October 1st, 1960. After a 5-year struggle which included political talks, protests, and an armed conflict, Cyprus finally gains independence from the United Kingdom and begins a new chapter in its long and rich history. Like every nation Cyprus has had its ups and downs, with the most notable events being the Turkish invasion of 1974, the 2004 accession into the European Union, and the financial crisis of 2012-13. The island-nation is now a major Mediterranean tourist destination and a regional business hub with an advanced high-income economy and a very high Human Development Index.
This year marks the 60th anniversary of the Republic of Cyprus and 60 years of diplomatic relations with the U.S.A. that began immediately after independence in 1960. The two countries are now enjoying their warmest relationship since the beginning with close cooperation in many fields such as defense, energy, business, counter-terrorism as well as regional stability. The signing of the Eastern Mediterranean Security and Energy Partnership Act of 2019 clearly shows the region is of great importance for U.S. foreign policy and Cyprus, as the center of this region, is set to play a leading role.
Cyprus has been a major business and financial services hub boosted by its stable political environment, EU membership and the Euro currency, its low corporate tax rate, and its strategic location, commonly referred to as the bridge between Europe, Asia, and Africa. Other important sectors for the Cypriot economy include the maritime industry, tourism, and the “troubled” oil and gas sector.
Huge discoveries of natural gas and oil in the eastern Mediterranean region mainly by Israel and Egypt have captured the attention of oil and gas giants and led to an increased interest for regional influence by the world’s superpowers. For Cyprus though, the exploitation of the commercially viable Aphrodite gas field and other potential gas fields is by no means an easy task. Bad relations with Turkey which tries to prevent this development even with military means, the high construction cost of the Eastmed pipeline (a pipe aimed at transferring gas from the region to mainland Europe via Cyprus and Greece), and the effect of Covid-19 pandemic to oil and gas prices are slowing down development and stalling further investment. These obstacles however, are considered temporary and cannot prevent Cyprus from further exploring, extracting, and potentially producing its own energy. The interests of Israel, Greece, the U.S.A., Egypt, Italy, France, and the EU are aligned with those of Cyprus and are all working together to bring the dream of the Eastmed pipeline and regional peace to fruition through this historic cooperation. Therefore further investment in Cyprus has become an important priority of the U.S. government.
The year 2020 has been very challenging for the world and Cyprus couldn’t be unaffected. The Covid-19 pandemic has taken more than 300 thousand lives, quarantined two-thirds of the world, brought trade to its knees, and the global economy in deep recession for the rest of the year. However, the strong economic position of Cyprus, its pre-pandemic low unemployment rate, the successful reforms imposed by its bail-out creditors together with the impressive management of the coronavirus health crisis by the government are giving Cyprus a leading edge by minimizing the post-pandemic effects and is putting the country on track to successfully navigate the rest of 2020.
Tourism, an industry that provides 20% of the country’s income, has been greatly affected but things are looking positive for this summer season. Rightfully named as a “Covid-19 safe destination” for summer 2020, Cyprus is getting ready to welcome its first international visitors as early as July, with extensive implementation of health and safety measures to assure a smooth and hassle-free stay for the tourists.
The services sector, in general, is also ready to restart and it’s back for international business with a new weapon on their arsenal – one that was precipitated by the coronavirus lockdown – digitalization. Companies were fast to introduced digital transformation and cross-border business can now be done faster and more efficiently.
No matter how hard and unpredictable 2020 is so far, Cyprus looks set to overcome the obstacles and salvage the remaining of the year with careful planning, strong partnerships, and further cooperation, especially with the U.S. which is expected keep contributing and supporting the region for peace, democracy and economic prosperity.
