Delivering the Cyprus Peace Dividend

The report argues that a settlement of the Cyprus problem would significantly boost the island's economy by creating economies of scale and opening access to the EU and Turkish markets. Using sectoral and total factor productivity (TFP) forecasting, the authors estimate that a solution could increase overall GDP by €11 billion to €17.4 billion over 20 years and raise GDP per capita by €6,800 to €11,000. Key growth sectors include wholesale and retail trade, tourism, construction, and professional services. The report also provides a framework for financing property compensation and emphasizes that closing the gender gap and establishing inclusive institutions are critical for maximizing the peace dividend.

• A solution to the Cyprus problem is forecasted to increase the total economic size (GDP) by between €11 billion and €17.4 billion after 20 years, with a baseline real GDP growth rate of 3.8% compared to 2.3% under the status quo.
• A settlement is tentatively projected to create approximately 100,000 additional jobs within the first 10 years, with the highest gains in tourism (30,000), wholesale and retail trade (18,000), and construction (10,000).
• The wholesale and retail trade sector is identified as the primary beneficiary of a solution, with a projected direct peace dividend of €2.9 billion by 2040 due to knock-on effects from tourism and education.
• A settlement would resolve disputes in the Exclusive Economic Zone (EEZ), reducing insurance costs and allowing for faster, more profitable exploitation of natural gas from the Aphrodite field via shorter pipelines to Turkey.
• Property compensation costs are estimated to range from €4.6 billion to €13.1 billion, depending on the valuation methodology and the area of land compensated; the baseline scenario suggests 61% of this could be funded by the increase in government tax revenues generated by the peace dividend.
• Closing the gender gap in labour force participation, particularly in the TCC where the female rate is only 40.3%, could potentially increase the TCC's economic size by up to 30%.
• Current economic growth is hindered by high electricity costs, water stress, and poor public transport; the GCC specifically suffers from a high non-performing loan (NPL) ratio of 23.6% as of Q1 2019.

APA

Mullen, F., Besim, M., & Florentiades, M. (2020). Delivering the Cyprus Peace Dividend. Peace Research Institute Oslo. https://cdn.cloud.prio.org/files/af35d28f-002d-47fa-9fe3-22a8950f1e00/Report E Delivering the Cyprus Peace Dividend.pdf?inline=true

Chicago

Mullen, Fiona, Mustafa Besim, and Michalis Florentiades. Delivering the Cyprus Peace Dividend. Peace Research Institute Oslo, 2020. https://cdn.cloud.prio.org/files/af35d28f-002d-47fa-9fe3-22a8950f1e00/Report E Delivering the Cyprus Peace Dividend.pdf?inline=true.

Wikipedia

{{cite report |last1=Mullen |first1=Fiona |last2=Besim |first2=Mustafa |last3=Florentiades |first3=Michalis |title=Delivering the Cyprus Peace Dividend |publisher=Peace Research Institute Oslo |date=2020 |url=https://cdn.cloud.prio.org/files/af35d28f-002d-47fa-9fe3-22a8950f1e00/Report E Delivering the Cyprus Peace Dividend.pdf?inline=true |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{mullen2020delivering, author = {Mullen, Fiona and Besim, Mustafa and Florentiades, Michalis}, title = {{Delivering the Cyprus Peace Dividend}}, institution = {Peace Research Institute Oslo}, year = {2020}, url = {https://cdn.cloud.prio.org/files/af35d28f-002d-47fa-9fe3-22a8950f1e00/Report E Delivering the Cyprus Peace Dividend.pdf?inline=true}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }