A Political Economy of Division, Development, and Crisis: Envisioning Reunification Beyond the Cyprus Economic Miracle

Abstract

This chapter examines three interrelated aspects: First, it offers an economic overview of the two parts of the country, which are de facto structurally divided, but also connected via some elements of interdependence. Secondly, it examines from the point of view of the current economic crisis in the Eurozone the basic features of the post-1974 economic development in Cyprus, focusing mostly on the last decade, which illustrates the end of an accumulation regime in what was seen as the “Cyprus economic miracle.” The economically stronger Republic of Cyprus (RoC) in the south went from slowdown to crisis, while the smaller economy of the Turkish Republic of Northern Cyprus (TRNC), heavily dependent on and recognized only by Turkey in the north, is in a deeper economic and social crisis. Reunification requires that the two parts of the country, economy, and society be reunited; critical research agendas ought to reflect the need to reorient economics toward an integrated economics of reunification. Finally, this chapter envisions a path toward sustainable reunification, realizable in the days of economic crisis on new forms of “development.” The current economic crisis makes mainstream approaches to private-led financing and neoliberal-inspired development increasingly untenable. Learning from the past and enriching knowledge from global experience, we propose innovative forms combining sustainable, democratic, and popularly controlled state-led and cooperative development.¹