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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: 070 - (21/02/03)

The Turks have been astounded by recent developments. When Ankara asked for deployment of NATO military protection equipment, such as anti-missile weapons and the like, its proposal was rejected by three vital members of the alliance, France, Germany and Belgium, where NATO has its headquarters. The move was not really directed against Turkey, but against the US in its, in their view, over hasty drive to war. In real terms the "Patriot" anti-missile batteries are already being delivered after a bi-lateral request to the Netherlands, so this is a political spat, not a military crisis.
But the organisation's charter lays down clearly under Article Four that specific provisions should be made to anticipate the threat of an attack on any member, while Article Five has specific provisions for responding to such attack. Together they entail a mutual defence pact that has held up for over forty years; and attack on one member is an attack on all.
The French, Germans and Belgians have in choosing this very blunt method of defying Washington, thrown into question the whole basis of the alliance, even if they later back down. It will not have escaped the attention of the Turks that they are being singled out by NATO here as they are by France in the EU, its former president, Giscard d'Estaing, is adamant that the Turks are not Europeans. This is arguable of course, given the fact that only five per cent of their territory lies in Europe, suggesting otherwise. But a more tactless approach cannot be imagined.

Stakes are very high
Turkey is intimately involved in the coming conflict by reason of the Kurds, who predominate in the south-east of the country. A complex game is being played out.
The new ruling party with its Islamicist origins is immensely nervous. It wants to keep itself in the good books of the military who are the guarantee of Turkey's secular state. They have intervened to overthrow an Islamicist party - led government before.
The military have been waging a thirteen-year struggle with Kurdish separatists in the South-east, now encouraged by the existence of a semi-autonomous enclave of Kurdistan in northern Iraq, which is being protected by the US and the UN in the "no-fly zones." The Turkish military have an agenda of their own-to expand Turkey into northern Iraq and deprive a fledgling Kurdistan of the oil reserves around Mosul, indeed of its very existence if possible. Hence the refusal to put Turkish troops under the command of US generals, made recently by Washington.
The Americans are immensely keen to deploy 80,000 troops on a northern front against the Iraqi forces on the ground in the north for more reasons than one. Washington is especially concerned about the postwar settlement. The last thing it wants to see is a free-for-all in northern Iraq, with Kurds, Turks, Iraqis and Iranians jostling for control of the oil-rich territory. It needs troops on the ground as well as air power to assert its authority and make sure that its will prevails.
Once the war is over it is for certain that the US will oppose any change of borders, any attempt by the Turks to seize northern Iraqi territory or any Kurdish ambitions for a greater Kurdistan of indeed for just statehood. The situation is tangled; but a triumphant US should have the upper hand.

Propaganda opportunity missed
It is perhaps because of the uncertainties in the situation that the US and the UK are overlooking a golden opportunity to make their case for war in Iraq, the Turkish angle being paramount here. There is now a semi-autonomous Kurdistan in Northern Iraq, which is an enclave of democracy, fledgling though it may be. It is engaged in reconstruction of the shattered local economy with some success and is firmly committed to a secular path.
It is controlled by two parties, one of them, the Patriotic Union of Kurdistan, has as its leader, Barham Salah, the most articulate (in fluent English) exponent of the American case there could be, and as someone on the spot able to substantiate his claim that the US is going to take the democratic, secular path of his enclave as the model for a future Iraq. When opponents of the war in the West doubt the American intentions in this regard, Salah is the living proof of the reverse, a democracy albeit embryonic, and its leader in action. The enclave only exists because of US and UK aerial protection in the 'no-fly zones', otherwise Saddam would extinguish it in no time. Saddam has been waging a three-sided war against his own people for thirty-four years, into which the US and the world, in the shape of the UN, intervened in 1991. They could have assured the victory over Saddam by marching on Baghdad, but disastrously failed to do so when the way was open. Bush junior is determined to rectify the errors of his seniors, not just of his father, but of his secretary of state, by doing so this time and establishing a democracy in Iraq. 
The Turkish government could benefit from pointing all this out themselves, except for their fear of Kurdish secessionism. But here the new regime in Ankara is making a historic mistake. If it came out in favour of the Kurdish enclave as a haven of democracy in Iraq it would be able to sideline the hard-line separatists of Kadek, formerly known as the Kurdistan Workers Party or PWK. The menace of Turkish military action has already provoked Kadek to threaten in turn a resumption of its terror campaign, suspended under a truce for the last three years. Osman Ocalan, the brother of the group's jailed leader Abdullah Ocalan, said recently that militants would infiltrate Turkey if Turkish troops entered Northern Iraq: "If Turkey sees the issue as a vendetta and starts an annihilation war the (Ankara) government will seal its own end," said Ocalan. "The armed resistance will be carried out in the widest possible area."

