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Books on Turkey
REPUBLICAN REFERENCE
Area (sq.km)
780,580
Population
68,109,469
Capital
Ankara
Currency
Lira
President
Ahmet Necdet Sezer
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Update No: 089 - (30/09/04)
Accord with the EU closer
The Turkish parliament convened on September 26th for an emergency debate on a
penal code reform set as a key condition by the European Union for possible
accession talks with the Muslim nation.
The lawmakers were recalled from summer recess after the government of Prime
Minister Recep Tayyip Erdogan agreed to drop a controversial plan to criminalize
adultery, ending two weeks of tension with Brussels.
Following fence-mending talks with EU Enlargement Commissioner Guenter Verheugen
in Brussels on September 24th, Erdogan said that the plans to criminalize
adultery had been abandoned and appealed for a special parliamentary session to
finish work on the penal code reform.
Verheugen, for his part, said Erdogan's assurances left "no more obstacles
on the table" ahead of the release of the October 6 progress report on
Turkey, which will form the basis for a December 17 decision by EU leaders on
whether to begin membership talks with Ankara.
Bulgarian support extended
Denying the Turks accession to the European Union would be "an
injustice" since Turkey, as a key member of NATO, has helped Governments
ensure European security for the past 50 years, Bulgarian Prime Minister Simeon
Saxe-Coburg said in interview published on September 26th.
Speaking three days before the start of his official two-day visit to Spain, the
Bulgarian leader told the Spanish daily El Pais: "To reject them would be
an injustice. The issue is whether they meet the accession criteria."
"For 50 years, Turkey has been one of the most important players in NATO.
Turkey has a role to play in Europe. It's our neighbour. How can we tell them:
You have been Europeans when you could defend us and now, no? It's
unacceptable," he added.
Bulgaria, who recently joined NATO, is itself a candidate for EU membership.
Saxe-Coburg, a former monarch who lived in exile in Spain for 55 years before
returning to his country after the fall of communism, also stressed that
Bulgaria "had been part of this (Ottoman ) empire (now Turkey) for five
centuries."
"It's a very big neighbour with a phenomenal economic potential," he
added.
French reservations
One of the remaining obstacles is that the French have substantial reservations.
Premier Jean-Pierre Raffarin in an interview with the Wall Street Journal
expressed the following query:" Do we want the river of Islam to enter the
riverbed of secularism?" He added; "It isn't the commitments made by
Turkey's Government, it's the attitudes of Turkish society……to what extent
can today's and tomorrow's governments make Turkish society embrace Europe's
human rights values?"
Raffarin's remarks unfortunately for the Turks find an echo in the Christian
Democratic opposition in Germany, whose leader, Alice Maizel, has proposed an
alternative to full membership, namely an associate status. The Turks have
firmly rejected any such idea. Chancellor Schroeder is on the other hand a
strong supporter of Turkish entry. It now looks more likely to go ahead, if at a
snails pace.
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CREDIT RATINGS
Fitch raises Turkey outlook
Fitch raised the outlook on Turkey's B+ credit rating from stable to positive,
fuelling gains on the prices for the government's international bonds, the
Financial Times reported on August 26th.
"The change in outlook reflects a combination of improving economic and
financial fundamentals, together with clearer prospects over the future of the
country's relationship with the IMF," Fitch said.
The International Monetary Fund's US$19bn loan programme to Turkey is set to
expire early next year but Turkish officials have recently indicated that the
government would remain committed to disciplined economic policy beyond the end
of the current agreement.
Turkish bonds have been volatile recently, as ratings agencies have issued
divergent views on the country's credit-worthiness.
Fitch's move still leaves its rating one notch below that of Standard &
Poor's, which surprised market's in August by raising Turkey from B+ to BB-.
However, rival agency Moody's said Turkey's credit rating was under pressure
from the country's widening current account deficit. It rates the country at B1.
S&P raises credit ratings on Turkish banks
International Rating Agency Standard & Poor's said on August 19th that it
raised its long-term counterparty credit ratings on turkey-based TC Ziraat
Bankasi AS (Ziraat), Turkiye Is Bankasi AS (Isbank), and Kobank to BB- from B+,
New Europe reported recently. The outlook on these banks is stable.
