06 Sep 2016 How do you solve a problem like Morphou?

More than 12 years since the last big effort to solve the Cyprus problem, the negotiations have finally entered the “make or “break” phase. There is a general acceptance that this is the last best window for what could end up being a very long time.

Forthcoming factors include the departure in January of US president Barack Obama and his team; the exit in December of UN Secretary-General Ban Ki-moon; the start of the Republic of Cyprus presidential election campaign in early 2017; the resumption of gas drilling in 2017; the increasingly difficult atmosphere in which Turkish Cypriot leader Mustafa Akinci is operating thanks to coalition changes; and the uncertainties surrounding the failed coup in Turkey.

Last week I did some number-crunching on the number of Greek and Turkish Cypriots who were displaced in 1974 and whose characteristics suggest they would have a strong desire to return.

This week I am going to look some numbers relating to Morphou. Media reports suggest reaching a deal on territory is now the final hurdle before the last grand meetings in which all aspects of the Cyprus settlement would be agreed, and Morphou seems to be the main sticking point.

What is the population of Morphou?

According to the partial census at the time, central Morphou had a population of 16,081 in 1973. Only 592 of these inhabitants were Turkish Cypriots, owing to earlier displacement in 1963-64. The average household size at the time was four persons, so one can estimate that the 16,081 inhabitants corresponded to about 4,000 housing units.

Today, according to the Turkish Cypriot census of 2011, central Morphou has a population of 18,946. And today the average household size is three persons, so one can estimate that this corresponds to about 6,300 housing units. The areas of Morphou that would have come under Greek Cypriot control in the Annan Plan had 17,860 residents in 2011. This corresponds to roughly 6,000 housing units.

As regards the origin of the residents, we only have data on the wider Morphou region. There were 30,037 inhabitants of wider Morphou in 2011. Of these, 16,701 have only Turkish Cypriot identity cards, so one can assume about half of the population is of Turkish Cypriot origin. Another 2,767 have both Turkish Cypriot identity cards and Turkish nationality, while 8,076 have only Turkish passports. The remainder are a mix of people from elsewhere, of which 1,882 also have Turkish Cypriot identity cards.


Why is Morphou a problem for Turkish Cypriots?

The main reason why Morphou has become problematic for the Turkish Cypriots is that support for a settlement among the current residents of Morphou is reportedly waning, thus jeopardising the chances of majority Turkish Cypriot support for a referendum. Back in 2004, support for a settlement among the voters of Morphou, at 64%, was almost as high as in the rest of the north (which voted 65% in favour), despite the fact that most of the residents of central Morphou were expected to move. However, according to a poll conducted by Prologue Consulting in July 2016, support in Morphou for a settlement had dropped to just 42%.

One reason for high support in 2004 was that the area had been rather neglected. It has few tourists and depends mainly on citrus fruits and potatoes. The unemployment rate was 10.9% in 2015, compared with a north Cyprus average of 7.4%. When the referendum came, the current residents were promised brand new housing further north, so voted in favour.

After 76% of Greek Cypriots rejected the Annan Plan in 2004, however, people thought this was the end of settlement efforts and private investment in housing got under way. Some public investment has trickled in, too, in the form of two universities and a planned hospital.

Most of the Turkish Cypriots in Morphou are from Limassol (places like Akrotiri and Polemidia) and Paphos. Some are now said to be eyeing their prime land in the south if they have to move. It they claim this land, it would create problems for refugee housing built on their land in the south. It also takes away some of the best opportunities for generating revenue for compensation, for example by consolidating and developing prime Turkish Cypriot land in coastal areas. On the other hand, water from Turkey is also raising the value of agricultural land in Morphou.

Who pays for rehousing?

Another reason is uncertainty about those 2004 promises of new housing. The government of Turkey has (quite rightly) been putting the squeeze on public spending in the north, so residents probably want to see guarantees of housing rather than merely promises.

Under the Annan Plan, dispossessed owners of the property in the territorial adjustment areas would get full possession of their property. Just over half of all Greek Cypriots displaced in 1974 would have got their property back this way. If this provision included in the next plan, then almost 18,000 people who currently reside in central Morphou would have to move and an estimated 6,000 houses will need to be found. Under the Annan Plan, they had three years to be relocated.

Rehousing will cost money. According to the Statistical Service, Cystat, the construction cost of a private-sector dwelling cost €949 per square metre in 2013 (latest data). If 6,000 housing units have to be built from scratch, and to the dimensions provided for in the Annan Plan (100 square metres for a family of three), then we are looking at a cost of more than half a billion euros before any land has been purchased, any schools built and so on.

Turkey is already being called on to write off Turkish Cypriot debt, which reached $3.7bn (€3.4bn) out of total Turkish Cypriot debt of €5bn in 2015, according to Turkish government data. (Incidentally, that means those reports of €17bn Turkish Cypriot debt to Turkey are false). Greek Cypriots also want Turkey to commit funds to compensation. As I have written elsewhere, it ought to be possible to get compensation to less than €5bn through territorial adjustment, reinstatement and a judicious use of exchange, but other inflated figures that have been doing the rounds have probably scared people.

What will sustain the economy?

As an economist, I also have to add my own question. Having gone to all that expense to move 18,000 people, how can one ensure that Greek Cypriots move back and that a region already lacking investment and with little tourism does not end up a half-empty ghost town? There are no easy answers.


See also by the same author: ‘Valuing Cyprus property for compensation’ here; “Cyprus refugees, property and homes’ here;  ‘Getting Cyprus property compensation under €5bn’ here; and property compensation should not cost €30bn’ here.