Testing the Resilience of the Turkish Cypriot Economy
The Turkish Cypriot economy (TCe) has struggled to recover since the onset of the COVID-19 pandemic in early 2020. With a contraction of 16.2 percent in GDP in 2020, when the COVID-19 pandemic first took hold, the TCe experienced the most severe recession in its history, and the most severe recession among the economies of Europe. Moreover, just as other economies were beginning to recover, in 2021 the TCe underwent a phase of exceptional political uncertainty and numerous exogenous shocks, testing its resilience. With the emergence of new variants of the virus, the COVID-19 pandemic continued to adversely impact the TCe throughout 2021, with cases reaching a new peak at the end of 2021 despite the Turkish Cypriot (TC) administration’s efforts to prevent the spread of the virus, together with its support for the health system, households, and companies. Furthermore, a new record low in average precipitation in 2021, a series of earthquakes at the beginning of 2022, and weak energy security, with a recent series of power outages experienced across the island, have all revealed the intrinsic vulnerabilities of the island to climate change and natural disasters. Building a competitive private sector would require reforming business regulations and procedures that are under the mandate of the TC administration, and that should be aligned with international best practices and the EU Acquis, irrespective of the broader context of the political economy. Special attention should be devoted to the regulation concerning imports and GL trade. Pre-permits and licenses imposed by the TC administration on imports, on top of regulatory uncertainty and other cumbersome procedures, contribute to increasing prices, penalizing consumers, and eroding domestic competitiveness. A dialogue framework between GC and TC private sectors could be established to support solutions to the long-standing constraints that have been impeding business cooperation across the GL, for the benefit of all Cypriots.
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Format: | Report biblioteca |
Language: | English en_US |
Published: |
World Bank, Washington DC
2022-03
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Subjects: | TURKISH-CYPRIOT, ECONOMIC INTEGRATION, HALLOUMI, HELLIM, WOMEN AND YOUTH, |
Online Access: | http://documents.worldbank.org/curated/en/099161502282335982/P1550440e68ffb09709c630c8cf40f3dcc8 https://openknowledge.worldbank.org/handle/10986/39503 |
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Summary: | The Turkish Cypriot economy (TCe) has
struggled to recover since the onset of the COVID-19
pandemic in early 2020. With a contraction of 16.2 percent
in GDP in 2020, when the COVID-19 pandemic first took hold,
the TCe experienced the most severe recession in its
history, and the most severe recession among the economies
of Europe. Moreover, just as other economies were beginning
to recover, in 2021 the TCe underwent a phase of exceptional
political uncertainty and numerous exogenous shocks, testing
its resilience. With the emergence of new variants of the
virus, the COVID-19 pandemic continued to adversely impact
the TCe throughout 2021, with cases reaching a new peak at
the end of 2021 despite the Turkish Cypriot (TC)
administration’s efforts to prevent the spread of the virus,
together with its support for the health system, households,
and companies. Furthermore, a new record low in average
precipitation in 2021, a series of earthquakes at the
beginning of 2022, and weak energy security, with a recent
series of power outages experienced across the island, have
all revealed the intrinsic vulnerabilities of the island to
climate change and natural disasters. Building a competitive
private sector would require reforming business regulations
and procedures that are under the mandate of the TC
administration, and that should be aligned with
international best practices and the EU Acquis, irrespective
of the broader context of the political economy. Special
attention should be devoted to the regulation concerning
imports and GL trade. Pre-permits and licenses imposed by
the TC administration on imports, on top of regulatory
uncertainty and other cumbersome procedures, contribute to
increasing prices, penalizing consumers, and eroding
domestic competitiveness. A dialogue framework between GC
and TC private sectors could be established to support
solutions to the long-standing constraints that have been
impeding business cooperation across the GL, for the benefit
of all Cypriots. |
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