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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: 093 - (28/01/05)

The November 2002 election of the Justice and Development Party (AKP) as Turkey's first single-party government in 15 years changed the political landscape. Under Recep Tayyip Erdogan, who belatedly became prime minister in March 2003-the conservative AKP has undertaken ambitious reforms with the long-term aim of Turkey joining the European Union. These have weakened the country's meddlesome generals and reversed decades of corruption, economic mess and authoritarian abuse of power. Turkey's 14m Kurds, who secured an interim constitution in March 2004, have been among the main beneficiaries. Turkish-Cypriot support for a UN-backed reunification plan for the island also aided Turkey's European aspirations, and in October 2004 the EU recommended the opening of membership talks.
Yet Western states remain suspicious of the depth of Turkey's reforms and fear that its prime minister (and his equally pious wife) will put the country on a more Islamic path. Relations with America have cooled since Turkey refused to let US troops attack Iraq from its territory in March 2004; blunt comments from Mr Erdogan have harmed those with Israel, another ally. But a personal friendship between the Turkish and Greek prime ministers could improve relations between the two traditional enemies.

EU membership the main issue
Turkey's EU membership continues to be a hot topic on the international agenda, triggering the unconcealed doubts of some Europeans as to how "Western" the country really is. Turkey has a lot to gain from its membership, politically, economically and strategically. Joining the EU will bolster Turkey's civil society and democracy bringing a definite end to the era of military interventions; accord her a more privileged place in the Islamic world; diminish the state's role in the economy and the state's centralizing command over the society; render Turkish Armed Forces a significant part and parcel of any European Army; and provide many young Turks access to new opportunities for better education. A number of European politicians seem to contend that this is too much to bestow to a country whose position in the map of civilizations is still notoriously dubious. 
Turkey might have a lot to gain from her full membership but so has the EU much to gain from her inclusion. Once the Baku-Ceyhan oil pipeline is completed, the EU will have one less worry about her energy needs. Given that the EU is Turkey's number one trading partner this large, dynamic, and young society will provide an important market for Europe and will further help to overcome the paucity in Europe's labour, land and natural sources. Furthermore, it is apparent that in the years to follow the world's strategic mapping will shift again, as it has many times in history, and the Middle East will attain enormous importance in shaping both international and domestic politics. Within this framework, Turkey's full membership will help the EU to strengthen its hand regionally and globally, furnishing it with a more credible role vis-a-vis ethnic, religious and national tensions around the world. After Turkey's inclusion the Islamic world will have a better view of the EU and hopefully, the EU will have a better view of Islam. 
It is a truism that there is an ongoing clash today. But unlike what many like to think, this is not a clash of civilizations between Islam and the West. On the one hand are those who want to live a life primarily, if not entirely, surrounded by people who are like them, who think and act and dress and talk and pray just like them, who are each other's mirror images. On the other hand are those others who are more cosmopolitan, more ready to welcome ethnic, religious, national diversity, those who are not so obsessed with their mirror image. The clash between these two mentalities is an ongoing tension that recognizes no map, cutting across national, geographical and religious boundaries. 
Today in some Turkish villages on the Aegean coast there is an enduring custom regarding the mirrors on the walls. They either cover the surface of a mirror with dark velvet or hang it with its silver ornamented back facing the wall. Aegean peasants believe that mirrors are the gateways to the uncanny netherworld of the djinni. Perhaps the belief is the outcome of centuries of wisdom in an old land where numerous ethnic and religious groups have both succeeded and failed to co-exist. In lands like this, in times like this, one should know better. 

Foreign minister Gul in Israel
Turkish-Israeli ties have weakened in recent times, in part due to Tel Aviv's hard line against the Palestinians. Restoring ties between Ankara and Tel Aviv and restarting the Middle East peace process topped the agenda of Turkish Foreign Minister Abdullah Gul during his three-day visit to Israel and Palestine, starting on January 3rd.
Gul held meetings in Tel Aviv with Israeli President Moshe Katsav, Prime Minister Ariel Sharon and Foreign Minister Silvan Shalom. He also met with Palestinian leaders. In late December, Turkey offered to act as a mediator in the Middle East Peace Process, saying that its good relations with all parties involved could help promote an end to the instability in the region

