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TURKEY


 

 

In-depth Business Intelligence

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 237,972 182,848 147,700 21
         
GNI per capita
 US $ 2,790 2,500 2,530 92
Ranking is given out of 208 nations - (data from the World Bank)

Books on Turkey

REPUBLICAN REFERENCE

Area (sq.km) 
780,580

Population 
68,893,918

Capital 
Ankara 

Currency 
Lira 

President 
Ahmet Necdet Sezer 



Update No: 103 - (28/11/05)

The conundrum of Europe
The issue of the day for the Turks is entry into the EU. This is not certain to happen; even if it does this would probably not be for fifteen years. Nevertheless, with talks with Brussels having started on October 3rd the question is on the agenda; 'To join, or not to join.'
The Europeans also have a conundrum on their plate, whether to admit this huge country with 70 million people and a high birth rate, or not. What is obvious is that a massive inrush of low-wage workers, often not able to find jobs, could be very disruptive and could provoke a nasty backlash from chauvinist elements in the EU countries, led by the likes of Le Pen in France or Lepper in Poland. The recent riots in France in immigrant quarters bear this out. A special clause limiting the scale of immigration from Turkey is on the cards, quite reasonably so. The free movement of labour, one of the foundry principles, may not be sustainable for the latterday concept of an enlarged European Union.
On the plus side the integration of a large secular Muslim nation-state would send out the right signal to the Islamic world that the West is not hostile to Islam as such, only to terrorist variants of it, as of any other religion, including Christianity. This was almost certainly the argument used by Jack Straw, the British foreign secretary, to swing the decision of whether to open negotiations the right way in late September and early October, particularly overcoming Austrian objections. He was fortunate that Angela Merkel was not yet in harness in Berlin or we might have seen a new axis of Berlin and Vienna at work to scupper the project.

Making the case for Turkey inside the EU
Those in favour of Turkish entry need to address the difficulties squarely and make a rounded case. There are several matters to be considered. One is that Turkish entry into the CAP of the EU would put an intolerable strain on its finances, given the scale of rural poverty in Anatolia. The fact that Turkey could apply for enormous sums of regional aid would be an appalling burden on the Brussels budget. 
Other special dispensations would be required. But in 15 years much will have changed. By 2020 the CAP might have ceased to exist in its present form, making for an easing of the situation.

The demographic predicament
The really big stumbling-block is that of immigration. Actually, by 2020 or so the EU will in all likelihood be suffering from labour shortages, especially in low-paid manual jobs. On present demographic trends there will be a rise of 77% in the over-65 year-olds by 2050, with a marked rise already evident by 2020. The trend by 2050 will leave two instead of four workers for every pensioner. The EU will need root-and-branch reforms of its public finances, its tax base, its pensions and health systems to deal with an ageing population, Joaquin Almunia, the Spanish socialist, who is the economic and monetary affairs commissioner, said on October 24th. 
An influx of Turks, and possibly Ukrainians, could help to resolve the labour shortages. Mr Almunia called for controlled, but substantial immigration to assist the restructuring of labour markets required. "It's a question of whether societies and institutions are able to absorb and integrate these people. You have to combine labour market requirements with social and political constraints and, in my native Spain, we have taken in millions of migrants in the last six or seven years but we don't feel the absorption capacity has been fulfilled."
This might seem a curious argument to use when there is so much unemployment around, one in five young folk in the EU being without a job. But it is structural, confined to certain types of jobs. Moreover, the restrictive monetary policies of Euroland are in part responsible for the problem. A new social contract, such as the New Deal in the US under Roosevelt is pre-eminently required. 
The US is a good point of comparison in another sense. Its own population is set to grow rapidly to over 500 million by 2050, with Mexicans and others coming in from the south. If the EU wants to rival the American giant and the low-wage Chinese colossus, it will need its own inflow of able-bodied, hard-working immigrants too. This is more especially true if the EU wants to overcome the sclerosis of its economic structures that on present estimates, according to Mr Almunia, will see growth of GDP in the 15 original members decline from 2.3% per year until 2010 to 1.8% in 2011-2030 and to 1.3% in 2031-2050, if labour productivity continues to grow at 1.7%.
The Turks and others can come to the rescue here. That this would put strains on the social order is true, but there could be a massive upside as well. Europe's whole future is in the balance. After energy and the environment, there is no more important issue on the agenda for European leaders than the enlargement, eastwards as well as south-eastwards, of the EU.