Turkish presence in Iraq
Turkish troops will be going into Iraq, but as part of a US-led coalition. A deal was thrashed out in Ankara in early February whereby the Turks will be allowed to enter the Kurdish self-run areas, a perilous move by Washington that could backfire. It is a cardinal rule of peacekeeping operations that the troops involved are not participants, taking one side in the situation instinctively. A very watchful eye will be needed to be kept by the US. It was clearly prepared to agree to almost anything so long as it could have 80,000 troops deployed in the north making it a two - front war for Iraq and facilitating a pincer operation. Ankara is also to receive umpteen credits from the US in addition to its US$16bn package from the IMF.
The war is deeply unpopular in Turkey; as in the UK and other close US allies. By going along with Washington, the AKP government is raising its stock where it matters in the councils of the world's policeman. The business community is naturally right behind the war keen to obtain contracts. The end to sanctions against Iraq, obviously the first step by the UN after the war is over, should benefit Turkey enormously, having missed out on more than US$75bn in trade foregone since 1991. Nervous as everyone is at the moment, the postwar situation could be very positive for the Turks so long as they do not get embroiled in a carve-up operation in Northern Iraq to grab the Mosul and Kirkuk oilfields, a madcap scheme some hotheads are talking about. Recep Erdogan, the leader of the AKP and shortly likely to be premier, has shown restraint and moderation so far since last autumn's overwhelming electoral victory. It is hoped he will continue to do so.

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FINANCIAL NEWS

IMF warns of risks to Turkish economy

The International Monetary Fund, (IMF), worried by fiscal slippage in Turkey's economic programme, warned recently that US compensation in the event of an attack on Iraq may be insufficient to rescue the country from any renewed financial difficulties, The Financial Times reported on January 27th.
A senior IMF official, interviewed at the World Economic Forum in Davos, said that a primary fiscal surplus of revenues over expenditure before interest payments of 6.5% of Gross Domestic Product (GDP) continued to be necessary if Turkey, aided by a US$16bn (£9.8bn) loan from the IMF, was to have a good chance of securing debt sustainability.
Depending on the budget the new government is due to finalise the primary surplus, which fell short at about 4.5% last year, may also be below the required level this year.
The IMF-backed programme was going very well until the elections were called last year, said the official. But analysts say that the previous government, a coalition of three parties, loosened the purse-strings in a failed attempt to win the November 3rd election.
The ruling Justice and Development Party (AKP), elected by a landslide, was then lulled into complacency by an initially exuberant reaction from financial markets. The government may also harbour exaggerated expectations of a US bailout in the event of a war on Iraq.
The US is understood to have offered Turkey a choice of US$3bn in grants and US$10bn in loan guarantees or US$2bn in grants and US$20bn in loan guarantees.
But the IMF official warned that Turkey would not be helped by further borrowing and said that it was unclear whether US grants would be big enough to meet its eventual needs.
Some political analysts believe that the government have also been under some pressure to pursue populist economic policies to ensure the election of Recep Tayyip Erdogan, the previously banned AKP leader, who said recently that he hoped to fun for parliament in a March 9th by election.
IMF officials were due to arrive in Ankara to start technical consultations with the government. But the Fund is unlikely to release its next loan tranche of US$1.6bn before further reforms.
Apart form a tough budget for 2003, a final IMF condition requires the resolution of a dispute surrounding Panukbank, a failed bank seized by the banking regulator in June.
Pamukbank was recently returned to its former owner, pending a court decision on whether the watchdog's action was justified.

