U.S. Department of State
Background Notes: Cyprus, October 1998
Bureau of Public Affairs
Released by the Bureau of European and Canadian Affairs
Official Name: Republic of Cyprus
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, Paphos, Kyrenia, Morphou. Terrain: Central plain
with mountain ranges to the north and south.
Climate: Mediterranean with hot, dry summers and cool, wet winters.
Nationality: Noun and adjective--Cypriot(s).
Population (1997 est.): 837,000. Greek area: 655,000; Turkish area: 182,000.
Annual growth rate: 1%.
Ethnic groups: Greek (78%), Turkish (18%), Armenian and other (4%).
Religions: Greek Orthodox, Muslim, Maronite, Roman Catholic, Armenian Orthodox.
Languages: Greek, Turkish, English.
Education: Years compulsory--6 in elementary; 3 in high school.
Attendance--almost 100%. Literacy--about 99%.
Health: Infant mortality rate--9/1,000. Life expectancy--73 yrs. males;
78 yrs. females.
Work force (1997): Greek area--285,000. Business and social services--
31%; trade and tourism-- 26%; agriculture--12%; manufacturing and
utilities--16%; construction and mining--9%; other--6%. Turkish area--
19,000. Agriculture--22%; public services--22%; industry--11%; trade
and tourism--11%; other--34%.
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 Party (center-right); AKEL (communist); EDEK (socialist);
United Democrats (center-left). Turkish Cypriot Community--National
Unity (right); Democratic party (center-right); Republican Turkish
(left); Communal Liberation (center-left); National Revival (center-
right); Patriotic Unity Movement (left), National Justice Party (ultra-
Suffrage: Universal at age 18.
Flag: Against a white background, island's shape in gold above two crossed olive branches.
GDP (1997): $8.5 billion.
Annual real growth rate (1997): 2.3%.
Per capita GDP income (1997): Greek Cypriots--$13,000; Turkish Cypriots--about $3,600.
Agriculture and natural resources (6.0% of GDP): Products--Potatoes and other vegetables, citrus fruits, olives, grapes, wheat, carob seeds. Resources--Pyrites, copper, asbestos, gypsum, lumber, salt, marble, clay, earth pigment.
Industry and construction (24.3% of GDP): Types--mining, cement, construction, utilities, manufacturing, chemicals, non-electric machinery, textiles, footwear, food, beverages, tobacco.
Services and tourism (69.7% of GDP): Trade, restaurants, and hotels 21.6%; banking, insurance, real estate, and business 17.5%; transport and communication 11%; government services 12%; social and personal services 8%.
Trade (1997): Exports--$1.2 billion: citrus, grapes, wine, potatoes, clothing, footwear. Major markets--EU (especially the U.K.), Middle East. Imports--$3.3 billion: consumer goods, raw materials for industry, petroleum and lubricants, food and feed grains. Major suppliers--EU, U.S., Japan. (U.S. trade surplus $700 million.)
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 is predominantly spoken in the south,
Turkish in the north. English is widely used. Cyprus has a well-
developed system of primary and secondary education. The majority of
Cypriots earn their higher education at Greek, Turkish, British, or
American universities. Private colleges and state-supported
universities have been developed by both the Turkish and Greek
Cypriot culture is among the oldest in the Mediterranean. By 3700 BC,
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 AD 364, Cyprus was ruled
by Byzantium. After brief possession by Richard the Lion-Hearted during
the Crusades, the island came under Frankish control in the late 12th
century. It was ceded to the Venetian Republic in 1489 and conquered by
the Ottoman Turks in 1571. The Ottomans applied the millet system to
Cyprus, which allowed religious authorities to govern their own non-
Muslim minorities. This system reinforced the position of the Orthodox
Church and the cohesion of the ethnic Greek population. Most of the
Turks who settled on the island during the 3 centuries of Ottoman rule
remained when control of Cyprus--although not sovereignty--was ceded to
Great Britain in 1878. Many, however, left for Turkey during the 1920s.
The island was annexed formally by the U.K. in 1914 at the outbreak of
World War I and became a crown colony in 1925.
Cyprus gained its independence from the U.K. in 1960, after an anti-
British campaign by the Greek Cypriot EOKA (National Organization of
Cypriot Fighters), a guerrilla group which desired political union with
Greece, or 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 about the implementation and interpretation
of the constitution. 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
in December 1963, after which Turkish Cypriot participation in the
central government ceased. UN peacekeepers were deployed on the island
in 1964. Following another outbreak of intercommunal violence in 1967-
68, a Turkish Cypriot provisional administration was formed.