At the same time, Standard & Poor's revised its outlook on Turkiye Garanti
Bankasi AS (Garanti) and Garanti Finansal Kiralama AS (Garanti Leasing) to
positive from stable. The B long-term counterparty credit ratings on these
institutions were affirmed.
In addition, Standard & Poor's raised its public information rating on
Akbank TAS to BB-pi from Bpi. Standard & Poor's does not publish outlook
statements on pirated entities. The Bpi ratings on Yapi ve Kredi Bankasi AS and
Turkiye Vakiflar Bankasi TAO were also affirmed.
The agency said that ratings on Ziraat reflect its full ownership by the
Republic of Turkey and its importance to the banking sector as the largest bank.
The bank also operates the largest branch network, with more than 1,100 outlets.
The restructuring of Ziraat has been successful and profitability, liquidity,
and capitalisation have improved significantly over the past two years.
The bank's main challenges are to diversify its revenues, achieve better
efficiency through better automation, and increase loan leverage.
The bank's large balance sheet is characterised by the dominance of government
debt. The ratings on Ziraat will continue to depend on the creditworthiness of
its shareholder, the economic environment, and the ability of the bank's
management to make it competitive with private sector banks. The ratings on
Isbank balance the high-risk banking and economic environment in Turkey with the
bank's leading commercial position and adequate financial profile and liquidity
position.
The bank's asset quality and capitalisation are recovering fast after being
negatively affected by the economic and financial crisis. Non-performing loans
have decreased by more than 50% from its peak in 2001.
The ratings on Kobank reflect the bank's adequate financial position and
ownership structure.
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ENERGY
Russia, Turkey to further energy cooperation - Putin
Russian President, Vladimir Putin, has spoken in favour of developing and
expanding trade and economic relations between Russia and Turkey, ITAR-TASS News
Agency reported.
"We must diversify our relations. We have many directions for cooperation,
energy is only one of these directions, although a very important one,"
Putin told Turkish media on the eve of his visit to Ankara.
"We are ready to continue supplying fuel to Turkey, gas and maybe oil as
well. We are ready to consider transit of fuel to other countries via
Turkey," Putin said. "Several Russian companies are willing to take
part in large-scale projects in Turkey in the electricity sector. We are also
ready to increase machinery supply to the Turkish economy," Putin went on
to say.
"Russian companies are interested in taking part in the privatisations
process in Turkey and this is quite feasible. We may also cooperate in the
aviation and military spheres: we continue to compete for a major contract to
supply helicopters to Turkey, etc. We have many areas for joining our
efforts," he said.
"The latest examples of large-scale projects, such as the Blue Stream
[natural gas pipeline], speak for the fact that we are capable of implementing
the most grandiose, at first glance even inconceivable plans," Putin said.
"The results speak for themselves: if in 1992 trade between our two
countries amounted to about US$1.3bn, by 2003 it went up to US$6.8bn, which is
an almost six-fold increase. That's an incredible growth rate," he said.
In the first six months of 2004 trade grew by 60 per cent, this is a very good
indicator which speaks of the fact that Russia and Turkey have fabulous
cooperation prospects, Putin added.
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EU ENTRY
Brussels may begin entry talks with Turkey in 2005
Turkey will probably start formal talks on joining the European Union in 2005,
but it is likely to take at least another 10 years to complete the reforms
needed to gain membership, according to a poll, cited by Bulgarian news network
on August 12th. Analysts said the chances of accession talks opening next year
have increased significantly after Turkey's ruling centre-right AKP party
introduced a flurry of political and economic reforms over the past few months.
The mid-range of 35 forecasts in the August 9th-11th poll gave a 70% chance that
the EU will start negotiations with Turkey in 2005 compared with a 40% forecast
in the last poll in May. The reform moves have raised expectations that a
European Commission report on Turkey, to be published in October, will encourage
the EU's 25 members to decide at their December summit that talks should begin.
Although Turkey's recent moves are likely to make the EU more receptive to entry
talks, membership is still some way off. The median forecast in the survey
showed Turkey would join the EU in 2015, unchanged from the previous survey.
