Cyprus peace moves are paying dividends for the breakaway Turkish Cypriot north, propped up by Turkey and squeezed for decades by international sanctions, but many say the current soaring growth is not sustainable. Easier movement across the UN-policed cease-fire line has attracted thousands more tourists, spawned a construction boom and sucked in higher wages from Turkish Cypriots working in the richer Greek Cypriot south.
Official figures show gross domestic product (GDP) in the self-declared Turkish Republic of Northern Cyprus soared 31 percent last year to $7,350 per head - still tiny compared to the Greek Cypriots' $21,000 but a huge jump from a low base. "The figures are growing, and growing fast," said Ali Erel, head of the Turkish Cypriot Chamber of Commerce. "But no economy can have that absorption power. We can't sustain it."
The east Mediterranean island was divided in 1974 when Turkey invaded in response to a Greek Cypriot coup. Peace moves are currently at a stalemate after Greek Cypriot voters rejected a UN peace plan in a referendum 12 months ago, and trade, transport and other sanctions on the north are still in place.
But practical conditions on the island have relaxed hugely since the cease-fire line was opened up two years ago for Cypriots on both sides, and the Turkish Cypriots' 'yes' vote to the peace plan has improved their image abroad.
Turkish Cypriot businessman Fikri Toros said up to 11,000 Turkish Cypriots were now commuting every day to jobs in the south, bringing back around $20 million a month in wages.
The Greek Cypriots' entry to the European Union last May meant the government had to allow free movement of EU citizens across the so-called Green Line dividing the island, ending a rule that allowed only brief day-trips into the north.
Now Turkish Cypriot hotels, restaurants, car hire companies and other tourism-related businesses are enjoying a far greater slice of the Greek Cypriots' lucrative tourist trade.
"We're hoping for half a million tourists this year coming in from the south alone," Toros said. "Previously we've not seen more than 360,000 in a year."
Cash from Turkey, Britain, Germany, Israel and other countries is pouring into construction as hotels, holiday villas and retirement homes mushroom across the northern landscape.
Signs of the new money are visible. The north still looks down-at-heel compared to the south, but a handful of shiny new shops and restaurants have opened in the last year or so, and streets in the coastal town of Kyrenia are getting a facelift.
But analysts say although there is room for plenty more expansion in the tourism sector, the boom is fragile and the cracking pace of economic growth cannot last.
"These factors have given a big boost to the economy, but of course it's not sustainable - having a second home is not a big productive activity," said Bulent Kanol, head of the non-profit Management Centre that fosters ties between north and south.
"There is a need for foreign direct investment here, and that still seems to be on hold apart from a few big Turkish and Israeli companies."
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