In July 1974, the military junta in Athens sponsored a coup led by
extremist Greek Cypriots hostile to Makarios for his alleged pro-
communist leanings and for his perceived abandonment of enosis. Turkey,
citing the 1960 Treaty of Guarantee, intervened militarily to protect
In a two-stage offensive, Turkish troops took control of 38% of the
island. Many Greek Cypriots fled south while many Turkish Cypriots fled
north. 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
peacekeeping forces maintain a buffer zone between the two sides.
Except for occasional demonstrations or infrequent incidents between
soldiers in the buffer zone, there had been no violent conflict since
1974 until August 1996, when violent clashes led to the death of two
demonstrators and escalated tension. There is little movement of people
and essentially no movement of goods or services between the two parts
of the island. Efforts to reunite the island under a federal structure
continue, however, under the auspices of the United Nations.
Since 1974, Cyprus has been divided de facto into the government-
controlled southern two-thirds of the island and the Turkish-Cypriot
northern one-third. The Government of the Republic of Cyprus has
continued as the internationally recognized authority; 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 each possessing a
right of veto over certain types of legislation and executive
Following the 1974 hostilities, the Turkish Cypriots formally set up
their own institutions with a popularly elected president and a prime
minister responsible to the National Assembly exercising joint
executive powers. In 1983, the Turkish Cypriots declared an independent
"Turkish Republic of Northern Cyprus" (T.R.N.C.). In 1985, they adopted
a constitution and held elections--an arrangement recognized only by
In February 1998, Greek Cypriots narrowly re-elected Glafcos Clerides,
a seasoned politician from the conservative Democratic Rally Party, as
president of the Republic of Cyprus.
Following his re-election, Clerides formed a government of national
unity, with open invitations for participation of all political
parties. His cabinet includes six ministers from Clerides' Democratic
Rally party, two ministers from the EDEK (socialist) party, three from
the Democratic Party (who broke ranks with party leader Spyros
Kyprianou) and one from the United Democrats. None of the Greek Cypriot
parties has been able to elect a president by itself or dominate the
56-seat House of Representatives. The 165,000 Greek Cypriot refugees
are also a potent political force, along with the independent Orthodox
Church of Cyprus, which has some influence in temporal as well as
Turkish Cypriots held multi-party "parliamentary" elections in 1993,
removing the long-ruling National Unity Party in favor of a coalition
of the Democratic and Republican Turkish parties. However, in August
1996, a new coalition was formed between the two main rightist parties,
the National Unity Party and the Democratic Party. The next
"parliamentary" elections will take place in the fall of 1998.
"T.R.N.C. President" Rauf Denktash won re-election in 1995 after an
unprecedented second round of voting. He defeated the incumbent "Prime
Minister," Dr. Dervis Eroglu.
UN-sponsored negotiations to develop institutional arrangements
acceptable to both communities began in 1968; several sets of
negotiations and other initiatives followed. Turkish Cypriots focus on
bi-zonality, security guarantees, and political equality between 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
The last face-to-face meeting between the leaders of the two
communities, President Clerides and Mr. Denktash, took place when the
two were invited in June 1997 by the UN Secretary General to engage
again in face-to-face negotiations. The two leaders met July 9-13,
1997, in Troutbeck, New York, to resume discussions to resolve
intercommunal strife and reunite the island. They met for a second
round in Switzerland, August 11-15, 1997. The U.S. also brokered two
direct meetings between the two leaders, including one meeting in
September 1997 to discuss security issues and a second meeting in
November 1997 under the auspices of U.S. Special Presidential Emissary
Richard C. Holbrooke to review informally the core issues of a
settlement agreement. International efforts to promote a settlement to
the Cyprus dispute began again in earnest following the February 1998
Principal Government Officials
President of the Republic--Glafcos Clerides
Foreign Minister--Ioannis Kasoulides
Minister of Finance--Christodoulos Christodoulou
Minister of Commerce, Industry, and Tourism--Nicos Rolandis
Minister of Communication and Works--Leontios Ierodiaconou
Minister of Justice and Public Order--Nicos Koshis
Ambassador to the United States--Erato Kozakou-Marcoullis
Ambassador to the United Nations--Sotos Zackheos
Cyprus maintains an embassy in the United States at 2211 R Street NW,
Washington, DC 20008 (tel. 202-462-5772) and a Consulate General in New
York City. Cyprus also maintains a trade center at 13 East 40th Street,
New York, NY 10016 (tel. 212-686-6016). Turkish Cypriots maintain
offices in Washington (tel. 202-887-6198) and at the Republic of
Turkey's Mission to the UN.
