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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: 105 - (30/01/06)

Ecevit speaks out
Former leaders can often be far more outspoken and forthcoming than those in power. In 1999 the then Prime Minister Bulent Ecevit took up an independent line towards the US, refusing to allow it to use Turkish bases to bomb Iraq. He was forthrightly against the recent US-UK war in Iraq.
At a press conference held at his own home on January 11th, he said that terror aimed at Turkey by the Kurdish Workers' Party (PKK) was being supported by the US. "It looks like the US has taken up a serious set of approaches towards Turkey in regards to what is happening in Iraq right now. Following the invasion of Iraq by American forces, it has become clear that the US supports certain PKK acts of terrorism." 
This is a highly controversial accusation, but possibly correct. Turkey has friends in high places in Washington, who will give Ecevit a hearing. Nobody could suppose that the elder statesman and intellectual, who has translated T S Eliot into Turkish, is an anti-American or an Anglophobe. He lived in London for many years, the venue for 'The Wasteland.'

Turkey, Denmark in row over Kurdish TV station
People in power have to be more circumspect, as recent events demonstrate. Turkish PM Recep Tayyip Erdogan, who leads a moderate Islamicist party that won a handsome endorsement from the people at the last elections, is keen for Turkey to be taken seriously as a candidate for EU membership. He is well aware that the Northern countries in the EU call the shots here, the Greeks, Italians and Spaniards not being averse, while the Portuguese, the British and the Irish are generally in favour of the idea.
The 'swing' states are Germany, Austria and the Scandinavians. He went to Denmark in November to muster support in this small, but strategically important, country. But the expected presence of a journalist from the Kurdish Roj TV, which is claimed to have links to the outlawed PKK, led him not to show up at a scheduled press conference on 15 November, hosted by Danish PM Anders Fogh Rasmussen in Copenhagen.
The Turkish Foreign Ministry has now urged Denmark to clarify its attitude towards Roj TV, which is based in Copenhagen. "Roj TV is an organisation which is the voice of the terror organization PKK," said a foreign ministry spokesman. Roj TV has said it had no links with the PKK. 
Citing principles on which he could not compromise, Rasmussen said that he had "no legal basis to exclude journalists from press conferences as long as they work within the law," adding that there are some things that we "see fundamentally different." He also said that "Turkey has to realise that there are some very specific conditions that need to be fulfilled if Turkey wants to become an EU member one day."
The Turkish visit to Denmark already had a heated backdrop because of the Danish daily Jyllands Posten, which published a series of sketched caricatures of the prophet Mohammed in September. Capitals of 11 Muslim countries sent a joint letter of protest to the Danish prime minister. 
Erdogan said: "Freedom of speech is important, but what is holy to me is more important. I would never abuse my freedom of speech to attack things that are holy to Mr Rasmussen."
A recent opinion poll has shown that 55% of the Danes are against Turkish EU-membership, an ominous result for Ankara. A new entrant has to have unanimous support among the 25-nation organization. 

Merkel comes round
Nevertheless, some are more equal than others in geopolitics, as in life at large. The key state for Turkey to win over to its side is Germany, which has the means to persuade other, smaller members to its view of the matter. 
Germany's new chancellor, Angela Merkel, was in opposition strongly opposed to Turkish membership of the EU. But she has come round to seeing the Turkish point of view. She now says that "things will develop well" with Turkey, and has acknowledged Turkish Prime Minister Recep Tayyip Erdogan's statement that Berlin and Ankara "will walk hand in hand as always." Merkel met with Erdogan during the Euro-Mediterranean summit in Barcelona on 27 November and she reassured the Turkish leader that "'pacta sunt servanda [agreements must be respected] applies and that things will develop well." 
Merkel has accepted an invitation to visit Ankara, and said that she will work for the integration of the estimated 3.5 million Turkish immigrants into German society. It is fears of their massive augmentation of course that makes many in Germany, as in Austria, oppose the idea of EU membership for Turkey.
Merkel's Christian Democrats have been arguing in favour of granting "privileged partnership" status rather than full membership to Turkey. Ankara has declared that no alternative to full membership was acceptable for the country. Everything looks still to be in the balance.

