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TURKEY


 

 

In-depth Business Intelligence

Key Economic Data 
 
  2002 2001 2000 Ranking(2002)
GDP
Millions of US $ 182,848 147,700 199,300 24
         
GNI per capita
 US $ 2,500 2,530 3,080 95
Ranking is given out of 208 nations - (data from the World Bank)

Books on Turkey

REPUBLICAN REFERENCE

Area (sq.km) 
780,580

Population 
68,109,469

Capital 
Ankara 

Currency 
Lira 

President 
Ahmet Necdet Sezer 

  

Background:
Turkey was created in 1923 from the Turkish remnants of the Ottoman Empire. Soon thereafter the country instituted secular laws to replace traditional religious fiats. In 1945 Turkey joined the UN and in 1952 it became a member of NATO. Turkey occupied the northern portion of Cyprus in 1974 to prevent a Greek takeover of the island; relations between the two countries remain strained. Periodic military offensives against Kurdish separatists have dislocated part of the population in southeast Turkey and have drawn international condemnation. 

Update No: 087 - (27/07/04)

Early in 2004, at a meeting with a group of journalists in Davos, Switzerland, where he was attending the annual summit there, the Turkish prime minister, Recep Tayyip Erdogan, spoke of his hopes for "a year of positive change" in a country thirsting for reform. 
The idea, he explained, was to speed up the process of "restoring the armed forces to their proper role", by which he meant removing them from politics, and taking "the last big steps" toward Turkey's membership of the European Union. Meanwhile, the economy, in the doldrums for a decade, would start showing signs of a turnaround.

Terrorism mounts
What Erdogan had not factored into account was a wave of terrorist attacks that could expose the basic weaknesses of his political strategy. 
A series of attacks in Istanbul have already cast doubt on Erdogan's ability to press on with his plan to recast the Turkish republic by excluding the military leadership from politics. Many Turks, including some in Erdogan's Justice and Development Party (AKP), believe that with terrorism threatening the nation, this is no time to pick a fight with the armed forces.
Murderous attacks in Istanbul last autumn killed 47 people, including the British consul there, Nigel Short. Further attacks followed this year. It is still not clear who was responsible. 
Some indication came when Turkish police discovered bomb-making equipment; they arrested four people suspected of having links to the al Qaeda extremist network in a security swoop ahead of June's NATO summit in Istanbul.
Anti-terrorism police told a news conference that the four detainees were members of the northern Iraq-based radical Islamist group Ansar Al-Islam, which Washington has tied to Osama bin Laden's al Qaeda, it said.

Fall-out from the attacks 
The attacks have already translated into a rise in popular backing for the secularist parties who wish to keep the army at the centre of Turkish political life. 
The terrorist attacks also threaten Erdogan's hopes of a real economic recovery. The Turkish economy has been showing some positive signs in the past few months, partly thanks to an enlarged budget deficit. But there are already signs that the terrorist attacks are having a dampening effect on the Turkish mood as a whole. Tourism, the nation's third largest source of foreign currency, is badly affected, while the effects on medium and long-term investments remain to be assessed. 
The third component of Erdogan's grand strategy, Turkey's spurt into the European Union, is also threatened. The prospects of Turkey turning into a new battleground for terrorism is unlikely to mobilize greater support for the Turkish aspirations within the EU. 

Religion and politics don't mix
As is to have been expected, the Istanbul attacks have been conveniently attributed to al-Qaeda. The attribution suits Erdogan and his government well. The very mention of the word al-Qaeda is guaranteed to draw the attention, and hopefully the support, of Washington. Also, by claiming that the terrorists were "foreign elements", the prime minister can foster the illusion that the Turks are victims of an external enemy. 
The truth, however, is more disquietening than that. The terrorist attacks that have hit Istanbul are, in part at least, an outcome of almost a quarter of a century of attempts in Turkey to mix politics with religion - attempts in which Erdogan's party, the Justice and Development Party, and its four predecessors, have played a leading part. 
The first figure to toy with creating a religious force, at the time against the left, was Prime Minister, Adnan Menderes, who had the misfortune to be overthrown in a military coup and hanged in 1960. 
The groups that he had fostered, and partly financed through public funds, did not raise a finger to help him in his hour of need. 
Switch to the 1970s and Suleiman Demirel, a political heir to Menderes, played the religious card. Demirel benefited tactically and succeeded in becoming prime minister on two occasions. However, he, too, was duly betrayed by his allies. 
One man who played the Islamist card to the full was Necemettin Erbakan, known to his followers as "Khojah" which means "master". Mayor of Istanbul in the 1990s, and a popular one, he ended up in prison for breaching the secular code defended by the military. He declaimed some religious verses in public that the Constitutional Court counstrued as inflammatory of ethnic strife and public disorder. It ruined his political career.
Erdogan has made the error that Menderes, Demirel and Erbakan all made before him. 
The terrorist attacks that have hit Turkey have little to do with Iraq or even rising hatred for the United States. Both Iraq and hatred for the US are used as pretext by Islamist groups who wish to destroy Erdogan's government. 
The only way to cope with the threat is to initiate a broad popular front dedicated to the values and traditions of Turkish democracy. Erdogan can take the lead in that direction. But beforehand, he needs to realize that anyone mixing politics and religion in Turkey "risks having that mix explode in his face," as a shrewd commentator, Amir Taheri, a guest contributor to Arab View, put it in his 'Turkey, Erdogan and the Deadly Mix.' 

