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Note: This document may not always reflect the actual appropriations determined by Congress. Final budget allocations for USAID's programs are not determined until after passage of an appropriations bill and preparation of the Operating Year Budget (OYB).

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CYPRUS

FY 1997 ESF Request

. . . . . . . . . . . . . . . . .

$15,000,000

Introduction

Cyprus continues to feel the strain of inter-ethnic conflict, distrust and misunderstanding. The divided island of Greek and Turkish Cypriots could be a flash point for regional problems.Approximately 200,000 Cypriots, almost one-third of the total Cypriot population, were displaced during the July 1974 coup and Turkish military intervention. The U.S. Government has continued to provide funds which, over the years, have shifted in emphasis from relief to long-term reconstruction and development activities. The United Nations High Commission for Refugees (UNHCR) and the Fulbright Commission have acted as the implementing agencies for the U.S. program through a series of program grants. UNHCR and the Fulbright Commission have the ability to work with both Greek and Turkish Cypriots and are well positioned to promote bicommunal cooperation.

The Development Challenge

Both the Greek and Turkish communities on Cyprus confront varying economic problems: the GDP per capita on the Greek Cypriot side has risen to over $13,000; while on the Turkish Cypriot side it has stagnated at around $3,000. The Government of Cyprus has a total external debt of $2.4 billion in 1993. USAID assistance helps to address some economic constraints, but the main focus is directed at underpinning our efforts to facilitate a political solution on the island.

Other Donors

After 1974, emergency humanitarian assistance was provided to both Greek and Turkish Cypriots by the International Committee of the Red Cross and by the United Nations High Commissioner for Refugees (UNHCR) with contributions from the United States and other countries. In 1974, the top five ODA donors to Cyprus provided $41 million in assistance with the United States share equal to 53%. Subsequently, donors other than the U.S. have discontinued assistance. The US is the only major donor still active in Cyprus and provides the only financing to the UNHCR program.

Cross-cutting and Special Initiatives.

Working through UNHCR and the U.S. Information Service (USIS), USAID funding promotes activities which encourage participation from representatives of both communities. This bicommunal approach is designed to demonstrate the positive, substantive results of cooperation. Further, the linkages established between individuals and groups from a variety of sectors will contribute to: (1) increasing the pressure on each side's leadership to compromise on an equitable solution or (2) at least, providing opportunities for contacts and increasing the number of stakeholders in a solution.

The Bicommunal Development Project implemented through the UNHCR and the Cyprus Red Cross includes agricultural activities such as forestry and pest control, environmental programs improving air and water quality, health components which build infrastructure to support prevention and treatment of illnesses, and sewage treatment and rehabilitation of areas near the dividing line.

The Scholarship Project implemented through USIS and the Cyprus Fulbright Commission offers U.S. scholarships for undergraduate and graduate degrees, and short-term professional training and bicommunal training in conflict resolution and business management.

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CYPRUS

FY 1998 PROGRAM SUMMARY

Strategic Objectives	Economic Restructuring	Democratic Transition	Social Stabilization	Cross-cutting / Special Initiatives	Total
--	--	--	--	--	--
Cross-cutting / Special Initiatives	--	--	--	15,000,000 a/	15,000,000
TOTAL	--	--	--	15,000,000 a/	15,000,000

a) Economic Support Fund

Director, Office of European Country Affairs: David Cowles

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