Turkey, Russia celebrate trade ties, while probing an expansion of geopolitical contacts 
Russian President Vladimir Putin hopes that trade with Turkey will rise by 50 per cent in the near future, hitting US$15 billion. He expressed this hope on January 11th at a meeting with Turkish Prime Minister Recep Erdogan, who arrived in Moscow on that day for a three-day working visit. 
"Your and our best suppositions on the development of relations in the economic sphere have come true," the Russian head of state said. "I agree with forecasts that trade may reach 15 billion dollars in the near future." 
Suggesting to concentrate at the talks "mostly on economic cooperation", Putin noted that "energy and transport are priorities" in this sphere. He specified that he had in mind "the power industry, supplies of raw materials and construction of infrastructure projects."
The Russian leader reported at the same time that he would also like to discuss the development of military cooperation. "We had plans in this sphere, and I should like to say a few words on this topic," the president said, adding that he also intends to speak on social issues. 
In turn, the Turkish premier claimed that Moscow and Ankara should develop the tourist industry. "Along with the development of trade and economic relations, the development of tourism gives a chance to the peoples of our countries to learn better each other, and prospects for rapprochement emerge," he noted. 
Erdogan noted that trade rose to ten billion dollars in 2004. "I believe that we shall score new results in a very short period of time," the Turkish premier continued. He held that "this process will accelerate even more thanks to investments in Russia and Turkey as well as in third countries."
The premier noted that a Turkish delegation of 600 businessmen arrives for a meeting of the business communities of the two countries, which will be held in Moscow on Tuesday. "We arrived on Monday. Another two jetliners will come today," Erdogan stated. "We shall jointly open earlier built (by the Turkish side in Russia) new projects and will discuss further expansion of relations at the talks." 
The Turkish premier agreed that the talks should discuss "possibilities for boosting military cooperation and interaction in the international arena and in the region."
Putin congratulated the Turkish premier and the entire Turkish people on the coming New Year, wishing them "all the best". The premier also congratulated Russians on the past holidays. "I want to express a desire that the year 2005 should bring many good things for all mankind, Russia and Turkey and that the year 2005 should become a year of prosperity for all of us," Erdogan noted. 
Erdogan also thanked Putin for "warm hospitality at a meeting on Monday evening". "I hope that today's meetings will be also fruitful," the premier added. 

Clashes kill seven 
Two soldiers and five far left militants, including two women, have been killed in a clash in eastern Turkey. 
The fighting occurred in a rural area in the province of Tunceli, the office of the local governor said on January 15th, adding that the security operation there was continuing. Three soldiers were injured, and two of the dead activists were women. 
The statement did not say to which group the militants belonged, but local security officials said they believed that they were from the outlawed Maoist Communist Party (MKP).
Members of far-left underground organizations have long been active in mountainous region, along with Kurdish rebels. In December, two MKP militants were killed in the same province in a clash with security forces.

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BANKING

Koc Holding signals interest in Yapi Kredi Bank stake


Koc Holding, a Turkish conglomerate, has signalled its interest in buying a substantial stake in Yapi Kredi Bank (YKB), ushering in what bankers say will be a decisive year in the restructuring of Turkey's creaking banking sector, the Financial Times reported on January 10th.
Reform of the sector is one of the key aims of December's agreement between Turkey and the International Monetary Fund (IMF) for a US$10bn three-year loan arrangement. The Turkish government has committed to a wide-ranging restructuring of the sector, including strengthening regulation and rules government lending and ownership.
Bankers said the YKB stake, which is being sold by Cukurova Group, a rival conglomerate in severe financial difficulties, could attract other bidders. These may include some foreign banks, which are perennially seeking to enter the market but are invariably put off by a lack of transparency and indifference to foreign investment.
YKB is one of Turkey's biggest banks by market share and is valued at some US$2bn based on its current share price. Cukurova has appointed JPMorgan to coordinate the sale of the stake.
In a statement to the Istanbul stock exchange recently, Koc said its financial services unit "plans to begin negotiations to buy" the 45 per cent of YKB currently owned by Cukurova. Koc Has interests ranging from automotive to retail and electronics, but has a small banking business.

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FOREIGN ECONOMIC COOPERATION

Russia, Turkey sign trade agreements, seek economic cooperation

Turkish Prime Minister, Recep Tayyip Erdogan, has stated that Russia is a country with which Turkey attaches great importance to its friendship, Anatolia News Agency reported.
Erdogan met recently the Chairman of the Russian Federation Confederation of Trade & Industry Chambers, Yevgeniy Primakov. "The trade volume between Turkey and Russia developed significantly in the recent past. Russia is now Turkey's second biggest trade partner," said Erdogan. "We will continue to work together and increase mutual investments. We will try to reach a balance in our trade with Russia," indicated Erdogan.
Erdogan also indicated that the trade volume between Turkey and Russia will reach US$25bn in 2007. "We plan to increase the total volume to US$30bn. Businessmen on both sides have a lot of work to do to reach such a target," said Erdogan.
According to Erdogan, Turkish investments in Russia are worth over US$2.5bn. "We can cooperate with our Russian friends in areas such as energy, transportation, defence, tourism, food, textiles and banking. Turkish and Russian companies can form joint ventures to help re-build Iraq," expressed Erdogan.
In a speech, the Russian Federation Industry & Energy Minister Viktor Borisovich Khristenko has said that sending a Turkish-Russian joint satellite into space would be important in opening a new page in mutual relations.
Upon the completion of the speeches, trade agreements were signed between the Chairman of the Russian Federation Confederation of Trade & Industry Chambers, Yevgeni Primakov, and the Chairman of the Turkish Union of Chambers & Commodity Exchanges (TOBB), Rifat Hisarciklioglu, as well as between Turkish-Russian Business Council Chairmen, Alexander Lebedev and Turgut Gur.