Turkish appeals court orders new trial for Kurd lawmakers
Human rights are beginning to get more of a look-in, essential given the 'Copenhagen criteria' to impress the Europeans of Turkey's EU credentials. An appeals court has ordered a new trial for four former Kurdish lawmakers convicted of links to outlawed Kurdish rebels, ruling the four did not receive a fair trial in a previous retrial earlier this year.
Leyla Zana and three other former Kurdish members of the Turkish parliament were released from prison last month after prosecutors asked for a retrial, citing procedural violations in their earlier retrial. The former lawmakers had served 10 years of their 15-year sentence and will remain free during their retrial. When it's the 'prosecutors' asking for a re-trial, rather than just the defence lawyers, it's inconceivable that they will return to fail.

Erdogan bestrides the world stage
Erdogan is becoming a high profile world figure, hosting the NATO summit at the end of June in Istanbul and, a happy not unpolitical event, his own daughter's nuptials shortly afterwards. Jordan's King Abdullah II, President Pervez Musharraf, Prime Minister of Greece and Prime Minister of Romania, Adrian Nastase, attended in early July the marriage of Erdogan's daughter to a close supporter.
More than 4,500 police were deployed, police sharpshooters were posted on rooftops and many streets around the centre were closed to traffic in downtown Istanbul for the wedding in the city's conference centre, which recently hosted NATO leaders, including US President George W Bush.
Nearly 7,000 people, including the entire cabinet, were invited to the civil ceremony that saw Erdogan's elder daughter, Esra, marry Berat Albayrak, son of the owner of an Islamicist paper which supports Erdogan's Justice and Development Party.

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AVIATION & SPACE

Turkey, European Space Agency sign cooperation agreement

Turkey signed a cooperation agreement with the European Space Agency (ESA) on 15th July, Anatolia News Agency reported.
The cooperation agreement on examining and using outer space through peaceful means was signed in the Scientific and Technical Research Council of Turkey (Tubitak).
Tubitak Deputy Chairman, Prof Dr Nuket Yetis, said that the agreement provided Turkey with cooperation opportunities with ESA in all kinds of scientific and technical studies that would be conducted for use of space through peaceful purposes.
ESA is Europe's gateway to space. Its mission is to shape the development of Europe's space capability and ensure that investment in space continues to deliver benefits to the citizens of Europe.
ESA has 15 member states. By coordinating the financial and intellectual resources of its members, it can undertake programmes and activities far beyond the scope of any single European country.
ESA's job is to draw up the European space programme and carry it through. The Agency's projects are designed to find out more about the Earth, its immediate space environment, the solar system and the Universe, as well as to develop satellite-based technologies and services, and to promote European industries. ESA also works closely with space organizations outside Europe to share the benefits of space with the whole of mankind.
ESA's 15 Member States are Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and Britain.

Inter Air begins domestic flights

Inter Airlines will soon be introducing domestic flights. Inter Airlines Press and Public Relations Director Mojdat Goktas told a press conference in Adana recently that the company will introduce roundtrip flights from Adana to the Turkish cities of Gaziantep, Istanbul, Ankara, Antalya, Bodrum, and Izmir. 
The company had previously been offering round trip flights to European countries, CihanNews reported. 
Goktas said that initially, they would offer flights from Adana to Antalya four times a week and to Izmir and Bodrum twice a week. Director Goktas said that they have no intention of competing with the state-run Turkish Airlines or any other private airline company but intend to provide services to customers who want to avoid long and exhausting bus journeys.

