       : Background Notes - CYPRUS

Source key      : ST
Program key     : ST BNOTES
Update sched.   : Occasionally
Data type       : TEXT
End year        : 1992
Date of record  : 19941018
Keywords 3      :
Keywords 3      : | CYPRUS

US DEPARTMENT OF STATE
BACKGROUND NOTES SERIES, CYPRUS, MARCH 1992
PUBLISHED BY THE BUREAU OF PUBLIC AFFAIRS

Official Name:   Republic of Cyprus1

PROFILE

Geography
Area:  9,251 sq. km. (3,572 sq. mi.); about the size of Connecticut.
Cities: Capital--Nicosia (pop. 164,400).  Other cities--Limassol, Larnaca,
Famagusta, Kyrenia, Paphos.  Terrain: Central plain with mountain ranges
to the north and south.  Climate:  Mediterranean with hot, dry summers
and cool, wet winters.

People

Nationality:  Noun and adjective--Cypriot(s).
Population (1991): 735,000.  Greek area:  565,000;  Turkish area: 170,000.
Annual growth rate: 1%.  Ethnic groups: Greek (78%), Turkish (18%), Armenian
and other (4%).

Religions: Greek Orthodox, Muslim, Maronite, Roman
Catholic, Armenian.  Languages:  Greek, Turkish, English.

Education:  Years compulsory--  6 in elementary; 3 in high school.
Attendance--almost 100%.  Literacy--about 99%. Health (1990):

Infant mortality rate--10/1,000.  Life expectancy--73 yrs. males; 78 yrs.
females.

Work force (1991): Greek area--280,000:  trade and tourism-- 24%; industry-
20%; agriculture--15%; public services--6%. Turkish area--74,000: agriculture-
29%; public services--22%; industry--10%; trade and tourism--10%.  Figures
cited are for the Greek Cypriot Community, unless otherwise noted.

Government

Type:  Republic.
Independence: August 16, 1960. Constitution:  August 16, 1960.
Branches:  Executive--president elected to 5-yr. term.  Legislative--
unicameral House of Representatives, members elected to 5-yr. terms.
Judicial--Supreme Court; six district courts.  Administrative subdivisions:
six.

Political parties: Greek Cypriot Community--Democratic Rally (right);
Democratic  (center-right);  AKEL (communist); EDEK (socialist).  Turkish
Cypriot Community--National Unity  (center-right); Republican Turkish
(Marxist); Communal Liberation (left); New Dawn  (right); Free Democratic
(center); Social Democratic (center-left).  Suffrage: Universal at age 18.

Central government budget (1991):  Total revenue--$1.2 billion; Total
expen-diture--$2 billion; Development spending--$206 million. Fiscal deficit
reached   $285 million (5% of GDP) in 1991.  Defense (1991 est.):  $379
million (6% of GDP).

Flag:  Against a white background, island's shape in gold above two crossed
olive branches.

Economy

GNP (1991):  $5.9 billion.  Per capita income (1991):  Greek Cypriots--$9,970;
Turkish Cypriots--about $3,500.

Natural resources: Pyrites, copper, asbestos, gypsum, lumber, salt, marble,
clay, earth pigment.

Agriculture (7% of GDP):  Products--Potatoes and other vegetables, citrus
fruits, olives, grapes, wheat, carob seeds.

Industry (18% of GDP):  Types--mining,  chemicals, non-electric machinery,
clothing, footwear, beverages, cement.

Services and Tourism (50% of GDP):  Trade, restaurants, and hotels 23%;
finance, insurance, real estate, and business 15%; transport, storage,
and communication 10%.

Trade (1991):  Exports--$838 million: citrus, grapes, wine, potatoes, clothing,
footwear.  Major markets--EC (especially the UK),  Middle East.  Imports--
$2.3 billion: consumer goods, petroleum and lubricants, food and feed grains.
Major suppliers--EC (especially the UK), Japan.

Exchange Rate:  US$2.30=1 Cyprus pound.
Fiscal year:  Calendar year.

