Chilly Economy

I went past the Dole office (unemployment exchange, for those who don't speak British English) last week. Kay's Social Security was due, and the offices are in the same building. The parking lot was jammed, and a crowd of people spilled out of the office, onto the pavement, and down the street. Most were Pontic Greeks. Some were English or other foreigners, and a rather frightening number were Cypriot.

'Pontis' – from Georgia or Ukraine – who came to Cyprus when the collapsing Soviet Union allowed them to apply for Greek passports and their Greek passports gave them a right of residency here, are the backbone of our cheap labour force. They're legal, so without the immigration hazards of Syrians, and they usually speak passable Greek. The men work construction sites, the older women do agricultural labour, and the young women serve in shops and supermarkets. Their particular dialect, a mixture of Turkish and Russian – sometimes leaning one way, sometimes the other – is as often heard as Greek or English.

Despite our politicians' assurances that Cyprus will remain unscathed by the economic turmoil knocking the rest of the world for six, the signs point to our facing a grim period. Friends are out of work with no sign of jobs on the horizon, and everyone is talking of cutting back. With hotel bookings down forty percent for the summer – most of our tourists come from Britain and the UK is looking at 2 million-plus unemployed, few of whom are considering a vacation on Aphrodite's Isle – hotels are considering closing... And our other major industry, housing for the foreign market, is suffering because building a second home isn't high on anyone's agenda, either.

The hoteliers are screaming to the government: “Do something!” The government is considering its options, and the whole shower of them need a good shaking. The deteriorating situation in the tourism industry has been building for years – ever since the hoteliers decided to take the Get-Rich-Quick route of catering to mass budget tourism instead of building up a quality product that can compete with the lower prices of our neighbours the Greeks, Turks, Egyptians, and Croats.

A few months ago TUI and Thompson – the companies that bring the lion's share of tourists to Cyprus – had a conference with the hoteliers to suggest changes that might raise the number of bookings to Cyprus. They cited prices and conditions as two of the reasons that tourists were opting for the competition over us. Our costs are too high, our waiters too rude, our hotels too ugly and too dirty.

I'm not in the tourism industry, so maybe I'm talking through my hat. But if I were, I'd be scrambling to improve my product instead of expecting the government to bail me out. Maybe it's too late for that: Cypriots own the businesses, but few work in them any more. Staff are Romanian, Bulgarian, Ponti, or Sri Lankan. Lacking a connection to this island, how can they promote it as effectively as someone who knows and loves it as home? Budget holiday-makers are increasingly opting for all-inclusive deals – meaning that they breakfast, lunch, drink, snack, and dine in the resorts, and smaller businesses – tavernas, bars, and cafes – are feeling the loss of business. Pretty soon they'll start letting staff go. Closing, even.

Bizarrely, the government approved a plan last month to build fourteen new golf courses (we only have three at the moment) in Cyprus – with attendant villas and hotel facilities. The water crisis means that each course has to have a desalination plant. Things keep getting crazier – from what I've heard, fewer people are playing at the golf courses we already have, and the houses planned for those sites have stopped selling. Does any one smell a kickback?

Speaking of property sales, last week Best Beloved pulled the figures from the Cyprus Land Registry for 2007-2008. Those for Paphos and Agia Napa, Cyprus' other great ex-pat centre, showed an 80% reduction in transactions. Limassol, Larnaca, and Nicosia weighed in at 70% down. Figures to February 2009 show a 90% decrease for Paphos. That's why all the builders are standing in line at the Dole.

The Dole is not easy to get here. The length of time that someone can sign on is directly proportional to how long they have been paying in – and after about six months, even someone who has been paying in for more than a decade sees a sharp drop in benefits. Collecting unemployment benefit is also not usual for Cypriots. Despite all the cracks about how locals are lazy gossips and non-stop coffee drinkers, there is a strong work ethic here. Many locals work two -- even three -- jobs rather than sign on, and to see Cypriots in the Dole queue was a shock.

“How,” I asked Best Beloved the other night. “Is the government going to afford all these payments?”

“It's not,” he answered. “Paphos went from a population of 20,000 ten years ago to one of 70,000 today. A decade ago there was work for anyone who wanted it. Now it's drying up: I saw a mid-sized construction project today up at the hospital with six concrete mixers lining up ready to unload. Remember how even three years ago you'd see a building site with a frantic civil engineer screaming into a mobile phone trying to find his next load of concrete? That's all ending. People will start to leave soon: The English are going already, but can't sell their houses for love nor money, the Eastern Europeans will be next – better to be poor at home than in someone else's country, and a lot of the Pontis will be packing up as well. We're looking at some big changes.”

Some of the lorries and diggers for sale at the building site between the roundabouts. It used to be difficult to buy a lorry, and some of these are quite new. The sign in Greek reads 'Don't look for us, we'll find you!'