Recent decades have given rise to pronounced economic and political transformations for
many, including North Cyprus. Since the late 1970s, a new economic and political
paradigm—liberalisation, privatisation and globalisation (LPG)—began to impose its market
rationality at an increasingly global level. This new paradigm is characterised by reduced
expenditures or the privatisation of public services and state owned enterprises, and the
expansion and creation of new markets. The general strategy is aimed at establishing a level
playing field for the private sector. In many countries, the shift to increasingly marketgoverned
social policies to provide such a level playing field to the private sector, especially
privatisation, has led to demonstrations and the political polarisation of the society.
North Cyprus, as a small, politically unrecognised state,1
is no exception in terms of
economic and political transformations. Despite the difficulties of integrating into the world
economy due to its political non-recognition, liberalisation and privatisation have been
especially important in the series of reform measures implemented since the 1980s, as
recommended by the donor country (Turkey) as well as by the policy makers and experts on
and off the island. However, the implementation of these measures has met with limited and
mixed success, and in some cases, complete failure and the decline of the economy. The
country continues to face a severe economic crisis and high unemployment. The failure of the
LPG policies has provoked opposite reactions from different segments of the society. The
main opposition party and most of the unions have argued that this failure is due to the alien
character of the reform package. It was prepared and imposed by the donor country and does
not respond to the sentiments and the true needs of the society and the economy. Thus, while
the need for the restructuring of the economy has been acknowledged, the argument has been
put forward that the reform program should be devised by the locals and should avoid
privatisation.