The Pamuk moment
A key factor will be Turkey's comportment as regards human rights. There is another Turkish intellectual than Ecevit who is stirring things up right now, Orhan Pamuk, its great novelist, author of Snow and Istanbul and several other highly esteemed works. It would be interesting to have Ecevit's frank views on Pamuk and his latest stand.
Pamuk, 53, often mentioned as a Nobel Prize candidate, faces up to three years in jail for "insulting Turkish identity" by telling a Swiss newspaper that one million Armenians and 30,000 Kurds were killed in the country in the 20th century. Pamuk is set to be tried under the criticised Article 301 of the recently revised Turkish penal code. The article has drawn criticism from all over the world.
The Istanbul court deliberating the case of Pamuk decided to adjourn the trial until 7th February 2006 to give the Turkish Justice Ministry time to establish whether the case was in line with judicial procedures.
According to observer accounts, Pamuk's initial hearing on 16th December took place amid chaotic scenes. Reiterating Enlargement Commissioner Olli Rehn's opinion that "not just Pamuk but Turkey also was on trial" in Istanbul, MEP Geoffrey Van Orden said that the "scenes in the courthouse were chaotic and became very aggressive". 
Pravda reported that in the courtroom one lawyer shouted at the European delegation that "you have no right to interfere in the Turkish justice system." Inside the packed courtroom, a British diplomat and a German MEP were reportedly attacked by "hostile" groups of nationalists, who also threw eggs at Pamuk.
MEP Camiel Eurlings said that "this is a black day for Turkey's accession process. The [Turkish] government badly missed the opportunity to cancel this case, having it go ahead instead. This is very bad for Turkey's image in Europe".
Rehn, a key figure if ever there was one, the EU Commissioner for Enlargement no less, has said that the case is "a litmus test as to whether Turkey is seriously committed to the freedom of expression and reforms that enhance the rule of law and benefit all Turkish citizens." Ankara be warned.

Turkish tourism fears slowdown from bird flu
Turkey has been in the news for another reason recently, the spread of bird flu. One can only hope that this scare proves as ephemeral as earlier ones, such as mad cow disease. Europeans love to have a live horror story from time to time, whether from humans, 'terrorism,' or animality and Nature itself.
Tourism is one of Turkey's main source of revenues, and with the recent outbreak of bird flu, in which three children have died, the tourism industry in Turkey are now fearing a devastating slowdown in business. Russia and the UK have already warned their citizens not to travel to Turkey, which is not a good sign for the tourism sector as visitors from these countries make up the bulk of tourism to the country. 
"The situation is alarming to the tourism industry," Osman Ayik, the head of the hoteliers' association in the Mediterranean province of Antalya, where Turkey's largest and most popular seaside resorts are located, told Anatolia news agency. The outbreak, he said, erupted just as sales for the summer season were about to begin. 
Another industry representative, Tayfun Zeytinbas, who heads an association of hotel managers, said that "the spread of bird flu to Antalya will pose a great danger to the sector. Even if there are no cancellations, we will be asked to discount prices."

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AGRICULTURE

Turkish budget allocates only 4bn liras for agriculture 

To strengthen the economy with European Union standards the agriculture sector needs full support, authorities have been told. The sector, which still supports millions of households, however, has been allocated only four billion Turkish liras which is too little in the new budget, said Turkish Union of Agricultural Chambers (TZOB) Chairman, S. Semsi Bayraktar, in an exclusive interview with Turkish Daily News. 
The EU's progress report on Turkey published last November estimated the amount needed to support the country's agriculture sector at 11.3 billion Euro. Budget allocations to agriculture decreased by 2.3 per cent in 2005 compared to 2004, and in the 2006 budget the share of agricultural investment is 13 per cent lower than in the 2005 budget. A solution to structural problems in agriculture is possible with a larger allocation of public funds. Such investments are needed for the efficient use of Turkey's water resources and the expansion of the country's irrigation system, he said. Bayraktar says the 2006 budget allocates only four billion liras for agriculture and that, in addition, YTL 100 million loan from the Support Price Stabilisation Fund (DFIF) will be used to support the export of agricultural products. While the government's Second Agricultural Forum promises a steady increase in agriculture support, the state's Agricultural Strategy Report for 2006-2010 recommends an allocation of no less than one percent of the gross national product (GNP). Bayraktar noted that the 2006 agricultural budget represents 2.5 per cent of the overall budget and 0.7 per cent of GNP. He added that agriculture accounts for 33 per cent of the nation's employment and 11 per cent of national income. Since agriculture is not fully supported, it hasn't gotten its share of benefits of Turkish economic growth because resources are insufficient, not only for agricultural support but also for agricultural investment.

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CREDIT RATINGS

Moody's upgrades Turkiye Garanti Bankasi's to positive 

Turkiye Garanti Bankasi had consolidated assets of 36.916 million Turkish liras (US$27.840 million) at the end of September. Moody's Investors Service upgraded Turkiye Garanti Bankasi to positive, from stable. The rating action reflects a significant improvement in the bank's economic capital levels in 2005 and the expectation of further significant improvement in 2006, New Europe reported.
It also reflects the ongoing improvement in the volume and quality of the bank's earnings, within the context of a better macroeconomic environment in Turkey. According to Moody's, economic capital - defined as total equity minus investments in subsidiaries and associates, fixed assets and net non-performing loans - which accounted for 15 per cent of total capital in 2004 (based on IFRS financials) went up to 29 per cent at the end of September 2005 and are expected to rise further to more than 40 per cent at year-end 2005, through internal capital generation and also through significant non-core asset sales by the bank in the fourth quarter of 2005. The bank has sold some 721 million liras of non-financial subsidiaries and real estate assets to its controlling shareholder, the Dogus Group, as well as to trade buyers. Dogus Group sold 25.5 per cent stake to General Electric Consumer Finance (GECF), in December 2005. Between them, GECF and the Dogus Group own 53.04 per cent of Garanti Bank's ordinary shares and have an agreement to jointly control the bank. The rating agency states that the bank's current management team and strategy will be maintained and that GECF will contribute resources and know-how that are likely to enhance the bank's credit risk management, product development and funding capabilities over the next few years.

