Former minister speaks of ‘miracle’ rebound of economy after invasion

On the eve of the anniversary of the 1974 invasion, Commerce Minister at the time Michalis Kolokasides recalled the impressive efforts to rebuild Cyprus’ economy after the one third of the island was suddenly seized.

Speaking to the Cyprus News Agency, Kolokasides, who took on the post in June 1972 before quitting after the invasion to then return to it in January 1975, said that, despite political tensions in the country, from 1960 to 1972 Cyprus recorded an annual growth of 7 per cent.

“After the invasion, we found ourselves all of a sudden with 40 per cent less of our land. Businesses in the north closed down and the agriculture sector collapsed.

“However, through bold government actions and initiatives, we pulled through, especially thanks to the action plans of 1975 and 1976, that saw the investment of $275 million aimed at creating between 16,000 and 20,000 jobs.”

The impressive revitilisation of the economy after the invasion was also the subject of a memorable piece in The Economist published in 1977, titled Miracle in Half of the Island.

“It’s difficult to even explain it, it was truly remarkable” Kolokasides said, adding that the economic efforts led to a stunning 14 per cent GDP growth only one year after the invasion, according to World Bank figures.

“The government machine may have been slow due to bureaucracy at the time, but after the invasion there was a nationwide effort to rebuild our economy,” Kolokasides added, praising the solid cooperation between the General Director of the Planning Office and the Finance Minister at the time Andreas Patsalides.

“We all had to work hard to save our country, there was no personal interest. The key element of the whole effort to rebuild the economy was the feeling that we all participated in a national effort to revitalise the economy, along with our lives and businesses.

“We were never tired, we constantly worked together,” Kolokasides recalled.

Nevertheless, the magnitude of the consequences brought about by the invasion were massive. The World Bank publicly stated that the events of 1974 “single-handedly destroyed the island’s economic outlook and perspectives through significant structural changes.

“Gross National Product per capita fell by 19 per cent, unemployment soared to 25 per cent and exports as well as imports fell by 55 per cent in the second half of 1974,” a World Bank report said.

Tourism also received a crushing blow, with a recorded loss of 64 per cent of revenue from the sector recorded the year after the invasion.

“Our hotspots were Famagusta and Kyrenia, nothing else existed at the time in terms of tourism,” Kolokasides said.

“However, despite the difficulties and the losses, we came together as a community and we rebuilt our economy.

“We never gave up and in about three years we were back on our feet, something we can be proud of.”