OVERVIEW

Cyprus has been divided since the Turkish military intervention of 1974,
following a coup directed from Greece.  Since then, the southern part of
the country has been under the control of the Government of Cyprus and the
northern part under an autonomous Turkish-Cypriot administration supported
by the presence of Turkish troops.  In 1983, that administration proclaimed
itself the "Turkish Republic of Northern Cyprus," recognized only by Turkey.
UN  peace-keeping forces maintain a buffer zone between the two sides.

PEOPLE AND  HISTORY

Greek and Turkish Cypriots share many customs but maintain distinct identities
based on religion, language, and close ties with their respective  motherlands.
Greek and Turkish are official languages in their sectors.  English is widely
used.  Cyprus has a well-developed system of primary and secondary education.
Cypriots traditionally have received higher education at Greek, Turkish, or
British universities.   Growing numbers also are being educated in the United
States.  Separate institutions of higher education on the island have been
developed by both the Turkish and Greek communities.

Cypriot culture is among the oldest in the Mediterranean.  By BC 3700, the
island was well inhabited, a crossroads between East and West.  The island
fell successively under Assyrian, Egyptian,  Persian, Greek, and Roman
domination.  For 800 years, beginning in 364 AD, Cyprus was ruled by Byzantium.
After brief possession by Richard the Lion-Hearted, the island came under
Frankish control in the late 12th century.  It was ceded to the Venetian
Republicn 1489 and acquired by the Ottoman Turks in 1571.

The Ottomans applied the millet system to Cyprus, under which non-Muslim
minorities were governed by their religious authorities.  This system
reinforced the position of the church and the cohesion of the ethnic Greek
population.  Most of the Turks who settled on the island during the three
centuries of Ottoman rule remained when control of Cyprus, although not
sovereignty,  was ceded to the United Kingdom in 1878.  Many, however,
left for Turkey during the 1920s.

The island was annexed formally by the UK in 1914 at the outbreak of World
War I and became a crown colony in 1925.  Cyprus gained its independence
from the UK  in 1960, after an anti-UK campaign by the Greek Cypriot EOKA
(National Organization of Cypriot Fighters), a guerrilla group which desired
political union with Greece, in a process known as enosis.  Archbishop
Makarios, a charismatic religious and political leader, was elected
President.

Shortly after the founding of the republic, serious differences arose
between the two communities over the implementation and interpretation of
the constitution.  Intercommunal fighting erupted in December 1963, after
which Turkish Cypriots, in their view, were forced to withdraw from most
national institutions and began to administer their own affairs.  UN
peacekeepers have been on the island since 1964.

In 1974, a military junta in Athens sponsored a coup in Nicosia led by
extremist Greek Cypriots supporting union with Greece.  The junta had been
hostile to Makarios for alleged pro-communist leanings and for what was
perceived as President Makarios' abandonment of enosis.  Turkey, citing
the 1960 Treaty of Guarantee, intervened militarily to protect Turkish
Cypriots. In a two-stage offensive, Turkish troops took control of 38%
of the island.  Many Greek Cypriots fled south while Turkish Cypriots fled
north.  After a cease-fire was declared, a large-scale population transfer
occurred.

GOVERNMENT

Since 1974, Cyprus has been divided de facto into two areas.  The Government
of the Republic of Cyprus has continued as the internationally recognized
authority, but, in practice, its power extends only to the Greek Cypriot-
controlled areas.

The 1960 Cypriot Constitution provided for a presidential system of government
with independent executive, legislative, and judicial branches, as well as a
complex system of checks and balances, including a weighted power-sharing ratio
designed to protect the interests of the Turkish Cypriots.  The executive,
for example, was headed by a Greek Cypriot president and a Turkish Cypriot
vice president, elected by their respective communities for 5-year terms and
possessing a right of veto over certain types of legislation and executive
decisions.

Certain provisions of the constitution were never fully implemented. The
Greek Cypriots argued that the complex mechanisms introduced to protect
Turkish Cypriot interests were obstacles to efficient government.  In
November 1963, President Makarios advanced a series of constitutional
amendments designed to eliminate some of these special provisions.  The
Turkish Cypriots opposed such changes.  The confrontation prompted widespread
intercommunal fighting, after which Turkish Cypriot participation ceased in
the central government.  Following a further outbreak of intercommunal
violence in 1967-68, a Turkish Cypriot provisional administration was formed.

