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Economic affairs in Cyprus are dominated by the division of the country into the southern (Greek) area controlled by the Cyprus Government and the northern Turkish Cypriot-administered area. The Greek Cypriot economy is prosperous but highly susceptible to external shocks. Erratic growth rates in the 1990s reflect the economy's vulnerability to swings in tourist arrivals, caused by political instability on the island and fluctuations in economic conditions in Western Europe. Economic policy in the south is focused on meeting the criteria for admission to the European Union. As in the Turkish sector, water shortage is a growing problem, and several desalination plants are planned. The Turkish Cypriot economy has about one-fifth the population and one-third the per capita GDP of the south. Because it is recognized only by Turkey, it has had much difficulty arranging foreign financing, and foreign firms have hesitated to invest there. The economy remains heavily dependent on agriculture and government service, which together employ about half of the work force. Moreover, the small, vulnerable economy has suffered because the Turkish lira is legal tender. To compensate for the economy's weakness, Turkey provides direct and indirect aid to tourism, education, industry, etc.

The Cyprus Broadcasting Corporation (CyBC) is the main broadcaster in the Greek Cypriot area, although there are also privately-owned radio and TV stations. A TV channel from Greek state broadcaster ERT is also available. The British Forces Broadcasting Service also operates radio and TV stations, although the TV signal is now confined to the Sovereign Base Areas or encrypted for copyright reasons. In the Turkish Cypriot area, Bayrak Radio Televizyon is the local broadcaster, with radio and TV from Turkish state broadcaster TRT also available.

Greek language is predominantly spoken in the south, Turkish language in the north. This delineation of languages is true only in the present period, due to the post-1974 division of the island, which involved an expulsion of Greek Cypriots from the north and the analoguous move of Turkish Cypriots from the south. Historically however, Greek (its Cypriot dialect) was spoken by nearly 82% of the population, which was evenly distributed along the entire area of Cyprus, north and south. Similarly, Turkish speakers were evenly distributed. English is widely used.

The 1960 Cypriot Constitution provided for a presidential system of government with independent executive, legislative, and judicial branches, as well as a complex system of checks and balances, including a weighted power-sharing ratio designed to protect the interests of the Turkish Cypriots. The executive, for example, was headed by a Greek Cypriot president and a Turkish Cypriot vice president, elected by their respective communities for 5-year terms and each possessing a right of veto over certain types of legislation and executive decisions.

Cyprus changed hands numerous times prior to the Medieval era, and was an important outpost of Christianity and European civilization during the Crusades. The tumultuous history introduced a variety of styles, including music from Armenia, France, Greece and Arabs. The island's peak as a cultural capital of Europe occurred from 1359 to 1432.

The central plain (Mesaoria) with the Kyrenia/Girne and Pentadactylos/Besparnak mountains to the north and the Troodos mountain range to the south and west. There are also scattered but significant plains along the southern coast. The climate is temperate, Mediterranean with hot, dry summers and cool, variably rainy winters.

Government computerization and telecommunications development, two of the priorities of the government's 5-year development plan (1994-1998), provide excellent opportunities for U.S. exports. Sales of computer-assisted design systems, new capital equipment for textile, clothing, footwear production, medical equipment, environmental equipment, and services are also expected to grow. U.S. pressure resulted in the adoption of a new copyright law in 1994 and a new patent law in 1998.