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Economic affairs in Cyprus are dominated by the division of the country due to the
Turkish occupation of the north part of the island.
The Cypriot economy is prosperous and has diversified in recent years. Cyprus has been sought as a basis for
several offshore businesses, due to its highly developed infrastructure. Economic policy of the Cyprus
government has focused on meeting the criteria for admission to the European Union.
Recently, oil has been discovered in the sea South of Cyprus (between Cyprus and Egypt) and talks are under way
with Egypt to reach an agreement as to the exploitation of these resources. The level of the oil field in terms
of production (barrels per day) that the two countries will be able to produce is still a matter of speculation.
The economy in the occupied part of Cyprus is heavily dependent on Turkey for subsidies for its survival. The
economy relies heavily on agriculture. The influx of about 100,000 Turkish economic migrants in the occupied
part of Cyprus, who in their majority are uneducated workers, has brought even more trouble in the economy of
the occupied area. Moreover, the small, vulnerable economy has suffered because the Turkish lira is legal
tender.
Eventual adoption of the euro currency is required of all new countries joining the European Union, and the
Cyprus government currently intends to adopt the currency on 1 January 2008.
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