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Books on Turkey
REPUBLICAN REFERENCE
Area (sq.km)
780,580
Population
68,893,918
Capital
Ankara
Currency
Lira
President
Ahmet Necdet Sezer
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Update No: 099 - (26/07/05)
Turks respond with real empathy and rally cry after the
attacks on London
Following July 7th's deadly terrorist attacks in London, Turkish Prime Minister,
Recep Tayyip Erdogan, who was attending a conference in Sun Valley, Idaho, in
the US, stated that he condemned the attacks. "I would like to express my
great sorrow over these attacks," Erdogan told a press conference. "As
you may recall, I emphasized global terrorism recently and made warnings. These
attacks are an offence against all of humanity. As the prime minister and son of
a country which has lost 40,000 citizens to terrorism, this is deeply
saddening."
Erdogan stated that Turkey had long stressed how terrorism has no particular
religion, language, race or nation and that it would continue to point this out.
He added that the entire world should come together to work to eradicate the
roots of terrorism.
As it so happens, Istanbul was the site of a terrorist attack in October 2003 on
the British consulate there, which killed the consul, Roger Short, and over 30
others. It can now be seen as a prelude to the London outrages. It coincided
with attacks on American commercial targets in the city.
Following the terror attacks in London, security levels at Istanbul's Ataturk
Airport were raised to their highest level. Metal detectors at the entrances to
the airport are on their most sensitive settings, and police dogs are now being
used to sniff passengers' baggage. Cars entering the premises are also now being
checked underneath with mirrors for possible explosives.
Erdogan said "We have always stressed that the fight against terror is
something we all have to join into together. I believe especially that our
mutual intelligence organizations need to pool their information and knowledge
to be better able to support one another against attacks of this kind..."
The EU - whither and whether?
Other events in Europe have also been seen as negative by Ankara, namely the
recent French and Dutch rejection of the EU constitution. This was widely
thought to have been a veiled No to Turkish entry, for which negotiations are
due to be begun on October 3rd. Given that Tony Blair is now in the EU
presidential chair until the New Year and is an enthusiastic supporter of
Turkey's bid for entry, they should go ahead.
But will they ever amount to much? The possible next leaders of France and
Germany seem to be agreed that Turkey will not become a full member, but be
allowed some association.
Speaking at the opening of the Eight Eurasia Economy Summit, European Union
Commission Turkey Delegation head Hansjoerg Kretschmer tried to put an
optimistic spin on it all. He emphasized that Turkey has made great progress in
recent years, adding that giving Ankara a date for EU membership negotiations
was a key decision.
Kretschmer stated that the nation's economy is getting better, with 10% growth
and unprecedented low inflation. He also stressed that in order to boost
domestic and foreign investment, political and macro-economic stability should
be maintained. In his speech, Kretschmer also urged an expanded role for women
in Turkish politics, as in other European countries. Also, in order to eliminate
disparities in education, all girls should be sent to school, added Kretschmer.
EU summit statement skips reference to Turkey's entry talks
The situation is still highly ambiguous. A statement by European Union
leaders issued on June 17th omitted all references to the launch of planned
membership negotiations with Turkey in October. Instead, the draft included a
short sentence pointing to the conclusions of a EU summit last year, which sets
October 3rd date for the start of Turkish talks, Deutsche Presse-Agentur (dpa)
reported. The draft stated that such pledges need to be implemented fully.
The summit statement also made no mention of Croatia's bid to join the EU.
Negotiations with Zagreb were put on hold last March, pending Croatia's full
cooperation with the Hague-based international war crimes tribunal on the former
Yugoslavia. This had been clearly predicted following warnings to Zagreb.
EU's Luxembourg diplomats said French and Dutch voters had kept the passage on
enlargement brief because it was not a subject for discussion at a meeting
dominated by the EU budget and the fate of the bloc's constitution following its
rejection. They insisted that the move did not signal a change in the EU's
policy towards Turkey, adding that promises made last year would be respected.
