Big stakes in little Cyprus

The largest external investor in Russia in 2011 was not the world’s biggest economy, the United States. Nor was it one of the emerging economic behemoths China or India, or even one of the country’s neighbors.  The country from which the most money entered Russia was in fact the world’s 121st largest economy, an island of just 850,000 people. The tiny Mediterranean state of Cyprus was responsible for 22 percent of the $18.4 billion in foreign direct investment that went in to Russia in 2011. Yet, as Mark Twain wrote, there are “lies, damn lies and statistics”, and that fact means little without knowledge of the Cypriot economy. In the past decade economic relations between Russia and Cyprus have increased exponentially, as political alliances have improved. The country’s President Demetris Christofias is a fluent Russian speaker and, as the European Union’s (EU) self-described only communist leader, appeals to a Moscow