Why Would Amazon Want to Buy The Nation of Cyprus? & Could it Actually Do It?

this is cyprus an absolutely gorgeous nation in the mediterranean filled with beautiful little towns a laid-back way of life and economy that is supposedly for sale that's right a fair few of you watching may have seen headlines that apparently amazon is going to purchase the island nation and set up its global headquarters there to have its very own little tax haven this story was originally published by the saxo bank which is a small european investment firm with a lot of operations in the area now spoiler alert it's not going to happen but it's not as crazy as it sounds and one day it genuinely could make sense as a business plan so stick around partially because i need that average watch time so that the youtube algorithm may bless this video but mostly because this bizarre prediction can tell us a lot about possibly the weirdest economy in the world there is a very good reason why cyprus was singled out as the most likely country to be purchased in the 2020 national yearbook and that's because of its long history of let's say being very agreeable to the whim of institutions with a healthy bankroll but of course the nation is fascinating for so many more reasons not least of which is that half of the country is technically subject to an illegal occupation of the territory of the eu and it gets even weirder than that if you were to look at the island of cyprus you would be forgiven for thinking it's just one little old country but depending on who you ask it has as many as four different entities claiming sovereignty over what is a very beautiful but otherwise very barren piece of land so there is a lot going on here and as always the best way to make sense of a lot of all of this is to look at the economics of the island to work out what is truly motivating all of these powerful institutions that apparently want to own cyprus so what is really driving the economy of cyprus why are so many people laying claim to it how have these tensions come back to bite them in recent years why would it make the ideal country for some global mega-corporation like amazon to buy and of course once we've made sense of all of that we can go ahead and put cyprus on the economics explained national leader board this video is brought to you by acorns the app that makes investing as easy as spending with acorns you can automatically round up your debit and credit card purchases to the nearest dollar and then automatically set aside that spare change into your diversified portfolio speaking of portfolios each acorns portfolio is professionally constructed with etfs managed by some of the world's most successful money managers including blackrock and vanguard i trust acorns with investing my own savings and i truly cannot say enough great things about their platform stay tuned until the end to learn more or sign up now at acorns.com ee and they'll deposit five dollars into your account to help you get started with investing again that's acorns.com ee the link is on the screen now and in the video description below the story of the cypriot economy starts as so many do in 1960 when it claimed its independence from the british this independence was granted so long as cyprus allowed the british to retain two naval ports here and here the british still fancy themselves a naval power at this time and cyprus was a great central location in the med while this was a great victory for the people of the newly formed nation it quickly fell into a new form of uneasy tension between the two dominant populations on the island the turkish and the greeks an attempt to control these tensions revolved around introducing a representative senate that would be well represented proportionally by politicians from both backgrounds this never really worked though and the nation unfortunately fell into a vicious civil war 14 years after their independence turkish troops landed on the nation's shores in an attempt to claim the land as their own obviously this was very unpopular in the international community considering both greece and turkey were members of nato and this conflict was taking place right on the doorstep of the soviet union turkey also had the audacity to carry out this invasion with weapons supplied to them by the us which was a major no-no due to this massive international pressure a ceasefire was eventually called but not before turkish forces occupied 36 percent of the nation's north up here in the pointy bit this led to many turkish cypriots been evicted from their homes in the south and likewise with greek cypriots in the north to this day the island is still divided like this although the area under turkish administration is not recognised by basically anybody although it still has all of the same functionality of a regular nation this means that the republic of cyprus you know the one that everyone agrees is cyprus has what is known as du jour sovereignty over the entire island there is an interesting debate about what makes a nation a nation and if you were to research this topic you would find that most experts would say it's other countries recognizing you as a country a membership in the un is also a huge boost you know what this is all well and good however the republic of cyprus has all of this but it still can't do so much as commission a public fountain in the north so that's a really strong point against this particular argument your move wendover to make this geopolitical fruit salad all the more interesting the un controls a vast swath of land between the north and the south as a buffer to avoid further tensions in the region this makes four different territory claims in an island that up until recently hasn't been overly prosperous oh and one little side note amongst all of this is that both the north and the south share the same capital city in nicosia so you know u.n buffer zone divided capital city retained british outpost or as i like to call it a real recipe for success now make sure to remember all of this tension because it will get really important later on but for the most part in this video when we talk about cyprus we will be talking about the republic of cyprus in the south now even after all of this was said and done and all the dust settled in the island it wasn't an easy path to prosperity for the new nation ongoing hostilities and a relatively relaxed way of life meant that the nation lacked the infrastructure to support industries that were driving growth in the modern world instead the country relied primarily on basic agriculture as it had for