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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: 108 - (30/05/06)

The enigma that is Turkey
The Turks are odd men out in the Middle East. 
The very concept of 'the Middle East' is an odd one. The Far East we all know about. But where is the Near East, if not precisely what we tend to call 'the Middle East?'
The answer is Turkey. Turkey is eastern by reason of its religion and history. But since Ataturk, one of the political titans of the twentieth century, it aspires to be Western. Thanks to his reforms, some 75% of Turks, in a late opinion poll regard themselves as Western.
It has been a secular state since Ataurk, a status fiercely guarded by its military. Its present government is Islamicist - but notably moderate in so being.

The impossible dream?
The Turks dream of being acceptable to Europe. The truth is that they despise the Arabs they once ruled over (which dominion they only lost by defeat in the First World War to the West), and would like nothing better than to be accepted as Europeans.
It is true that they once ruled over millions of Europeans, notably in the Balkans. But it was the Greeks and others that threw them out. Hence their great respect for them. Hence why they want to join them.
It is a good idea. But unfortunately an impossible one - for now.
It is still in lots of peoples' interests to play with it.

Here are the dreamers
A recently published Eurobarometer poll that focuses on the future of Europe shows that people in European Union countries do not have a problem with Turkey's membership. Some 30 per cent of them said that enlargement means hope. For 8 per cent of them enlargement means satisfaction and for 4 per cent of them enlargement means excitement. Those who are against enlargement make up 36 per cent of respondents. For the EU population, a European social welfare system could strengthen the EU citizenship of the population. To this could be added a European constitution and, moreover, being able to vote in all elections organized in the member state where they live. 
For EU citizens, in the fight against terrorism, the promotion of democracy and peace in the world, the fight against organized crime, food safety and ensuring continuous energy supplies, there should be more decisions made at the European level rather than a national level.
For EU citizens, a common army or a well-defined external border are not the most helpful things for the future of Europe. For them the most useful thing is a consistent living standard among member states as well as the introduction of the euro in all member countries.

This survey shows many things
EU citizens are not against further enlargement. This should be underlined particularly in some countries where governments are against Turkey's membership. These governments are putting forward the idea that their public does not want to see any more states join the EU.
The second issue is that democracy and human rights are what EU citizens care most about. When Ankara is able to join the EU it will mean that Turkey fully respects the EU's democratic criteria.
The third issue is that EU citizens want to see consistent living standards among member states. If the economic effect of starting accession negotiations with Turkey last October 3rd is analysed, Turkey's membership and its economic impact can be forecast. And the impact for Turkey will be very important. In other words, when Turkey joins the EU, it won't be today's Turkey. It will be an economically prosperous Turkey.
Therefore, the latest Eurobarometer demonstrates that the declarations of underhanded EU politicians against Turkey's membership do not reflect European public opinion. It shows also that Turkey has a very long way to go and that the pace of reforms should not slow down. To the contrary, no matter what the political benefit, Ankara should give emphasis to political and economic reform and even the staunchest European political opponent to Turkey's membership would have to change their mind. 
Even the brightest politician can hold a false opinion about enlargement or EU policy. In 1977, late French President Francois Mitterand, then opposition leader, told a French magazine: "One has to be careful not to turn the common market into a mere free trade zone. Neither Greece nor Spain is in a position to join the (European) Community. Accession is neither in their interest nor is it in our interest. Interim steps are desirable."
Four years later, Mitterand was elected president of France. By the time he left the presidency in 1995, Greece, Spain and Portugal had been EU members for more than a decade, negotiations were completed with Austria, Finland and Sweden, and the first steps had been taken towards the admission of post-communist Central and Eastern Europe.

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The Turks know of one other 'Middle Eastern' people who are oddmen out - the Israelis. They are the only pro-Israeli country in the region. Both are of course intensely pro-Western.

FICC, Turkey sign economic cooperation pact
The Federation of Israeli Chambers of Commerce has signed an economic cooperation agreement with the Turkish Chambers of the Aegean Region to forge bi-lateral trade relations between the two chambers. "Trade relations between Turkey and Israel have accelerated over the past few years," said Uriel Lynn, President of the FICC. "Between 2002 and 2005 trade relations between Israel and Turkey increased by 79 per cent to US$2.1 billion in 2005." 
Exports to Turkey grew by 13% to US$919 million, while imports saw a rise of 22% to US$1.2b. Lynn added that there are currently about 152 Israeli companies investing tens of millions of dollars in Turkey. 
The agreement was signed during the visit of Nedim Kalpaklioglu, deputy chairman of Aegean Region Chamber of Industry (EBSO) Executive Board to Israel, who headed the delegation of 20 Turkish companies at the "Agritech 2006" conference, which opened its gates in Tel Aviv recently. 
The trade agreement was established to seek out ways in which economic cooperation and trade can promote regional economic integration between Israel and the Aegean region. 
The EBSO counts almost 6,048 companies in 51 different sectors. The region includes the city of Izmr, the third largest city of commerce in Turkey and a central port city, which provides 70.3% of all agricultural production and 10% of all employment. 
The Port of Izmr has a capacity of 12.5m tons, where 55% of all transportation in imports and exports takes place. The major sectors in the Aegean region are agriculture, industry, mining and tourism. Global companies investing in the region include Philip Morris, General Motors, Coca Cola, Samsung and Tetrapak. 
Turkey has been an integral part of a thriving Mediterranean economy, a crucial land bridge between Europe and Asia, a trade crossroads, and an essential warm water maritime link for Ukraine and Russia. 
Among the areas in which Israel and Turkey have enhanced their cooperation in recent years are water and energy. 

