Since 1974, Cyprus has remained divided, with the internationally recognized Republic of Cyprus effectively governing only the southern region inhabited by Greek Cypriots. The Cypriot government has consistently worked toward the reunification of Cyprus, maintaining that the 41-year-old issue is an international matter. Recently, there is finally hope for the reunification of Cyprus, which is expected to provide a significant stimulus to the economy. Global immigrant investors and those who have already immigrated to Cyprus are looking forward to this investment opportunity.
With the recent strengthening of cooperation between the European Union and Turkey on counter-terrorism and migration control, the Cyprus issue, which has long been a stumbling block in bilateral relations, is expected to restart the reconciliation process. The prospect of reunification for this small Mediterranean island nation has also attracted close attention from investors.
Currently, there is a strong call for reunification in both the Greek Cypriot-controlled areas and the Turkish Cypriot-controlled areas, and reunification would provide a significant stimulus to the economy. Therefore, global investors are closely monitoring this investment opportunity.
Due to the Turkish invasion, Cyprus was divided into two parts in 1974. The division of Cyprus is primarily due to the two different ethnic groups, Turkish and Greek, living on the island. Turkey has approximately 35,000 troops stationed in northern Cyprus and is the only country in the world that recognizes the "Turkish Republic of Northern Cyprus." Now, both the President of the southern Greek region, Nicos Anastasiades, and the President of the northern Turkish region, Mustafa Akıncı, are very hopeful for reunification.
Phidias Pilides, President of the Cyprus Chamber of Commerce and Industry, stated in Nicosia (the capital of Cyprus): "This may be the best time for negotiations." Meanwhile, on the other side of the United Nations-controlled buffer zone that divides Cyprus in half, Fikri Toros, President of the Chamber of Commerce of the "Turkish Republic of Northern Cyprus," also agrees with this view. He believes: "Now is a very good time; reunification will compensate for the economic opportunities missed previously."
If Cyprus is reunified, the economic output in 2035 will reach 45 billion euros (49 billion US dollars), whereas if it remains divided, the combined output of both sides will only reach 2.5 billion euros. Reunification will bring the average economic growth over the next 20 years to around 4.5%, while if it remains divided, it will be around 1.6%.
The core sectors of Cyprus's economic growth are professional services, shipping, and tourism. A representative from the European Bank for Reconstruction and Development's Cyprus office said: "These three sectors have attracted a lot of foreign capital. Cypriot professional firms can provide accounting, legal, and trust services to Turkey, the largest and fastest-growing regional market."
Stelios Haji-Ioannou, Chairman of easyGroup, stated: Investing in Cyprus when it was preparing to exit the international program in March of this year was a very good choice.
John Hourican, CEO of Bank of Cyprus, stated: "The dividends of a unified economy for the banking system are quite significant."
The CEO of Hellenic Bank agreed: "Now, the eight major banks in the south and some smaller banks in the north are hoping for a result of reunification; reunification should be very likely."
The harbor and tourist city of Famagusta Bay on the east coast of Cyprus, as well as the Varosha district of Famagusta (occupied by Turkey in 1974), will bring 15 billion euros in investment.
Pilides said: Cyprus has the third-largest fleet in the EU and is the largest shipping center in the EU; reunification may also bring significant growth to shipping. The embargo on Cypriot vessels by Turkey will also be lifted, which will stimulate demand for shipping services and allow containers from Cypriot ports to be transported smoothly to Turkey.
The natural gas recently discovered in the eastern Mediterranean can also be transported to Europe via pipelines in Turkey. Companies providing offshore oil and gas services will also be interested in building bases in a reunified Cyprus to cover a wider area, including the natural gas recently discovered in Egypt.
Business leaders are concerned about potential gains, and political leaders are also very supportive; logistics are currently being refined.
Turkish Prime Minister Ahmet Davutoğlu stated after the dialogue between Turkey and the EU on November 29 that a solution to the problem would be released in "a few months." On the same day, European Commission President Jean-Claude Juncker said, "Things are moving in a positive direction. If we can reach an agreement on some important issues, I believe we will finally achieve our goal."
Eurasia Group analyst Mujtaba Rahman said: A reunification agreement could be reached in mid-2016. Reunification may require billions of euros in investment, and these funds will come from the EU, private investors, and international donations. Reunification has received widespread international support. Russian Foreign Minister Sergey Lavrov stated on December 2 that Russia will always support reunification.
US Secretary of State John Kerry also stated during his visit to Cyprus on December 3: "The moment for the reunification of Cyprus is approaching."