However, several EU countries have pointed out that the EU, which took in 10 new
member states last year, must now slow down expansion. According to diplomats,
talks with Turkey would probably start on schedule; but even optimists stated
the talks could last up to 15 years. Opposition to further enlargement and
especially Turkish entry into the EU is believed to be one of the factors, which
contributed to the French and Dutch rejection of the constitution. Opinion polls
show the issue is also unpopular in other EU states.
Meanwhile, EU newcomer Poland has launched a task force focusing on the future
enlargement of the 25 members EU to include Turkey and Ukraine, Poland's
Rzeczpospolita daily reported on June 17th. Polish Deputy Foreign Minister Piotr
Switalski recently announced that Warsaw would support Ankara but added that it
would be quite difficult to accept Turkey and reject Ukraine.
A Polish foreign ministry official quoted by Rzeczpospolita admitted that
despite Poland's continued support for Turkey's EU bid, relations with Ankara
became bitter after the Polish parliament passed a resolution honouring some
1.2-1.5 million ethnic Armenians who perished in 1915-23 under Ottoman Turk rule
as victims of genocide. Turkey has repeatedly denied the deaths constitute
crimes against humanity and vehemently criticised Poland and other European
states that passed similar resolutions. It also insists the events are being
used as a black mark against its bid for EU entry.
Ankara is to begin membership negotiations with the bloc in October. However, EU
officials have consistently warned that accession talks for the near 70
million-strong country could last well over a decade.
Kilci says Turkey will complete privatisation process this year
The selling off of major ticket items in Turkey's privatisation process will
be concluded by the end of the year, Metin Kilci, the director of the
Privatisation Board (OIB) announced on May 11th, Anatolia News Agency reported.
He said they aim to complete the privatisation processes of the controversial
sale of Turkish Telecom, steel producer, Erdemir, and oil refiner, Tupras, by
the end of this year. Kilci said the problems in the privatisation of Turkish
Telecom were not due to the withdrawal of the Koc-Sabanci consortium and the
Soanish Telefonica. Kilci added that the changing of the contract conditions for
mobile phone operator, Avea, which is causing concern among bidders for the Turk
Telekom privatisation was not on the agenda.
According to Kilci, this will not have a negative impact on the process. "Avea
is not the only reason for the withdrawal from the tender by Spain's Telefonica.
We give information to tender participants on Avea. There will be a decision on
a partnership with Avea after the privatisation. There will be no surprises
regarding the ownership of Avea," Kilci said in an interview with the
financial group, CNBC-e TV.
In response to criticisms of selling off profitable state companies, Kilci said
that was very natural. According to him, the privatisation of 46.12% of the
public shares of the iron and steel producer, Eregli Demir Celik, was justified
and that the process of privatisation would start in the near future. The
evaluation process at Tupras is continuing and bidders are expected to apply for
pre-qualification for 51% of the oil refiner until June 13th, Kilci said. He
added that based on current market capitalisation, Erdemir was valued at more
than 2.16bn Euro and Tupras at 2.8bn Euro.
Seven to eight companies in the energy sector would also be privatised, Kilci
said, adding that the treasury had benefited to the tune of one billion Euro
from sell offs in the first quarter of this year. "We are planning to
increase this resource for the treasury by the end of the year," he said.
No new companies are added to the privatisation portfolio this year but Kilci
said they were working on sugar beet refiners, port authorities and insurance
firm Basak Sigorta. Restructuring of state tobacco and cigarette concern TEKEL
is under way, and a new tender could take place in 2006, if not this year, the
OIB chief said.
IMF agrees to release second loan tranche to Turkey
The International Monetary Fund (IMF) recently gave, in principle, approval
for the latest tranche in a US$10bn loan to be handed over to the Turkish
government. IMF Turkey chief Lorenzo Giorgianni commended the Turkish
government's economic efforts in the direction of economic health after the deep
recession of 2001, which was generated by a political crisis resulting in
devaluation and banking and corporate bankruptcies.
After the recent talks with Turkish economy officials, Giorgianni said the IMF
was ready to release the 873.5m Euro if the Turkish parliament passes new bank
and tax laws by the end of the month, as promised by Economy Minister Ali
Babacan. Turkey is to pass legislation on banking and social security reform
before parliament goes into its summer recess at the end of June.
Babacan recently assured that the legislation, which has been in the works for
months and is essential for 800m Euro of new IMF funding to be released, would
be passed by parliament by the end of June. He stated that parliament is working
very hard to pass these laws. "We remain very encouraged with the direction
of policies and the prospects for the economy.
This government's programme has produced the best economic performance in a
generation," Giorgianni told Anadolu news agency, adding: "Looking
ahead we agreed that continued prudent fiscal and monetary policy implementation
is essential to allow further reductions in inflation and interest rates,
continued robust growth and progress in reducing the unemployment rate."
Giorgianni said that in addition to discussions on the need for new banking and
tax laws, his team had discussed in length with Turkish officials the need to
broaden the tax base, and to increase tax and social security compliance. As
part of the social security reforms, the government has withdrawn from an
amnesty for debts of social security payments owned by Turkish companies that
would cost the treasury billions of lira. So the government has decided to adopt
measures that would be in conformity with social and pension laws.
The overhaul of social security, pensions and taxation to ensure compliance and
to widen the tax base so that Turkey's high tax rates can be reduced in due
course is essential for a wider restructuring of the economy.
Giorgianni said that if the legislation were passed then he would advise to
release the fund next month. If the legislation is not passed then it could
prevent the release of the 800m tranche.
Babacan said "strategic future plans" for two state-owned banks were
almost completed. The two, Halkbank and Ziraat Bank, were big casualties of the
2001 crisis. Turkey has recently posted extremely impressive economic indicators
with growth up 6.3 per cent last year and inflation down to single figures after
years of runaway prices. Foreign investment has started to flow in quickly and
interest rates have dropped considerably. The impressive results are in part
thanks to Turkey's strict adherence to policies laid down by the IMF and World
Bank, which between them have lent Turkey around US$35bn since 1999.
Italian businessmen home in on Izmir investments
An Italian business delegation led by five government officials and 28
businessmen from Italy's Anacona province visited Izmir to discuss investments
and explore ways to cooperate with Turkey. A sister-city partnership was
recently signed between Anacona Governor Enzo Giancarli and Izmir's Mayor Aziz
Kocaoglu. Giancarli told Anatolia news agency that his group intends to boost
cultural and commercial relations between Anacona and Izmir as both areas are
similar.
The Italian official stressed more on the commercial relations and even
highlighted that currently Indesit and Faber, two leading companies from Anacona
are operating in the Aegean region. Giancarli said, "We have signed an
important protocol with Mayor Kocaoglu. This protocol is no ordinary protocol.
We will develop projects and implement them soon." Currently there are 250
major Italian investors in Turkey.
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AVIATION
Enka to build terminal at Moscow's Sheremetyevo airport
Turkish group Enka has agreed with Russia's Aeroflot to build an additional
terminal called Sheremetyevo-3 at Moscow's Sheremetyevo Airport by late 2007,
Aeroflot spokesperson, Irina Dannenberg, said, Anadolu News Agency reported on
June 20th.
Dannenberg refused to comment on the investment of the project but Kommersant
daily reported that the price tag will reach 400m Euro. State-controlled
Sheremetyevo has been Moscow's main international airport for decades but has
faced tougher competition from the privately run Domodedovo airport in recent
years.
THY and ST aerospace sign maintenance contract
Turkish Airlines (THY) and Singapore Technologies Aerospace (ST Aerospace)
signed a letter of intent to cooperate on the maintenance and repair of
passenger jets at Istanbul's Sabiha Goksen Airport by 2007, Anatolia News Agency
reported recently.
THY and ST Aerospace have a 50-50 share in the joint venture. The companies are
planning to finish the construction in a year with a 230m Euro investment. The
facility is expected to serve planes from Europe, Central Asia and Middle East.
The letter was signed between THY board Chairman Candan Karlikekin and general
manager Temel Kotil and ST Aerospace Chairman Tay Kok Kiang. ST Aerospace is a
leading independent third-party aircraft maintenance, repair, overhaul and
engineering specialist, with offices and facilities located in key aviation hubs
all over the world.
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DEFENCE
Turkey to buy 17 Sikorsky helicopters
The Turkish defence industry managing committee has decided to purchase 17
Seahawk naval helicopters including replacement parts and related equipment for
its navy from United Technologies Corp's Sikorsky Aircraft unit, Defence
Minister, Vecdi Gonul, announced recently, Anatolia News Agency reported.
The deal involves the initial purchase of 12 Seahawks with an option for five
more according to the decision, Gonul said, but he refused to reveal any
financial terms of the deal. The Turkish armed forces already have eight S-70B
Seahawk helicopters. Gonul announced earlier that the ministry had completed the
works for determining the needs of the Turkish Armed Forces for the following 10
years. The projects will be based on the use of national industrial
opportunities and increasing the domestic added value to the highest level,
Gonul elaborated. 20 fire extinguishing helicopters will also be purchased for
the forest general directorate.
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FOREIGN ECONOMIC COOPERATION
Vietnam, Turkey sign cooperation protocol
Vietnamese Foreign Minister, Nguyen Dy Nien, and Turkish Deputy Prime Minister
and Foreign Minister, Abdullah Gul, met recently to discuss a number of key
issues, New Europe reported.
The minister signed a protocol on cooperation and on this occasion they also
inaugurated the Vietnamese embassy in Ankara. Nien was on a three-day official
visit to Turkey, he also met with Interior Minister and Chairman of the Turkish
subcommittee for Turkey-Vietnam Joint Committee, Abdulkadir Aksu, Culture and
Tourism Minister, Atilla Koc, Industry and Trade Minister, Ali Coskun, and
Minister of State in Charge of Trade, Kusad Tuzmen. Nien discussed with the
Turkish leaders issues affecting the international arena, concrete measures to
boost bilateral ties, including the early conclusion of bilateral negotiations
for Vietnam's joining the WTO.
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FOREIGN ECONOMIC RELATIONS
Ankara, Bangkok to boost economic ties
Thai Foreign Minister, Kantathi Suphamongkhon, accompanied by a delegation,
recently attended the luncheon hosted by the Union of Chambers and Commodity
Exchanges of Turkey (TOBB). Prior to the meeting, Suphamongkhon said Turkey
could prove to be an important partner for Thailand and both countries could
benefit from each other's experiences, Anadolu News Agency reported.
He cited the opportunities for cooperation between the two countries in the
construction sector adding that both countries should further encourage small
and medium enterprises and sign partnership deals. Meanwhile, TOBB Acting
Chairman, Faik Yavuz, said Turkey attaches great importance to enhancement of
its commercial and economic relations with Thailand. Yavuz stated that total
exports from Turkey to Thailand reached 123.5m Euro last year, while imports
from Thailand amounted to 500m Euro. Yavuz added that more trade relations
should be established with Thailand and TOBB is ready to launch efforts to this
end. Erdal Eren, chairman of the Turkish Contractors' Union, said that Turkey
and Thailand could undertake common projects in third countries.
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FOREIGN LOANS
World Bank offers 143.7m Euro for railway restructuring
The World Bank recently approved a 143.7m Euro railway restructuring loan
for Turkey. In a statement, the bank said this loan would be utilised to improve
the financial viability, productivity and effectiveness of railways operation in
the country. Andrew Vorkink, country director for Turkey, stated that the World
Bank is pleased to help Turkey in improving productivity and effectiveness of
railway operations and to assist (Turkish railways) TCDD in reaching a
financially sustainable situation and reducing the fiscal burden. The project
will align the Turkish railways competitiveness with European railways, at a
period when EU accession negotiations are starting and also contribute to
improved rail safety in Turkey, New Europe reported.
The lending instrument for the railway restructuring project is the World Bank's
two-phased Adaptable Programme Loan (APL) in two currencies (US$ and Euro).
APL's provide phased support for long-term development programmes. They involve
a series of loans that build on the lessons learned from the previous loan(s) in
the series.
The APL1 with a total cost of US$221.0m of which US$184.7m is financed by the
bank would include firstly advisory services to implement the restructuring of
the TCDD under current Railway law and to prepare APL2, secondly initial staff
adjustment programme, thirdly line capacity increase along Mersin-Toprakkale and
Yenice-Bogazkopru corridors, fourthly training for TCDD staff and finally
support for improved internal and public communication. The APL2 will involve a
cost of US$230m of which US$115m is expected to be Bank financed and would
include firstly advisory services to complete the restructuring of the TCDD and
assist in the implementation of the new institutional and regulatory set-up
resulting from the new laws, secondly support for continuing the staff
adjustment programme, thirdly line capacity increase along the Irmak-Zonguldak
corridor and finally other components considered necessary to ensure the success
of the overall programme.
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TELECOMMUNICATIONS
Alfa Group to buy Turkcell from Cukurova in Q3
Alfa Group is planning to complete a 3.3bn Euro deal with Cukurova Group on
buying a stake in Turkey's leading mobile operator, Turkcell, in the third
quarter of the year, Alfa Telecom, which manages the group's telecommunications
assets recently said in a press release.
Cukurova Group and Alfa Group are finishing up work on a final agreement for the
3.3bn Euro deal under which Alfa granted Cukurova a US$1.7bn six-year term loan
as well as purchasing US$1.6bn of convertible bonds, which gives Alfa the
opportunity to take an indirect stake in Turkcell, Anatolia News Agency
reported.
With the exception of specific requirement, the bonds can be converted within 18
months after the issue date, the release said. "The indirect conversion
ratio for Alfa Group to Turkcell is expected to be around 13.22 per cent,"
it read. A number of outside conditions need to be followed in order to
implement the agreement, including getting the necessary permission from
regulatory agencies. "The parties propose completing the above-mentioned
transaction in the third quarter of 2005," the release said. It was
reported earlier that Cukurova planned to use the money from the deal to pay off
its two million Euro debt to the Turkish government and also purchase 13 per
cent of Turkcell, currently owned by Yapi & Kredi Bankasi AS.
Oger to buy Turk Telecom stake
A consortium led by Oger Telecom of Saudi Arabia offered the top bid of
US$6.55bn (5.48bn Euro) for a majority stake in state-owned Turk Telekom in a
privatisation auction.
Oger's winning bid is to be paid with an initial instalment of 20% of the total
price, and then five equal payments. The offer for 55% of the landline
telecommunications company values the whole businesses at US$11.9bn.
Oger Telecom is part of the Saudi Oger Group, which is owned by the family of
former Lebanese Prime Minister, Rafik Hariri, who was assassinated in February.
The Oger-led consortium also includes Telecom Italia SpA and BT Telconsult, the
international consulting arm of BT Group PLC.
"It's our first investment in Turkey, and we're very excited for the
future," Oger Group's, Muhammad Hariri said.
The sale still must be approved by Turkey's competition agency and the cabinet,
said Metin Kilci, head of the government privatisation agency.
Also bidding was a group headed by Dubai-based Emirates Telecommunications Corp,
or Etisalat. Bids started at US$5.95bn, rising in increments of US$50m. This was
Turkey's seventh attempt in a decade to sell the telecom. Earlier efforts at
privatising Turk Telekom ran into resistance from labour unions and even the
military, which was concerned about selling a state asset with national security
implications to a foreign power.
Turkey's privatisation agency initially considered bids from four consortia, but
dropped the offers from groups led by Turkish firms Koc Holding and Turkcell.
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