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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)

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: 082 - (01/03/04)

The EU beckons
The Turks are very serious about wanting to join the EU. This might to some seem a bizarre idea. Only five per cent of Turkish territory is in traditional Europe, above the Bosphorus. Historically the Turks are hardly a Western power, having occupied the Balkans for centuries with very different aspirations and ideas, notably Islamic ones.
It is really the heritage of Ataturk which is at work here. The essence of the matter is that the Turks know that they would do a lot better inside the EU than outside. They have a low opinion of the Arab world, even without any animosity to the Arabs personally. They have a regard only for the Israelis amongst neighbours and near neighbours to the south. It is to the north that they look for salvation.

Schroeder comes to town after Merkel
The key figure for the Turks will always be the German chancellor, the leader of the country that really counts in the affair. With two and a half million Turks already living in Germany, it is clearly the tolerance level of the Germans that is the sticking point. There are 3.8 million Turks in the EU in all.
Gerhard Schroeder came to Ankara in late February. He did so just after a visit by Angela Merkel, the woman who wants his job, heading, as she does, the Christian Democrats. She proposed that the Turks should drop the idea of joining the EU in favour of having a 'special relationship' with it. But the Turkish premier, Recep Tayyip Erdogan, rejected the idea.
Schroeder had a delicate role to play, arriving after considerable turmoil in relations between the Turks and the West. He knows that the opposition in Germany is hostile to the idea of Turkish entry, as is the bulk of French opinion.
The EU is to decide in December whether to admit Turkey to negotiations for entry. Schroeder's position is in favour of doing so, so long as the Turks are able to meet the 'Copenhagen criteria' on democracy, worked out for candidate countries several years ago. 
There is every incentive for them to do so. Perhaps the strongest reason for the Europeans to keep up the dialogue with Turkey is that they can have an influence for the better in the country, whereas nobody else can, to the same extent, not even the Americans.
One very positive sign is that German public opinion has undergone a sea-change on the issue in the last few years. Today 56% of Germans in polls are in favour of talks with the Turks on accession, up from 31% two years ago. 

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AUTOMOBILES

Toyota to boost production at Turkey plant, hire 400 new staff

Japan's Toyota Motor Corp said recently its subsidiary in Turkey will increase its annual production capacity to 150,000 units, up from 100,000 units, at its Adapazari plant for the start of production of the all-new Toyota Corolla Verso, reported New Europe recently. 
To support this growth, Toyota will employ 400 new staff by August to bring the number of employees in Turkey to 3,000.
Toyota said investment for the production capacity increase and the production of the new Corolla Verso will rise by €180m (US $224.4m) to reach a total of €700m (US $872.6m).
The Japanese automaker expects to sell 62,000 units of the new 7-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) builds the Corolla Hatchback. Toyota said it sold 834,661 vehicles in europe in 2003, including 21,651 Lexus cars, with a market share of 4.7%.

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ENERGY

Turkey backs US$1.3bn sell-off of Tupras oil

Turkey's privatisation board recently approved the US$1.3bn sale of a controlling stake in state oil refiner Tupras, giving fresh momentum to a long-faltering privatisation programme, Reuters from Istanbul reported.
A labour union pledged to seek cancellation of the deal, criticised by rating agencies and analysts who have said it would add to the heavy debt load of the company behind the winning bid, Russia's Tatneft.
Kemal Unakitan, finance minister, said contract talks would begin with winning bidder Efremov Kautschuk GmbH, a German company representing the interests of Tatneft, once Turkey's Official Gazette had published the board's ruling. Rating agencies Fitch and Standard & Poor's put Tatneft on Credit Watch in January.
Efremov Kautschuk won the tender in a joint bid with Turkey's Zorlu Group, which has industrial and financial interests.
Turkey's privatisation programme is an important element of its US$19bn loan accord with the International Monetary Fund and analysts said the recent announcement gave a boost to the slow-moving sell-off process. "The Tupras sale is a landmark in that it would provide the government with the necessary impulse to push forward with the long ailing sell-off process," said Simon Quijano-Evans at Bank Austria Creditanstalt.
Last year Turkey carried out sell-offs worth US$893m, falling well short of a US$4bn target. Turkey said in January that it was looking to raise an estimated TL 1,600,000bn (US$1.2bn) from privatisations in 2004.
"Although the news should underpin asset prices, markets will want to see the sale go through fully before any euphoria sets in, especially taking into account last year's Petkim and Tekel debacles," Mr Quijano-Evans said.
The privatisation Administration said in January it had cancelled a tender for state-run petrochemicals company Petkim after it failed to attract enough bids.

