1.1 Origins of the Book
In 2004 Cyprus joined the European Union. An ever present challenge at that time was the increasing number of elderly people in the Cypriot population. The numbers involved were dramatic. Since the social insurance system in Cyprus affects mainly the elderly population through the pension scheme, it was decided that the book also focuses not only on the labour movement which initiated the campaign for social insurance but also on the campaigns of the elderly movement towards the improvement of the social insurance system in the country.
The dramatic increase in the elderly population in Cyprus led me to consider the evolution of social insurance addressing their living conditions as well as the role of the labour movement and latterly by the elderly movement itself. Ultimately, this book aims to provide an analysis of the policy of the Cypriot social insurance system through tracing all of the historical and social elements that could provide an understanding of this system as an evolving entity. It is very much an exploratory book in that its use of archive material as an integral source is unique in the book of the evolution of social insurance in Cyprus.
In 1976, two years after the Turkish military occupation of the north part of the island, there were 50,285 people aged over 65 years. Twenty-five years later, in 2001, this had increased by 63% to 82,313. As the total population of Cyprus increased over the same period by less than this percentageâan increase of 41% from 497,879 to 703,529âit is not surprising that those over 65 years made up an increasing proportion of the population, rising from 10.1% to 11.7%.1
The response from the Cypriot Government was to increase the value of pensions. However, this did not mean that the increments ensured that issues of deprivation and disadvantage that the elderly population might experience would be met. One commentator stated that:
Yet the increasing number of elderly claimants together with worsening economic conditions meant that there were concerns about the future of the social insurance system and its sustainability. There was very real anxiety at national level that meant ways had to be found to prevent the system of financial support for pensioners from collapsing.3Unfortunately, there are, still, low pension payments⊠(and there is the need) for the increase of minimum pensions in order to secure a decent quality of living for older people.2
In the course of this investigation I came to appreciate that the topic was very large and general but that such a policy book could not ignore social insurance, already under discussion in the European Union and at a national level. So, I was keen to concentrate on that topic while maintaining a focus on social conditions in relation to the impact of such a system, especially on the elderly population as a specific user group.
As a result, I went on to develop the subject which now focuses on the historical evolution of the social insurance scheme in Cyprus and to explore and analyse those factors and driving forces that led to its development. However, I had to decide the time-frame of such a topic. Booking the relevant, yet limited, literature I found that efforts to introduce social insurance in Cyprus began during the British colonial years in the early twentieth century. This directed me to begin my research from the arrival of the British on the island in 1878 and the reasons that brought them to Cyprus in the first place. This exploration has contributed significantly to an understanding of the attitude that the British colonial administration maintained on the issue of social insurance in Cyprus.
Two key points about the status of the book have to be made:
To begin, this book is the first comprehensive work focusing on the social implications of the development of social insurance in Cyprus over a period of 126 years. At the same time its attention is not uniquely focused on the elderly population but has also followed the struggles of the labour movement as the first movement which raised the issue of social insurance and initiated the campaign for its introduction in Cyprus.
Second, in researching the topic I found a gap in the local literature regarding these two areas of research, that is, the development of social insurance and elderly people and the relationship between the two. My initial attempts to explore this led to the conclusion that there was a dearth of material in the public domain. Apart from some scattered references, there is no comprehensive book specifically aimed at the elderly population of Cyprus within the context of their social circumstances, especially before, but also after the introduction of social insurance. This, in turn, led to the exploratory research which I then undertook and it is this gap that this book seeks to begin to fill.
Given the paucity of existing material, the book, of necessity, contains a significant amount of description of both key events and actors considered in the context of the social and political conditions of their time. This descriptive material contributes to providing an account of the history and processes involved so that it is possible to begin to understand some of the key factors in the development of social insurance provision for elderly people in Cyprus.
