CYPRUS 23 – 24 June 2005 1 Peer Review Increasing Labour Supply through Economic Migration, Ireland Increasing Labour Supply through Economic Migration Statements and Comments Nicos Trimikliniotis Cyprus Labour Institute This paper comments on the situation, trends and policy considerations presented by Alan Barrett entitled “Ireland: Increasing Labour Supply through Immigration” in the context of examining whether there are issues that are relevant to and transferable to Cyprus. By way of introduction, it must be stated that the ‘paradigm’ of Ireland, as one of a small country of emigration transformed into a country of immigration and managing to achieve high levels of economic growth over a short period of time is one that is often quoted in Cyprus and is indeed a paradigm worth examining and learning from when considering Cyprus economic (and social) development. At the same time it must be noted that there are vital contextual differences that cannot be ignored. This Report shall only deal with the area controlled by the Republic of Cyprus. Part 1: ‘Inside the Cyprus Miracle’ - Economic Development, Migration Policy and Accession to the EU Cyprus is smaller than Ireland in both size and in population. Like Ireland, Cyprus had historically been colonised by the British; hence it retains a similar legal and administrative system. Also Cyprus had historically been a country of emigration, exporting migrants to richer countries. As is usually the case in former British colonies, many Cypriots migrated; in fact the number of Cypriots living abroad nears half the population of the island (Anthias, 1992a). The Turkish invasion of 1974 left the Cypriot society and economy devastated: 18 % fall of the GNP between 1973 -1975, 30% rise in unemployment, mass poverty and a loss of 37% of the country’s territory. Since then Cyprus has seen extensive economic development and has been transformed into a society which acts as ‘host’ to immigrants. The dramatic economic growth in the 1980s and 1990s, referred as ‘”the economic miracle” (Christodoulou, 1992) was structured by a number of ‘external’ factors such as the Turkish occupation of the north since 1974. This, by default, created the preconditions for rapid modernisation, in spite of the severe drop in the GDP during 1973-75 and the sharp rise in unemployment and mass poverty. Cheap labour was provided by the 200,000 Greek Cypriot displaced persons, who were forcibly expelled from the northern part and lived in refugee camps. This fact, together with a concerted effort by the Government, political parties and trade unions, created the conditions for the kind and level of development that was subsequently experienced in Cyprus based on the massive expansion of the model known as ‘mass tourism’ (Christodoulou 1992; Cyprus Labour Institute, 2005). Economic growth was maintained from the late 1970s, 1980s and early 1990s until its current ‘stabilisation’ to a growth rate of 2-4% following the violent partition of the island. Migration was the key factor that determined the continuing economic growth, when low skill labour shortages were located in the mid 1980s in crucial sectors for development. It was at this point that immigration was to become a key employment policy and the institutional setting was developed to cope with the inflow of temporary migrant workers (see appendices for the characteristics of migration to Cyprus).