In February 1975, the Turkish Cypriots formally set up their own government
with a popularly elected president and a prime minister responsible to the
National Assembly exercising joint executive powers.  In 1983, the Turkish
Cypriots declared the independence of the "Turkish Republic of Northern
Cyprus" (TRNC) and in 1985 adopted a constitution and held elections; this
arrangement is recognized only by Turkey.

Principal Government Officials
President--George Vassiliou Takis Nemitsas Christofides
Foreign Minister--George Iacovou
Ambassador to the United States--Michaelis Sherifis
Ambassador to the United Nations--Andreas Mavrommatis

Cyprus maintains an Embassy in the United States at 2211 R Street NW,
Washington, DC 20008 (tel. [phone]).  The Cypriot Consulate General is
located in New York City and Cypriot Honorary Consuls are in Atlanta, Baton
Rouge, Chicago, Fort Wayne, Houston, Los Angeles, Oakland, Philadelphia,
Phoenix, Portland, San Francisco, St. Louis, Rochester, MN., and Wellesley,
MA.  Cyprus also maintains a trade center at 13 East 40th Street, New York,
NY 10016 (tel. [phone]).  The Turkish Cypriots maintain offices in
Washington and at the Turkish Mission to the United Nations in New York.

POLITICAL CONDITIONS

Both the Republic of Cyprus and the "TRNC" have active multi-party political
systems. There are four major Greek Cypriot political parties--the conservative
Democratic Rally, the center-right Democratic Party, socialist EDEK, and
communist AKEL.  None has been able to elect a president by itself or dominate
the 56-seat House of Representatives.

President Vassiliou, a successful businessman elected in 1988 as an independent
with backing from AKEL,  faces pressures from the party of former President
Spyros Kyprianou and the Socialist party led by Vassos Lyssarides.  Both are
considered less flexible on settlement issues than the President.  The 165,000
Greek Cypriot refugees are also a potent political force, along with the
Orthodox Church of Cyprus, an independent branch of Greek Orthodoxy which
exercises broad influence in temporal as well as ecclesiastical matters.

On the Turkish Cypriot side,  the National Unity Party founded by current
"TRNC President" Rauf Denktash, controls all but five seats in the  assembly.
The two main opposition parties--the leftist Republican Turkish Party and the
Communal Liberation Party--have boycotted the assembly since they lost a
critical general election in May 1990. They contend that election rules
were unfair and that the Turkish mainland had intervened unfairly during the
campaign.   One month earlier, Denktash, running without party affiliation,
was re-elected with 67% of the votes.

Efforts to develop institutional arrangements acceptable to both communities
have been made almost since the founding of the republic.   UN-sponsored
negotiations began in 1968.  Since 1975, there have been several sets of
negotiations and other initiatives.  Despite setbacks, discussions continue
to focus on ways to establish a new constitutional arrangement for the State
of Cyprus that will regulate the relations of the two communities on a federal,
bicommunal,  and bizonal basis.  Turkish Cypriots place emphasis on bizonality,
security guarantees,  and political equality of the two communities.   Greek
Cypriots emphasize the rights of  movement, property, settlement, and the
return of territory.  Turkish Cypriots favor a federation of  two nearly
autonomous societies living side by side with limited contact, while Greek
Cypriots envision a more integrated structure.

Talks between Greek Cypriot President Vassiliou and Turkish Cypriot leader
Denktash have taken place since 1988.  UN efforts continue, with Security
Council Resolutions 649 (1990) and 716 (1991)  calling on both communities
to negotiate on an equal footing and to complete an overall framework
agreement.

ECONOMY

The economy of the Republic of Cyprus has made a dramatic recovery from the
1974 hostilities which created  more than 230,000 jobless and homeless
refugees across the island.  Cyprus benefited from the mid-1970's economic
boom in the Middle East and from its evolution as a substitute base for
multinational companies fleeing civil war in Lebanon.  Already a signatory
of a custom's union agreement with the European Community (EC), which provides
for gradual elimination of bilateral customs duties on 82% of goods traded,
the government  applied for full membership in the EC in 1990.

