Development Challenge Other Donors FY2001 Program / Summary Tables Program Summary Work Force Data Program/Sector Summary USAID Search: Cyprus Previous Years' Activities 2000, 1999, 1998, 1997 Tuesday, 12-Dec-2000 10:35:53 EST

Introduction

Cyprus continues to feel the strain of inter-ethnic distrust and misunderstanding, with the potential of being a flash point for regional problems. The U.S. national interest in a settlement of the political division of Cyprus is consistent with the International Affairs Strategic plan. The approach seeks to promote growing, ongoing bi-communal cooperation on initiatives that would benefit the whole island, and lead to a broader political settlement, based on a bi-zonal, bi-communal, federal framework, as called for in UN Security Council resolutions. This foreign policy objective is consistent with the USAID Agency goal of strengthening democracy and good governance in recipient countries. In the context of the recently announced (December 1999) candidacy of Turkey for accession to the European Union, there is cautious optimism that new, UN-sponsored, "proximity talks" may help pave the way to a settlement of the deep socioeconomic and political division of Cyprus. The first round of these mediated talks -- completed in New York in December 1999 – was an important first step, but had no conclusive outcome. Additional rounds of proximity talks are planned for early CY 2000.

The Development Challenge

Both the Greek and Turkish communities on Cyprus confront varying economic problems: the GDP per capita on the Greek Cypriot side has risen to over $13,000; while on the Turkish Cypriot side it has stagnated at around $3,000. The U.S. Government has continued to provide funds which, over the years, have shifted in emphasis from relief to long-term reconstruction and development activities. While USAID assistance addresses some of these economic issues, the main democracy and governance-related challenge is to promote bi-communal participation in programs that benefit both island communities. This assistance is directed at underpinning our efforts to reduce inter-communal tension on the island. The United Nations Development Program (UNDP) and the Fulbright Commission act as the implementing agencies for the U.S. program through a series of program grants.

UNDP and the Fulbright Commission have the ability to work with both Greek and Turkish Cypriots, and are well positioned to promote bi-communal cooperation. The Nicosia Master Plan and the Nicosia Sanitary Sewerage System projects are two examples of programs that have been planned and implemented by both communities, and from which each community derives benefit. In December 1997, the leadership of the Turkish Cypriot community officially suspended Turkish-Cypriot participation in bi-communal meetings. Thus, while 38 bi-communal meetings were held in FY 1997 to implement these projects, very few in-country meetings were conducted in FY 1998, following the suspension of formal bi-communal contacts. Informally, however, progress on some priority bi-communal initiatives, such as the expansion of the Nicosia sewerage plant, continued. In FY 1999, there were over 25 bi-communal meetings on initiatives managed or funded by UNDP or its implementer, the UN Office of Project Services (UNOPS). In FY 2000, USAID assistance will support an important descriptive study on strengths, constraints and opportunities through potential integration of the two economies on Cyprus.

Other Donors

After 1974, emergency humanitarian assistance was provided to both Greek and Turkish Cypriots by the International Committee of the Red Cross and by the United Nations High Commissioner for Refugees (UNHCR) with contributions from the United States and other countries. In 1974, the top five Official Development Assistance donors to Cyprus provided $41 million in assistance with the United States share equal to 53%. Subsequently, most donor assistance levels have declined – U. S. assistance excepted. In 1997, the UNHCR ceased to act as an implementing agent for the United States. While a number of countries (including Germany, Italy, Slovakia, and the Czech Republic) currently have specific, bi-communally-oriented initiatives focusing on women, political parties, journalists, and labor unions, the United States is clearly the major donor supporting bi-communal activities in Cyprus; well ahead of the United Kingdom, and the European Union. Since early 1998, U.S., bi-communal program assistance has been provided through UNDP.

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