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FOOD & DRINK

Efes buys Russia's Krasny Vostok brewery 

Turkey's EBI (Efes Breweries International) said in a statement on January 25th that it had signed an agreement to buy 92.34 per cent of Russian brewery, Krasny Vostok, in a deal and according to that value of Krasny Vostok's enterprise was estimated at about US$390 million. Efes said in a regulatory news release issued by the London Stock Exchange that the deal was subject to regulatory approval, New Europe reported. 
Krasny Vostok holds a three per cent share of the Russian market by volume and has an annual brewing capacity of 10 million hectoliters and it operates one brewery in Kazan in central Russia and the second one in Novosibirsk in Siberia. 
According to CEO of Efes, Ahmet Boyac, the acquisition will enable them to solidify and build on their fourth position within the dynamically consolidating Russian market through increased capacity, extensive geographical coverage, lower cost base and higher sales volume. Efes has been looking for this type of opportunity for a long time. They wanted either an acquisition or a greenfield project in Siberia or the Russian Far East. EBI derives about 80 per cent of its revenues from Russia, and has three local breweries, one in Moscow, one in Ufa in the southern Urals and the third one in Rostov in the southern area. 
Krasny Vostok also owns three malting facilities in Kazan with an annual capacity of 93,000 tonnes. Krasny Vostok's brand portfolio consists of an upper mainstream brand "Solodov" and economy brands, including "Krasny Vostok," "Zhigulyovskoe" and "Yershistoe." With this acquisition of Krasny Vostok, Efes Breweries International will increase its annual malt production capacity from 46,000 tonnes to 139,000 tonnes and its annual brewing capacity in Russia will increase to 18 million hectoliters and its market share will go up to around 10 per cent.

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FOREIGN INVESTMENT

Chamber of Industry calls for German investment 

The chairman of the Istanbul Chamber of Industry Kucuk said on February 2nd that the 1,200 German firms investing in Turkey do not come close to representing the real potential of Europe's largest economy, New Europe reported.
Kucuk called on German investors to increase their activities in Turkey. Kucuk said that the political, economic, trade and cultural ties between Turkey and Germany would continue to develop in the course of Turkey's membership negotiations with the European Union and that he hoped Germany also would continue the strong support it gave Turkey in the lead up to the talks.
Trade between Turkey and Germany amounted to some US$20 billion last year, he said, a significant portion of it arising from investments made by Turks who have settled in Germany. 
The head of Istanbul's powerful association of industrialists presented the audience with facts and figures about the Turkish economy, a pleasurable job now that the country has succeeded in taming inflation and bringing state finances under control.
Turkey's consolidated budget deficit for last year came in at a mere two per cent of gross domestic product (GDP). Figures released on January 31st showed Turkey with a record trade deficit of US$43 billion, an increase of nearly 25 per cent over the previous year.
Kucuk said the unexpected strength of the Turkish lira had slowed industrial production but that nonetheless the country had enjoyed average growth of 7.9 per cent over the past three years, by far the best performance of any EU or candidate country. 
Kucuk said that last year Turkey's strong privatisation showed a record of US$8.2 billion came close to matching the total receipts of the prior two decades combined.

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INFORMATION TECHNOLOGY

Bill Gates will keep investing in Turkey 

Microsoft Chairman, Bill Gates, said recently that he will continue to invest in Turkey, and stressed that Turkey had a bright future. Turkish Prime Minister, Recep Tayyip Erdogan, said that global competition was no more related to conventional or weapons industry, New Europe reported.
Erdogan said, "The more knowledge you produce, the stronger you become. Unfortunately, information technologies has a share of 0.0007 per cent in Turkey's GNP." Erdogan also stated that his dream was to set up a "Silicon Valley" in Turkey, and noted, "We wish global information technology actors to choose Turkey as a base." According to Erdogan, Turkey is laying the necessary groundwork for the establishment of kind of a "Silicon Valley" in Turkey. According to him, necessary legal arrangements, tax exemptions, and additional resources for research and development projects are among the measures to be taken to encourage investments in information technologies in Turkey. Gates has indicated that his company will initiate "My First Computer" campaign in Turkey with the assistance of Turk Telekom and Intel Corporation. In a press conference held in Istanbul, Gates remarked that technological developments in Turkey will go on. "We continue to develop new programs in Turkey with our partners. 'My First Computer' campaign is designed to make 80 per cent of families own a computer," he said. Gates stressed that the 'My First Computer' campaign will make it possible to sell computers at extremely affordable prices that could be paid in monthly instalments. "First time users of computers in Turkey will use 'Windows XP Starter Edition,' in Turkish, a stripped down version of the standard operating software aimed at schoolchildren.
Furthermore, computers will be equipped with anti-virus and educational programs. There will also be a control mechanism that parents can use to block certain webpages that they might not want their children to see.

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