Doughnut Economics Cyprus
A couple of weeks ago the Cyprus finance minister opened himself up to ridicule when he claimed the Cyprus economy was going to shrink by about five percent.
The following week the figure had been revised to ten per cent, which was at best wishful thinking.
With loss of the Cyprus tourist sector, and anyone who thinks Cyprus is going to see any tourists before the end of the season is living in la la land, the economic downturn is going to be far greater than ten per cent.
The world is heading into economic meltdown far worse than the Great Depression, international trade already down by 30%. IMF has warned the global recession is likely to be worse than the Great Depression, and has urged countries to spend, spend, then spend some more, which is an amazing about turn for the IMF.
To put the Cypriot figures in context, the UK economy is expected to shrink by anywhere between 13 per cent and 30 per cent depending on which model, the assumptions fed into the model. The Treasury has forecast April May June the economy may shrink by 30 per cent.
We can not go back to normal as normal was not normal, it was destroying the planet.
We have been able to hear birdsong, our streets traffic free, our cites pollution free, the skies free of planes. A world few of us will have seen in our lifetimes.
In India they are able to see in the far distance the snow covered Himalayas, a sight last seen over thirty years ago,
We were told we could not cut carbon emissions within the timescale required for zero carbon 2035, it was impossible, impractical, and yet we have achieved massive reductions overnight.
Politics is not a race, two or more corrupt political parties in a race as to decide who gets the opportunity to do the bidding of oligarchs.
Politics is who does what to whom.
We have seen capitalism put into suspended animation. We are in a postcapitalist world, we have been since 2008. Who decides what the future will look look like once we are through the coronavirus pandemic?
If we look to the UK, Chancellor Rishi Sunak has made billions of pounds available, to furlough workers with the government providing 80% of salary, a week later for the self employed, grants, soft loans to small businesses, all to keep businesses in hibernation, ready to be woken up.
In the covid-19 pandemic we are living in another now. What we have to do is create our own another now, an alternative reality, a vision of how we wish the world to be. We failed in 2008, we cannot fail again in 2020, we cannot return to what was the norm, as the norm was not normal.
EU failed to deliver on eurobonds, offered loans that put the southern vassal states in debt bondage with austerity to follow.
We have seen post-WWII relentless rise in GDP, or at least up to the 2008, but this rise is not normal, it has been at huge environmental cost, and the increase in GDP has not been fairly distributed, it has been shared with the rich.
If I ask a bank for $100,000 to safeguard an ancient forest, I will probably not get very far. If I ask for $1 million to cut down the forest sell the timber they will happily give me the money.
If I ask a bank for 100 million euros to destroy pristine coastline for a hotel development, bring in dredged sand to create a beach, destroy bamboo groves habitat of a rare endangered snail, show I will have guaranteed contracts with a big tour company to bring in all-inclusive guests, I will of course not tell them no benefit to the local economy, the bank will hand me the money, or at least they would have pre-coronavirus pandemic.
Destruction of a forest, of a pristine coastline, is not without costs, soil erosion, floods, loss of a carbon sink, species loss, degradation of water supply, loss of inshore fishing and fish breading grounds, which then feeds into ocean acidification, warming climate, rising sea levels, forest degradation, loss of coastline, further loss of fisheries. These costs are dismissed as externalities (a polite way of saying someone else problem).
The standard economic model showing monetary flows between households and businesses, together with flows of capital and goods and services, sometimes expanded to include the role of banks and government, is too simplified, it takes no account of the economy is embedded within society, which in turn is embedded within Gaia.
Never confuse a model with reality, even worse distort reality to reflect the model.
Kate Raworth has drawn a model that incorporates what went before, but also includes the commons, the flow of energy, flow of materials, and thus more accurately reflects reality.
We therefore have to devise a new economic system, one that sees the poor are not left behind, are not reliant on food banks, homeless are not living on our streets, whilst at the same time we do not exceed our planetary limits and what we do produce is fair and equitable.
One such system is doughnut economics. How do we apply it to Cyprus, to the island, to municipalities, to sectors?
Look to Amsterdam, where the city is working with Kate Raworth to devise doughnut economics for the city, a 21st century economic system.
One of the largest sectors in Cyprus is tourism, it cannot be a return to mass tourism which not only is destroying the planet is destroying Cyprus, it brings in the dregs of the tourist industry, all-inclusive hotels with no benefit for the local economy.
Does Cyprus need an easyJet flight every day, sometimes two a day, would not two or three a week suffice (assuming easyJet is in business and will not run out of money by August)?
A proposal for a doughnut economy for Cyprus, a broad brush to be expanded upon.