THY reports higher losses in Q1

Turkish Airlines (THY) recently announced its financial results for January-March 2004, regulated according to international financial reporting standards (UFRS), New Europe reported. 
According to the figures, THY had a total turnover of 600tr Turkish liras and a net loss of 87tr liras in this period. The occupancy rate of THY planes during this period was 65%, while the rate during the same period of 2003 was 59%. The number of passengers during January-March 2004 rose by 20% to 2.5m people compared with the number of passengers during the same period of 2003, which were 2.1m people. The number of passengers during the first five months of 2004 rose by 26% from 3.5m to 4.4m compared with the same period in 2003. The losses during the first three months of 2004 were declared to be due to the near 30% decrease in the prices of domestic air tickets and the 10% decrease in the prices of foreign air tickets from January 2004. The decrease in the foreign exchange rate was also deemed to be contributing factor.

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CONSTRUCTION

Construction firms clinch €2.85bn in contracts

Turkish construction companies have won €2.850bn worth of contracts in the first 6 months of the year in separate 125 projects across the world, Turkish State Minister, Kursad Tuzmen, said recently, CihanNews reported.
Tuzmen said that the recent performance indicated that the Turkish companies would easily reach the target of €5bn worth of foreign contract for 2004.
Turkish construction firms had gained €3.179bn worth of foreign contracts in the whole of 2003 while the corresponding figure for 2002 was below €1bn.
Turkish construction companies have undertaken €58bn worth of 2,600 projects in 62 countries across the world until now, the Turkish State Minister said in a statement. Tuzmen noted that local construction companies have taken active roles at international tenders. "The construction sector is a most important one that provides great revenue to the Turkish economy. The action plan put into practice in 2003 has been successfully implemented and will continue to be implemented," the minister was quoted as saying by CihanNews.
In the first half of the current year, Turkish construction companies gained 125 projects in separate 25 countries across the world. The overall value of the projects is estimated at €2.850bn. Turkish companies have attained most contracts in Romania, Russian Federation, Iraq, Saudi Arabia and Algeria.
Turkish companies won €1.15bn worth of contracts in the Russian Federation, €229m of contracts in Iraq, €231m worth of contracts in Afghanistan and €246m of contracts in Kazakstan in 2003.
Tuzmen said that Turkish companies have a great advantage over the foreign counterparts in reconstruction projects of Iraq and Afghanistan. He said, "Thanks to Turkish companies' reasonable offers and their higher information technology as well as Turkey's proximity to the region and its experience, Turkish construction companies are very lucky in attainment of the tenders in Iraq and Afghanistan in the upcoming period. This situation forces several foreign companies to cooperate with the Turkish companies to operate in these regions."

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ENERGY

Companies favour power imports from Bulgaria

Turkish companies are interested in electricity imports from Bulgaria in connection with the liberalisation of the Turkish market, Bulgarian news agency BTA reported recently. Up to 140m kWh of electricity may be exported every month, according to a report.
The national grids of Bulgaria and Turkey do not operate in parallel and supplies will require that "an island" be formed on Turkish territory, Mityu Khristozov, chief engineer of the National Electric Transmission Company (NEC), said recently.
This is how electricity was exported to Turkey under a 1998 inter-governmental agreement, which was unilaterally suspended by Ankara in April 2003. "NEC used to export up to 4,000m kWh a year under the agreement," Khristozov was quoted as saying by BTA.
At the end of 2003, anticipating a rise in electricity consumption in Greece in august and September due to the Olympic Games, Bulgaria specifically repaired its power stations and transmission network.
NEC signed an agreement with Greek power utility Public Power Corp in February for the period to the year's end.
The maximum amount envisaged in the contract of about 65m kWh a month has been exported since early June. Nearly the same amount is supplied through intermediaries to privileged consumers in Greece. NEC's total exports in January-May increased by 50% year-on-year.

Turkey, Greece sign agreement to build power transmission line

An electricity transmission line will be constructed between Turkey and Greece in addition to a natural gas pipeline. A 64-kilometre part of the 260-kilometre power line will be in Turkish territories, Anatolia News Agency reported.
Turkish Electricity Transmission Corp (Teias) and Trakya Joint Venture (Akpe Ltd - Galdesan) officials signed a contract on 16th July for construction of the line on the Turkish side. 
Turkish Energy and Natural Resources Minister, Hilmi Guler, parliamentarians, bureaucrats and contractor company officials attended the signing ceremony in the ministry building.
Speaking at the signing ceremony, Guler said that total investments in transmission in the next three years would reach nearly US$344m.

