Cyprus

The following entry is the one originally submitted by the contributors. The previous version of this entry that appeared in the original printing of the encyclopedia was not the one submitted by the contributors and was mistakenly used by the Publisher. The entry was written by Drs. Efthimios Poulis and Konstantinos Poulis, and the Publisher apologizes for submitting the wrong version of this entry for publication.

Cyprus is an island in the Mediterranean Sea whose political status is dominated by the division of the country into the Greek-Cypriot southern area (the Republic of Cyprus) controlled by the Cyprus government and the northern area that is administered by Turkish Cypriots. The Greek-Cypriot part of the island enjoys a prosperous economy, which is one of the advanced economies of the world according to the International Monetary Fund. A large part of this southern part's prosperity is attributed to Cyprus's strategic location at the crossroads of three continents and in close proximity to the Middle East. This position has played a positive role but at the same time has been the historical platform of political turbulence for many years. Characteristics like the developed infrastructure, a stable legal framework, and the highly skilled workforce also contribute to the wealth that Greek Cypriots enjoy and have made Cyprus a popular business center. Moreover, tourism plays a dominant role toward growth and wealth generation, which is, however, susceptible to external influences such as fluctuations in the financial conditions of major tourism-generating, primarily Western European, countries such as Germany and the United Kingdom.

The Turkish-Cypriot area of the island has about 20 percent of the population and its Gross Domestic Product (GDP) is one-third of the GDP of the southern part of the island. The de facto Turkish-Cypriot administration is recognized only by Turkey, and thus attracting foreign investment has been a difficult task to accomplish. As a result, the economy of the northern part still relies on agriculture and on the government.

The Republic of Cyprus has been a member of the European Union since May 2004. The beginning of 2008 marked the entry of the country to the Eurozone and thus Cyprus has adopted the euro at a fixed [Page 471]exchange rate of CYP 0.585274 per EUR 1.00. The introduction to the Eurozone was accompanied by accelerated growth at a rate that is above the European Union average. This growth is largely a result of the activity of traditional, family-owned enterprises with a high entrepreneurial flair supported by a liberal economy whose backbone is the private sector. In this respect, the public sector has a supervising role monitoring the smooth operation of the economy and providing public utilities. The main economic indicators manifest the country's economic “health” with the inflation rate being less than 3 percent, whereas registered unemployment is less than 4 percent.

The services sector is an increasingly important part of the economy, as indicated by its 70–73 percent contribution to GDP and its share in employment. At the same time, the importance of agriculture and manufacturing showcase a steady decline over the years. Key services sectors include banking and financial services, insurance, advertising, legal, architecture and civil engineering, accounting and auditing, consultancy, design, electrical and mechanical engineering, market research, medical, printing and publishing, public relations, education, software development, and tourism and related services. In terms of social life, Cypriots enjoy a high standard of living with no or extremely low levels of homelessness or criminality.

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