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TURKEY


 

 
Key Economic Data 
 
  2002 2001 2000 Ranking(2002)
GDP
Millions of US $ 182,848 147,700 199,300 24
         
GNI per capita
 US $ 2,500 2,530 3,080 95
Ranking is given out of 208 nations - (data from the World Bank)

Books on Turkey

REPUBLICAN REFERENCE

Area (sq.km) 
780,580

Population 
68,109,469

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: 085 - (01/06/04)

The Turks are turning an important corner. They are recovering from a grave financial crisis in 2001. Inflation, regularly at over 70% annually, is now in single figures for the first time since 1972. 
A proclivity to inflation has been built into the Turkish economy for a long time, the downside of having a strong secular state, a remarkable achievement for an Islamic country. For the state can simply print money, an irresistible temptation. There are naturally problems aplenty and any number of calls on the purse. Print money and they seem to be solved!
Of course they never are. 

The revolution may be happening
The Turks are Muslims and probably need for the moment a Muslim believer to lead them. They have one in Premier Recep Erdogan, leader of the Islamicist Justice and Development Party, AKP.
The Turks have long aspired to join the EU. Brussels and responsible European leaders are loath to dissuade them because they are aware that the prospect is having a wholesome effect, promoting a veritable civil rights revolution. The Turks are turning over a new leaf.
The fact that the secular arm of the Turkish state, the army and security services, have long been down on fervent Islam is one reason no doubt why the present ruling party is keen to foster a new regime of human rights. They were on the receiving end of abuses in them for decades, several predecessors as Islamicist parties having been banned.
The real test is how they handle the problem of the Kurds, who number 13 million. In late April the European Commission warned Ankara that its decision to keep a former Nobel peace prize nominee, Leyla Zana, and three other Kurdish MPs in jail could set back its membership chances, due for consideration in December's EU summit. The Ankara state security council confirmed lengthy sentences for them, delivered originally in 1994, in April.
The four are accused of links with the banned Kurdish Workers' Party (KKP). It has ceased to be a major force of late, as the success of Kurdish enclaves in Iraq under US tutelage has been working in favour of moderation. 

Kurdish Iraq
Meanwhile as June 31st approaches, the date when an Iraqi administration is due to take over in Baghdad, the Turkish government and the Turkish army, which is another power centre in many policy areas, are clearly watching what dispositions may be made for the Kurds in Northern Iraq. This has been the most stable and relatively trouble-free area of the country since the invasion and the Kurds have 'de facto' been governing themselves, supported by a well armed, trained and highly motivated force of 60,000 fighters.
The Turks, who have for years been struggling and often fighting with the substantial Kurdish minority in the east of Turkey are, extremely concerned that if the Iraqi Kurds are given a large measure of autonomy, that this will reactivate the Kurds on their side of the border. Military intervention has always been on the cards if the outcome is felt by Turkey to be against their national interest.
This is yet another seemingly intractable problem for post-independence Iraq just as the whole Kurdish problem is one that will be squarely on the table in Turkey's negotiations to join the EU.
The AKP government scored a big plus by backing a UN plan to settle the 30-year old partition of Cyprus. The Turkish Cypriots overwhelmingly endorsed it in a recent referendum, while the Greek Cypriots just as overwhelmingly rejected it. The Turks are certainly improving their prospects of joining the EU ahead of the vital December meeting. But they will need to show more flexibility in the Kurdish Question.

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AUTOMOBILES

Car sales higher than EU


Turkey surpasses the automobile sales of eight European countries, Austria, Denmark, Finland, Greece, Ireland, Luxemburg, Portugal and Sweden, with record sales in the first quarter of the year. When sales reached 95,395 units between January and March, Turkey took first place among 27 European countries with a 368.7% increase. In the same period in 2003, Turkey was only ahead of Luxemburg in automobile sales, New Europe reported. 

Toyota's Turkish unit to roll out new Corolla Verso MPV

TMMT, the Turkish unit of Japanese carmaker Toyota, celebrated the start of mass production of the all-new Corolla Verso MPV recently, New Europe reported. 
On an annual basis, the production capacity has surged to 150,000 units from 10,000 units. It is expected that employment at TMMT will also rise from 2,600 people to 3,050 by June 2004.
The total investment of TMMT's is 700m Turkish liras. TMMT will now produce three body types of the Corolla which are sedan, station wagon and Verso. Corolla Verso is designed in Europe.
President and CEO of Toyota Motor Europe Dr Shuhei Toyoda said: "Toyota is very proud of the expansion of its plant in Turkey. Not only does the increased investment in TMMT reflect our belief in Turkey as a valuable economic and business partner, but it also highlights the hard work and dedication of the entire TMMT staff. TMMT now serves as the sole production site worldwide for the Corolla Verso."
Toyota expects to sell 62,000 units of the new seven-seater Corolla Verso in Europe this year, with sales beginning in May. With the addition of the new Corolla Verso, all Corolla body types are now manufactured and designed in Europe, as Toyota Motor Manufacturing UK (TMUK) manufactures the Corolla Hatchback.

