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Following its independence in 1960, the Republic of Cyprus has followed a policy of building dams and water reservoirs to collect all possible fresh water. The country's slogan was appropriately "No drop of water to the sea". Since then, Cyprus has increased its fresh water storage capacity from 6 million m3 in 1960 to 298,7 million m3 today. Indicative of this effort is the fact that Cyprus ranks first in the ICOLD (International Commission on Large Dams) register, in the area of Europe, with 50 large dams per 10,000 km2. Despite these efforts, a series of drought years in the 1990s have left these dams almost completely empty. In 1998, dams carried less than 15 percent of their water capacity and as things looked like they couldn't get worse, that percentage dropped to 5 percent by December of 1999. The months of October and November of 1999 were the driest two since the Cyprus Weather Service started collecting data in 1896, and the Minister of Agriculture warned that dams may suffer structural damage if they dry up any further.
Long term precipitation forecasts are not optimistic either. According to the United Nations Population Information Network (POPIN) a Food and Agriculture Organization (FAO) division, Cyprus is listed among 9 countries, which will face "water scarcity" (the organization's second most severe category of water stress) by year 2025. To confront the prospect of a continuous drought which would result in permanently dry faucets, the Cyprus government switched to a multiple water development strategy of collecting, producing, recycling and conserving water. First, the government sped up the construction of additional dams on the stream-like 'rivers' of Dhiarizos, Ezousas, Kha Potami, Pedhieos, Akaki, Peristerona, Karyotis and Tylliria. Then, it completed the Nicosia and Limassol sewage systems which recycle sewage water for irrigation, gave licenses for the construction of desalinization plants, and initiated a water conservation campaign. This campaign consisted more on coercion than persuasion, since it consisted of higher prices for water and the prohibition of water consuming activities such as watering gardens, washing cars with a hose, etc., yet water usage did decrease.
The license for the construction of the first desalinization plan in Cyprus was given to Caramondani Bros. Ltd. in January of 1996. The plant was built in the Dhekelia are on the Eastern part of the island and has been operating since April 1, 1997. The plant, which is privately owned and sells its water to the Water Development Board of the government, produces 40,000 m3per day, and supplements other water supply to the Larnaca and Famagusta districts.
Two more desalinization plants are under way, one to the west of Larnaca which will supply Nicosia through a conveyor and one near Zakaki, a village in the Limassol district, which will provide water to the town of Limassol. Construction of the plant near Zakaki has not started yet, following strong opposition for environmental reasons. Confronted with the yet another dry winter of 1999-2000, the government has nonetheless, stated its determination to have that plant operating by the summer of year 2000.
b.TOURISM
Tourism has been a booming industry in Cyprus and accounts for most
of the island's dominant sector, services. Bed capacity has increased almost
six fold since 1981 (see Economic Data section, item 16), and foreign visitor
arrivals have surpassed 2.2 million in 1998, with estimates reaching 2.5
and 2.7 million arrivals in 1999 and 2000 respectively. Receipts from tourism
have exceeded 800 million Cyprus Pounds (1 CYP=1.8 USD), constituting 40
percent of the island's foreign exchange and 20 percent of the country's
GDP. Given the great significance of tourism for the economy, the government
had struggled in the pre desalinization years to provide hotels and other
tourism related businesses with uninterrupted water flow, a difficult task
given the severity of the water stress. This has meant sacrifices not only
to the expense of the agricultural sector, but also to the expense of the
average household. In many cases, residential areas were restricted to
less than 24 hours of running water per week, resulting in water hoarding
and other desperate measures.
Fig.1.2: Plenty of Sea and Sun but little drinking
water on the island of Aphrodite.
c. AGRICULTURE--TRADE
By 1996, agriculture contributed 4.9% of the country's GDP or 189 million CYP. It also employed 30,000 people or 9.8 % of the workforce. In relation to other economic sectors agriculture is behind, since 9.8 % of the workforce contributes only 4.9 % to the total economic output.
Potato farmers are particularly hurt by falling prices in Northern European markets, and have been repeatedly receiving compensation from the government, which is nonetheless not enough to cover their expenses and leave them with an adequate profit to live on. Cyprus grows top quality potatoes, mostly in the "Kokkinokhoria" (means "red soil villages") area which feature excellent soil of a rich red color. Cypriot potatoes are considered the best, and most pricey potatoes in Europe along with Israeli potatoes which are also of high quality.
Potato exports accounted, in 1995, for 43 million of the total 68 million CYP, or 63 percent of total agricultural exports. The fact that 87 % of agricultural exports go to EU member countries has meant that Cypriot farmers have had to compete with countries such as France, Spain, Portugal, Italy, Holland, and Ireland, all of which produce potatoes, and are also receiving a variety of direct and indirect subsidies under the European Union's Common Agricultural Policy (CAP). Although the quality of the potatoes of these countries is lower, there significantly lower cost and final price has almost driven Cyprus potatoes out of some northern European markets.
