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  TURKEY

REPUBLICAN REFERENCE

Area (sq.km) 
770,760

Population 
66,493,970

Capital 
Ankara 

Currency 
Lira 

President 
Ahmet Necdet Sezer 

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Background:
Turkey was created in 1923 from the Turkish remnants of the Ottoman Empire. Soon thereafter the country instituted secular laws to replace traditional religious fiats. In 1945 Turkey joined the UN and in 1952 it became a member of NATO. Turkey occupied the northern portion of Cyprus in 1974 to prevent a Greek takeover of the island; relations between the two countries remain strained. Periodic military offensives against Kurdish separatists have dislocated part of the population in southeast Turkey and have drawn international condemnation. 

Update No: 067 - (15/11/02)

The Turks held a key election to parliament on November 3rd, which predictably was won by the Islamicists of the Justice and Development Party (AK), which secured 34.3% of the vote and took 363 seats in the 550-seat parliament. The Republican People's Party obtained 19.4% of the vote and 178 seats.
By provision of the electoral system any party failing to attain 10% of the vote forfeits the right to parliamentary representation at all. Consequently, the three ruling parties in coalition government were all wiped out, suffering the fate of Solidarity in Poland last year. A party with one third of the votes can obtain nearly two thirds of the seats and rule as a single party government.
  The figure is as high as 10% (it is only 5% in say Germany and Poland) to keep out the Kurds, whose electoral representation is already split.

Challenge to secularism? 
The question that dominates debate in Turkey is if AK will be a threat to the long tradition of secularism in its political life, dating from the days of Ataturk (1922-38). The military, who are the guardians of that tradition, are likely to be especially wary of the new government and caution it against adventurism of any sort, always with the implicit threat that they would take over power if secularism is really threatened.
The form of allegiance to Islam that AK professes is nothing like the firebrand versions elsewhere, such as in Iran and the Arab world. The Turks wear their religion comparatively lightly.
The leader of AK, Recep Tayyip Erdogan, denies that the party is Islamicist and has any type of fundamentalist agenda. He is well aware of the forces of secularism in Turkey, having had a prison term for reading out a poem which was deemed seditious in 1997. The military had just pushed AK's predecessor, Welfare, out of government and were about to ban it altogether. Actually AK has had four predecessors of an Islamicist stamp, all banned sooner or later by the military.
Mr Edgogan, a former mayor of Istanbul, has himself been prohibited by the Constitutional Court as an ex-prisoner from standing for parliament and so from being prime minister. The president has called on Abdullah Gul to be premier, an urbane reformist and moderniser in the party.
Far from introducing a fundamentalist regime, at this stage at any rate, the AK government is flaunting its pro-Western leanings, wanting Turkey to join the EU and loyal to NATO and the US alliance.
The business community are even talking of a new 'age of Ozal,' referring to the mid-1980s when the reformist Turgut Ozal transformed the economy with Thatcherite measures. Ozal's Motherland Party harboured religious conservatives, many of whom recently left to the join AK, dooming the previous government, which Motherland led.

The economy recovers
The key challenge for the AK government will be the economy, which crashed last year, GDP falling by 9%. It has begun to recover, growing by 4.7% in the first half. Measures will be needed to comply with the demands of the IMF, heavily engaged in a US$16bn credit programme, the largest it is extending anywhere.
The stock market rallied on the news of a single party government and the lira strengthened. The markets are looking on favourably and the West expectantly. Erdogan is calling himself an Islamic equivalent of a Christian Democrat on the Kohl model. He is well aware that Turkey's chances of joining the EU depend enormously on Germany, the paymaster of the union and its de facto leader in tandem with France. While the French, like the British and northerners generally, are not averse to eventual entry for Turkey, the Germans have obvious reservations at the prospect of millions of Turks migrating to their country when they are facing a tide of immigration from Poland and Central Europe already.
The economy is again the key here. Only if it is securely growing could there be any suggestion of EU entry, as also a rectification of human rights abuses, being routinely applied to quell the Kurds.

Giscard disdains Turkey
Former French president Giscard d'Estaing, who is head of the convention drafting a new constitution, provoked a furore on November 8th by saying that the EU would be destroyed by the entry of Turkey. Coming five days after the elections and the formation of a new government of pro-Islamic stamp, the statement is a slap in the face for the Turks.
Referring to Turkey's Muslim population and high birth rate, he said that it had a different culture, a different approach, a different way of life. "It would inevitably become the biggest member state, with a population of 68m already and the largest land-area. Its capital is not in Europe; 95% of its population live outside Europe; it is not a European country."
The Turkish government rejected Giscard's 'negative attitude,' noting that the country had been part of Europe since the tenth century.
This is a disingenuous argument, letting the cat out of the bag. If Turkey joined Europe in the tenth century, then it was not part of it beforehand.
Actually only in the eleventh century did the Turks join Europe in a fashion by defeating the Byzantine Empire at the battle of Manzikert in 1071 AD, and thereafter flood in as invaders. They took until 1453 AD to occupy it fully, whereupon they swallowed the rest of the Balkans and pushed into Hungary, defeating the Magyars at the battle of Mohacs in 1526 AD. They then invaded Vienna in 1689, but were defeated, their final retreat being begun on 9m:11 of that year, which some have recently suggested is significant. It took the Europeans until 1912 to complete their expulsion, right out of the Balkans except for a narrow strip of land just north of Istanbul, which technically being north of the Bosphorus, is in Europe. 
All of this makes them not exactly typical, indeed decidedly eccentric, Europeans even if for up to six centuries they controlled much of Southern and Central Europe.
The European Commission and member governments immediately disowned Giscard's position, but his remarks reflect widely-held views voiced in private by French, German and other politicians. But it is also thought hardly wise to express them publicly, for fear of setting back the reformers, not least of a vital NATO country at such a time. Giscard, no longer an elected politician can be represented as speaking only for himself, but he has nevertheless delivered a message.

