Hit the (natural) gas and solve the Cyprus conflict

GALLIA LINDENSTRAUSS

Since the failure of Greek Cypriots to pass the Annan plan in a 2004 referendum that would have brought about the reunification of Cyprus there has been little incentive for Greek Cypriots to reconsider their position regarding reunification. However, presently, there is a chance that the natural gas discoveries off the shores of Cyprus could invigorate ongoing negotiations.

The degree of incentive, of course, rests on the size and location of the discoveries. Still, the prospects seem high and it is expected that the gas discoveries will provide Cyprus with all its energy needs for many decades and leave some more for exports.

Admittedly, until now, the prospect of gas findings has only led to a greater degree of destabilization in the area. The fact that there has been a growing collaboration between Israel and Cyprus and that the Turkish Navy has been increasingly flexing its muscles in the eastern Mediterranean has added anxieties to an already volatile region.

These are tensions that can be perhaps managed and contained, and some multinational corporations have shown their willingness to pay the not uncommon price of drilling in an area of instability. And yet, if the two sides were to be able to cooperate, this would no doubt ease many of the challenges related to such a long-term endeavor.

Some Greek Cypriots are currently trying to dismiss the seriousness of the Turkish threats, but such threats did deter several companies from participating in a bid for hydrocarbon exploration near Cyprus in 2007. In fact, there is a strong record of Turkish success in deterring Greek Cypriots and those who assist them. Also, the weakness of Greece – and the EU in general – as well as the fact that U.S.-Turkish relations are now at their peak, creates an uncomfortable setting for any direct confrontation between Turkey and the Greek Cypriots.

The newly forged alliance between Cyprus and Israel could possibly provide some counterweight to the Turkish threats, but due to all the other threats Israel faces, it is not clear that it is truly willing to put itself in a confrontational position against Turkey. True, Israel is also faced with a similar challenge to that of the Greek Cypriots as it has an incentive to protect its rights of gas explorations in the region – a right that is being disputed, for example, by Lebanon. However, compared to Cyprus, Israel is facing an array of threats and hence has extremely complex variables to take into consideration.

One must also address the possible actions of the Turkish Cypriots. While Turkish Cypriots’ approval of the Annan plan in 2004 did not result in international recognition of the Turkish Republic of Northern Cyprus, it has added some legitimacy to the community’s wishes and demands. Hence, some international actors will listen to the claims of the Turkish Cypriots for a share in the gas revenues. A fair handling of these revenues could also help build trust between the communities; this is vital for a long-lasting solution.

Whether the Cypriot problem will be solved with true reunification, a very loose federal structure, or a partition remains an open question. However, it is clear from past attempts to solve this problem that such a solution will entail substantial costs, especially for the compensation of lost property.

While in the past, the expectation was that the EU would cover the main costs of a political solution in Cyprus, the growing economic problems of the EU make this less plausible; even if European institutions do pull through, they will do so in a limited manner. Thus, if even part of the revenues from the gas discoveries could be used to cover the costs of a solution, the chances of a successful outcome would increase. A constructive use of the revenues might also save Cyprus from the “resource curse,” a term that denotes a degeneration process that results from revenues that are not used in a way that encourages long-term growth. One should not overemphasize the impact of economic incentives to solving ethno-national conflicts, but one should not dismiss them either.

Were this cooperation to succeed with Cyprus, one might endeavor even to think of broader collaboration in the eastern Mediterranean that would also include Lebanon, Israel, the Palestinians and Turkey. Still, even if the natural gas discoveries can be used only to solve the Cypriot problem, which has received the unflattering nickname of “the diplomat’s graveyard,” it is probably well worth it. 

At the end of the day, even if no gas is ultimately discovered, the Cypriots might find that positive cooperation on this matter will facilitate the long-awaited political solution.

Gallia Lindenstrauss is an associate researcher at the Institute for National Security Studies (INSS) at Tel Aviv University, Israel.