ABSTRACT
Contemporary global trends have induced renewed attention in the study of welfare state systems. Some countries have chosen to respond to increased and more intense competition by ‘racing to the bottom’ as far as welfare provisions are concerned, in an attempt to overcome the demands imposed by budgetary constraints. Even though a popular response to global competition forces, the free market ideology is by no means a hegemonic model. On the contrary, other countries have not abandoned their social obligations, and they have in fact set economic and social prosperity as their twin objectives. Within the boundaries of this latter category enter the examples of many welfare state models. Nonetheless, this chapter will focus on one upon which not a lot of ink has yet been shed: the example of the Cypriot welfare state system. It ought to be underlined from the outset that Cyprus is a divided island and, conse-
quently, all information refers to the non-occupied part of the country, upon which the Government of the Republic exercises effective control.1 Moreover, it has to be pointed out that research specifically with respect to the welfare system of Cyprus is limited, and hence literature pertaining to this is particularly narrow.2 This is further compounded by the extremely limited public policy debate, which is dominated by the political problems of the country. Whereas the unresolved division of the island remains a central point of discussion, other issues become generally subordinated. Recent policy debates – such as those relating to the national health system – do exist, but these are raised in a relatively ad hoc and piecemeal manner. In any overview pertaining to Cyprus, what has to be borne in mind is the issue of
size; size in terms of territory and population3 has throughout history dictated much of the fate of the island. Furthermore, its geographical position gives it a strategic significance that makes it a vulnerable target. So, to a significant extent, its history has been determined by external factors, as past conquerors have left their marks upon the country’s culture, politics and demographic structure (Wilson 1993: 3). It is within this intricate context of the island’s size and history that its welfare system has developed, clearly quite distinct from that of other European states. Since 1988, the Republic has been officially ranked among the high-income econo-
mies of the world. Despite the limited development undertaken under British colonial
agriculture, which accounted, at the time, for over 45 per cent of labour market activity and for over 16 per cent of the gross domestic product (GDP) (Statistical Service 2003). The church played a central role in the provision of social services to the people.5 For the social needs of the people, provisions were made by the community as well as by the extended family, which had a supportive role (Social Welfare Services 1969). The colonial heritage of the ‘infant’ Republic consisted of a basic (albeit limited) social
welfare system, similar to that of its colonial ruler. In the early 1960s, there existed a probation service, as well as a child care programme made up of foster care and children’s homes, coupled with a ‘Public Assistance Scheme’ for the relief of poverty, which was administered by the District Commissioners. This, as Pashardes (2003: 18) claims, ‘ … was rooted in the Beverage principles of flat contributions and benefits.’ From the birth of the Republic to the present day, all social welfare services have been incorporated under the Department of Social Welfare Services, which is under the competency of the Ministry of Labour and Social Insurance. Of importance is that the colonial era left behind it a foundational basis to build upon the welfare state of today. Therefore, with independence, improvements in terms of development were achieved,
but within an already established framework. Furthermore, the basic principles of indicative planning were adopted, which clearly embodied both the development strategy and the economic policy of the government. The years between 1960 and early 1974 were characteristic of sustained economic growth and development (Statistical Service 2003) that led to important social and related demographic changes. A gradual limitation of the agricultural sector occurred, with the development of both industry and services. This translated into high rates of urbanization, a shift to the nuclear family form, as well as the formal participation of increasing numbers of women in the labour market. Invariably this led to a definition of various sorts of social needs, which came in the form of low level policies that were meant to provide security to people who were living under conditions of extreme poverty (Triseliotis 1977; Attalides 1981). Efforts were undertaken by the government to raise the level of health, social security, education and general welfare. By 1967, it was becoming increasingly evident that the Cyprus government was put-
ting more emphasis on its social policy, as it committed itself by stating that, ‘it recognizes that health, education and other social considerations affect and interdependent on a vast complex of variables which determine both the social and economic welfare of the island’ (Astarita 2004: 2). Overall though, public assistance was minimal, given the full employment and comparatively high living standards (Cyprus Government Official website). This period of relative affluence was however interrupted with the 1974 Turkish invasion of Cyprus.6 Over one-third of Greek Cypriots were displaced from their homes, while unemployment rose sharply and led to mass emigration. Moreover, around 70 per cent of the natural resources and economic potential of the island were lost, particularly with regard to agriculture. Tourism, which had begun picking up, also slumped, whereas major important infrastructural projects, such as the National Airport and the Famagusta Port, were lost, along with several hospitals and school buildings. All these created severe and unprecedented economic and social problems, reversing the socio-economic development of the previous years. Under the conditions created, it was deemed appropriate to adopt measures to reacti-
vate the economy (Planning Bureau 2000: 9). In terms of social welfare, government spending focused, immediately after the invasion, on meeting the very basic survival
eign aid used origins of the majority of the refugees, they were incorporated into an urban wageeconomy through labour intensive policies structured around an urban industrial base’. The very serious economic and social problems created by the invasion were tackled successfully, and during the period 1975-78 the Cyprus economy exhibited rapid reactivation, which was described as an ‘economic miracle’ (Christodoulou 1992). The economy of Cyprus underwent a significant transformation over the years. Even
though today the primary and secondary sectors are of significance, the service sector has acquired an ever-growing importance (Republic of Cyprus 1994a: 4-5). Government welfare has continued moving towards the provision of long-term housing, health care services, free secondary education, a wage-related social insurance scheme, scholarships and loans for needy students to study abroad, infrastructural projects (new schools and hospitals), and other welfare institutions, such as children and youth homes, hostels and daycare centres (Republic of Cyprus 1994b: 159). By 1981 Cyprus clearly defined its social policy with the following three basic objectives (Republic of Cyprus 1994b: 159):
& to secure a minimum acceptable standard of living for all citizens; & to attain a more equitable distribution of the national income and the tax burden,
both between different income groups as well as regions; special emphasis being attached on improving the income position of the displaced;
& to implement as well as improve existing social programmes by preparing the introduction of new institutions.
