ECONOMY

1. General Information
The development policy in the Turkish Republic of Northern Cyprus aims at the realization of structural adjustment required for the achievement of the highest possible rate of growth compatible with the maintenance of economic stability, the more equitable distribution of national income and the improvement of standard of living. For the realization of these objectives long-term plans and annual programs have been prepared and put into action since 1977, which marked the beginning of the planning period. In accordance with the liberal economic policy adopted by the government of the TRNC Trade, Tourism, Education, Transportation and Industrial sectors preserved their priority and importance.
For the assessment of the economic performance in the TRNC the following financial indicators are worth examining.

a) Growth Rate of Gross National Product (GNP)
The real growth rate in 2004 has been realized as 15.4%. The GNP which was 3,810.5 million TL in 1977 rose to 11,739.6 million TL in 2004 at constant prices of 1977 which accounted for 2,520,806,747.4 million TL at current prices and 1,765.2 million at US dollar basis.
In 2004, Trade-Tourism sectors have the highest share in GDP, which covers 17.5%. Wholesale and Retail Trade follow this with 14.1% and Public Services with 13.9%.

b) Per Capita GNP
The GNP per capita which was 26,279 TL in 1977 rose to 60,498 YTL in 2005 at constant prices of 1977 and 14,270.8 YTL at current prices of 2005 which represents 10,567 US $.

c) Public Finance
The basic aim of the fiscal policy in the Turkish Republic of Northern Cyprus is the creation of the necessary conditions for internal monetary stability, supporting the more productive projects, reducing the budget deficits by limiting the rate of growth of current expenditures, transfers and increasing revenues.
The total local revenues which is composed of tax revenues, non-tax revenues, factor incomes and the social funds, reached to the level of 771,8 million US $ in 2005. Within this context the share of the taxes in the GNP rose from 10.7% in 1977 to 20.2% in 2005.

d) Foreign Trade
The economy of TRNC has the characteristics of an island economy with limited resources. During the period of 1977-2005 there was an increase in the volume of the foreign trade. The volume of foreign trade, which was 106.9 million in 1977, rose to 915.1 million dollars in 2004. During this period the imports of the TRNC increased from 82 million dollars in 1977 to 1255.5 million dollars in 2005, while the exports rose from 23.9 million dollars in 1977 to 68.1 million dollars in 2005. The foreign trade deficit, which was 58.1 million dollars in 1977, reached 1,187.4 million dollars in 2005. Export earnings met 29.15% of the total imports in 1977, 36.6% in 1978, 43.4% in 1979 and 50.1% in 1980. These favourable developments did not continue in the subsequent years, dropping finally to 5.4% in 2005.
TRNC has adopted a liberal trade policy and practices no discrimination against any foreign country. She has succeeded in establishing trade relations with more than 60 countries all over the world.
Agricultural and industrial products including processed agricultural goods are worth mentioning in the overall exports of the Turkish Republic of Northern Cyprus. The share of the agricultural products, which accounted for 77.5% of the total exports in 1977 dropped to 36.1% in 2005. The share of the industrial products in the total exports increased from 12.1% in 1977 to 60.4% in 2005.
The main agricultural and industrial products including agricultural based processed goods exported from TRNC are; Readymade Clothes, Citrus, Concentrated Citrus, Dairy Products, Refreshments, Medicine, Carobs (Seed and Grounded), Hides and Leather, Alcoholic Beverages, Tobacco, Cigarette.
 

e) Employment
The employment policy aims at attaining full employment and the systematic promotion of schemes for the training and re-training of the labour force for increasing productivity and eventually the most efficient utilization of manpower.
There is not any acute unemployment in the TRNC. The average number of unemployment, which was 1,337 in 1977, reached 1,090 in 2005 and eventually the unemployment ratio, which was 2.9% in 1977 dropped to only 0.99% in 2005.
During the period of 1977-2005 the working population has increased by 143.5%. The working population, which was 44,795 in 1977, rose to 109,090 in 2005. During this period 64,595 people were employed in the economy but they were mostly employed in the services sector and consequently lack of productivity and disguised unemployment were the two important questions requiring solution.