The Iraqi card
The looming crisis with Iraq is putting the Turks in a quandary. There are about 1,700 US troops in the country under NATO arrangements, while US and UK planes use the Incirlik airfield to fly over Northern Iraq, patrolling its no-fly zones.
The Turks fear an adverse fall-out of a ground war on their economy. But a new regime in Baghdad could at last end the UN trade embargo on Iraq, which has cost Turkey more than US$20bn over the last decade. 

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ENERGY

Minister say all preparations made to export natural gas to Europe 

Energy and Natural Resources Minister, Zeki Cakan, said on 31st October that they had made all necessary preparations on exporting natural gas to Europe and added that the ministers had signed agreements on the issue, Anatolia News Agency has reported. 
Holding a press conference at the Motherland Party (ANAP) headquarters in Zonguldak, Cakan said that he would go to Greece following the elections and stated that Turkish and Greek governments would sign an agreement on natural gas which would be exported to Greece. He added that Turkey would become an energy corridor between Caspian region and the West with this agreement. 
Stating that the most important issue of all countries was energy, Cakan noted that Turkey had a very significant location on the transportation of Caspian oil and natural gas to Europe. 
Cakan said: "At least 50m tonnes of oil will flow to Ceyhan in 2005. Turkey consumes annually 31m tonnes of oil and its products. We will obtain US$200-300m transition fee when 50m tonnes of oil comes to our country. We have made all necessary preparations on exporting the natural gas to Europe. The ministers have signed the agreements on that issue. We are prepared to export natural gas to Greece, Bosnia and Herzegovina, Hungary and Austria."

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FINANCIAL NEWS

World Bank optimistic over growth in Turkish economy despite threats

The economic situation in Turkey may be headed for a rapid upturn based on new evidence of higher growth and attainable goals for the next financial year. Inflation has dipped impressively to below the 35% target, and as such is not related to excessive monetary expansion. However, current world affairs - upcoming elections, the prospect of a US-led attack on Iraq, and the generally sluggish world economy - present a number of uncertainties that are difficult to measure in terms of their effect on the country's currently positive path.
In an interview with Turkish Daily News, World Bank Director, Ajay Chhibber, in response to a question regarding expected growth rate for 2002, noted: "Turkey is likely to achieve its target of three per cent growth in national income for 2002 and may even exceed it to reach some four per cent increase. This is a quick and strong recovery and is impressive since it is also coupled with a sharp decline in inflation to under the target of 35 per cent." 
The World Bank representative, based on the fact that Turkey has a customs union with the EU in industrial products, is confident of the country's ability to compete with economies across the Union.
"Turkey's exports to Europe have remained vigorous over a 20-year period and have increased as a share of its national income," he noted. 
The predominantly Muslim nation has since the early 1980s clearly evolved as a more outward oriented, global economy and has achieved a series of successes in world integration.
However, Chhibber does not discount the fact that Turkey could be enjoying additional success if certain constraints were removed from the entrepreneurial private sector.
"Among these I would rate these days the high taxes, exorbitant energy costs, high interest rates and the cost of social security - especially the costly employer contributions," Turkish Daily News quoted him as saying. Although, certain natural advantages such as cheaper skilled labour and location neutralise these downfalls, the question is for how long. In addition, Turkey's slow legal system is for the most part viewed as a major constraint to business, which in turn is starting to feel the need to concentrate more on knowledge and technology. Attention to such matters will help efforts to attract much needed foreign investment, which, according to the World Bank executive, could boost Turkey's growth by some two per cent annually.

IMF ready to work with new Turkish government

The International Monetary Fund (IMF) said on 4th November that they were ready to work together with the new government to be formed in Turkey. 
IMF spokesperson, Conny Lotze, told Anatolia News Agency correspondent that they
were looking forward to work together with the new Turkish government. 
Lotze said that they welcomed the statements of the Justice and Development Party supporting the IMF-backed economic programme.

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INFORMATION TECHNOLOGY

T-Systems Turkey, ITD share e-business acumen

T-Systems Turkey has entered into a partnership agreement with Illetisim Teknoloji Danismanlik Ticaret (ITD), a provider of audio systems, payment systems and e-business solutions. T-Systems will offer combined services to the country's financial community, Europemedia.net reported recently.
The first joint product launched by the firms has been the "Individual Retirement Solution Package," which targets the insurance sector. T-Systems Turkey employs 140 staff and is a subsidiary of T-Systems International, which is represented in 24 country. ITD subsidiary EST has also put its signature to the partnership agreement. EST specialises in Internet-based solutions and products such as shared e-commerce infrastructure.

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