Cyprus Mail
Cyprus Cyprus Talks

Vague TC data hampers World Bank report on cost of solution (Update)

THE absence of reliable information about the economic situation in the north is delaying World bank experts from concluding their report that will indicate the potential cost of a Cyprus solution, and the impact and benefits to each community, currently divided.

This week, a delegation from the World Bank presented the stage at which studies on the cost of a solution to the Cyprus problem are, allowing the two sides’ negotiators and experts to ask questions and make remarks, government spokesman Nicos Christodoulides said on Friday.

Speaking to the Cyprus News Agency, Christodoulides said that, during Thursday’s meeting with the World Bank delegation, after the United Nations tweeted that “excellent coordination” with the World Bank continues.

“Excellent coordination continues between the @UN and the @WorldBank in support of a #Cyprus settlement,” UN Cyprus tweeted.

Christodoulides said that the process of finalising the reports is ongoing, and that work on this issue has not yet been concluded.

“It was a very broad-strokes presentation,” a source with knowledge of the discussion told the Cyprus Mail.

“They basically analysed their methodology.”

The Greek Cypriot side was represented at the meeting by Finance ministry official Yiorgos Panteli and negotiator Andreas Mavroyiannis.

According to the source, the World Bank analysts are having a hard time obtaining reliable data from the Turkish Cypriot side, making it difficult to determine the true present picture.

However, it added, the final report, expected in draft form in approximately one month, is not likely to state a final figure, which will constitute the ‘cost of a solution’.

“Instead, it’s going to be a list of recommendations, or ‘best practices’, that will be based on certain assumptions, since there is no political agreement yet on many of the points that will determine the cost of the solution – like, of course, the property issue,” the source explained.

“Things like whether Social Insurance payments will be the obligation of the central government or each constituent state will impact recommendations – but there’s no agreement yet.”

Among the preliminary recommendations that came up at the meeting were that the size of the economy does not favour large-scale economic division, meaning optimal economic solutions require a largely unified economy, and that allowing competition between the two post-solution constituent states would be counter-productive.

“For instance, if one state is allowed to offer incentives to attract investments in its own territory – at the expense of the other state – this is likely to end up in a race to the bottom for both states,” the source said.

A parallel study, conducted by the International Monetary Fund, aims to look at the macroeconomics of a united Cyprus, and fiscal and taxation policy.

Analysts from the IMF and the World Bank, which were commissioned to look into the economics of a solution by United Nations’ envoy Espen Barth-Eide, started data-collection last December.

Meanwhile, according to the government spokesman, the next meeting between President Nicos Anastasiades and Turkish Cypriot leader Mustafa Akinci has been rescheduled for Tuesday, instead of Monday.

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