Turkish energy minister, Azeri president to sign accord on Baku-Ceyhan pipeline

Energy and Natural Resources Minister, Hilmi Guler, left for Azerbaijani capital Baku recently to sign a final agreement about the Baku-Tbilisi-Ceyhan crude oil pipeline project after provision of necessary finance, Anatolia News Agency reported. 
Releasing a written statement, the Ministry of Energy and Natural Resources said that Guler and accompanying delegation went to Baku as the guest of President Ilham Aliyev of Azerbaijan and attended a signing ceremony. 
According to project finance plan, 70 per cent of estimated cost will be provided by international finance organizations and companies will meet the remaining 30 per cent. 
Nearly 20 international creditor organizations including World Bank, International Finance Corporation (IFC), US Eximbank and European Bank of Reconstruction and Development (EBRD), will approve loans to finance Baku-Tbilisi-Ceyhan crude oil pipeline project. 
After finalization of financing procedures, President Aliyev of Azerbaijan and Energy and Natural Resources, Minister Guler, will sign the final agreement. 
The 1,760-kilometre pipeline will transport Caspian basin oil to the Mediterranean. It has planned to start oil transportation in the first months of 2005. 
The Baku-Tbilisi-Ceyhan crude oil pipeline project will have an annual capacity of nearly 50 million tons. 1,070-kilometre part of the pipeline will be constructed in Turkey and cost about 1.4bn US dollars.

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FOREIGN ECONOMIC RELATIONS

Turkey and Syria to increase annual trade

Turkey and Syria aim to triple their annual trade volume to US$3bn, the head of a Turkish business delegation said after meeting with visiting Syrian President, Bashar Assad. "The amount of trade between our two countries does not exceed US$1bn, I think that it could go up to US$3bn thanks to our common efforts," Rifat Hisarciklioglu, head of the Union of Turkish Chambers of Commerce and Trade Associations, said in Istanbul, New Europe reported recently. 
Hisarciklioglu said Assad, along with his Vice Minister for Economy, Ghassan Abash, had met with the businessmen, promising them he would lower barriers preventing them from investing in and exporting to Syria. "We were delighted to learn that all the bureaucratic difficulties will from here on out be dealt with by one centre, and to learn that Turkish businesses will receive priority concerning state contracts," he added. "We are ready to provide every kind of service," Turkish Foreign Minister Kursad Tuzman told the Syrian leader at the Istanbul Stock Exchange on the third and final day of his state visit to Turkey, the first by a Syrian president.