The shift from an agriculture-based to a service-based economy in Cyprus is creating new social divides; increasingly farmers regard themselves as second class citizens left behind in Cyprus economic "miracle" story. The drought has made an existing problem of overuse of underground fresh water sources even more acute. Farmers have spend large sums of money to build new wells and drills in the search for some more water. This tactic has not been particularly effective in increasing the fresh water supply, but did succeed in raising farmers' cost of production. The inability of the government to provide them with cheap water for irrigation is bad news for the sector, which will have to slim down its size.
In addition, Cyprus' effort to join the European Union has forced it to liberalize its import regime, allowing unrestricted imports. This has been a problem for the high-cost Cypriot agriculture. The proximity of the island to lower-cost producers such as Syria, Egypt or Israel enables the easy import of cheaper agricultural goods to compete with domestic ones. In some past instances where potato, onion and tomato prices increased due to domestic production scarcity, the market was flooded with imported goods within days. Farmers were particularly upset with the ability of merchants to do these imports, since they have traditionally relied on periodic instances of high prices to make up losses and maybe some profit.
Another problem for Cypriot agriculture is a labor shortage. Young Cypriots do not find it desirable to work in agriculture, regardless of the pay. The oven-like summers of Cyprus, with temperature reaching as high as 45 degrees Celsius (111 degrees Fahrenheit), and the low prestige of the job have led to a severe labor shortage. Recognizing the problem, the government has allowed farmers to import labor, mainly women, from such countries as Bulgaria or Romania who do the harvesting of seasonal crops such as potato, citrus olive, or grape picking. This labor is not considered "cheap", because although these workers get paid less than their Cypriot counterparts, their employers assume the cost of airfare, health insurance, social security, and full room and board. These workers are subject to a maximum stay of three to six months each time.
The high cost of airfare, medical exams and other fixed costs has meant an incentive for farmers to keep these workers in Cyprus for longer so as to bring their average wages down. This has put pressure on the to find ways to employ them, with the answer being planting more crops. For example, a potato farmer who may need foreign workers for only 40 days to pick his potatoes, may plant tomatoes, cucumbers, zucchini, or just about anything else to keep his/her workers occupied for three or even six months. The rationale is that having paid the fixed costs, it is then much cheaper to employ these foreign workers. The result of this line of thought has been a general agricultural overproduction in the last few years and below-cost market prices. The absence of farmer's unionization to control, plan and limit production has led to the paradoxes of a flood of goods in an island in drought, and the collective bankruptcy of farmers even as they increased their total production.
Fig. 1.3: The author taking a break from
Fig. 1.4: Fields of Brussels Sprouts:
his Ph.D. program to conduct
no fields of dreams here...
some 'field' work on a vintage
Massey Fergusson...
d. PROSPECTS FOR THE FUTURE
The Cyprus climate seems to be getting steadily drier, which, in the absence of main rivers, would dictate the decrease in the size of the agricultural sector. This is in the process of happening regardless of the displeasure and misfortune of farmers. Cyprus, a net exporter of food, may have to settle to simply feeding itself, or even import. The increase of the services sector indicates the direction in which the Cypriot economy should move while also absorbing the excess labor of agriculture. The overall good health of the Cypriot economy enables the island to finance its new water policy of desalinization, which seems to be a long term resource, not a temporary 'relief' measure. Regardless of how tough the effect of the drought may be on the agricultural sector in Cyprus, it seems to be a regional, or even global problem of the future which world leaders should address.
II. Legal ClusterThe Republic of Cyprus is the only internationally recognized state, with sovereignty rights over the entire island (except for the two British Base areas --see fig. 1.1). However, it does not control 37.4 percent of its territory in the northern part of the island, which is occupied by Turkey since 1974, and where a self proclaimed "Turkish Republic of Northern Cyprus" ("TRNC") was declared in 1983. This entity was characterized by the United Nations Security Council to be illegal, and the Republic of Cyprus does not co-operate with it on the water problem.
On trade, the "TRNC" is not allowed to trade internationally, so it exports its products (mainly potatoes, citrus) to Turkey, where they are (mis)labeled as Turkish goods.
Cyprus, a WTO member, has had a customs union with the European Union (EU) since 1987, and applied for full membership in 1990. In 1998, the EU and Cyprus started bilateral accession talks. In order to comply with EU's "acquis communautaire", a long set of legal standards required for accession, Cyprus has liberalized its trade regime to allow unrestricted imports of agricultural goods.
However, like the EU who subsidizes domestic agriculture through its Common Agricultural Policy (CAP), Cyprus also gives generous subsidies to its own farmers.
III. Geographic Clusterb. Geographic Site: Southern Europe
c. Geographic Impact: Cyprus
Local constituencies try to avoid the construction of desalinization plants close to them out of fear of environmental damage caused by these plants. Although a recent parliament investigation concluded to no environmental harm is caused by these plants, this has not ended protests in the form of blocking roadways and causing traffic delays. The citizens of Zakaki have also mobilized local party leaders and parliament representatives to support their objections.
Also, agricultural areas, especially where potatoes, citrus, and grapes are produced are especially hurt by the drought. The new policy of switching to desalinization for the island's fresh water needs does not include them (not cost-efficient), so they are naturally worried about the future of their profession.