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FOREIGN LOANS

Turkish ministers, EU leader sign financial assistance programme

State Minister, Ertugrul Yalcinbayir, said on 31st January that Turkey would like the European Union (EU) to act according to the equality rule in financial assistance issue, Anatolia News Agency has reported. 
Yalcinbayir, the EU commissioner for enlargement, Guenter Verheugen, and State Minister Ali Babacan signed "2002 pre-accession financial assistance programme for Turkey" which would finance 18 projects in Turkey and which are worth 126m Euros. 
Yalcinbayir said that the cooperation between Turkey and EU should further increase and added that Turkey had requested the EU to act with the equality which was extended to other candidate countries as well. 
Recalling that Turkey acted more rapidly, confidently and entirely in implementation concerning fulfilment of political criteria, Yalcinbayir recalled that European Convention on Human Rights was signed in 1954 and said that they had always promised to fulfil political criteria in the convention. 
He added that some reservations put to the convention created many reservations and fulfilling all the provisions in convention and protocols of the convention was their target. Verheugen said that the EU was ready to give concrete support to Turkey on the reform path. 
Noting that he was pleased to sign the new assistance package with Turkish government officially, Verheugen said that Turkey was being encouraged to make more progress in Copenhagen summit. 
Verheugen said that EU was ready to give concrete support to Turkey to help those efforts and added that he was pleased that consultants would visit Turkey from EU countries for the first time in 2003 to provide consultancy concerning adjustment to EU laws.

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PRIVATISATION

Turkey to sell US$4bn in state owned companies

Turkey plans to sell off more than US$4bn in state assets this year as part of an agreed financial plan with the International Monetary Fund (IMF). Deputy Prime Minister, Abdullatif Sener, says the government expects to sell stakes in state owned industries including an oil refinery, Tupras, a petrochemicals firm, Petkim, the tobacco and alcohol monopoly, Tekel, and the national airline, Turkish Airlines. 
Turkey's US$16bn IMF loan requires the government to reduce debt by selling assets and posting a budget surplus before interest payments. Turkey has been repeatedly getting bailouts for financial crisis over the past few years but the economy is in shambles with corruption rife and inflation soaring.

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SHIPPING

Greece and Turkey agree to increase ferry services

Greece and Turkey agreed recently to increase ferry services between Greece's Aegean islands and the Turkish coast. The agreement looks at establishing a regular service from Izmir to the Aegean islands, the Greek northern port city of Thessalonica and the port of Piraeus, Athens. Greek Development Minister, Akis Tsohatzopoulos, and Turkish Tourism Minister, Gudal Aksit, signed the agreement, which also looks at promoting tourism and establishing cooperation between travel agents. Relations between traditional rivals Greece and Turkey have improved over the last few years following a mutual exchange aid in the aftermath of two earthquakes in 1999. The two neighbours have since signed trade, energy, transport and agriculture agreements.

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TRANSPORT

Turkish minister asks Syria to reduce transport transit charges

State Minister Kursat Tuzmen asked Syrian Transport Minister, Makram Ubayd, to decrease the transit transport fees and to lift the city tolls, which are important problems for Turkish exporters, Anatolia News Agency has reported.
Tuzmen met with Ubayd and explained to him the various issues which the Turkish side consider as obstacles for improving bilateral relations. 
Tuzmen said that the transport fees were high and they impeded further improvement of commercial relations, adding that the city tolls had to be lifted. 
Tuzmen said that commercial relations would further increase, adding that facilities should be provided to Turkish firms in land transportation tenders of Syria. Tuzmen said that Turkish firms had to be preferred in the tender of buying US$89m of railway cars and US$60m of locomotives. Tuzmen also demanded Syria's bringing facilities to Turkish companies regarding the tender of buying big buses and rehabilitation
tender of Al-Ladhiqiyah Port. 
Turkish-Syrian Business Council Chairman, Turgut Doyran, told the Anatolia correspondent that business connection worth of US$200-250m was made during their contacts in Syria...

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