thousands of years this unrealized potential was perhaps best typified in its tourist industry the country is beautiful it has miles of unspoilt beaches and crystal clear waters all bathed in the mediterranean sun the only problem was nobody could get there the country had only opened its first commercial airport in 1968 and it was in its capital city which was inexplicably as far away as physically possible from all of the beaches the nation had to offer so unless your idea of a resort getaway was a scheduled flight to an ex-air force base and then a two-day drive over cobblestone roads to a beach shack with no plumbing cyprus probably wasn't getting your tourist dollars this of course did eventually start to turn around as the international community started to forget the troubles of the 60s and 70s and the government rolled out sweeping reforms in an attempt to modernize the nation now in terms of government investment into infrastructure there are normally some areas that have pretty high returns on investment tourism as mentioned earlier is the first big one this won't work for all nations of course but for those that happen to be blessed with a type of environment that is commonplace in cyprus well a few roads and some small local airports opens the nation up quickly to those sweet tourist dollars that are looking for a less crowded place to get sunburns the same went for agriculture which saw a massive increase in output after the nation embraced modern mechanized farming techniques it's a common misconception that all nations that have experienced a period of rapid growth have done so because they embraced modern manufacturing and yes of course there are many examples of where this has been the case but heavy industry is incredibly expensive and competitive to break into it's like starting a business and deciding on a cafe i mean sure if it goes well you'll do okay but could you possibly think of a more saturated competitive and uninspired business idea anyway rant aside all of this was to say that cyprus was much better served by making small investments into little industries rather than massive investments into becoming a manufacturing hub which is a lesson that many other nations could learn from because well it worked and in fact one of the nation's biggest payoffs was its investment into harboring a strong business center companies need a few things to set up operations in a nation they need some profit incentive to be there they need confidence the nation won't devolve into chaos and lacks business regulations and taxes are always helpful too once international businesses were confident of the continued status quo on the island they were more than happy to move in the first big additions being shipping companies today cyprus is home to the third largest merchant navy in europe only falling behind greece and the united kingdom in fact cyprus actually has a shipping fleet twice as large as the united states now the reason that so many merchants choose to do business in cyprus was a little bit to do with its central location and a lot to do with its favorable taxation and business laws there is something called a flag of convenience in shipping where ships that are by their very nature not bound to a particular country in the world will pick and choose between nations to see who will give them the best deals on rules around how much tax they will need to pay what standards are required on the ship and even down to who they can employ from what country for all of these reasons panama is actually technically home to the largest merchant fleet in the world but cyprus is still a compelling option especially for those who do a lot of business in europe and that's because of the last piece of the ciprian puzzle membership in the eu in 2004 cyprus became a member of the european union which was fantastic it meant it could adopt the euro and open itself up to business directly with all of europe this made all of its previous progress in the fields of agriculture tourism and financial services all the better in the years after admission into the eu cyprus saw a huge spike in economic growth and money started pouring into the nation to set up administrative centres to take advantage of this new market this investment took the form of everything from venture capital firms looking to modernize farming techniques all the way to major hotel chains setting up resorts across the coastline dedicated to the new wave of european tourists this membership into the little european club also opened up the nation to outward investment opportunities given all of the tax and business laws we mentioned earlier cyprian banks were flush with foreign cash and these reserves only escalated when those same banks could hold euros reinvestment into cyprus was an option but the whole nation only had a gdp of around 25 billion dollars and these banks were now holding on to hundreds of billions of euros it would be like bill gates investing into a lemonade stand no matter how good the returns it wouldn't be worth their while so they invested into other fast-growing european nations specifically their ancestral homeland of greece which was you know not awesome the eurozone crisis hit cyprus extremely hard not necessarily through any fault of their own but more so that their banks had invested into nations that were no longer able to make their repayments it didn't take long before uneasy global billionaires and multinationals wanted to withdraw their funds from cypriot banks causing a minor run on these institutions given the nation no longer had free reign to print its own currency after it adopted the euro the government needed a far more radical solution to this problem so in 2013 cyprus confiscated funds held in their banks exceeding a hundred thousand euros a portion of this excess cash was changed from money sitting in the bank to shares in the bank itself in theory the individuals affected were no worse off but in practice well in an economic crisis would you rather have cash or shares in a sinking bank the answer should be pretty obvious this is what is known as a bail in as opposed to a bailout so you might be asking then amongst all of this why on earth would amazon want to buy cyprus well as we said earlier it doesn't this proposal was merely a demonstration of how easy it is for wealthy institutions to buy their way into the systems of cyprus you see membership in the eu brought cyprus much more than just dodgy investment opportunities it also brought with it all the perks of being a member of the eu its citizens could live and work and do