‘People are now worse off than 10 years ago’
PEOPLE living in North Cyprus are on average $3,500 worse off compared to a decade ago, Deputy Prime Minister and Economy and Energy Minister Erhan Arıklı said this week.
He made the stark assessment during a “vision and consultation” press conference at the Lefkoşa Merit Hotel, where he talked about his activities during his first six months in office.
During the meeting, Dr Arıklı painted a bleak picture of the economic situation in the TRNC and put forward his proposals to improve it.
Pointing out that the country is going through a “difficult pandemic period” both in terms of health and the economy, the Deputy PM said: “We are grappling with an economic contraction. We are using our resources, both as a state and government, and we are trying to ensure that society gets through this crisis with the least possible damage.”
Stating that the economy and the service sector have been seriously affected by the pandemic, Arıklı said: “We allowed the economy to be crushed under health.”
He said that there has been an economic “slowdown” in the TRNC since the “2009 crisis” and after 2017.
“Unfortunately, the Covid19 pandemic occurred before we could get out of this period,” he said. “Many of the problems we experienced already existed but perhaps were inconspicuous. The pandemic has forced us to face all these problems.”
Dr Arıklı pointed out that since 2011, GDP per capita has fallen by around $3,500. He noted that unemployment has risen to around 10 percent because of the pandemic crisis, with young people and women most affected.
Pointing out that the country is “once again faced with the fact that economic activities are severely affected due to over-dependence on the tourism and higher education sectors”, Dr Arıklı emphasised that “structural problems” in the economy have “grown, deepened and become more urgent with the crisis”.
He went on: “If we are talking about normalisation, returning back to ‘normal’ after the pandemic will not help us because what we are going through actually started long before the pandemic crisis and returning to normal won’t actually solve any of our problems in the long run.
“We need a new normal. If we are to normalise, we need to create a new model of economic growth.”
He stated that globalisation and the use of technology is increasing day by day in the world and the concepts of economic competitiveness and sustainability have gained “a whole new dimension”.
The TRNC needs to “produce more and export more”, create more job opportunities for women and young people, and the tourism and higher education sectors need to be built on “more rational and solid foundations”, he said.
“If we don’t plan for economic growth, we have no chance to get past what we are going through right now,” the minister stressed.
He also shared data about the “growing” 2021 fiscal year’s budget deficit.
“The TRNC 2021 Fiscal Year’s budget has been formulated with a local budget deficit of 1,980 million TL and a general budget deficit of 830 million TL, with the assumption that Turkey will contribute 1,150 million TL,” he said.
“Afterwards, based on the projected contribution of 800 million TL to the budget deficit as part of the ‘Economic and Financial Cooperation Agreement’ signed with Turkey, the general budget deficit increased from 830 million TL to 1,180 million TL.
“With the additional Covid-19 measures taken as of June, the amount of 400 million TL, which was not foreseen in the budget in the ‘Covid-19 measures package’ announced in February 2021, reached 600 million TL. In this context, it is estimated that our total deficit by the end of the 2021 fiscal year will reach 1,780 million TL.”