Turkish trade minister notes contribution to regional economic stability

Industry and Trade Minister, Ali Coskun, said recently that Turkey saw Economic Cooperation Organization (ECO) as a multilateral economic cooperation platform which would contribute to economic stability and welfare in the region, Anatolia News Agency reported. 
The first meeting of ECO industry ministers started in Iranian capital Tehran. 
Speaking at the meeting, Coskun said that economic, commercial, social and political changes that occurred in the world due to globalisation had increased importance of regional cooperation. 
Coskun noted that ECO, which had been established to encourage economic, commercial, technical and cultural cooperation in order to ensure sustainable socioeconomic development in the region, had become a regional cooperation organization covering 7 million kilometres of an area in which 350 million people were living and having rich natural resources and human resources. 
ECO had become one of the most important strategic belts in the world in regard to distribution of not only geopolitical, but also economic and political resources, Coskun stressed. Coskun said that increasing trade among member countries and with other countries was of great importance. All cooperation possibilities and industrial investment opportunities among regional countries should be seized. 
Coskun said that ECO Chamber of Commerce and Industry should work actively in order to establish and put into practice institutional mechanisms. Therefore, member countries foresaw that ECO Chamber of Commerce and Industry should have a permanent secretariat. 
He added that the Union of Chambers and Commodity Exchanges of Turkey (TOBB) had proposed on 12 October 2002 to host the permanent secretariat in ECO Ministerial Meeting held in Istanbul. Reiterating TOBB's proposal, Coskun stressed that Turkey was ready to do anything to form and function the permanent secretariat and said that Turkey expected support of member countries. 
Coskun said that the government had launched a comprehensive programme to lift obstacles before Turkish and foreign investors, to better investment environment, and to offer attractive opportunities to direct foreign investors. The government had put into practice many new laws to reach that target, Coskun stated. Coskun noted that Turkey had become an attractive country for investments thanks to their efforts and invited investors in ECO member countries to Turkey. 
Iranian President, Mohammad Khatami, received Coskun and industry ministers of other participating countries. ECO, which as established by Turkey, Iran and Pakistan, as a supra-governmental organization, has become an organization comprised of ten members as Afghanistan, Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan joined the organization.

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FOREIGN LOANS

World Bank supports SME export finance in Turkey

The World's Bank's board of executive directors approved last week a US$303.1m Export Finance Intermediation Loan II (EFIL II) for Turkey, New Europe reported.
In a statement, the World Bank said, "The main objective of the project is to follow through on the achievement of the predecessor, EFIL I project, that was successfully implemented during 1999-2003 and continues to serve as a catalyst to support export and real sector growth in Turkey. To this end, the project will provide medium and long-term working capital and investment finance to Turkish exporting enterprises. One other main benefit of the project will be fast private sector recovery and job creation, supported by a healthier and more developed financial system."
Commenting on the decision Andrew Vorkink, World Bank country director for Turkey, said, "The government's request for an EFIL II credit line for exporters is very timely. The project will support the current upward momentum in export performance by both small and medium enterprises and, by extension, promote further general economic growth in Turkey." 
The credit line is to go to Turkish Industrial Development Bank - Turkiye Sinai ve Kalkinma Bankasi (TSKB), with a government guarantee. The Export Finance Intermediation Loan (EFIL II) has a maturity of 16 years, including a 6-year grace period.

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TRANSPORT

Greek, Turkish ministers sign memo on motorway

Turkey and Greece signed a memorandum of understanding for Thessaloniki-Istanbul European Corridor concerning the motorway between Igoumenitsa-Ipsala-Istanbul, Anatolia News Agency reported recently. 
Transport Minister, Binali Yildirim, and Greek Transport and Communications Minister, Khristos Verelis, signed the memorandum of understanding. 
Delivering a speech at the signing ceremony, Yildirim said that the memorandum of understanding would contribute to transportation on the motorway between Igoumenitsa-Ipsala-Istanbul. He added that it would also increase transit passages from Europe via Turkey to the Far East. 
Yildirim said that this cooperation would also contribute to railway transportation and development of infrastructure standards. 
Stating that Verelis and he also held meetings on telecommunications, Yildirim said that meetings, which have been started recently between Telekom and Greece's telecommunication organization OTE, are continuing. 
Yildirim said that cooperation in transportation and communication between the two countries would have positive effects to improvement of Turkish-Greek relations. 
Upon questions, Yildirim said that 100 km of Ipsala-Istanbul motorway was completed and noted that construction on 70 km of the motorway continued. 
Verelis said that a big part of motorway in Greece would be completed by the end of 2006 and stated that two committees were set up to carry out technical studies for this joint initiative. 

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