business in any member state almost with the same ease as if they were citizens of those states this is something that was great for the people of the nation who might be interested in such opportunities but even better for wealthy individuals who like the sound of european citizenship as well if you are a wealthy person getting citizenship in cyprus is extremely easy this means that legitimate and illegitimate global billionaires alike have been able to claim dual citizenship in cyprus as a sneaky backdoor into europe where they will then set themselves up in paris or berlin or rome or wherever with all of the amenities afforded to any other eu member this is particularly popular with russian and chinese billionaires who would not be granted citizenship in these more conservative countries this passports for sale scandal caused a major outcry in the european community when it came under scrutiny in 2018. since then the nation has had to drastically pull back on this lucrative little pastime but that might not be such a big problem given that just a year later exxonmobil announced it made the world's third largest natural gas discovery this gas was discovered off the coast of cyprus which is where these disputed borders get messy once more you see the republic of cyprus and even the european union had learnt to just accept northern cyprus's something that is there and there isn't much that they can do about it but now with a prize that could potentially be worth trillions of dollars tensions are starting to heat up again over who lays claim to these gas fields countries get 200 nautical miles off their coastline to exclusively exploit for fishing and drilling but how large that coastline is really depends on how you draw these borders a flareup of tensions could ruin the country's progress into transitioning from an agrarian afterthought in the middle of the ocean to an advanced centre of business even if that business is sometimes a little bit on the naughty side now it's time to put cyprus on the economics explained national leader board and as always we will start off with size now the economy of cyprus is fascinating but it is very small its recent advancements have made a big difference but with a gdp of less than 25 billion dollars it's almost in line with micronations like monaco or malta it gets a two out of ten an important thing to note about this though is that this does not take into consideration the economy of the north as this region is not recognized by the international agency that makes these figures even still the economy of northern cyprus is even smaller and more basic than the south so it's unlikely to make much of a difference here gdp per capita is a better story though because the population of the island is very small especially when those same international organizations don't recognize all of the people in the north with a gdp per capita of 28 000 it is a securely middle-class economy somewhere between greece and italy in terms of prosperity it gets a five out of ten stability and confidence well this really depends on the time frame in recent years it has been doing alright for itself and depending on what happens with these guest fields it might continue to do so even still in its short history as an independent state it has been home to wars divided territories controversial bank bailouts and international scrutiny over selling passports it gets a 3 out of 10. growth now we measured this figure over the last decade because spoiler alert pretty much every country in the world has grown rapidly when you extend the timeline out far enough the 10-year figure also works well because it assesses how well an economy has been able to come back from financial crises that plagued the last decade which in the case of cyprus is not well despite recent improvements the economy is still smaller than it was at its peak in 2008 so it gets a 0 out of 10. finally industry this has certainly been improving and the nation has been opening itself up to new profitable industries like all the ones we've discussed in this video but it's still certainly not what you would call a powerhouse by any means it gets a 5 out of 10. all together this gives the nation an average score of 3 out of 10 which is bad and puts the nation into last place on our leaderboard for now the good news is that you can put yourself in a more secure financial position by automating your savings with acorns acorns makes it super easy to automatically set aside funds into your savings or investment account every day week or month just choose the amount that you want to transfer set the frequency and boom just like that you're all set acorns will take care of the rest speaking of nifty features there's also smart deposit which helps you save money before you can spend it simply deposit your next paycheck into your acorns checking account and as soon as the fund's hit acorns will automatically move a percentage of your deposit right into your investment or retirement account i'd be remiss if i didn't mention one of the best things about investing with acorns which is that you don't actually have to worry about picking the right stocks and bonds that's because acorns provides pre-built portfolios that are professionally managed not to mention well diversified thanks to etfs comprised of thousands of securities i trust acorns with my own personal investments and i truly cannot be happier with their service feel free to sign up now at acorns.com ee and they'll deposit five dollars into your account to help you get started with investing again that's acorns.com ee the link is on the screen now and in the video description below thanks for watching guys bye

Channel: Economics Explained

Views: 691,135

Rating: 4.8154941 out of 5

Keywords: is amazon going to buy cyrus, can amazon buy cyprus, the economics of cyprus, the economy of cyprus, the economy of cyprus explained, the economics of cyprus explained, cyprus economics explained, economics explained cyprus, cyprus economy explained, cyprus economy, cyprus economy economics explained, cyprus economics, will amazon buy the country of cyprus, can amazon buy a country, is amazon trying to buy a country, is amazon trying to buy cyprus, economics explained

Id: lwYOJLGw-Mw

Length: 18min 9sec (1089 seconds)

Published: Thu Dec 24 2020

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[u/Ozyzen]

I think the person who made the video picked up a few facts here and there, and then filled the gaps with his own assumptions.

[u/golifa]

He could unite Cyprus

[u/Greekheaded]

Time to get the G3 out the closet