It is vital to say that the subject was approached and the book written from my position as a Cypriot academic with the values and stance that I developed and which have been influenced by having been born and raised in Cyprus. Having mentioned my Cypriot identity it is critical to explain that until 1974 the term Cypriots covered both Greek-Cypriots and Turkish-Cypriots. All the struggles for social insurance included the whole population since Cyprus had not yet been divided. From 1974 onwards, all developments which occurred in the Republic of Cyprus, including social insurance, excluded Turkish-Cypriots because they were forced to move to the north of the island which is not controlled by the Republic. Only those with contributions to the scheme continued to receive their retirement pensions through the United Nations peacekeeping force stationed in Cyprus.
1.2 Structure of the Book
In Chap. 2 the political circumstances that led the British to Cyprus are discussed in order to provide an understanding of their approach to ruling Cyprus and the way they governed the island from 1878 until 1900. The social conditions during the first 22 years of the British occupation and the environment under which the idea for a social insurance system first began to form are outlined and accounts are provided of the daily struggle of Cypriots to try and survive. The lack of any supporting mechanisms to older Cypriotsâ welfare is identified alongside describing the efforts to establish the first trade unions together with the social and political forces that drove those attempts.
The discussion in Chap. 3 provides an analysis from 1900 to 1931. The consequences of British rule and the tax system it imposed on the local population, which ensured very difficult living and working conditions, are discussed along with the inequalities between public servants and private sector workers in relation to retirement pensions. The working environment which is presented in this chapter provides an understanding of the emergence of the new working class, the rise of the labour movement and its efforts to establish organized trade unions and the subsequent response of the colonial government and the local elite.
Chapter 4 explores the period between 1931 and 1960 which describes and analyzes the key events in relation to social insurance and provides information on the first government scheme against extreme poverty, the Public Assistance Aid, which functioned as a safety net, mainly to many older people who, due to the lack of social insurance, did not have any means of survival following retirement. The struggles of the labour movement, primarily through strikes, for the establishment of trade unions and its determination for an improvement in the working and living conditions and the introduction of a social insurance scheme are considered together with the introduction of the first legislation for social insurance through a flat-rate scheme.
The years between 1960 and 1974 are explored in Chap. 5 and the discussion is developed to illustrate the progression of the social insurance scheme, the position of the labour movement in relation to the law and the first major amendment of the scheme in 1964. Also considered is the impact of the establishment of the first organized elderly movement and the Turkish military invasion of Cyprus upon social insurance, for both working people and pensioners. The new social environment that arose after the Turkish invasion, especially in relation to the living conditions and social insurance provisions, is also examined in relation to the older population as well as the transformation of the Cypriot family system, especially for those who became refugees, and the response of the state to their plight.
Chapter 6 focuses on the post-war years from 1974 onwards. The critical years after the war are explored within the sphere of the agreement of the social partners (government, employers and trade unions) to freeze certain social insurance benefits in an effort to protect the scheme from collapsing. Furthermore, following the implementation of the austerity measures this chapter refers to the so-called post-disaster miracle (as government officials characterized the economic growth) that occurred three years after the war. A major focus is a discussion of the second major amendment to the social insurance system and the provision of data on the introduction of a new scheme, the earnings-related or proportional social insurance scheme, which replaced the old flat-rate scheme, although not for everyone. Those who were already receiving retirement pensions based on contributions on the flat-rate scheme were excluded from the new scheme creating two-tier beneficiaries. In addition, there is an examination of the initiation of the campaign of the elderly movement for equal treatment through the improvement of retirement pension payments, as well as the campaign for the introduction of the âthirteenth pensionâ which is an additional salary, equal to the regular 12-month salary of an employee, paid every December. Also, there is a discussion on the establishment in 1999 of the House of Elders and its role and contribution on the issue of social insurance. Finally, the conclusion brings together the various strands of the book in a summary of the evidence and a review of the main arguments with a consideration of possible future developments.
1.3 Setting the Contexts
The Conflicting Nature of Social Policy and the Welfare State
This section aims to set the conceptual framework within which the book will be developed. As the m...