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CREDIT RATINGS

Fitch assigns Sekerbank rating

Fitch Ratings, an international rating agency, assigned Turkey's Sekerbank long-term foreign and local currency ratings of B- (B minus). Issuing a statement, the agency said the outlook on all long-term ratings was stable. It stressed that the rating of B- reflected Sekerbank's strong core funding and initiation of a corporate restructuring designed to enhance future performance, New Europe reported.

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ENERGY

Denmark invests in energy

Prince Joachim of Denmark and Turkish State Minister Kursad Tuzmen recently inaugurated the Danish-Turkish Business Forum in Ankara, Anadolu news agency reported. 
Tuzmen said Turkey can become one of the powerful economies by 2023. He noted that the Turkish government is quite attentive to the investment environment and that there are attractive investment opportunities for foreigners in Turkey. Bilateral trade volume between the two countries amounted to €700m in 2003, which Tuzmen believes it is less than the potential volume.

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FOOD & DRINK

Pamukkale boosts wine exports to Europe

Pamukkale Wine industry and Trade Corp, a Turkish wine production company in Aegean Denizli's province, exports 750,000 litres of wine to European countries annually, Yasin Tokat, the chairman of the executive board of the company said, Anadolu News Agency reported.
Tokat said that Pamukkale wines would initially become a European trademark and then a world trademark. He added that his company was exporting 750,000 litres of wine to many European countries like France and Germany, The Netherlands, Denmark and Austria. Tokat said that Pamukkale was providing Turkey with US$5m of foreign exchange income through its exports. The industry chief further revealed that Turkish wines would be seen in many world countries soon.

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FOREIGN ECONOMIC COOPERATION

Trade chief departs for Astana

New Europe has reported that Turkish Foreign Trade Undersecretary Tuncer Kayalar left for Kazakstan recently to hold a series of official meetings and to inaugurate the Turkbuild Construction and Construction Equipment Fair. According to the local press, 61 Turkish firms were to take part in the fair. During his visit, Kayalar was scheduled to meet with Turkish trade consultants in the Russian Federation, Kazakstan, Azerbaijan, Turkmenistan, Uzbekistan and Kyrgyzstan in order to assess Turkey's commercial and economic policies about the region. Kayalar was also scheduled to meet with officials of Kyrgyz-Turkish Businessmen's Association. 
On the agenda were ways to increase mutual trade with the regional countries, potential sectors, marketing strategies about these sectors, transportation, banking, mutual investments and construction.

Turkey and Germany team up

The Turkish-German Chamber of Commerce and Industry, which was set up under the initiative of the Union of Turkish Chambers and Commodity Exchanges (TOBB) and the Association of German Chambers of Industry and Commerce (DIHK), was opened in Cologne, Germany on April 27th, New Europe reported recently. 
The chamber which was set up to further improve economic relations between Turkey and Germany will support cooperation and investment activities of private sector organisations of the two countries. Chairman of the chamber, Kemal Sahin, held a press conference at the Marmara Hotel in Istanbul recently, where he noted that Germany was the most important foreign trade partner of Turkey.

Turkish minister, Iraqi businessmen delegation discuss boosting trade, ties

Turkish State Minister, Kursad Tuzmen, received the Association of Iraqi Businessmen Chairman, Thameer Sheikly, and, accompanying delegation recently, Anatolia News Agency reported.
Stressing that they aimed to increase trade volume between Turkey and Iraq, Tuzmen said that they would do their utmost to help Iraqi people.
Noting that despite all the problems, Turkey's exports to Iraq amounted to nearly US$580m in four months, he said that they could reach US$1.8bn of exports to Iraq at the end of 2004.
The Association of Iraqi Businessmen Chairman, Thameer Sheikly, said that he was also accompanied by representatives of Iraqi contracting services companies in his visit to Turkey, stating that they held meetings with representatives of Turkish contracting services companies.
Sheikly said that Turkish and Iraqi companies could offer their bids together for tenders in the process of reconstruction in Iraq and noted that there were many projects in Iraq. Stating that they needed Turkish companies in those projects, Sheikly said that they were paying this visit to Turkey to start lasting cooperation between the two countries. He added that they wanted to make good use of experience and knowledge of Turkish companies.