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FOREIGN RELATIONS

Turkish, Belgian premiers discuss bilateral relations, EU

Turkish Prime Minister, Recep Tayyip Erdogan, talked with his Belgian counterpart Guy Verhofstadt, Anatolia News Agency reported. 
According to a press release issued by the Prime Minister's Office, Erdogan discussed the results of the 17 December EU summit with Verhofstadt. "I told Verhofstadt that the 17 December decision was a turning point in Turkey-EU relations," said Erdogan. Both leaders agreed on developing cooperation between their nations prior to 3 October, when Turkey begins accession talks with the EU. "We will share our experiences gained from new members with Turkey," stated Verhofstadt.
Erdogan reminded Verhofstadt that the isolation of the Turkish Cypriots should be ended and that the commission's 7 July decision to facilitate financial aid to northern Cyprus be immediately put into effect. "A new initiative sponsored by the UN will be very helpful," remarked Verhofstadt.

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NUCLEAR ENERGY

Russia to help Turkey with nuclear energy

Russian President, Vladimir Putin's recent historic visit to Turkey started with a discussion about joint energy projects. Putin offered to help Ankara build a nuclear energy plant. Turkish Energy Minister, Hilmi Guler, and Russian energy and Industry Minister, Victor Khristenko, discussed joint energy opportunities. Khristenko said Russia was prepared to cooperate with turkey on energy and said the discussions are underway.
The Russian minister further said that Moscow considered Ankara as a "partner with a vision" of establishing an atomic energy plant and emphasised that this would be a project for the next 10-15 years. The Turkish minister spoke on behalf of the government and said they were currently writing plans for a nuclear energy complexes in China, India and Iran.
The Russian Economic Development and Trade Ministry, trade turnover between Russia and Turkey in the first half of the current year increased 60.3 per cent year-on-year to 4.622bn Euro. Russian exports to Turkey increased 66.9 per cent year-on-year to 3.810bn Euro in the first half, while its imports from Turkey increased 38.1 per cent to 812m Euro, Interfax News Agency reported.
Turkey is Russia's 14th largest trading partner, accounting for over 3 per cent of Russia's foreign trade and around 5 per cent of the so-called shuttle trade is factored in. Russia is Turkey's second largest exporter and its eighth largest importer.
State Minister, Kursad Tuzmen and Khristenko also signed on December 1st an investment protocol at a Turkish-Russian Joint Economic Commission (KEK) meeting in Moscow. While in the capital, Tuzmen also visited the Russian-Turkish Businessmen's Union.
"We want to boost our investments in Turkey, particularly in the fields of oil, natural gas and aluminium," Khristenko said.
Praising the Turkish companies doing business in his country, Khristenko underlined that Russian firms want to take part in Turkey's privatisation process. For his part, Tuzmen noted that a Turkish Commerce and Investment Zone is soon to be established on Russian soil.

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TELECOMMUNICATIONS

TeliaSonera plans to buy Turkcell stake

Finland's Sonera Holding, owned by the Swedish-Finnish telecoms firm TeliaSonera which already has a 37% stake in leading mobile operator Turkcell, has decided to buy another stake in Turkcell, which would make it a majority shareholder, a recent statement said, cited by Anatolia news agency. TeliaSonera also planned to purchase 13.1% stake held by Turkish bank Yapi Kredi. However, in a statement to Istanbul Stock Exchange, Sonera said that no deal has been finalised yet. Earlier, TeliaSonera said it was ready to purchase Yapi Kredi's stake. "Sonera Holding, as one of Turkcell's main shareholders, closely watches every potential to buy or sell Turkcell shares that may emerge," Sonera said in the statement.

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TRANSPORT

Georgia, Azerbaijan, Turkey sign rail construction declaration

Georgia, Azerbaijan and Turkey signed a joint statement on the construction of a Kars-Akhalkalaki-Tbilisi railway at the Georgian Ministry of Foreign Affairs. The statement was signed by Georgian Economic Development Minister, Aleksi Aleksishvili, Minister of Transportation of Turkey, Binali Yildirim, and Deputy Minister of Transport of Azerbaijan, Musa Panahov, Kavkasia-Press News Agency reported.
Aleksi Aleksishvili said at a news briefing after the signing ceremony that a foundation had been laid for the implementation of a historic project of the century. "We have agreed that the Kars-Akhalkalaki-Tbilisi railway project will be implemented at an increased pace. A working group will be set up to work on specific details of the project," he said.
Aleksishvili also said that the estimated cost of the project was US$350m, of which US$200m will have to be spent on the construction of a railway link between Kars [Turkey] and Akhalkalaki [Georgia] and US$150m on restoring the Akhalkalaki-Tbilisi section. All three parties will finance the project.
"The Turkish side will start working on the project for the Kars-Akhalkalaki section in 2005. Thanks to the Baku-Tbilisi-Ceyhan oil pipeline, Georgia, Azerbaijan and Turkey have acquired extensive and important experience in the implementation of joint projects," said Aleksishvili.
Binali Yildirim said that modern roads would be built alongside the Kars-Akhalkalaki-Tbilisi railway, providing a direct link with Europe.

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