The economy has shifted from agriculture to light manufacturing (especially
of clothing and footwear) and services and expanded rapidly in 1990 due to
strong growth of domestic demand and tourism.   The government is promoting
industrial restructuring toward "flexible specialization" aimed at penetrating
new markets, especially in Europe.   Tourism--which has rebounded after a
decline due to the Gulf war--is a vital source of foreign exchange and a
strong stimulus to growth.  More than 1.5 million touristsvisited Cyprus
in 1990.

GNP of the government-controlled area grew by 6% in 1990, topping the 5.6%
average growth rate during previous decade.  Unemployment declined further
to 1.8% of the workforce.  Severe labor shortages were felt in tourism,
industry, and agriculture.

Agriculture fell to 6.8% of the GNP in 1990 and accounted for 14% of
employment and 26% of total exports.  Potatoes and citrus are the principal
export crops.  Cyprus subsidizes vineyards and winemaking and has an annual
glut of unsold wine. The island has few natural resources and must import
fuels, most raw materials, heavy machinery, and transportation equipment.

A drop in tourist arrivals due to the Gulf war, drought, and the government's
failure to enact tax revisions all had a negative impact on state finances in
1990, which saw the deficit rise to 5.1% of GDP--more than double 1990 levels.
However, the deficit is forecast to drop to 3.5% of GDP in 1992, well above
administration targets.  The trade deficit has increased steadily from $281
million in 1973 to $1.5 billion in 1991, but other earnings--mostly from
tourism--have kept pace, resulting in a favorable trade balance.

Turkish Cypriot Economics

The economic disparity between the two communities is pronounced.  In 1991,
Turkish Cypriot  per capita income was about $3,500; for Greek Cypriots it
rose to $9,970.  The Turkish Cypriot economy suffers from a lack of private
and governmental investment, and shortages of skilled labor and experienced
managers.  The Government of Cyprus has sought, with some success, to limit
economic interaction between the Turkish Cypriot sector and the outside world.

Agriculture is waning as an economic mainstay.  Recent measures have provided
subsidized credits for investing in tourism, an area which Turkish Cypriots
are working to develop.  As in the south, earnings from tourism largely offset
the merchandise trade deficit.  Four-fifths of visitors to the north are from
Turkey.

The common unit of account among Turkish Cypriots is the Turkish lira, subject
to 70% inflation in 1990.  Financial reforms have instituted a free market in
foreign exchange and authorized residents to hold foreign-currency denominated
bank accounts.  This encouraged transfers from Turkish Cypriots abroad,
resulting in a construction boom, imports, and customs duties.  Local
revenues now cover about 80% of current needs of the authorities.  Commercial
bank credit available to Turkish Cypriots, however, is only 7% of that
extended in the Greek Cypriot south.

Turkey is the major source of development assistance and of imports; the EC is
the primary destination of exports, which consist principally of citrus.

DEFENSE

Since independence, the Republic of Cyprus has been a neutral country and a
member of the Non-aligned Movement.  It is not a member of any military
alliance.  Troops of five official military organizations, however,  are
based in Cypriot territory:  Greek Cypriot, Turkish Cypriot, mainland Greek,
mainland Turkish, and the UN Force in Cyprus (UNFICYP).

The Greek Cypriot community requires compulsory military service for males
following secondary education.  The Greek Cypriot National Guard numbers about
10,000, with 65,000 reserves.  Many senior officers of the Greek Cypriot
National Guard and a number of its personnel are Greek army regulars.
A separate mainland Greek military contingent also is stationed in the
Republic of Cyprus.

A 4,500 troop Turkish Cypriot Security Force, originally designed to protect
Turkish Cypriot enclaves before 1974, is also based on compulsory military
service for Turkish Cypriot males.  In addition to the estimated 30,000
Turkish military forces stationed on Cyprus, Turkish regulars provide a
significant portion of the leadership of the Turkish Cypriot Security
Force.

UNICYP has about 2,200 troops with military contingents from the UK ,
Canada, Austria, and Denmark, as well as civilian police from Australia and
Sweden and smaller units from Finland and Ireland. The UN force patrols the
cease-fire buffer zone, known as the "green line," between the two communities.
In addition, British forces are stationed at two Sovereign Base Areas on the
southern coast of the island.

