A former British colony, Cyprus gained independence in 1960 as the UN recognised Republic of Cyprus. However, in 1963 following disagreements in the Greek Cypriot majority/Turkish Cypriot minority power sharing government there was an outbreak of communal strife, and Turkish Cypriots withdrew from the power sharing government. The situation intensified with ongoing conflicts between the Greek Cypriot and the Turkish Cypriot communities. In July 1974 a Greek junta-supported coup attempted to annex Cyprus to Greece, forcing President Makarios to flee. Turkey responded by invading Cyprus, giving Turkish Cypriots de facto control in the north, forcing partition of south and north into two distinct communities (Greek and Turkish). The UN was asked to intervene and peacekeeping forces established a UN buffer zone known as the ‘Green Line’, this separates the two ethnic communities. The Greek Cypriots in the south continue to maintain the only internationally recognized government: the ‘ Republic of Cyprus’. In 1983 Turkish Cypriots in the north declared independence and the formation of a "Turkish Republic of Northern Cyprus" recognized only by Turkey. The Greek Cypriot-controlled Republic of Cyprus joined the EU on 1 May 2004. Now every Cypriot carrying a Cyprus passport has the status of a European citizen. However, there are no direct trade and economic links between Greek or Turkish Cyprus and the latest talks between two communities, brokered by the UN, failed to agree on a unity plan. Since 2003 greater access has been agreed between the two areas.⁵³

GDP of Cyprus⁵⁴ per capita is Intl $11,588. This falls within the range of $21,223 ( Israel) and $600 (Palestinian Authority Gaza Strip) in the 6 MECC countries of the Middle East (Table 9).

Table 9: GDP per capita (Intl $): 6 MECC countries of the Middle East, 2001

Source WHO (2001) *CIA World Factbook (2003est.)**(2002est.)

The economy of the Greek Cypriot south is considerably more prosperous than the Turkish Cypriot north. However, the Greek Cypriot south is heavily dependent on tourism, and has been at times highly vulnerable to political instability in the region and fluctuations in economic conditions in Western Europe. In 2003 a comparison of the economies of the two areas of the island showed Greek Cypriot agriculture at 4.1%; industry 20.3%; services (government and tourism) 75.6%. In contrast the north was found to be more dependent on agriculture at 10.6%; industry 20.5%; services (mainly in government) 68.9%. The Turkish Cypriot economy has roughly one-third of the per capita GDP of the south, and because it is recognized only by Turkey, has had much difficulty arranging foreign financing and investment. To compensate for the economy's weakness, Turkey provides grants and loans to support economic development. Events throughout the island remain highly influenced by continuing negotiations on uniting Cyprus.⁵⁵