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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 

  

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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