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ENERGY

Turkey plans US$10bn energy plants at Ceyhan 

Turkey wants to promote Ceyhan as a hub for regional oil and gas trade and is to planning to build an oil refinery, an LNG terminal and a petrochemicals plant on its Mediterranean coast. Turkey is planning to invest US$10 billion on this project, New Europe reported.
Ceyhan is already the terminus of a 1.5 million barrels per day pipeline and a terminal for Iraqi crude. Another line with one million barrels per day capacity from Baku on the Caspian through Tbilisi will come on stream in early 2006. According to the energy official, "The government has started talks with leading international energy companies to build the project. A total investment value of US$10 billion has been calculated for the three plants," he said. Italian Energy Company ENI announced plans on November 9 to evaluate with the Turkish company Calik a one-million-barrel-per-day pipeline to link Samsun to Ceyhan.

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FOREIGN LOANS

Turkey gets 1.6bn Euro IMF loan 

The International Monetary Fund has agreed to release 1.6 billion Euro in delayed loan payments to Turkey and has accepted that legislation to overhaul the country's social security system will not be brought in before next year, officials said, Anadolu News Agency reported. 
The agreement ends weeks of stalemate between the IMF and Turkey over the social security legislation, which is aimed at unifying various institutions, collecting outstanding payments, and streamlining the system. The decision to release the loan payments comes after the government agreed to its 2006 budget, which includes a commitment to a primary surplus of 6.5 percent of GDP. The IMF froze loans under a US$10 billion stand-by programme in July due to dissatisfaction at Turkey's low pace in social security reforms.

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PRIVATISATION

Turkey to privatise power plants

This year Turkey has received a record breaking 20bn Euro from privatisations. In the course of current privatisations, Turkey will continue with the sell-off of electricity power plants across the country in 2006, reported Anadolu News Agency.
The Turkish government plans to sell first the energy distribution companies and follow with the sale of the power plants. The privatisation board, backed by the energy ministry, has started the preliminary preparations for the sale of the power plants.

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TOURISM

Turkey hopes tourism boom helps its EU bid 

Some 22 million tourists are expected to visit Turkey this year - an increase of 25 per cent over last year, according to figures from the Ministry of Culture and Tourism. Those visitors include 12 million Europeans and a growing number from the United States who have become enchanted with this country lying on the fringes of Europe and Asia, rich in the ancient histories of many civilizations. Some 334,000 US citizens visited Turkey during the first nine months of 2005, a 47 per cent increase over last year, and some 550,000 American tourists are expected next year, New Europe reported.
Turkish leaders hope that all these tourists will help improve their country's image and deepen ties with other nations - an effort that has become particularly important as negotiations get underway for full membership for Turkey in the European Union. The EU talks began October 3, but the proposal remains controversial. If admitted, Turkey would be the only country in the EU that is virtually all Muslim, and it would stretch the borders of the EU east to Iran, Syria and Iraq. The latest polls show only 35 percent of Europeans support Turkey's EU bid, and their views on Turkey's lack of "Europeanness" are proving stubbornly hard to overcome - even among Europeans who enjoy vacationing here. Still, tourism is seen as a way to soften these attitudes. "Tourism must be taken up as a national policy priority, supported by all sectors, groups and organisations," the government's 2005 "Tourism Master Plan" posted on the ministry's web site says.

Ankara to expand tourism relations with Teheran

Representatives of Iranian and Turkish travel agencies will probably attend Iran's international tourism exhibition scheduled to be held in Isfahan in December. Turkey's cultural and information affairs attaché in Iran, Mehmet Kaya announced his country's participation in the exhibition. The exhibition will have a workshop that will comprise of 200 representatives of Iranian and Turkish travel agencies. In this workshop, ways for attracting tourists will be studied. Kaya also specified that Turkey is willing to help Iran in holding such exhibitions in a proper organised manner, Anadolu News Agency reported.
According to Kaya, one of the most important issues in developing the tourism industry is holding tourism exhibitions. Every year Turkey holds a tourism exhibition to advertise its tourism, through introducing itself to the world and gaining considerable profits.
"Since 1980, Turkey gave its tourism industry special attention, and all the articles and regulations of the country are in favour of a flourishing tourism industry in the country; besides the private sector plays an active role in the issue," asserted Kaya.
Tourism is a great source of economic income for Turkey and the country has been very successful in attracting tourists in the past few years. During this year, Turkey had attracted 12m tourists, among which 940,000 were Iranians and about 3m from the Arab countries of Persian Gulf region.
In order to boost its tourism revenue, environmental issues were also focused as it provides the necessary bed for foreign investment in the sector and facilities for representatives of foreign tour agencies to work in the country.

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