In Cyprus negotiations, this time it’s different

The leaders of both Turkish and Greek communities in Cyprus recently signed a joint declaration committing themselves to a confederation of two federal states. Thus the Cyprus negotiations restarted. That is better than the alternative. But there is reason to look beyond the usual pessimism of Cyprus watchers. I think this round is truly set to be different. Let me explain why.

I first travelled to Cyprus in 1981. It was right after the military coup in Turkey. I was a university student on a school trip. And what was a young economics student’s first impression conflict? I remember standing on the roof of the Ledra Palace Hotel in the U.N. buffer zone in Lefkoşa. I was looking at the south side of the city with my back turned to the north side. Turkish Lefkoşa was like a sleepy Central Anatolian town, while Greek Nicosia resembled a modern European city.

Last week, I was at Larnaca airport, driving toward Nicosia. The road I was on was no better than those in the north. Nicosia these days looks very much like Lefkoşa. After about 30 something years, the regional disparity is less of a problem. It is definitely still there, but not as severe as it was before.

Forty years ago, the per capita income of the south was about six times that of the north. Now that disparity has declined to around threefold. And that is not only due to the recent economic crisis in the south. The disparity started to decline before that. The past 10 years especially saw significant change. I consider this as the first major difference.

Let me come to the second issue regarding why this round of negotiations is different in Cyprus. Have you seen the Eurobarometer survey? The question that interested me is something like this: “which of the following statements best reflects your household situation?” I am interested in the first statement, which goes something like: “Your current situation does not allow you to make any plans for the future.
 
You live day by day.” In late 2013, 37 percent of the participants from the EU27 chose this statement as best reflecting their household situation. How about northern and southern Cyprus? Some 65 percent for the former and 59 percent for the latter. If you live day by day you cannot plan for your future and you certainly cannot invest. Foreign investment will also wane. What struck me here is the similarity of the gloomy answers from both sides of the island. This time, there is no statistically significant difference between the two sides. Both business models are in shambles. That is a first.

However, we did not hear anything positive from the last time both sides’ leaders met. Why? I think it is taking some time for the leaders to understand that they are in an unprecedented situation. This time, they both have to change the context of the discussion. This time, we need more creativity from the leaders. They are most equipped to deal with an old set of communal issues. This time around, however, they have to approach those issues with a new understanding. This time, there is the need to devise a new business model for the whole of the island. The business models of both sides being in shambles presents a good opportunity to approach the old problems with new methods. It is time to build closer connectivity between the southerners and Turkey and northerners and Greece. Hearing all that bad news from both sides of the island, I say one more time, “This time is different.” It may take a while for the leaders to see this, but they will. They are the ones who signed the joint declaration after all, aren’t they?