Cyprus has an open, free-market, serviced-based economy with some light
manufacturing. The Cypriots are among the most prosperous people in the
Mediterranean region. Internationally, Cyprus promotes its geographical
location as a "bridge" between West and East, along with its educated
English-speaking population, moderate local costs, good airline
connections, and telecommunications.
In the past 20 years, the economy has shifted from agriculture to light
manufacturing and services. The service sector, including tourism,
contributes 70% to the GDP and employs 62% of the labor force. Industry
and construction contribute 24% and employ 25% of labor. Manufactured
goods account for approximately 69% of domestic exports. Agriculture is
responsible for 6% of GDP and 12% of the labor force. Potatoes and
citrus are the principal export crops.
After robust growth rates in the 1980s (average annual growth was
6.1%), economic performance in the 1990s has been mixed: Real GDP
growth was 9.7% in 1992, 1.7% in 1993, 6.0% in 1994, 6.0% in 1995, 1.9%
in 1996 and 2.3% in 1997. This pattern underlines the economy's
vulnerability to swings in tourist arrivals (i.e., to economic and
political conditions in Cyprus, Western Europe, and the Middle East)
and the need to restructure the economy. Declining competitiveness in
tourism and especially in manufacturing will act as a drag on growth
until structural changes are effected. Overvaluation of the Cypriot
pound has kept inflation in check in recent years (3.5% in 1997) and is
forecast to continue to do so in the foreseeable future. Economic
prospects are good over the long term, and real growth in 1998 is
expected to reach 3.0%.
Trade is vital to the Cypriot economy--the island is not self-
sufficient in food and has few natural resources--and the trade deficit
continues to grow. Exports rose by 1.3% in 1997, while imports rose by
2.2%, resulting in a trade deficit of $2.1 billion (2.7% higher than
the previous year). Cyprus must import fuels, most raw materials, heavy
machinery, and transportation equipment. More than 50% of its trade is
with the European Union (especially the U.K.); the Middle East receives
20% of exports. Cyprus signed an Association Agreement with the
European Union (EU) in 1972, which resulted in the establishment of a
Customs Union between the two sides. Cyprus applied for full EU
membership in 1990 and has since linked the Cyprus pound to the
European Monetary Unit (ECU). EU accession negotiations started on
March 31, 1998. In 1991, Cyprus introduced a Value Added Tax (VAT),
which is currently 8%. Cyprus ratified the new world trade agreement
(GATT) in 1995 and began implementing it fully on January 1, 1996.
Cyprus has the fourth-largest ship registry in the world, with 2,758
ships and 25.5 million gross registered tons (GRTs). It is an open
registry and includes ships from more than 43 countries, including
Greece, Germany, and Russia.
Cyprus has been liberalizing its trade regime by eliminating import
quotas and licenses and lowering tariffs on most products as a result
of its obligations under the new world trade agreement and its Customs
Union agreement with the European Union. As a result, U.S. products are
becoming more competitive in Cyprus and prospects for further expansion
of bilateral trade ties are excellent.
Government computerization and telecommunications development, two of
the priorities of the government's 5-year development plan (1994-1998),
provide excellent opportunities for U.S. exports. Sales of computer-
assisted design systems, new capital equipment for textile, clothing,
footwear production, medical equipment, environmental equipment, and
services are also expected to grow. U.S. pressure resulted in the
adoption of a new copyright law in 1994 and a new patent law in 1998.
In February 1997, the government revised its policy on foreign direct
investment, permitting 100% foreign ownership in certain cases.
Regulations on foreign portfolio investment in the Cyprus Stock
Exchange also have been liberalized. Additionally, Cyprus passed a
modern banking law in July 1997, incorporating all the provisions and
directives of the EU for the prudential supervision of credit
Cyprus has concluded treaties on double taxation with 26 countries,
including the U.S., and has removed exchange restrictions on current
international transactions. Non-residents and foreign investors may
freely repatriate proceeds from investments in Cyprus.
The 1,049 full-fledged offshore companies--which are located in Cyprus
but conduct business abroad only--qualify for various tax- and duty-
free concessions. Foreign exchange earnings from offshore companies
rose to $346 million in 1997. There are about 40 U.S.-owned firms in
Cyprus; about half operate exclusively on an offshore basis.