FOREIGN RELATIONS

The Government of Cyprus follows a non-aligned foreign policy, although it
identifies with the West in its cultural affinities and trade patterns and
maintains close relations with Greece.   Turkey does not recognize the
Government of Cyprus.

Since 1974, the foreign policy of the Government of Cyprus has sought the
withdrawal of Turkish forces and the most favorable constitutional and
territorial settlement possible. This campaign has been  pursued primarily
through international forums such as the United Nations and the Non-aligned
Movement.  In 1990, Greek Cypriot popular and political support for membership
in the European Community spurred the government  to make a formal application
to the EC--despite bitter objections from the Turkish Cypriots, who argued
that such a move required their consent.

US-CYPRIOT RELATIONS

The United States regards the status quo on Cyprus as unacceptable.
Successive US Administrations have viewed UN-led intercommunal negotiations
as the best means to achieve a lasting settlement.  The United States will
continue actively to  support and aid the UN Security Council's efforts.
Since 1981, the United States has had a Special Cyprus Coordinator--currently
Ambassador Nelson Ledsky.

The United States has channeled $260 million in assistance to the two
communities through the UN High Commissioner for Refugees and the Cyprus
Red Cross since the mid-1970s.   The United States now provides $15 million
annually to promote bicommunal projects and finance scholarships for Cypriot
students.

The United States has been the largest financial contributor to UNFICYP since
the creation of the force in 1964.  By November 1990, the US had contributed
48%--$203 million out of a total $424 million--to the UNFICYP account.

Principal US Officials
Ambassador--Robert E. Lamb
Deputy Chief of Mission Carolyn R. Huggins
Chief Political Officer--Donald Braum
Economic/Commercial Officer--Trevor Evans
Defense Attache--Lt. Col. Thomas Haase
Public Affairs Officer-- Marcelle Wahba
Consular Officer--Cynthia Stockbridge

The US Embassy in Cyprus is located at Therissos Street and Dositheos Street,
Nicosia;  US mailing address: PSC 815, FPO-AE 09836-0001. Tel. [357] (2)
465151 through 465155; Telex 4160 AMEMY CY ;  Fax: [357] (2) 459-571.

Travel Notes

Climate and customs:  Climate is comparable to the southern Atlantic states.
Clothing and shoe requirements are similar to those in Washington, DC.
December through March are rainy; summer temperatures often exceed 380C
(1000F) with low humidity. Americans do not need a visa to enter Cyprus.

Health:  Medical facilities are available.  Tapwater is safe.

Telecommunications:  Telephone and telegraph communications within Cyprus
and to international points are good.   There are few telephone links
between north and south Cyprus. Nicosia is seven time zones ahead of
eastern standard time.

Transportation:   Larnaca International and Paphos International Airports,
and the ports of Limassol, Larnaca, and Paphos are the only legal ports of
entry and exit to the Republic of Cyprus.  Ships carrying cargo and passengers
call regularly at Larnaca and Limassol, the principal southern ports.  Ercan
and Gecitkale Airports in the Turkish Cypriot area are served by Turkish
Airlines but are not recognized by the International Civil Aviation
Organization.

Visitors arriving in the north are not permitted to visit the Republic of
Cyprus in the south.  Visitors arriving in the south from abroad can often
obtain permission from the Government of Cyprus and from Turkish Cypriot
officials to visit the north, but travelers with luggage and those suspected
of intending to depart Cyprus from the north probably will be prohibited
from crossing. The American Embassy in Nicosia is able to advise travelers
of current requirements. Buses and taxis are the only forms of local public
transportation. There are no trains on the island.  In Nicosia, good taxi
service is always available at moderate prices.

Published by the United States Department of State
Bureau of Public Affairs
Office of Public Communication
Washington, DC
March 1992

Editor:  Deborah Guido-O'Grady

Department of State Publication 7932 -- Background Notes Series -- This
material is in the public domain and may be reprinted without permission;
citation of this source is appreciated.

For sale by the Superintendent of Documents, US Government Printing Office,
Washington, DC  20402.