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Cyprus
Please note: All linked documents are in PDF format
| Objective |
SO Number |
FY 2004 |
FY 2005 |
FY 2006 |
| Cyprus Bicommunal Transfers |
223-0410 |
33,520 |
8,492 |
14,400 |
| Transfers |
|
4,900 |
4,900 |
5,600 |
| Total (in thousands of dollars) |
38,420 |
13,392 |
20,000 |
|
The Development Challenge:
USAID assistance to Cyprus began as a humanitarian relief operation in the summer of 1974 and has since evolved into a multi-sector development program aimed at increasing the quality and quantity of interaction between the estranged and geographically-separated Greek Cypriot and Turkish Cypriot communities and reducing the significant economic disparity between the communities to reinforce the practical, economic foundation for reunification under a future bi-zonal, bi-communal federation. USAID assistance supports cooperation between individuals and organizations from the two sides in order to reduce tensions and promote a climate that will foster reconciliation and a durable peace settlement.
The division of the two physically separated communities is reinforced by economic differences. While Greek Cypriot per capita gross domestic product (GDP) is approximately $19,200, Turkish Cypriot per capita GDP is approximately $5,600. The disenchantment of the Turkish Cypriot community is reflected in an ongoing process of emigration, including many of the young, and a resulting brain drain.
Facilitating a resolution to the Cyprus dispute, defusing tensions between NATO allies Greece and Turkey, and promoting stability in the Eastern Mediterranean remain key U.S. foreign policy priorities. The United States supports the mission of the United Nations Secretary General in working to achieve a just and lasting settlement that protects the legitimate interests of both Greek Cypriots and Turkish Cypriots. Since April 2004, when Greek Cypriots rejected the Annan Plan in referendum 76% to 24% and the Turkish Cypriots approved the Annan Plan 66% to 34%, the international community, led by calls from the United Nations Secretary General and the European Union (EU) Council of Ministers, has worked to reduce Turkish Cypriot isolation. The international community, especially the United States, has reiterated its position that the Annan Plan remains the best and only basis for a permanent solution and has encouraged the two sides to engage in a productive dialogue to convince the Secretary General to resume negotiations based on the will for a solution on both sides. This remains a challenge in a complex context in which the Republic of Cyprus is an EU member since May 1, 2004 and Turkey's EU accession negotiations are set to begin on October 3, 2005.
The USAID Program:
U.S. objectives for Cyprus include reunification of the island, reduction of tensions, and promotion of peace and cooperation between the two communities on Cyprus. USAID's approach supports these objectives by focusing on increasing and strengthening cooperation and mutual tolerance between Greek Cypriots and Turkish Cypriots, supporting initiatives that encourage a comprehensive settlement. These include recent initiatives to reduce economic disparities between the communities, so that the Turkish Cypriot community can shoulder its share of the economic costs of settlement. The resulting cooperative relationships and activities are expected to strengthen each side's ability to compromise on a just and lasting settlement; provide opportunities for multi-sector contacts to increase the number of stakeholders in a solution; provide tangible examples of the benefits of cooperation and permanent settlement; and promote tolerance and mutual understanding between the two communities in support of a comprehensive settlement.
USAID's ESF grant to the United Nations Development Programme (UNDP) for the Bicommunal Development Program (BDP) supports technical assistance, commodities, and training and workshops related to multi-sector cooperation, including in agriculture and veterinary science, education, civil society, and non-governmental organization (NGO) strengthening, information technology, communication, and telecommunications. Activities also involve local governance through improved services and public infrastructure, environmental management, public health, economic development, urban renewal, and historic restoration and preservation. The program has fostered cooperation despite an unevenly enforced prohibition on bi-communal meetings by the Turkish Cypriot leadership. According to the UNDP October 2002 Annual Report there were over 155 bi-communal meetings in 2001. In 2002, the number of BDP-facilitated bi-communal meetings (over 200) far exceeded the number that took place in 1996, previously considered the high point of bi-communal activities. The opening of the checkpoints between the north and south in April 2003 has enabled a deepening of bi-communal activities. Meetings between Greek Cypriots and Turkish Cypriots to plan and implement projects of island-wide interest are becoming commonplace, as are activities that bring the two communities together for a common cause. There are approximately 40 ongoing activities with the authorities of the two Cypriot communities, with 60 more initiatives being implemented by NGOs in both communities.
USAID's Cyprus Partnership for Economic Growth Program (CyPEG), which began at the end of 2004, firmly supports the goal of reunification and empowered cooperation of all Cypriots. CyPEG will accelerate economic growth in the Turkish-Cypriot community to directly support north-south economic integration and the adoption and implementation of EU standards, and lead to a Turkish-Cypriot community that can shoulder its share of the economic costs of settlement and reunification. It will strengthen the domestic and international competitiveness of the Turkish-Cypriot small and medium enterprises (SMEs) and help restructure the financial sector so that the SMEs can thrive. Assistance will include direct firm-level technical assistance to improve quality, adopt standards, implement best practices, establish lending programs and bank guarantee programs, and provide infrastructure support for business (e.g. efficiencies in the use of energy and related markets consistent with European markets, and transportation and storage facilities). The restructuring of the financial sector will include bank reform, restructuring and consolidation assistance, adoption and implementation of EU and international standards, and training.
In case of actual political settlement, the program would support the terms of the approved peace agreement in strategic areas, facilitate the transition, help to ensure its implementation, and be dedicated to the success and viability of the UN-brokered agreement between the two communities.
Other Program Elements:
Other agencies' activities include the U.S. State Department's Cyprus-America Scholarship Program, implemented by the Cyprus Fulbright Commission, and the Bicommunal Support Program, implemented by the U.S. Embassy in Nicosia.
Other Donors: The United States is the principal bilateral donor supporting bi-communal activities in Cyprus. The U.K., Germany, Norway, Slovakia, and the Czech Republic are funding modest initiatives focused on civil society, urban restoration, women, political parties, entrepreneurs, journalists, and labor unions. With Cyprus' recent EU accession, the EU will presumably become the largest overall donor to Cyprus, supporting the development of the entire island. A total of Euro 259 million has been proposed to help economic development in the Turkish Cypriot Community, with particular emphasis on alignment with EU legislation and policies, social and economic development, and development of infrastructure.
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