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TURKEY


 

REPUBLICAN REFERENCE

Area (sq.km) 
770,760

Population 
66,493,970

Capital 
Ankara 

Currency 
Lira 

President 
Ahmet Necdet Sezer 

  

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: 074 - (19/06/03)

Earthquake again
Troubles do not come singly in Turkey, it appears. At a time when the Turks were smarting at the US coalition war in Iraq and its swift success an earthquake struck at the beginning of May in Bingol. The death toll among 198 students trapped in wrecked buildings was nearly one hundred.
The northern stretch of Turkey from Istanbul to the eastern mountains is an earthquake zone. Yet the authorities always seem to be caught short, short of relief supplies tents and the like. Crowds clashed with troops in the aftermath of the shock.

Iran conflict casts a shadow
Many at the beginning of the year would have expected Turkish troops to be involved in the Iraq conflict. The government was talking of putting 40-70,000 soldiers in Northern Iraq to protect Turkomans there. Some were expecting an operation against the Kurds, especially those returning to Kirkuk.
But parliament by three votes failed to pass a motion backing the war, itself intensely unpopular with the population at large. The US dropped a massive more than US$20bn credit package, and the bourse and lira plummeted. Turkey had lost out in a big way, so it seemed.
But the difficulty with credit is that you have to finance it and pay it back, at least theoretically. The economy does not necessarily benefit.
The prospect of trade opening up as UN sanctions are ended in Iraq is far more promising than US handouts. The Turks have foregone at least US$75bn in lost trade with Iraq since 1990. If only trade can resume on its old scale, then this should be a far more rewarding pick-me up than US credit. Once the current instability is overcome then Iraqi opportunities for Turkish businessmen should mount.

Kurds are the winners
The clear winners in the Iraq crisis were the Kurds. The two Kurdish enclaves are doing well under US protection and the Turks did not spoil things by showing up there, as it turns out.
The thirteen million Kurds of Turkey have been given a model of how to comport themselves - don't demand secession, set up local democratic structures and US help will be at hand, not in credits, but in concrete projects, such as building schools and hospitals. Something similar is needed for the Turkish Kurds.

Tensions at the top
The present Islamicist government is not likely to provide it, although the Kurds are after all Moslems too. The government are still reeling from their failure to secure the vital pro - war vote. The military feel particularly disenchanted, unable to deliver to their US allies in a crisis. Still, the whole affair shows that Turkey is a democracy after all.
Turkey's chief of staff, General Hilmi Ozkok, is a reasonable man, with a sense of history, a moderate, playing down differences with the government. The Justice and Development Party (AKP) is looked at askance by most of the military, the custodians since Ataturk of Turkey's secularist path. But Premier Recep Tayyip Erdogan, the former mayor of Istanbul, is another moderate. Erdogan and Ozkok should be able to keep the extremists at bay. Having asserted itself as a democracy so recently, Turkey does not want another military coup.

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ENERGY

Turkey-Greece natural gas agreement up for approval


A Bill on approval of agreement on construction of a natural gas connection between Turkey and Greece and supply of natural gas from Turkey to Greece, was presented to the Turkish parliament speaker's office recently, New Europe reported. 
The agreement, which was signed in Thessaloniki on February 23rd, 2003, aims at the realisation of Turkey-Greece Natural Gas Pipeline Project. The project foresees initially the supply of part of Greece's natural gas demand via Turkey, and to transfer natural gas in following years to southeast and central European countries via Turkey and Greece. The EU Commission supports the project for which Trans-Europe network has already disbursed €9.58m as financial support.