Turkey, Kazakstan sign memorandum after economic meetings

Turkey and Kazakstan signed a memorandum of understanding regarding third term Joint Economic Commission (JEC) meetings, Anatolia News Agency reported.
Turkish State Minister, Mehmet Aydin, and Kazak Education and Science Minister, Zhaskbey Kulekeyev, signed the memorandum of understanding.
Speaking at the signing ceremony, Aydin said countries sign cooperation protocols on economy within globalization process aiming to increase their power and roles, stating that Turkey attributed importance to cooperation with Kazakstan in this respect. 
Aydin said both the government and private sector would extend necessary efforts to improve cooperation. "We are ready to overcome every difficulty to put the protocol into practice," Aydin said. Kulekeyev said that trade volume between the two countries failed to reflect the real potential, stressing that a long term economic cooperation programme was signed between the two countries. 
Kulekeyev said a joint highway transportation company was envisaged to be set up to strengthen transportation, and noted that both countries would inform each other on the regulations and statistical data. 
Kulekeyev said they supported the Baku-Tbilisi-Ceyhan project, and noted that this project would further improve bilateral relations. Stressing that the two countries could unite experiences for use of nuclear energy for peaceful purposes, Kulekeyev said Turkey and Kazakstan could also cooperate on rational use of water resources. 

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FOREIGN LOANS & AID

World Bank donates 460m dollars to Turkish Justice Ministry

An agreement on a US$460m donation by the World Bank under its technical support to the Turkish Ministry of Justice was signed recently, Anatolia News Agency reported.
Issuing a statement, the Turkish Treasury Under secretariat said that the accord had been reached with the World Bank on extension of technical support to the Turkish Ministry of Justice for enhancement of functioning of civil and administrative courts, lessening of work burden on courts and implementation of "system of restructuring of debts through arbitration under the Execution and Bankruptcy Law."
The agreement on US$460m of Institutional Development Fund donation was signed by the Turkish Treasury and World Bank officials and took effect immediately.

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PETROCHEMICALS

Cortex signs finance deal with Saudi fund

To finance petrochemical imports Cortex Co of Turkey recently signed an agreement with Saudi Development Fund for financing export of petrochemical products, New Europe reported. 
Under the agreement, the Saudi Development Fund will extend SR 75m for financing exports of chemical products of the Saudi Arabian Basic Industries Corporation 
(SABIC) to Turkey. Director General of the Exports Programme at the Saudi Development Fund Ibrahim Al-Muflih and Olgan Zorlu, the deputy chairman of Istanbul-based Cortex signed the agreement.

Petkim sees 2004 turnover up 20%

Turkey's state-run petrochemicals firm Petkim, slated for privatisation, aims to increase its turnover in 2004 by 20% to US$860m, New Europe reported recently. Petkim general manager Mustafa Mutlu said in an interview that the firm was aiming for US$1bn in turnover next year. The firm has reported a 2003 loss of 215 trillion liras adjusted for inflation, which stood at 13.9% for wholesale prices at the end of last year. Profit in 2002 was 2.65 trillion liras. 
"Demand has been insufficient in the face of higher input costs," Mutlu said. Worldwide price rises in naphtha fuel, which Petkim import, had also hit profits. "Naphtha rose to US$370 per tonne last year and is now around US$310," he said. "For Petkim to be profitable, naphtha must be below US$220." The privatisation administration cancelled a tender for Petkim in late January after it failed to attract enough bids. The government has said it still plans to sell the firm this year. A strengthening local currency was also a drag on profits, Mutlu said, because Petkim denominates its sales in dollars. The Turkish currency has been trading at two-year highs amid confidence in the country's economic recovery.

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TRANSPORT

Enka, Bechtel sign Romanian road deal

Turkish construction group Enka Insaat has said it and US construction giant Bechtel had signed a deal on a €2.241bn motorway project in Romania, New Europe reported recently. 
The joint venture project covers a 415km (258 miles) stretch of motorway linking the Transylvanian city of Brasov to the western border with Hungary and is scheduled to be completed within 9 years, Enka said in a statement. The project would be the biggest ever infrastructure investment made in Romania since the 1989 fall of communism. Romania defended the deal in February, saying it was done transparently and did not breach the law, after reports that the European Union was looking into it. An EU Commission spokesman said at the time that the EU has been monitoring events surrounding the awarding of the contract but no official investigation was under way. Romania hopes to enter the EU in 2007. Last year, the government offered state guarantees for external credits of about US$2.5m for the project.

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