Doughnut economics was developed by Oxford economist Kate Raworth as an antidote to conventional economics which does not reflect the real world and has not served us well.
What is the economy for? Until we can answer that question, how do we know what to measure, how do we measure success?
Economies need to be distributive, regenerative.
Visualise a doughnut. In the centre nothing, this is where resides abuse of human rights, poverty, malnutrition, homelessness, food banks, it is where we should not be. The body of the doughnut is where we wish to be, a circular economy, everyone’s needs met, living within the limits of the planet. Beyond the doughnut, again where we should not be, global warming, species loss, habitat destruction, acidification of our oceans, pollution, rising sea levels.
Kate Raworth has developed a doughnut economics model for Amsterdam, working with the city. Something that should be studied, adapted to Cyprus, but no two places are the same.
For Cyprus we need a doughnut model for the island and for each and every municipality and sector, and the people involved in developing it.
The largest sector in Cyprus is tourism, but it is not in a healthy state, has not been for years, and looking at crude tourist numbers is about as helpful as focusing on GDP to measure economic well being.
One only had to wander through Protaras last year at the height of the tourist season to see all was not well. During the day, mid-afternoon, empty sunbeds, watersports siting idle. At night, during the evening, bars and restaurants empty.
The last few years many local businesses have gone bust. They finished last season in very poor shape, and many more would not have survived another season.
Tourism has to benefit society with minimum impact on the environment.
Mass tourism is bad for the planet, bad for Cyprus, it is not sustainable.
There is an over-reliance on tour companies, on mass tourism, on all-inclusive hotels.
Cyprus has become the dustbin for the dregs of the tourist industry, all-inclusive attracts the dregs, little if any money flows into the local economy.
Cyprus is not going to see tourists this year, therefore time to reflect, seize the opportunity for radical change and innovation.
Rewind the tourist sector to thirty years ago when Cyprus was a quality destination, attracted quality tourists, when hoteliers took a pride in their hotels, restaurateurs in their restaurants.
Cyprus needs far fewer tourists, quality tourists. There should be no all-inclusive hotels, tour companies should be no more than 20% of hotel bookings (no single tour operator more than 10%), pay promptly at the end of the month (with penalty for late payment).
Encourage long stay, fourteen days and longer, discourage short stay, short breaks, seven days and shorter. Fewer flights for the same hotel occupancy.
The noisy bars bulldoze to the ground. Restaurants in an attempt to compete with all-inclusive hotels are in a race to the bottom, a race to the bottom no one can win, have to improve.
What passes as coffee shops is laughable, Cyprus is infamous for bad coffee, coffee shops serving drinkable coffee could count on one hand.
Replace noisy bars with traditional tavernas and coffee shops. It would be difficult to find good examples without visiting Plaka in Athens. Paul’s Coffee Roasters and Lazaris (though not for coffee) near St Lazarus Church in the back streets of Larnaca set high standards, take a pride in what they do, as does Nick’s Coffee Bike outside Larnaca Marina, but these are the rare exceptions, not the norm, oasis amidst the dross. Once the norm in Cyprus, until a race to the bottom to attract custom from all-inclusive hotels, a race no one can win.
For restaurants slow food not fast food, local cuisine using fresh local seasonal produce. Sea food restaurants overlooking the sea, fresh caught fish, for example Spartiatis overlooking Konnos Bay and Demetrion beside Liopetri River overlooking the sea.
Tourism is more than hotels, it is bars, coffee shops, restaurants, car hire, boat trips, water sports. All of which have suffered in recent years thanks to all-inclusive hotels.
There is a need to improve standards within the tourist sector, hotels, restaurants, bars, coffee shops. How to measure standards?
TripAdvisor is worthless, fake reviews and trolls. Google Maps marginally better. Proposal to tender a contract to assess standards seriously flawed in a country where everyone knows everyone, someones cousin friend went to school with.
Create an open source open coop collaborate commons platform Booking Cyprus. Charge a small fee to generate a surplus to maintain and improve the platform and fund local community green projects.
There is a need to diversify within the tourist sector.
Diversify away from tourism based on a handful of coastal resorts.
Encourage rural tourism, bookings through FairBnB not AirBnB. AirBnB destroys local communities, FairBnB works with and supports local communities.
Encourage cultural tourism.
An example would be a week of tango at Grecian Park, not organised by the hotel, they host a week organised by two dancers well known within the world of tango.
A green new deal, use it to kick start the economy.
Look to what DiEM25 is proposing for Europe. EU needs to issue eurobonds, €500 billion a year to finance a Green New Deal for Europe.
Implement a tree planting programme. Start by planting trees at bus stops for the 101 / 102 bus service Paralimni Protaras Ayia Napa to provide much needed shade.