The US fishing in muddy waters
In another complex geopolitical imbroglio, US Secretary of State Rice has made great efforts recently to convince Greek and Turkish politicians to reject a Gazprom proposal to participate in a new gas pipeline under construction between the two Mediterranean neighbours. 
The US$746 million pipeline project is a joint venture between the Greek and Turkish state-owned gas companies, Depa and Botas. During a recent visit to Athens, Alexei Miller, Gazprom CEO, offered to invest in tripling the capacity of the Greek-Turkish pipeline and to provide long-term supply agreements. At the same time, energy-rich Azerbaijan has also stated its interest in participating in the project. Neither Athens nor Ankara has made a decision about whether to accept the Russian or Azerbaijani bid.
During her April 25 stopovers in Greece and Turkey, Rice made it clear that Washington wants to see both countries reduce their reliance on Russian gas supplies. This, naturally, means excluding Gazprom from the new project, whether as a shareholder in the pipeline company or as a gas supplier. Instead, Washington suggests, Greece and Turkey should make a long-term deal to buy Azeri gas supplied by an international consortium led by BP and Norway's Statoil, which is due to come on line in 2007.
It is quite symptomatic that America's top diplomat raised the issue of European energy security at a time when the White House was preparing to host Azerbaijan's President Ilham Aliyev. According to US administration officials, the Azerbaijani leader, whose democratic credentials are shaky at best, was finally invited to Washington in order to prevent the South Caucasus country "from coming under Russia's sway and eliminating … the last chance to give European countries an alternative route for energy."

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Ankara recalls its ambassador to Canada
Turkey has recalled its ambassador to Canada, Aydemir Erman, for consultations to protest Canadian Prime Minister Stephen Harper's recent remarks describing the forced deportation of Armenians in 1915 Ottoman Turkey as "genocide." 
Harper, in a three-paragraph statement on April 19, recalled motions adopted by the Canadian Senate and the House of Commons backing the Armenian genocide claims and said, "My party and I supported those resolutions, and continue to recognize them today." It was the first time a Canadian prime minister acknowledged the so-called genocide.
Turkish diplomatic sources said over the weekend that Ambassador Erman has not yet been officially withdrawn from Canada, but that following his consultations with government officials, it could be an option. Another option includes barring Canadian firms from participating in official tenders, including the construction of a major nuclear power plant. Turkish sources expressed particular uneasiness about the acknowledgement of genocide claims coming from the Canadian government for the first time.
In the past five years, the parliaments of France, Russia and Poland have also adopted motions describing the occurrences in 1915 as "genocide," but the governments of these countries have tried to disassociate themselves from the motions and have noted that they won't change their foreign policy.
On April 25, Turkey's Foreign Ministry issued a statement accusing Harper of exhibiting a "gravely prejudiced attitude."
"Such statements ... are not only counter-productive to the atmosphere of dialogue we wish to build between Turkey and Armenia, but also adversely affect relations between Turkey and Canada," the Foreign Ministry said.
Turks and Armenians are at odds over the genocide claims. The Armenian diaspora accuses the Ottoman Empire of deliberately massacring up to 1.5 million Armenians between 1915 and 1919. Turkey stresses that these figures are inflated, and claims that far fewer Armenians died, but that it was due to civil unrest under the conditions of World War I and the collapse of the Ottoman Empire. Turkey also asserts that during the ethnic conflict, thousands of Turks were also killed by Armenian militants.
To break the deadlock, Turkish Prime Minister Recep Tayyip Erdogan last year suggested in a letter sent to Armenian President Robert Kocharian the establishment of a committee of Turkish and Armenian historians to study the claims. However, Kocharian refused Erdogan's proposal, saying that the two countries must first establish diplomatic relations and that committees could be formed only within the process of normalization of relations.