Turkey, a relatively poor country with a largely Muslim population of about 70m,
has made significant progress in reforming its economy since a financial crisis
in 2001 forced it to conclude a multi-billion dollar loan pact with the
International Monetary Fund.
Recent budgetary data for the first seven months of the year showed the country
was meeting targets agreed with the IMF. In addition, the IMF said in its yearly
review that macro-economic conditions were "at their best in decades"
and praised Turkey for its recent fiscal controls and efforts to curb inflation.
But it did warn risks remained for the economy, notably high debt and a wide
current account gap.
Turkey has also brought its human rights legislation, a major sticking point,
more into line with that of the EU. Merrill Lynch analyst Mehmet Simsek sees an
85% chance the EU will open accession talks with Turkey in 2005, possibly under
a proviso that talks will end if political reforms are reversed.
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FOREIGN RELATIONS
Kosovo wants to improve relations with Turkey
Metin Kilic, the undersecretary of Turkish Coordination Bureau in Kosovo, said
on August 21st that Kosovo wanted to further improve its relations with Turkey,
New Europe reported recently. In an interview with the A A, Kilic said: "Kosovar
leaders think that Turks constituted the best-educated group in Kosovar society
working in full harmony with the other groups. Kosovar people are grateful to
Turkey for its assistance during and after the crisis in Kosovo. They appreciate
that Turkey is the only country completing visa proceedings for Kosovar people
in a day. Kosovar leaders want to further improve economic and social relations
and cooperation with Turkey."
Recalling that Turkey had provided Kosovo with humanitarian aid worth of US$5bn
since 1999, Kilic said that the Turkish Peace Force made a great contribution to
efforts to provide peace and security in Kosovo.
Noting that there had still been thousands of Kosovar refugees in Turkey, Kilic
added that Turkey and Kosovo cooperated in education, culture and health.
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FREE TRADE AGREEMENT
Turkish, Syrian ministers initial free trade agreement
Turkish State Minister, Kursad Tuzmen, and the Syrian minister of trade,
Ghassan al-Rifa'i, initialled a Turkey-Syria free trade agreement on August
28th. Tuzmen said that the free trade agreement which was initialled between
Turkey and Syria was a historical chance for the two countries. The agreement
would be signed before the end of 2004 under the instructions of prime ministers
of Turkey and Syria, he noted, Anatolia News Agency reported.
Tuzmen stressed that they aimed to further develop relations with regional
countries and create the atmosphere of peace, tranquillity and stability.
"We will see that putting into practice the free trade agreement which was
initialled today will be a turning point for commercial and political relations
between Turkey and Syria," Tuzmen underlined.
The Syrian minister of trade, Ghassan al-Rifa'i, thanking organizations of
private sectors of the two countries for their contributions and constructive
attitude, said that they believed that the free trade agreement would contribute
to joint interests of Turkey and Syria. They wanted the agreement to be signed
and put into practice as soon as possible, Al-Rifa'i noted.
Stating that the two countries would also work together in three other areas,
Al-Rifa'i listed those areas as establishing border trade centres, forming free
zones and making good use of fields which would be cleared from mines for joint
projects.
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TOURISM
Vietnam, Turkey sign trade, tourism agreements
Vietnam and Turkey have signed agreements on tourism co-operation, developing
small- and medium-sized enterprises (SMEs) and trade promotion during a recent
visit to Turkey by Trade Minister, Truong Dinh Tuyen.
During the visit, Minister Tuyen and Turkish Minister of the Interior,
Abdulkadir Aksu, co-chaired a session of the Vietnam-Turkey Committee for
Economic Co-operation. They said they were pleased at the development of
bilateral economic co-operation, with two-way trade values increasing from
US$47m in 2001 to nearly US$70m in 2002, US$80m in 2003 and more than US$43m in
the first half of this year.
Discussions focused on how to promote economic, trade and investment relations
as well as co-operation in science, agriculture, transport, the textile industry
and tourism. The ministers also agreed to give top priority to promoting
co-operation in construction, developing SMEs, shipbuilding, irrigation
development, telecommunication, farm produce, food processing and energy.
Minister Tuyen attended a Vietnam-Turkey business forum in Istanbul and visited
an international trade fair in Izmir.
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