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A former British colony, Cyprus became independent in 1960 following years of resistance to British rule. Tensions between the Greek Cypriot majority and Turkish Cypriot minority came to a head in December 1963, when violence broke out in the capital of Nicosia. Despite the deployment of UN peacekeepers in 1964, sporadic intercommunal violence continued, forcing most Turkish Cypriots into enclaves throughout the island. In 1974, a Greek Government-sponsored attempt to overthrow the elected president of Cyprus was met by military intervention from Turkey, which soon controlled more than a third of the island. In 1983, the Turkish Cypriot administered area declared itself the "Turkish Republic of Northern Cyprus" ("TRNC"), but it is recognized only by Turkey. A UN-mediated agreement, the Annan Plan, failed to win approval by both communities in 2004. In February 2014, after a hiatus of nearly two years, the leaders of the two communities resumed formal discussions under UN auspices aimed at reuniting the divided island. Talks were suspended in October 2014, but resumed in earnest in May 2015 following the election of a new Turkish Cypriot "president." The entire island entered the EU on 1 May 2004, although the EU acquis - the body of common rights and obligations - applies only to the areas under the internationally recognized government, and is suspended in the area administered by Turkish Cypriots. However, individual Turkish Cypriots able to document their eligibility for Republic of Cyprus citizenship legally enjoy the same rights accorded to other citizens of EU states.

Location

Middle East, island in the Mediterranean Sea, south of Turkey; note - Cyprus views itself as part of Europe; geopolitically, it can be classified as falling within Europe, the Middle East, or both

Natural Resources

copper, pyrites, asbestos, gypsum, timber, salt, marble, clay earth pigment

Population - distribution

population concentrated in central Nicosia and in the major cities of the south: Paphos, Limassol, and Larnaca

1102677
Greek (official) 80.9%, Turkish (official) 0.2%, English 4.1%, Romanian 2.9%, Russian 2.5%, Bulgarian 2.2%, Arabic 1.2%, Filipino 1.1%, other 4.3%, unspecified 0.6%
NICOSIA (capital) 251,000 (2014)
Conventional long form
Republic of Cyprus
Conventional short form
Cyprus
Local long form
Kypriaki Dimokratia/Kibris Cumhuriyeti
Local short form
Kypros/Kibris
Republic of Cyprus - presidential democracy; Turkish Republic of Northern Cyprus (self-declared) - semi-presidential democracy
Name
Nicosia
Geographic coordinates
35 10 N, 33 22 E
Time difference
UTC+2 (7 hours ahead of Washington, DC, during Standard Time)
Daylight saving time
+1hr, begins last Sunday in March; ends last Sunday in October
accepts compulsory ICJ jurisdiction with reservations; accepts ICCt jurisdiction
The area of the Republic of Cyprus under government control has a market economy dominated by a services sector that accounts for more than four-fifths of GDP. Tourism, finance, shipping, and real estate have traditionally been the most important services. Cyprus has been a member of the EU since May 2004 and adopted the euro as its national currency in January 2008.
Inflation
-1.429%
Total tax rate (% of commercial profits)
24.7%
Real Interest Rate
5.706%
Manufacturing, value added (% of GDP)
4.963%
Current Account Balance
US$ -1,022,632,658
Labor Force, Total
623,401
Employment in Agriculture
4%
Employment in Industry
16.23%
Employment in Services
79.78%
Unemployment Rate
11.73%
Imports of goods and services
US$ 12,363,125,784
Exports of goods and services
US$ 12,280,828,097
Total Merchandise Trade
42.23%
FDI, net inflows
US$ 4,979,180,351
Commercial Service Exports
US$ 9,736,514,350
citrus, vegetables, barley, grapes, olives, vegetables; poultry, pork, lamb; dairy, cheese
tourism, food and beverage processing, cement and gypsum, ship repair and refurbishment, textiles, light chemicals, metal products, wood, paper, stone and clay products
Commodities
citrus, potatoes, pharmaceuticals, cement, clothing
Partners
Greece 10.9%, Ireland 10.2%, UK 7.2%, Israel 6% (2015)
Commodities
consumer goods, petroleum and lubricants, machinery, transport equipment
Partners
Greece 25.7%, UK 9.1%, Italy 8%, Germany 7.5%, Israel 5.5%, China 4.8%, Netherlands 4.1% (2015)
Country Risk Rating
B
Political and economic uncertainties and an occasionally difficult business environment can affect corporate payment behavior. Corporate default probability is appreciable.
Business Climate Rating
A3
The business environment is relatively good. Although not always available, corporate financial information is usually reliable. Debt collection and the institutional framework may have some shortcomings. Intercompany transactions may run into occasional difficulties in the otherwise secure environments rated A3.
  • Trade crossroads between Europe, Africa, and Asia
  • Membership of the Eurozone
  • Tertiary sector: tourism, corporate services, maritime transport
  • Well-trained and English-speaking workforce
  • High-quality transport and telecoms infrastructures
  • Partitioning of island (since 1974) and poor relations with Turkey
  • Limited domestic market, isolated, remote, and outside the heart of Europe
  • Limited diversification of economy and foreign customer base
  • Regional geopolitical instability
  • High debt levels of all economic players
  • Huge banking sector, very highly concentrated and loaded with debt

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