U.S. firms are mainly engaged in the regional marketing of computers,
computer graphics, telecommunications, printing equipment, household
products, and soft drinks. Since 1994, re-entry visa provisions have
been streamlined and 3-year work permits have been introduced for
Trade Between Cyprus and the United States
The U.S. embassy in Nicosia sponsors a popular pavilion for American
products at the annual Cyprus International State Fair, hosts the
Commercial Awards dinner, and organizes other events to promote U.S.
products throughout the year. Total U.S. exports to Cyprus were about
$700 million in 1997 (compared with $670 million in 1996), making the
U.S. Cyprus' number-one supplier of total imports for the third year in
a row. Exports include American tobacco and tobacco products, automatic
data processing and other machinery, and cereals. Principal U.S.
imports from Cyprus consist of clothing, footwear, steel tubes and
pipes, dairy products, and various food items.
Turkish Cypriot Economy
The economic disparity between the two communities is pronounced.
Although the Turkish Cypriot area operates on a free-market basis, the
lack of private and governmental investment, shortages of skilled labor
and experienced managers, plus inflation and the devaluation of the
Turkish lira (which the Turkish Cypriots use as their currency)
continue to plague the economy. A Greek-Cypriot-organized economic
boycott of the Turkish Cypriot region also has negatively affected the
Turkish Cypriot economy.
Turkey is, by far, the main trading partner of the "T.R.N.C.,"
supplying 55% of imports and absorbing 48% of exports. In a landmark
case, the European Court of Justice (ECJ) ruled on July 5, 1994,
against the British practice of importing produce from Northern Cyprus
based on certificates of origin and phytosanitary certificates granted
by "T.R.N.C." authorities. The ECJ decision stated that only goods
bearing certificates of origin from the Government of Cyprus could be
recognized for trade by EU member countries. That decision resulted in
a considerable decrease of Turkish Cypriot exports to the EU: from
$36.4 million (or 66.7% of total Turkish Cypriot exports) in 1993 to
$24.7 million in 1996 (or 35% of total exports) in 1996. Even so, the
EU continues to be the "T.R.N.C.'s" second-largest trading partner,
with a 24.7% share of total imports and 35% share of total exports.
Assistance from Turkey is the mainstay of the Turkish Cypriot economy.
Under the latest economic protocol (signed January 3, 1997), Turkey
undertakes to provide Turkish Cypriots loans totaling $250 million for
the purpose of implementing projects included in the protocol related
to public finance, tourism, banking, and privatization. Fluctuation in
the Turkish lira, which loses about 50% of its value against the U.S.
dollar every year, continues to exert downward pressure on the Turkish
Cypriot standard of living.
Turkish Cypriot authorities have instituted a free market in foreign
exchange and authorize residents to hold foreign-currency denominated
bank accounts. This encourages transfers from Turkish Cypriots living
The Government of Cyprus has historically followed a non-aligned
foreign policy, although it increasingly identifies with the West in
its cultural affinities and trade patterns and maintains close
relations with Greece.
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. Turkey does not recognize the Government of
Cyprus' 1990 application for full EU membership caused a storm in the
Turkish Cypriot community, which argued that the move required their
consent. Following the December 1997 EU Summit decisions on EU
enlargement, accession negotiations began March 31, 1998.
The Government of Cyprus enjoys close relations with Greece. Cyprus is
expanding relations with Russia, Israel, and Syria, from which it
purchases most of its oil.
Cyprus is a member of the UN and most of its agencies as well as the
World Bank, International Monetary Fund, Council of Europe, and the
Commonwealth. In addition, the country has signed the General Agreement
on Tariffs and Trade (GATT) and the Multilateral Investment Guarantee
Agency Agreement (MIGA).
The United States regards the status quo on Cyprus as unacceptable.
Successive administrations have viewed UN-led intercommunal
negotiations as the best means to achieve a fair and permanent
settlement. The United States will continue actively to support and aid
the UN Secretary General's efforts. In June 1997, the U.S. appointed
Ambassador Richard C. Holbrooke as Special Presidential Emissary for
The United States has channeled $305 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 U.S.
scholarships for Greek and Turkish Cypriots.
Principal U.S. Officials
Ambassador--Kenneth C. Brill
Deputy Chief of Mission--Deborah E. Graze
Chief Political Officer--Donald Shemanski
Economic/Commercial Officer--Clark Price
Defense Attache--Col. Phil Rusciolelli
Public Affairs Officer--Dr. Judith R. Baroody
Consular Officer--David Dreher
Administrative Officer--Thomas Young
The U.S. Embassy in Cyprus is located at the corner of Metochiou and
Ploutarchou Streets in Engomi, Nicosia, Cyprus mailing address: PO Box
4536, Nicosia Cyprus. U.S. mailing address: PSC 815, FPO-AE 09836-0001.