2. Main Sectors
a) Agriculture
The agricultural sector is the backbone of the economy in the TRNC. Although its share in the GDP is decreasing from year to year it is still of major importance especially as far as its contribution to GDP, employment, exports and supply of raw materials to industry are concerned.
The contribution of the agricultural sector to the GDP increased from 619.3 million TL in 1977 to 1,179.5 YTL in 2005 at constant prices of 1977. The export of the agricultural products accounted for 36.1% of the total domestic exports and 12% of the working population was employed in the agricultural sector in 2005.
 

b) Manufacturing Industry
The TRNC industry has developed very small, small and medium-sized enterprises, owing to the physical structure of the country. Industrial activities are mainly focused in food and beverages, furniture and fixtures, metal and non-metallic industries, textile and clothing and other such light industries.
The manufacturing industry achieved one of the highest rates of growth during 1977-2005 period. The value added of the sector increased from 317.2 million TL in 1977 to 1,364.7 YTL in 2005. The share of the sector in the GDP increased from 8.4% in 1977 to 10.3% in 2005 and the export of the industrial products accounted for 60.4% of the total domestic exports.

c) Tourism
Tourism continues to be a basic priority sector and one of the main factors of economic development. Northern Cyprus has a total of 133 hotels with an overall bed capacity of 13,145 in 2005, which were 3,265 in 1977. Throughout the summer season all hotels are fully booked therefore it is advised that reservations are made earlier in the year.
The unique climate of Cyprus offers year-round opportunities for a perfect holiday. Rainfall is concentrated in December and January, and the average sea temperature is above 20°C for more than half the year. Cyprus is renowned for its wild flowers, which carpet the island in spring (there are more than 38 species of orchids alone) and scent of orange, lemon and grapefruit blossom fills the air.
The coastline of Northern Cyprus offers some of the finest and safest bathing opportunities in the Mediterranean. Although most holiday establishments have modern pools, the crystal clear waters of the Eastern Mediterranean are wonderful for swimming, snorkelling, sailing and skiing. Most of the holiday complexes are situated near the picturesque ancient port of Girne on the north coast, or Gazimagusa in the east. The narrow fertile northern coastal strip is backed by the spectacular Beşparmak mountains -also known as the Girne range, studded with its medieval castles and fortresses. The rugged slopes are covered with Aleppo pines, olives and carob trees, with small villages nestling in the hillsides. Nearer the coast, most activity is concentrated along the coast road. Since most hotels can assist in car hire, travelling around the country is no problem.
Inland, behind the rocky Girne range and the imposing Five Finger Mountain, stretches the huge fertile Mesaoria plain where Ercan airport and the island’s capital, Lefkoşa are found. Along the east coast lies the ancient fortified city of Gazimagusa and the nearby ruins of Salamis. To the northeast, the landscape becomes more broken and open fields give way to small pastures enclosed by stonewalls and interspersed with olive trees and rocky outcrops. The beaches here are a blend of rock pools and sheltered sandy bays.
Information on tourist sites to be found in ensuing sections are organised under three district regions: Girne, the area of northern coast between the sea and Beşparmak mountains, where the majority of holiday complexes are found; Gazimagusa, the ancient port with its long open beaches; and finally, Lefkoşa, the capital city and Güzelyurt, the western coast famous for its citrus groves. Flights arrive at Ercan airport from which most hotels have transport services.
The Turkish Cypriot people are renowned for their generous hospitality. During shopping or enjoying a meal, you are made to feel particularly welcome.

d) Construction
The construction sector is rather a newly developing sector, which showed a dramatic increase in the amount and as of its contribution to the GNP of the country. Contribution of the construction sector to the GDP increased from 646.7 million TL in 1977 to 1,271 YTL in 2005 at constant prices of 1977 which constituted 4.19 % of GDP in 1977 and 9.8% of GDP in 2005.

e) Education
The TRNC’s education system aims at fully developing the abilities of all individuals, young and old, both for their personal benefits as well as that of the society as a whole. The education system in the TRNC can be broadly defined in three parts: Pre-school education, Primary education and Secondary education, which are compulsory. Post school education is carried out mainly at universities. The universities are fully committed to modern international teaching techniques and provide high quality education and research opportunities for national and international students. The TRNC is proud of its seven universities namely, - the Eastern Mediterranean University, the Near East University, the European University of Lefke, Girne American University, Cyprus International University, Middle East Technical University-North Cyprus Campus, Anatolia University Open Faculty. In addition to these Ataturk Teachers Training Academy, Nursery High School and, Tourism and Hotel Management High Schools are also giving higher education.
Higher education is the very fast improving sector in the TRNC. The TRNC Universities, except Anatolia University, are offering instructions in English and the number of students pursuing higher education in the above-mentioned seven universities reached 41,865 students during the 2005-2006 academic years.