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E. ECONOMY AND SOCIO-ECONOMIC INDICATORS. 1. Cyprus economy is based on the free market system. The private sector is the backbone of economic activity. The Government's role is basically limited to safeguarding a transparent framework for the operation of market mechanism, the exercise of indicative planning, and the provision of public utilities. 2. Although the blow inflicted on the economy by the Turkish invasion of 1974 was devastating (the occupied part at that time accounted for almost 70% of GDP), recovery was remarkable. The decline in the volume of production experienced during 1974, was quickly reversed, and by 1977, this surpassed its pre-1974 level. Business confidence returned, and was followed by a sharp upturn of investment. By 1979 conditions of full employment were restored. The rate of unemployment, which approached 30% of the economically active population during the second half of 1974, had been virtually eliminated (1,8%), and the refugees were rehoused temporarily, pending return to their homes. 3. In more recent years (1990-1996), the economy has been growing at an average rate of 4% in real terms. GDP has surpassed the C£4,0 billion mark, and the rate of inflation has been contained to relatively low levels (2.6% in 1995, 3.0% in 1996). Full-employment conditions prevail (unemployment rate 2-3%) during the 1996 period. 4. The per capital income is one of the highest in the region with USD13.650 (1996). 5. In the post-1974 period, the economy underwent major structural changes. The manufacture sector became one of the major motors of growth during the second half of the 1970s and early 1980s, and this role was undertaken by tourism in the late 1980s, and by other services sectors in addition to tourism in the early 1990s. These structural changes were reflected in a corresponding differentiation of the above-mentioned sectors, as their contribution to GDP and gainful employment. Summing up, Cyprus has gradually been converted from an underdeveloped country by which the importance of the primary sectors dominant, into a services oriented economy. 6. International trade is of considerable importance to the economy of Cyprus. On the production side, the lack of raw materials, energy resources and heavy industry, for the production of capital goods, necessitates the import of such inputs. On the demand side, because of the small size of the domestic market, exports are vital in supplementing aggregate demand for Cypriot agricultural, and manufactured products and for services. The main economic partners of Cyprus are the European Union member countries, the neighbouring Middle-East countries, and the countries of central and eastern Europe. 7. The main characteristic of the balance of payments position is a wide deficit In the trade balance, which in several years was more than offset by invisible earnings from tourism, international transportation, offshore activities and other services.
9. Infant mortality (1996): 8 per 1000 live births 10. Total fertility rate (1996): 2.1
17. Persons/doctor (1995): 404 18. Persons/hospital beds (1995): 195 19. Telephone lines/1000 population(1996): 562 20. Passenger cars/1000 population(1995): 387 (Note: Because of the presence of the Turkish army the Government of the Republic of Cyprus has no access to the occupied area and therefore official figures in respect of that part of Cyprus are not available).
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