‘North-South income gap is widening’
THE gap between incomes in North and South Cyprus is widening, a top economist has said.
According to Derviş Kemal Deniz, the annual per capita income in South Cyprus is $32,000 while in the TRNC it is $9,000.
Mr Deniz said that this difference has increased “in the last four to five years”.
He noted that the monthly salaries of “professors, specialists or those in senior positions in South Cyprus are between 1,600 and 1,800 euros” and that those who work at low level jobs make “between 700 to 1,000 euros”.
In addition, according to the South Cyprus Statistical Office’s data, the average monthly salary in the South is 1,573 euros, while 50 per cent of those working in the South earn below 1,500 euros a month.
Based on the same data, the gross salary of 25.7 percent of employees is below 1,000 euros. The majority of employees in South Cyprus earn a salary of 1,000 euros, it was said.
In the TRNC, the new minimum wage, effective as of September 1, is 4,970TL gross and 4,324TL net. It is reported that the majority of private sector employees in North Cyprus earn just the minimum wage.
Mr Deniz said that in 2007-2008, the per capita income in the TRNC was the equivalent of $15,000 but since 2010 it has fallen to $9,000.
He attributed the income gap between South Cyprus and the TRNC to reasons such as the TRNC’s “introversion and dependence on domestic sectors”, its isolation from the global economy and less cooperation with the European Union. He also pointed to “cheap labour” brought from abroad.
“A person who earns a 2,000TL salary in his country is willing to work in our country for a net minimum wage of 4,324TL, but this salary isn’t enough for TRNC citizens,” he explained.
“In two or three years’ time, citizens who currently earn 10,000TL [a month] under today’s conditions won’t be earning enough.”
Mr Deniz indicated that this situation “pushes young people to migrate to Europe or South Cyprus, encourages them to work there, while cheap labour from abroad has taken their place in the TRNC”.
He continued: “This trend creates a small number of rich and a lot of poor people in the country, turning it into a model similar to that of Middle Eastern countries.
“In order to become one of the European countries, we must adopt the global economy and join in international practices.”
Mr Deniz also touched on the TRNC’s lack of international recognition, saying: “We are unknown in the political arena, but we are known commercially. . . We should work with the European Union and attract investors to the country.”
He also said that “distrust” in the country’s tax system has contributed to its “economic regression”.
“Because people thought that the taxes they paid would go to interest groups, they chose not to pay taxes or just pay the minimum amount, which reduced per capita income,” Mr Deniz added.
‘currently In two or three years’ time, citizens who earn 10,000TL [a month] under today’s conditions won’t be earning enough