Solution will bring economic benefits

Makarios Droushiotis writing in Politis says that the ultimate aim of the discussions on property that are currently underway is to make the solution of the Cyprus problem a huge opportunity for the economy to grow rather than put it in danger of collapsing.

The backbone of the overall approach to the issue is the proposal to set up an Organisation of Property Development which will undertake the responsibility of developing T/C property in the south, rebuilding Varosha and develop other land in the north that will benefit from a solution.

According to reliable sources the original idea came from UN experts who have carried out detailed surveys, visited all the areas to be developed, looked at examples elsewhere in the world and adapted the plan for urban development to the specific needs of the Cyprus problem.

They took into account that the fear (real or exaggerated) that the economy would collapse was one of the factors that led to the rejection of the plan in 2004. Tangible possibilities for the economy to grow will lead people to think maturely and creatively. Furthermore, a strong economy will help overcome the problems that will arise in implementing the solution.

The experts discussed their ideas with both sides. The Turkish side adopted them, worked on them further and announced that it is open to amendments and improvements. Their proposal, moreover, enjoys the approval of the UN and other mediators.

“Despite any weaknesses and obvious reservations towards certain aspects of the proposals that the G/C side may have, the document is not open to rejection”, an EU diplomatic source told the paper.

The proposals are seen as an opportunity for massive development all over the island, something that will make the solution very appealing because it will offer something significantly better than that which exists today or that which would exist if the talks were to fail.

Specifically, the value of T/C land in the south will increase and thereby strengthen the compensation fund.

The size and quality of the properties concerned (500,000 skales, many right on the sea) in an environment without political problems and within the EU would attract billions of foreign investments. The solution will not be an issue that will affect just a few romantic ideologist and the refugees who will receive compensation for their property, but the rest of the population, especially the inhabitants of Larnaca, Limassol and Pafos, who will benefit from the growth in jobs, services, trade, etc.

The writer says that this growth will be gradual and controlled, will last many years and will serve the needs of the solution. The experts have noted that more than 30 T/C villages have been completely deserted and that separate development plans could be created for each one of them.

Moreover, there are large expanses of land along the Kyrenia coast that are currently military areas. This land has not been given to anyone and could be returned. One idea is for this land to also be given over to the Organisation of Property Development. Owners could get Turkish Cypriot land of equal value in Limassol or Larnaca. What’s more, in Kyrenia, once the necessary infrastructure has been created, a couple of hundred houses could be built and given to Greek Cypriots who had property in Kyrenia which cannot be returned, either as a permanent home or as a holiday home.

These are just some of the possibilities that the experts have considered. Perhaps for some they may seem utopian, yet there have been many examples of similar land development done successfully in other countries.

The key to its success is proper management and stability. The Organisation of Property Development, would come under the Property Commission which would be a central government body. Both Greek and Turkish Cypriots would participate, as would foreigners, with management knowledge and experience.

If stability is achieved interest from foreign investors is expected to be huge thanks to Cyprus’ geographical position, its membership of the EU, its services sector and infrastructure. What’s more Turkey, which today is a hostile mass that overshadows the island, would become a financial partner. With the 15th largest economy in the world, and a 10% growth rate, it could offer great opportunities and financial activities. One of Cyprus’ largest economic partners today is Russia. Russia’s largest partner is Turkey. A thawing of relations would turn Cyprus into a services centre that could cover a large geographical area from the Mediterranean to the Baltic Sea.

The fact that Turkey has embraced these arrangements on the property issue, is, according to the various mediators, a groundbreaking event. If despite this there is no solution, then the Cyprus problem will be considered truly unsolvable.

One of the thorny issues in the discussions on property is that of bizonality and how that affects the right to property. The T/Cs do not want to see their society disturned and do not believe it would benefit a solution if the present balances are upset.

The G/C side in its document puts the emphasis on the right of the owner, but also recognises the problems that would be created by forcing the user to move and offers solutions such as long term leases.

In essence both sides agree that that it is doubtful if a huge number of Greek Cypriots will want to return under Turkish Cypriot rule. However, the Turkish side does not want to leave this to chance, fearing there may be a campaign by those who are against a solution and may want to make things difficult. Also they want to ensure they have majority ownership of the land, so that they will have the power to withstand the pressures of free market forces.

What is needed is a formula that would recognise the rights of owners and would not put a ceiling to the number of properties that would be returned, but which in practice would also protect the user as well as safeguard the majority of land ownership.

Once the majority ownership of land in the T/C state is establised, either with a ceiling or through exceptions, then the market will open and everyone will be free to buy and sell wherever he wants.

The Greek Cypriot side wants that any restrictions to land ownership expire in ten years time. The Annan plan provided for the return of a third of one’s land and there was a derivation from the acquis of 15 years or when the GNP of the T/Cs reached 85% of that of the G/Cs, whichever came first. But the EU could propose to the T/C state that it abandon either wholly or in part any restriction if it believed that the political, economic or social conditions in Cyprus allowed it.

In view of the fact that the EU does not accept any permanent derivations, it is believed a similar arrangement will be included in the new plan. However, an economy that is based on land development cannot survive without European buyers. Thus the market itself will remove all derivations from the very first day.

The Greek Cypriot negotiating team is failing to take seriously proposals tabled by the Turkish Cypriot side and sometimes even treats them “with contempt”, the Turkish Cypriot leader Dervis Eroglu has said.

In a rare interview, Eroglu told the Sunday Mail that the talks with President Christofias are “going slowly”, repeating his view that the latest effort is “the last chance” for a solution.

“Everything that needs to be discussed has been discussed ... but Christofias seems to be seeking more time by blaming me and calling me intransigent,” he said.

He complained that his team’s proposals in the talks are “not taken seriously” and are even sometimes treated “with contempt” by the Greek Cypriot team, despite the UN considering them “reasonable”.

The Turkish Cypriot leader hinted that his vision for the island’s future rested on a model very close to the situation prevailing today.

“No one on Cyprus is any longer a refugee,” said Eroglu, adding: “On both sides people have established new lives, so what we need is a solution that does not bring about social upheaval.”In effect, Eroglu sees ethnic separation as the key to a solution, hence the focus in the leaked Turkish Cypriot property proposals on finding innovative ways to finance compensation and relocation for Greek Cypriot refugees with a “limited” return.

He called on Christofias to lead his people by telling them “the facts” about the “pain” of a solution which both sides will have to share.