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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: 071 - (27/03/03)

The Turks have a new premier, Recep Tayyip Erdogan, who could not be entering on his new duties at a more critical time. He has in effect been in charge all along, the leader of his Justice and Development Party (AKP) and an able operator.
It was an anomaly he was not permitted to stand for parliament before. Now he is seen to be in charge there will not necessarily be any changes in policy. An awful lot depends on the war and how Ankara comports itself in its outcome.

The Turkish problem
The Turks were overrun in 1991 by hundreds of thousands of Kurdish refugees. They certainly want no repetition of that situation today. 
But they themselves urged the US to create the nearly fully autonomous enclaves for the Kurds in Northern Iraq precisely to enable a return of refuges to their homeland. The success of that policy augurs well for the future. If Turkey turned nasty with the Kurds there, it would be hurting its own interests, risking a new exodus and alienating the Americans.

The Ankara-American axis
Never has there been such a strained relationship between Ankara and the US, Washington was decidedly tactless in its handling of the issue of having access for its troops into Iraq from Turkey. The well publicised haggling over money would have been more appropriate in a bazaar. But sovereign states and peoples do not like being treated as store holders or alley merchants. The affront to the dignity of the nation was felt by the population at large, indeed overwhelmingly resented.
The parliament narrowly rejected the government motion to give the US access, leaving little time for a repeat before war starts. The Americans are not going to forget or forgive easily. That war is highly unpopular in Turkey does not gratify them either. The more than US$25bn package of aid and credit is now not likely to be forthcoming from the US in anything like such a munificent form, if at all. The stock market slumped on the news.
But that is short - term thinking. A post -Saddam Iraq offers Turkey huge opportunities. As much as US$75bn has been foregone in trade since 1991, what with UN sanctions in place. Things can only improve here. 
Still a Turkish consent would have led to those loans, sorely needed after a long recession. To lose Washington's support now would be a calamitous blow. It may not come to that. A belated cooperation would be better than nothing. Erdogan just needs a handful of MPs to change their minds. And parliament meets in secret session. 
As one swift measure of support, the parliament allowed the US the use of its air space and the use of air bases just as the conflict began.

EU hopes receive a blow
Turkey's chances of EU entry have long been poor, if not non-existent. Recent events have made them dimmer. The refusal of three nations, France, Germany and Belgium, to allow NATO to give Turkey protective equipment and AWACs in February was circumvented later on a technicality. But it has left a sour taste behind. 
The Greek part of Cyprus is to join the EU, but not the Turkish as a result of internal political developments there. This dashes Turkey's own EU hopes. If little Turkish Cyprus is not going to join, then vast Turkey is out of the question.
Turkey is at a crossroads all right. Erdogan has some hard thinking to do.

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Azerbaijan, Georgia, Turkey to begin laying trunk gas pipeline

The Azeri, Georgian and Turkish presidents are expected to give their go-ahead to the construction of the Baku-Tbilisi-Erzurum gas pipeline within the next few days. "This will mark the beginning of the first stage, which will be followed by routine work. As a result, the South Caucasus gas pipeline, which will hopefully bring gas to all parts of Georgia, will become a reality," said Georgian president, Eduard Shevardnadze, Interfax News Agency reported.
In commenting on his talks with representatives of the International Financial Corporation and the head of the European Bank for Reconstruction and Development, (EBRD), who arrived in Georgia to discuss details on financing the Baku-Tbilisi-Ceyhan oil pipeline, Shevardnadze said he does not doubt that the scheme for further funding of the project will be approved.
He said that financial support from these international organisations had helped complete the construction of the Baku-Supsa oil pipeline. "If that first project had not been developed, the oil and gas pipelines might have remained a dream," he said. Representatives of the International Financial Corporation (IFC) and the EBRD inspected the route of the future oil pipeline and confirmed that it's environmentally safe," he said.
The Baku-Tbilisi-Erzurum gas pipeline is expected to be put into service in 2006. Its annual handling capacity is 30bn cubic metres of gas. Under an intergovernmental agreement, concluded with Azerbaijan, Georgia will receive five per cent of the total volume of gas transit for free. During the first 20 years Georgia will have the right to buy an additional 500m cubic metres of Azeri gas at reduced prices. 

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IMF desk chief welcomes economic measures announced by government

International Monetary Fund (IMF) Turkey Desk Chief, Juha Kahkonen, said on 3rd March that the measures, announced by the government were pleasing, Anatolia News Agency has reported. 
Kahkonen issued a written statement and said: "The steps announced today by the government are welcome. The budget, in particular, appears consistent with a primary surplus of 6.5 per cent of Gross National Product (GNP). Discussions are continuing on other aspects of the forth review."

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Turkey interested in investing in Sudan - Turkish minister

State Minister Kursad Tuzmen said on 28th February that Sudan needed new investments, stating that "we want to take our place there from now on," Anatolia News Agency has reported. 
Tuzmen held a news conference prior to a four-day visit to Sudan together with a 200-person businessmen delegation. 
Tuzmen said daily oil production of Sudan was approximately 300,000 barrels as of 2002 and noted that this figure was estimated to increase to more than 500,000 in the coming years. 
Tuzmen said Sudan recorded the biggest growth rate in the past 10 years after China and noted that "Sudan is expected to implement a comprehensive programme in the coming period envisaging renewal of country's infrastructure. We expect our contractor companies to take an important share in projects of motorway, airport, hydroelectric power plant, port, telecom and others." Tuzmen said he would meet with 14 ministers there. 
Tuzmen said following his visit to Sudan, he planned to visit Egypt, Libya, Azerbaijan, Turkmenistan and Saudi Arabia between 7th-11th March, aiming to find new markets and develop existing ones.

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World Bank delegation in Turkey to hold talks on second adjustment loan

A World Bank delegation arrived in Turkey on 24th February to discuss Second Public and Finance Sector Adjustment Loan (PFPSAL-II). Sources said that the delegation would discuss realizations that would allow approval of loan tranches of US$900m under PFPSAL-II, Anatolia News Agency has reported. 
Turkey has not yet taken the second and third tranches of US$1.35bn of PFPSAL-II as it could not provide the necessary conditions. The bank lent a first tranche of US$450m in August 2002.
Sources said that the International Monetary Fund (IMF) was also seeking the same conditions as the World Bank and that approval of the "Fourth Review" by the IMF Board would be an important criterion for release of the second and third tranches by the World Bank. 
The World Bank wants Turkey to put arrangements like indirect tax reform and financial control law into practice before approving the US$900m of second and third tranches of the US$1.35bn of PFPSAL-II.
Meanwhile, sources said that talks between Turkey and the World Bank under the Country Assistance Strategy (CAS) were expected to start in March. CAS agreement might come into force in June or July following completion of those talks. 

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Stock exchange drops by 10 per cent; interests, US dollar rate increase

The semi-official news agency, Ankara Anatolia, in Turkey on 17th March reported that the day's second session, the Istanbul Stock Exchange registered a drop of 260.62 points and closed at 9,482.92 points. During the second session of the day, the shares lost an average of 2.67per cent in value. Given the decrease of 860.76 points in the first session, the stock exchange lost a total of 1,121.38 points today. The overall drop in the shares was 10.57 per cent. 
Anatolia Agency reports that the simple interest rate increased to 69.32 per cent and the compound interest rate to 70.09 per cent. The rate of the US dollar in the Istanbul free market and the foreign exchange markets in the banks has exceeded the 1.7m Turkish lira mark.

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