A major point of this paper is that the climate has been shifting from moderate to increasingly hot and dry.
Cyprus is believed to have been heavily forested in ancient times. The Persians, Egyptians, and Alexander the Great, all used Cyprus to build their imperial navies. This seems to have taken a toll on the island's landscape, which never recovered from this deforestation. Although the main mountain range of Troodos is still forested --mostly with pine trees-- the predominant color in Cyprus is a light yellow, resulting from the dried up low grass that grows in the winter.
IV. Trade Clusterii) TRADE LIBERALIZATION: In accordance with EU directives, Cyprus no longer has restrictions on the import of agricultural goods
iii) DESALINIZATION: Three desalinization plants are constructed/under construction which will provide Cyprus with adequate supplies of fresh water in the near future. Most people have not attempted to drink that water and buy bottled water instead, despite assurances that the water is safe to drink.
b. Indirectly Related to Product: YES, TOURISM
c. Not Related to Product: NO
d. Related to Process: YES, WATER
STRUCTURE of the ECONOMY (footnotes 1, 4)
| (% of GDP) | 1977 | 1987 | 1996 |
|---|---|---|---|
| Agriculture: | 13.2 | 7.4 | 4.9 |
| Industry: | 31.0 | 27.5 | |
| Services: | 55.8 | 65.1 |
| Average annual growth | 1977-1987 | 1988-1998 |
| Agriculture | 1.8 | 0.5 |
| Industry | 3.2 | 2.6 |
| Services | 8.0 | 6.5 |
| Imports | 6.1 | 4.2 |
| GNP | 5.8 | 5.0 |
TRADE:
| 1977 | 1987 | 1997 | |
| US $ (mil) | |||
| Tot.Exports (fob) | 318 | 621 | 429 |
| Tot.Imports (cif) | 619 | 1,463 | 3,678 |
4. TOURISM:
| Bed Capacity | |
|---|---|
| 1973: | 14,796 |
| 1981: | 15,253 |
| 1990: | 59,271 |
| 1997: | 84,368 |
| Cypriots vacating in: (1995) | |
| Cyprus Only: | 61 percent |
| Cyprus And Abroad: | 8 percent |
| Abroad Only: | 31 percent |
As tables 1.1 through 1.5 show, the service sector in Cyprus (mostly tourism) is growing much faster than either agriculture or industry. The result is the reduction of the relative size of the latter too in the overall economy. The six-fold increase of bed capacity since 1973, is more impressive when taking into consideration the fact that the 1973 figure reflects the capacity of the entire island, whereas post-1974 figures do not reflect the bed capacity of the Turkish-occupied area.
The rapid growth of tourism has provided employment to people previously employed in agriculture and industry. The shift of the economy to services has simultaneously been a shift away from production. This is evident in the exports figures (Table 1.3) which actually indicate a value decline between 1987 and 1997. The six-fold increase of import value between 1977 and 1997 supports the characterization of the Cypriot economy as one that relies on trade and comparative advantage, not on self-sufficiency.
V. Environment Clusterb. The Turkish Cypriots who live in the Northern part of Cyprus (aforementioned "TRNC") occupied by Turkish forces since 1974, have found alternative ways to solve their drought problem. Their solution was to drag huge water balloons from the Turkish coast 40 miles away. Obviously, this method does not render them self sufficient and requires the cooperation of Turkey which could, in theory, cut water supplies. This is unlikely to happen for Turkish Cypriots, yet, the same plan would not work for the entire island, because of the conflict situation between the Republic of Cyprus and Turkey.
According to the international law of the United Nations, Turkey illegally occupies the Northern part of Cyprus. To agree on a plan for Turkey to provide Cyprus (all of it) with fresh water would be a highly unrealistic expectation. The degree of non-cooperation is extremely high. In the summer of 1995, a huge fire, which raged out of control for three days destroyed most of the existing forest land in the northern coast of Cyprus. "TRNC" (Turkish-Cypriot) authorities repeatedly declined the offer of the Republic of Cyprus to send fire trucks and fire extinguishing equipment to help put out the fire.
c. The Republic of Cyprus considered, in the early 1990s, a plan to transport water from Crete through special fresh water tankers. This plan was soon rejected because of its high cost, plus the fact that it did not provide for long term solutions, but only short term relief. Had co-operation between the two Cypriot communities existed at that time, maybe a plan to transport water from Turkey would make sense for the entire Cyprus. The current plan to become self-sufficient through desalinization seems however, to eliminate other options from consideration.
VI. Other FactorsAlthough cases of prostitution or inappropriate employer-employee relations are probably very rare, the fact remains that most of these female workers attract more attention from their middle age employers than they should. Wives are upset over this and try to keep an eye on the behavior and every day whereabouts of both their husbands and of these women. Economically speaking, this does not lead to higher productivity.
3. UN Population Information Network at: www.undp.org/popin/fao/water.html
4. European Desalinization Society at: www.edsoc.com
5. World Bank web site data bank
6. Cyprus Broadcasting Corporation, TV channel 1, transmitted via: www.cybc.com.cy
b. Graphics
1. Map borrowed (with permission) from www.kypros.org
2. Personal photos