Tel. (2)776-400; Telex: 4160 AMEMY CY; Fax: (2)780-944;
Consular Fax: (2)776-841; Web Page:
TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program provides
Travel Warnings and Consular Information Sheets. Travel Warnings are
issued when the State Department recommends that Americans avoid travel
to a certain country. Consular Information Sheetsexist for all
countries and include information on immigration practices, currency
regulations, health conditions, areas of instability, crime and
security, political disturbances, and the addresses of the U.S. posts
in the country. Public Announcements are issued as a means to
disseminate information quickly about terrorist threats and other
relatively short-term conditions overseas which pose significant risks
to the security of American travelers. Free copies of this information
are available by calling the Bureau of Consular Affairs at 202-647-5225
or via the fax-on-demand system: 202-647-3000. Travel Warnings and
Consular Information Sheets also are available on the Consular Affairs
Internet home page: http://travel.state.gov and the Consular Affairs
Bulletin Board (CABB). To access CABB, dial the modem number: (301-946-
4400 (it will accommodate up to 33,600 bps), set terminal
communications program to N-8-1 (no parity, 8 bits, 1 stop bit); and
terminal emulation to VT100. The login is traveland the password is
info (Note: Lower case is required). The CABB also carries
international security information from the Overseas Security Advisory
Council and Department's Bureau of Diplomatic Security. Consular
Affairs Trips for Travelers publication series, which contain
information on obtaining passports and planning a safe trip abroad, can
be purchased from the Superintendent of Documents, U.S. Government
Printing Office, P.O. Box 371954, Pittsburgh, PA 15250-7954; telephone:
202-512-1800; fax 202-512-2250.
Emergency information concerning Americans traveling abroad may be
obtained from the Office of Overseas Citizens Services at (202) 647-
5225. For after-hours emergencies, Sundays and holidays, call 202-647-
Passport Services information can be obtained by calling the 24-hour,
7-day a week automated system ($.35 per minute) or live operators 8
a.m. to 8 p.m. (EST) Monday-Friday ($1.05 per minute). The number is 1-
900-225-5674 (TDD: 1-900-225-7778). Major credit card users (for a flat
rate of $4.95) may call 1-888-362-8668 (TDD: 1-888-498-3648)
Travelers can check the latest health information with the U.S. Centers
for Disease Control and Prevention in Atlanta, Georgia. The CDC hotline
at 877 FYI-TRIP (877 394-8747) gives the most recent health advisories,
immunization recommendations or requirements, and advice on food and
drinking water safety for regions and countries. This information is
also on the web at: http://www.cdc.gov/travel/index.htm. A booklet
entitled Health Information for International Travel (HHS publication
number CDC-95-8280) is available from the U.S. Government Printing
Office, Washington, DC 20402, tel. (202) 512-1800.
Information on travel conditions, visa requirements, currency and
customs regulations, legal holidays, and other items of interest to
travelers also may be obtained before your departure from a country's
embassy and/or consulates in the U.S. (for this country, see "Principal
Government Officials" listing in this publication).
U.S. citizens who are long-term visitors or traveling in dangerous
areas are encouraged to register at the U.S. embassy upon arrival in a
country (see "Principal U.S. Embassy Officials" listing in this
publication). This may help family members contact you in case of an
Further Electronic Information:
Department of State Foreign Affairs Network. Available on the Internet,
DOSFAN provides timely, global access to official U.S. foreign policy
information. Updated daily, DOSFAN includes Background Notes; Dispatch,
the official magazine of U.S. foreign policy; daily press briefings;
Country Commercial Guides; directories of key officers of foreign
service posts; etc. DOSFAN's World Wide Web site is at
U.S. Foreign Affairs on CD-ROM (USFAC). Published annually by the U.S.
Department of State, USFAC archives information on the Department of
State Foreign Affairs Network, and includes an array of official
foreign policy information from 1990 to the present. Contact the
Superintendent of Documents, U.S. Government Printing Office, P.O. Box
371954, Pittsburgh, PA 15250-7954. To order, call (202) 512-1800 or fax
National Trade Data Bank (NTDB). Operated by the U.S. Department of
Commerce, the NTDB contains a wealth of trade-related information. It
is available on the Internet (www.stat-usa.gov) and on CD-ROM. Call the
NTDB Help-Line at (202) 482-1986 for more information.
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