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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: 065 - (26/09/02)

The Turks are in an apprehensive state. The crisis in the Middle East affects them profoundly. Matters are seldom dull in this important nation which is both Western Asian and European.

Costs of Iraqi isolation
Iraq used to conduct a more than US$3bn trade with Turkey before the Gulf War of 1991. No longer. In 2001 trade was barely US$1bn. Accumulatively this has meant the foregoing of US$20-30bn in ruined trade.
Actually, the figure is probably less than that due to smuggling of oil from Iraq, which takes place comprehensively via Turkish border points. Difficult to estimate as it is, smuggling is likely to have reached up to 480,000 barrels per day, not all via Turkey. Indeed, only about a quarter probably takes that route.

Crisis management 
The Turkish government, which faces elections and probable dismissal in November, is patching together a makeshift policy on Iraq. It feels obliged to toe the line of the issue with Washington, its vital ally. The risks of doing so are, nevertheless, huge. The Turks are averse to 'regime change' for geopolitical reasons - basically their fear of Iraq's dismemberment and an independent Kurdistan - even while they could benefit economically from it and the restoration of normal ties.
The US is likely to reassure Turkey that the territorial integrity of Iraq will be retained. It need not fear an independent Kurdistan. In that case it makes sense for Turkey to back an invasion if it happens and give the US use of bases and airports, which it has anyway under longstanding agreement.

Political uncertainty
The political outlook will remain highly uncertain until the elections are over. The three-party coalition under the ailing premier, Bulent Ecevit, looks certain to fall.
New political groupings could do well, either one set up by defectors from the coalition or the reborn Islamicists. Another coalition is likely. The Islamicists would probably be blocked out by the military, but are not in fact extremists by and large.

New life in coalition
The right-wing National Movement Party (ANAP) has openly challenged reforms on civil rights necessary for EU membership. The Motherland Party wants the ANAP out of the coalition. But since it is likely to fall soon anyway, this seems otiose. 

Economy recovers somewhat
After a fall in GDP of 9.4% in 2001, GDP is now bouncing back by 4.7% in the first half. A figure of 3% for the whole year is now likely.
Foreign debt is US$31bn after the crisis shocks of 2000-2001, which saw huge bankruptcies and two million put out of work. But the IMF is extending loans of US$16bn. Turkey is far too important to the West to be neglected; an undoubted pillar of Western alliances in the Middle East. 

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Toyota unit eyeing new model production, export

Toyota Motor Corp's Turkish arm has commenced production of station wagons for export to Europe from its western Turkey plant. Toyota Otomotiv Sanyi Turkiye announced it has plans to produce and export, by the end of March next year, 12,000 stations wagons and 28,000 Corolla sedans to 22 European countries from its Adapazari plant.
Although the plant was already producing sedans, it only began exporting them in February, Turkish Daily News informed. Investment in the Adapazari plant since last year has amounted to 500m Euros, the company said in a statement, which further noted: "With the start of production of a third new model by 2004, investment in the Adapazari plant will reach 750m Euros."

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Turkey to set up space agency

The Turkish Space Institution (TUK) will be formed by the Air Force Command to enable Turkey to have an active role in international space activities, Anatolia News Agency has reported. The institution will start its activities next year. 
A military official, who made a presentation on behalf of the Air Force Command at the 13th National Astronomy Meeting held in southern Antalya Province, said that initiatives to form TUK were launched in 2000. 
The official noted that the institution would cooperate with countries experienced in field of space and work to establish communication with relevant institutions and increase training. 
The draft law on the formation of TUK was sent to the General Staff to be presented to the National Defence Ministry, the official stated. The official said that the draft would be presented to the government soon. 
TUK would work under the auspices of the prime minister but have a public and legal authority and administrative and financial autonomy. 
It will prepare a national space policy, adjust to international competition conditions in the long term, inform the public about space, develop education and training, lay technological infrastructure, ensure coordination among civilian, military, commercial and industrial organizations working in the field of space, increase living standards of the society by making use of the possibilities of the space, and make use of current and later acquired capabilities for the security and interests of the country.

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Baku-Ceyhan oil pipe foundation to be laid 18th September 

Minister of Energy and National Resources, Zeki Cakan, has said that Baku-Tbilisi-Ceyhan (BTC) oil pipeline's foundation will be laid on 18th September in Baku with the participation of President Ahmet Necdet Sezer and the presidents of Azerbaijan and Georgia, Anatolia News Agency has reported. 
At a press conference he held on 9th September, Cakan said Botas had completed basic and detailed engineering work successfully. He said that they will start the construction phase in accordance with the report of BTC Company which was sent to Botas on 29th August. 
Cakan said that the contracts which are related to the Turkish part of BTC oil pipeline will be signed on 20 September in Ankara with a ceremony, adding that the foundation laying ceremony will be held in Ceyhan on a date which will be determined in September...

Sofregaz clinches Greece-Turkey pipeline bid

Turkish state concern, Botas, has revealed its bid to conduct engineering work on a US$300m natural gas pipeline between Greece and Turkey.
France's Sofregaz tendered the lowest bid at US$5.2m to carry out fundamental and detailed engineering work on the 285km pipeline that will run from the western Turkish city of Bursa to north eastern Greece's Komotini, Botas officials informed. 

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Turkey begins fulfilling commitments needed for IMF 

State Minister for Economy, Masum Turker, aid on 30th August that they would not hold talks with the IMF delegation earlier than the scheduled time, but they had started to fulfil commitments about the review before arrival date of the IMF delegation, Anatolia News Agency has reported. 
Turker stressed that this time, commitments would be fulfilled before the arrival of the IMF delegation. He explained that he would attend the IMF-World Bank meeting in Washington in September. 
When reminded that some civil organizations claimed that postponement of elections would cause a serious financial burden on Turkey, Turker said: "At the moment, postponement of elections is out of question. As the Democratic Left Party (DSP), we earlier said that we did not want early elections, but postponement of elections is now out of question also for us after the decision on holding early elections was taken." 
Noting that Turkey would not have any problem in rolling over its debts next year, Turker said: "You are trying to repay your debts so you don't need any more money to make some other expenditures." 
Turker stressed that continuation of the economic programme would cause the debts to decrease. 
Responding to a question about economic targets, Turker said: "There has not been any change in targets. Everything goes on according to plan." 
When asked about effects of a possible operation against Iraq on the Turkish economy, Turker said that this was a supposition and he did not comment on suppositions.

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Crimea duty-free zones to be set up for transporting Turkish goods to CIS

A Crimea Free Zone Economic Region and a Crimea Special Industry Region are being established for Turkish products to be transported duty-free to the Commonwealth of Independent States (CIS) markets. 
Globus Holding Inc. Chairman, Ahmet Caliskan, told the Anatolia News Agency correspondent on 2nd September that Turkish products would have a place in CIS markets with a protocol which would be signed with a Crimean delegation. 
Caliskan said that they were aiming for the free zone to be a shopping centre with this project and added that their work was to establish shuttle trade again. 
Caliskan said that the Turkish goods would enter the CIS markets duty-free or with low duty, cheap transportation, ready infrastructure and low energy and stated that the protocols would be completed till the end of October. 
Caliskan recommended Turkish entrepreneurs to invest in those regions where 10 million people from CIS visit. 
The Crimean delegation and Caliskan will sign a protocol related to the project in Istanbul on 5th September.

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