transcript

This text below is a phonetic transcript of a radio story broadcast by PRI's THE WORLD. It has been created on deadline by a contractor for PRI. The transcript is included here to facilitate internet searches for audio content. Please report any transcribing errors to theworld@pri.org. This transcript may not be in its final form, and it may be updated. Please be aware that the authoritative record of material distributed by PRI's THE WORLD is the program audio.

MARCO WERMAN: Just about every country's economy is beleaguered right now. Things are especially gloomy in countries that depend on foreigners who are no longer showing up. The World's Aaron Schachter reports on an example – the European island nation of Cyprus.

AARON SCHACHTER: Picture this: your four-bedroom dream home, with swimming pool, garden, more than 300 sunny days each year, on the edge of a quaint village hundreds of years old, just a few other neighbors. And did I mention a view of the Mediterranean? Anne Lloyd moved into that house three years ago from Kent, England.

ANNE LLOYD: We loved the island. We'd been back several times, and then we reached a point where we thought, “We could actually afford to buy a holiday home here.” And while the home was being built, we thought, “it's too nice to be a holiday home. Let's take early retirement and come.” So that's what we did.

SCHACHTER: Lloyd and her husband paid – are you ready for this? -- $150,000. The house is just outside the historic port city of Kyrenia in northern Cyprus. Even at twice the price, the place would seem like a steal. But that was before the financial panic started last autumn. About 45 minutes and a world away from the tourist beaches, Ismael Ozemek and his crew of four are renovating a middle-class house in a residential neighborhood of Turkish Nicosia, Cyprus' divided capital. This time last year, Ozemek was working like mad building holiday and retirement homes for eager Brits and Europeans.

OZEMEK: The global crisis, it's also reflected in what's happening here. The foreigners are not investing in Cyprus or in northern Cyprus, so we're having to get by on doing small jobs for the Cypriots, for local people.

SCHACHTER: Ozemek says 80 percent of building sites in northern Cyprus have shut down. In many cases, contractors simply walked away. He's laid off half his staff over the past year. The British, who were the main buyers here, have been hard hit by recession and a drastic devaluation of the pound. But the problem isn't just the global meltdown. Devrim Celal is a northern Cypriot businessman and a part owner of a beachfront resort.

DEVRIM CELAL: It's almost impossible to talk about economy in the north because an economy needs inputs and outputs, measurables. We don't have any of those.

SCHACHTER: Celal says the real estate bubble that started in the late 1990s was bound to burst. And it's highlighted the fact that unlike many other places hard-hit by the economic crisis, northern Cyprus has only a single other industry to fall back on other than tourism: government.

CELAL: The main driver of the economy tends to be the largest sector of our economy, which are public servants. There are 55,000 checks issued by the government every month to individuals.

SCHACHTER: That's a fifth of the total population. But there are other problems as well. The island of Cyprus officially divided along ethnic lines in 1974. That's when Turkey occupied the northern third of the island in response to a Greek Cypriot attempt to unite with Greece. There's also a lack of infrastructure, which is keeping the retirees away – people like Jennifer Metcalf, from central England.

JENNIFER METCALF: I like the comforts of home, really. The situation with water and electricity is not really – I find very, very difficult to deal with, you know? We couldn't have showers this morning because we ran out of water and, you know, it's just – I mean, I think it's the wrong time to be thinking about buying anything, anyway.

SCHACHTER: And until the world economy turns around, northern Cyprus, like tourist-dependent places all around the Mediterranean, are going to have a very, very difficult time. For The World, I'm Aaron Schachter, Nicosia, Cyprus.

Copyright ©2008 PRI's THE WORLD. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to PRI's THE WORLD. This transcript may not be reproduced, in whole or in part, without prior written permission. For further information, please email The World's Permissions Coordinator at theworld@pri.org.