Turkish premier receives BP, Gasprom officials; discusses pipeline, natural gas

Prime Minister Recep Tayyip Erdogan received on 29th May the president of BP, Lord John Browne, and an accompanying delegation. Energy and Natural Resources Minister Hilmi Guler was also present in the meeting, Anatolia News Agency has reported. 
The Prime Minister's Press Centre issued a written statement on the matter, saying that the meeting was held in a friendly and warm atmosphere. 
Erdogan expressed pleasure over BP's carrying out the Baku-Tbilisi-Ceyhan Project, which was an important project for Turkey. Erdogan told the BP delegation that Turkey expected natural gas to arrive in Erzurum province for the first time in 2006, adding that Turkey would be very pleased if that date could be advanced. 
Both sides also discussed inclusion of other regional countries to the project, and they exchanged views about the activities and projects carried out by BP. Prime Minister Erdogan also received information about the exploration activities started in the Black Sea basin. 
Lord Browne said that Ceyhan would be an important energy terminal when Baku-Tbilisi-Ceyhan project was completed, adding that the burden and threat to the Straits due to tanker traffic would reduce significantly. Browne noted that Baku-Tbilisi-Ceyhan project was a model project in ecological, security and humanitarian aspects. Prime Minister Erdogan stressed that the project's reduction of pressure on the Straits was particularly important. 
Prime Minister Erdogan also received on Gazprom's Deputy Chairman Yuri Kamarrow, the company director general of Gas Export and Gazprom executive board member, Aleksander Nedvedev, and Ali Sen, the executive board chairman of Bosphorus Gas Cooperation Company, which is a partner of Gazprom in Turkey,. 
After the meeting Ali Sen said that Gazprom would do whatever was necessary to solve Turkey's problems on natural gas with Russia by peaceful means. 
Sen quoted Erdogan as saying that the agreement which was made regarding Blue Stream [litigious deal for Russia to supply gas to Turkey] should be favourable to both sides. He added that Gazprom was ready to remove those problems. 
Stating that a meeting would be held on 16th June to remove technical problems in the natural gas agreement between Turkey and Russia, Sen said that all agreements on natural gas which had earlier been signed between the two countries would be reviewed. 
Stating that they had not make any commercial agreement to go to arbitration, Kamarrow said that they wanted to sell natural gas to Turkey by taking into consideration commercial aspects. 

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FINANCIAL NEWS

Turkey urged by IMF, World Bank to implement economic programme fully

The IMF delegation headed by Juha Kakkonen, chief of the Turkish desk, has ended the fifth review of the stand-by agreement with Turkey, NTV television has reported. The delegation asserted that structural reforms were being delayed, and urged Turkey to implement the economic programme to the letter. 
The IMF delegation which left Turkey on 31st May, issued a written statement in connection with its contacts. In its statement, the IMF delegation affirmed that the targets of 5 per cent growth and 20 per cent inflation could still be achieved. The IMF team pointed out that Turkey's financial situation is under pressure, and asserted that structural reforms are being delayed in certain fields. For the current positive situation to be maintained, it says, the government must implement the economic programme to the letter. 
The statement said that the meeting of the IMF Executive Directors Council which will discuss extending a new credit tranche of US$500m to Turkey may meet before the end of June, if the government takes steps to keep the economic programme on track and speeds up the structural reforms. 
Meanwhile, State Minister, Ali Babacan, has said that there is no delay in the work being conducted by the IMF. He stressed: "What is important is not the credit; we are trying to have a reliable economy in international markets." 
Babacan said that he expected the IMF Executive Directors Council to convene by the end of June. He pointed out that legal arrangements were being made in connection with the structural reforms, and added: "We want the laws to be debated in parliament in a natural process. More sensible laws are enacted that way. It is a matter of a few weeks and that should not be a problem; we have been waiting for those laws for the past 30 or 40 years." 
In reply to a question, Babacan stated that the World Bank loan of US$1.2bn would be forthcoming once the structural reforms were completed. 
On the other hand, World Bank Vice-President Johannes Linn has said that the Turkish economy was on its way to recovery but that cautious financial policies must be pursued given the country's large debt. 
Linn held a news conference before he left Turkey at the end of a two-day visit. He said the World Bank was pleased with the introduction of the tax reform and the Public Tenders Law, but stressed that the work on social security and agricultural reform had to continue. 
Linn affirmed that in order to release two tranches totalling US$1.275bn to Turkey, the World Bank had to see the privatisation of the public banks, the more efficient functioning of the Banking Regulation and Supervision Agency, and the enactment of social security laws. He also stated that within the framework of the aid for new countries in 2004-2006, the World Bank will enable Turkey to use a new loan that may go up to US$4.5bn.

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