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FOOD & DRINK

THY catering bid starts
 

Given the number of passengers and destinations high among the leading companies in Europe, competition in the Turkish Air Lines (THY) tender was expected to be intense. After a 10-day postponement, major companies had the chance to compete for the catering bid on April 28th, New Europe reported.
Four companies competing for the tender, worth US$70m annually and renewed every five years, are: Gate Gourmet USAS, LSG Sky Chef Sancak Catering, TAV-Do&Co and Sofra Group. USAS currently provides the catering services to THY. Gate Gourmet USAS is expected to win the tender for two main reasons: It has been providing the catering services to THY for the past 15 years and has a 70 per cent market share.
The authorisation to provide catering services for THY will be a major triumph for the company with the largest share of the market. Nine facilities belonging to Gate Gourmet USAS and with others owned by LSG Sky Chef Sancak Catering are currently in service. LSG Sky Chefs Sancak Catering has a 30 per cent market share had has been providing catering services for private air lines.
Mustafa Bayrak, the owner of Sancak Catering, the Turkish partner of LSG Sky Chef Sancak Catering, also owns Sancak Tul and Sancak Air. With more than 200 facilities in 48 countries, LSG Sky Chefs provides catering services to 270 airline companies. TAV Investment Holding, the managing operators of Istanbul's Ataturk Airport, emerged as a surprise name when it announced its participation in the tender.

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FOREIGN LOANS

World Bank grants 27.3m Euro loan
 

The World Bank approved a 27.3 million Euro Avian Influenza and Human Pandemic Preparedness and Response Project Loan (AIHP) for Turkey, New Europe reported.
The overall objective of the Project is to minimise the threat in Turkey posed to humans by highly pathogenic avian influenza (HPAI) infection in domestic poultry, and to prepare for the control and response to an influenza pandemic and other infectious disease emergencies in humans. The influenza has scared tourists away from visiting Turkey and badly hurt the country's poultry industry. Turkey has reportedly culled 2.27 million poultry across the country in an effort to halt the spread of the disease.

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SHIPPING

Palmali buys Russian LUKoil's oil tankers for US$265m


Turkey's Palmali Shipping has closed a deal to buy 10 Artic oil tankers from Russian oil major LUKoil for US$265m, Vedomosti reported recently.
The tankers with dead weights of 20,000 tonnes, will transport oil and oil products among the ports of the North, Baltic, Barents, Norwegian and White seas.
Some of the tankers will be Russian-registered. Palmali Shipping will be in charge of commercial management of the tankers.
The technical maintenance of the ships will be carried out jointly with Russian state-owned shipping company, Sovkomflot.

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TELECOMMUNICATIONS

Owners of Turkcell battle to secure balance of power


Following the postponement of a recent annual shareholder meeting, the battle for control of Turkcell among its three main owners has entered a new and possibly decisive phase, the Financial Times reported recently.
The three shareholders in Turkey's number one mobile phone group - Cukurova Holding - a struggling Turkish conglomerate, TeliaSonera, the Nordic telecoms group, and Alfa Holding, a Russian telecoms operator - appear unable to agree on the appointment of the seven-member board's one independent director, who would prove decisive in tipping the balance of power in favour o f the three owners.
The issue was to have been thrashed at the annual meeting recently but was postponed at the last minute after a court intervened in the dispute. The meeting will now be held in the near future, people close to Turkcell have said. Whether the shareholders can set aside their differences in the atmosphere of claim, counterclaim and legal action that has resulted remains to be seen.
Cukurova Holding owns 53 per cent of a holding company that owns 51 per cent of Turkcell. TeliaSonera owns 43 per cent of the holding company. Separately, Alfa owns 13 per cent of Turkcell through an alliance with Cukurova. TeliaSonera has taken legal action against both Cukurova and Alfa over this alliance, agreed last year, claiming that it breached an existing agreement that gave TeliaSonera first call on Cukurova's Turkcell stake.
In recent weeks, Cukurova has sought to reassert its waning position at Turkcell, engineering the departure of several senior executives, apparently against the wishes of TeliaSonera, Alfa and Muzaffer Akpinar, Turkcell's highly-regarded chief executive.
Turkcell's market share and financial position have remained strong throughout the dispute, which has been ongoing for more than a year. The latest twist, however, has added a new element of uncertainty and forced investors - about 17 per cent of Turkcell is listed on the Istanbul and New York stock markets - to consider the problems more seriously.
"The composition of the board will be very important and we do not know yet what that will be," says Nergis Kasabali, telecoms analyst at Ata Invest, a Turkish investment bank.
At the heart of the case is a need for one of the three main shareholders, or two in concert, to gain 51 per cent of the company, which would effectively give the owner complete control.
Cukurova, Alfa and TeliaSonera own at least two thirds of Turkcell jointly but none is dominant. Cukurova, which is heavily in debt to the state, is fighting a rearguard action to protect its last remaining significant asset. TeliaSonera and Alfa both view Turkey as a key growth market, with Turkcell as the prize.

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