Being a tax haven will have been a disaster for the people of Cyprus

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The finance sector was Cyprus' number one income earner. But it was not its number one employer, by a long way. Bill Mitchell found the employment data from its Ministry of Finance, which was as follows:

The most recent detailed labour force statistics available from Cyprus are the – Labour Statistics 2011 – publication.

The following Table shows the proportions of employment by main industry sector in relation to total employment (WRT is wholesale and retail trade).

As the FT notes this morning, the impact on all other sectors of the banking crash has already begun. Having been a tax haven will prove to be a disaster fro the people of Cyprus. With all other economic activity squeezed into the background by an over-expanded finance sector the ripple effect will be enormous.

Sometime soon small states are going to realise that being a tax haven and putting all eggs into one highly volatile market really does not pay.