Pedestrianise the sea front at Larnaca and extend the pedestrianised area into the back streets around St Lazaris Church. Provide an electric shuttle bus service from Larnaca Marina to Mackenzie Beach.
Cyprus is over-reliant on oil imports, which is crazy in a country with abundant sunshine. Install roof top solar, feed into local community owned and controlled local grids, paid a fair price, consumers pay a fair price, surplus generation fed to other local grids via a publicly owned national grid, any ‘profit’ fed back into the local grid or used to fund local community projects.
The proposed Paphos Marina with facilities for cruise ships should be scrapped. Cruise ships are floating environmental disasters. Floating all-inclusive hotels that bring no benefits to local economies.
The project in Paphos to create a marina for 1,000 boats plus cruise ships is an example of the insanity that is destroying Cyprus. It should be scrapped.
Cruise ships are nothing more than glorified floating all-inclusive hotels, that cause horrendous damage wherever they dock, with little benefit to the local economy.
The streets of Athens, especially areas like Plaka and Acropoli, are clogged whenever a cruse ship docks, causing a problem for both locals and visitors, and they do not spend any money. The tour buses ferrying them around, traffic congestion, noise and pollution.
Venice is being destroyed by cruise ships.
Cruise shop are major greenhouse gas emitters, plus passenger fly to start and end of trip. Cruise ships dump their sewerage and garbage overboard, including plastic.
Will there even be cruise ships? As we have seen floating hell when covid-19 spreads through the ship and nowhere will permit a plague ship to dock.
These floating all-inclusive hotels are now all rapidly returning to port, discharging their passengers and being mothballed. The industry has not just been devastated, it has ceased to function. Coronavirus has been the perfect storm. It has gone from being an industry worth $46 billion (£37 billion) a year, with 26 million passengers per annum, to an almost total standstill overnight. The only destination for cruise ships, the scrap yard.
Art and culture should be part of our doughnut.
Art and culture would seem an oxymoron when said in the same breath as Ayia Napa, and yet Ayia Napa has an excellent International Sculpture Park on a hillside overlooking the sea and hosts an excellent Medieval Festival.
How many visitors are aware of the open air theatre during the summer in the grounds of Larnaca Castle?
Cyprus has a democratic deficit which should be addressed. Not only open municipalities to the public, open to public participation, live stream all meetings.
A doughnut may appear to be a simple concept, but appearances can be deceptive. Its power lies in its simplicity.
A lower social bound below which we should not fall. An upper planetary bound which we should not exceed. It is also circular, symbolises not only money flowing around the economy, but also symbolises mutual cooperation, collaborative commons.
A simple example will suffice. On changing money in a car hire, we are recommended to take a boat trip. The boat trip recommends a restaurant. The restaurant recommends a vineyard from where they source their wine. To visit the vineyard, we return to the car hire to hire a car. We pass through a lovely little village, learn of a house available through fairbnb should we be tempted to return. At the vineyard, we learn they are renting out a beautiful studio apartment with amazing views of the sea. We find a coffee shop which we have been recommended, and as is the nature of coffee shops, interesting conversations ensue with the owner and barista and fellow coffee drinkers, we learn of many cultural events, an out of the way fish restaurant overlooking the sea and of a taverna overlooking the sea. We learn Cyprus has much to offer, which we would never have learnt of from tour guides at an all-inclusive hotel. And the local economy has benefited. And maybe we will return one day to explore further.
Salient points of a doughnut economy:
- GDP is not a useful measure. We cannot have infinite growth on a finite planet. Obsession with GDP has destroyed the planet whilst at the same time creating obscene levels of inequality. The top richest 1% have accrued more wealth than the poorest 99%. Uncontrolled growth has a name, cancer.
- Create, innovate, value human development. With rare exceptions there is a lack of innovation in Cyprus. One bar owner opens a bar with white seats, overpriced drinks, moronic music thudding out. Then more bars open with white seats, overpriced drinks, moronic music thudding out. Those that follow, do not bother to check the first bar always empty.
- Understand the power of networks, how feedback systems operate.
- An economic system must be distributive. All must share in the wealth created.
- Transactions within an economy are not simply financial, nor are the players only government and private sector. The economy also has to include open coops, collaborate commons, each working in loose partnership with each other.
- Economy has to be regenerative. It is a necessary but not sufficient condition to merely protect the natural world from harm.
The Cypriot economy is moribund if not in free fall, no tourists anytime soon.
The time should be put to productive use to implement a doughnut economy.
It is important public information, in Greek and English, to keep everyone informed, not only locals but also visitors. Then network and share with other municipalities, not only across Cyprus, across Europe.
