Economic challenges and reform calls in Northern Cyprus

Economic organizations in Northern Cyprus have raised concerns regarding instability and the need for structural reform. The Cyprus Turkish Chamber of Industry (KTSO) highlighted challenges such as high energy costs and limited access to finance, while the Cyprus Turkish Chamber of Tradesmen and Craftsmen (KTEZO) warned that the economy has entered an ‘alarm’ phase. KTEZO reported that business closures are outstripping new openings, citing inflation and contractions in the construction and tourism sectors as primary drivers.

In response to these pressures, calls for strategic shifts have emerged. Economist Şahap Aşıkoğlu proposed a five-year production and export program for the Turkish Republic of Northern Cyprus (TRNC) aimed at increasing exports from $116 million to $250 million. This strategy suggests moving away from simple requests for financial resources toward securing purchase guarantees and public procurement quotas. Additionally, discussions have surfaced regarding the need for foreign exchange conversion regulations to better align with the specific profit margins and production needs of various export sectors.