The Turkish ambassador to North Cyprus, Halil Akca, made a series of hard hitting announcements yesterday. The essence of the message was that in future, Turkey would switch the essential funding it provides away from public sector salaries to private sector investment.
Mr Akca went on to say that Turkey would not be funding major state infrastructure projects related to airports, harbours, telecoms and electricity. He stated that the North Cyprus Government did not have the capacity to finance these projects and had, in most cases, abandoned improvements. He stressed that these projects should now be taken over by the private sector in a series of privatisation moves and pointed out that Turkey was following the policy of privatisation. The ambassador went on to say that following these new policies would give a major boost to the North Cyprus economy.
“Bank savings should be used to fund private investments and not used to underpin consumption or State debt”
Akca estimated that TL9 billion could be used this way and said that systems should urgently be set in place to allow the switch to private sector funding.
Akca pointed out that Turkey was unhappy with seeing its funding to North Cyprus being used for buying consumer goods in South Cyprus. He said that two recent studies had shown that even taking casino earnings into account, the North spent five times more in the South than Greek Cypriots spent in the North – spending he feels was completely lost to the economy.
He didn’t blame North Cyprus consumers, saying that in the main they purchased imported goods rather than Greek goods, because these were considerably cheaper in the South. However he said that this indicated an overhaul being needed in the TRNC to address quality, price, service and guarantees for goods.