Turkish Cypriots need a vision

Turkish Cypriots are much like us in many ways, yet different. I was in Girne the other day and was a little late to pick up the car from its parking place. It was around 11:30 p.m., mind you. Not that late. But the parking place was closed already. Well, closed is a relative term. Everybody working there had gone home, but they left the doors open for the convenience of latecomers such as myself. This was not a garage in an obscure part of the island, but just inside Girne, close to all those restaurants and casinos. Tourism is the bread and butter of Girne, yet the owners of the parking lot grant you free parking if it gets too late for them, not for you. I wonder at what hour of the day they expect to make money in that place. Let me tell you one thing: That never happens in Turkey. Turkish Cypriots are not like their brothers in Turkey.

I can tell you many similar anecdotes. Turkish Cypriots are not equipped to earn their living in a competitive business environment. Why? What is the difference between Turks in Cyprus and Turks in Turkey? I think the difference lies in Turkey’s market reforms of the early 1980s. That framework never transferred to the island. The Turkish Republic of Northern Cyprus (TRNC) declared its independence again in the early 1980s but its institutional set up was definitely pre-market reform when compared to Turkey. Hence, the difference lies not in the genetic code of the people, but in their government’s institutional structure that provides incentives to individuals. In other words, the TRNC was designed as Turkey 1.0 when Turkey 2.0 was already available. With relative stability and the customs union, we are now on Turkey 3.0 while our brothers and sisters on the island are stuck with the same old model.

Let’s take a look at some figures to better understand the situation on the island. The government employs about 26 percent of the Turkish Cypriot workforce. That roughly means that every family there has at least one government employee or more if you also count the pensioners. This is way too many. The figure for Turkey is less than 15 percent, and the Greek Cypriot Administration in the South only employs 12 percent of its labor force. They have other things to do down there. If you look at the budget of the TRNC, about 85 percent of the expenditures are transfers. These are personnel payments and other current transfers, which mean that the TRNC only transfers income to Turkish Cypriots. It has no investment budget of its own and no vision for the future.

That now appears to be the gist of the matter. When asked whether they feel content with their lives, about 35 percent say that they do not. When asked whether they are happy with their country and its future, more than 60 percent and about 80 percent do not agree. This is a sense of an ending, if you ask me. If you have no hopes for the future of your country, then you don’t plan ahead and you don’t invest. The unsustainable situation breeds further unsustainability through every aspect of life. This was the same sense of an ending that led Turkish Cypriots to vote for the Annan Plan to end the frozen ethnic conflict in Cyprus. The South, however, voted against the plan at the time. With its business plan shattered and its failing banking system, I am now more optimistic.

People living in ethnic conflict zones have a different institutional structure. Turkish Cypriots need a vision of future. Without such a vision, they will lose the little they have. An unsustainable situation only breeds more unsustainability. Sustainability requires a vision, and this “vision thing,” as I put it, is the business of politics. So if there is a sense of an ending in Cyprus, it is the politicians’ fault.