Cyprus - Commerce and Industry

Textile is the most important product for export, followed by potatoes, shoes, cement and raw materials. Furthermore canned fruit, wine, vegetables and olive oil is being exported. Most important export countries are Greece, the United Kingdom and the Arabic countries. In 1998 export was good for 1.1 billion dollar.
But the trade balance chronically shows a deficit because Cyprus has to import many products, being a small island. In 1998 it had to import for 3.5 billion dollar. Mainly these products are foods, oil and oil products, machines and chemical products. Main import countries are the United Kingdom, the USA, Germany, Greece and Italy. Cyprus has been linked to the European Union since 1973 by an Association Agreement which provides for the establishment of a customs union in two stages. This agreement contains arrangements on trade, financial and technical cooperation which are to be applied for the benefit of the entire population of the island. The first stage provided for the phased reduction of tariffs on industrial goods and agricultural products. After the invasion in 1974 this arrangement was only valid for the Greek part.

The commerce in the Turkish part is concentrated on Turkey. In 1998 it exported for 63.9 million dollar and imported for the amount of 374 million dollar.
The industry was heavily damaged by the events of 1974. The Greek part however, which had lost 70% of its production capacity, recovered quickly and flourishes again.

Growth of the construction industry was considerable as a result of the thriving tourism. Apartments, holiday bungalows and hotels were build everywhere.
There is almost no heavy industry. Most companies have at most 5 employees and mainly agricultural products are processed.

The most important branches are the food sector, shoes-, textile-, paper- and tobacco-industry. In the cities there are a lot of one-person companies. The biggest part of the processing industry is concentrated in the area around Nicosia and Limassol.