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FOREIGN ECONOMIC RELATIONS

Turkish minister urges improved trade with Israel

Turkish Agriculture and Rural Affairs Minister, Sami Guclu, said recently that trade between Turkey and Israel should be further improved, Anatolia News Agency reported.
Delivering a speech at the meeting of Turkish-Israeli Joint Economic Commission (JEC), Guclu noted that relations between the two countries have developed in political, commercial and economic fields recently.
Stressing that the Turkish government had the determination to take every kind of measure and put into practice measures to bring Turkish-Israeli relations to a level that would be a model for regional countries, Guclu noted that the JEC meeting was a significant step in that respect.
Guclu said that although there was a free trade agreement between Turkey and Israel, trade could not be brought to a desired level, adding that trade volume between the two countries amounted to US$1.5bn in 2003.
Stating that some positive developments started to take place in bilateral commercial relations as of the beginning of 2004, Guclu noted that Turkey's imports from Israel increased by 25 per cent, while exports to Israel rose by 21 per cent in the first six months of 2004. He added that they expected trade volume between the two countries to reach US$2bn this year.
Guclu said that there were 118 Israeli companies in Turkey, while there was fewer number of Turkish companies in Israel, underlining that joint initiatives should be launched in investment and service sectors.

Ankara eager to boost trade ties with Libya

Turkey is about to enter a new era of bilateral relations with Libya, Turkish State Minister, Kursad Tuzmen, said after a recent seminar on business opportunities between Turkey and Libya in Tripoli. The Minister stressed the need that trade relations between the two countries should be improved further. According to CihanNews, Turkey aims to increase its trade volume with Libya to US$4bn.
Tuzmen met with the Libyan Prime Minister, Muhammed Ganem, during his visit in the Trablusgarp region. Speaking to reporters in Trablusgarp, Tuzmen said Libya is a gate for Turkey to reach the African market. "We want to enter a new era with Libya. We want to boost the relations and friendship with Libya," the Turkish official said, CihanNews reported.
Trade recessed between two countries as embargoes were imposed in Libya at the beginning of 1990s, Tuzmen said. Turkish-Libyan Joint Economic Cooperation (JEC), which could not be held since 1996, would convene in Ankara in the second week of August, Tuzmen stated.
Tuzmen said that they would take up the improvement of the relations between two countries in upcoming JEC meeting.

Turkey's export to Iraq in first half of 2004 worth US$880m 

Chairman of the Turkish-Iraqi Business Council, Ercument Aksoy, said that figures for exports to Iraq were a success for Turkish businessmen. Stating that US$880m in exports had taken place in the first six months of the year, Aksoy noted that exports could close at US$1.3-1.5bn this year, Sabah web site reported.
Recalling that the restructuring of Iraq had a potential of US$40bn, Aksoy stated that the volume of trade between Turkey and Iraq could reach US$5bn in a short period of time, and maintained that the state's maintenance of good relations through bilateral agreements would increase competitive strength.
Speaking at a press conference at which the Turkish-Iraqi Business Council's report on "The Restructuring of Iraq, and Turkish-Iraqi Relations" was disclosed, Aksoy pointed out that Turkey had actualised US$880m in exports to Iraq in the first six months of the year. Aksoy continued:
"We had closed this record level in 2001 with exports in the region of US$1bn. For there to be US$880m in exports in the first six months despite all manner of adverse conditions shows both Iraq's interest in Turkey and the desire of Turkish businessmen to conduct business in Iraq even under such bad conditions."
Stating that they had pulled back their target of US$2bn in exports, Aksoy said the main reason for this was the delay in the US Congress distributing US$18.4bn in reconstruction funds to the main contractors.

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FOREIGN ECONOMIC COOPERATION

Turkey, Azerbaijan sign environmental agreement

Turkish Environment and Forestry Minister, Osman Pepe, returned from Azerbaijan to Turkey recently, Anatolia News Agency reported.
Pepe, who went to Azerbaijan as the guest of Azerbaijani Ecology and Natural Resources Minister, Huseyngulu Bagirov, met Bagirov and stressed that the two countries should improve their cooperation.
Pepe also met Azerbaijani Economic Development Minister, Farhad Aliyev, and discussed investment and cooperation opportunities. 
Pepe, who was received by Azerbaijani Parliament Speaker, Murtuz Aleskerov, said the Caucasus was very important for Turkey and they closely monitored developments in the region.
Azerbaijani President, Ilham Aliyev, and Prime Minister, Artur Rasizade, also received Pepe. Pepe and Bagirov signed a Cooperation Agreement on Protection of Environment.

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TOURISM

Antalya tourist arrivals surge

The number of tourists coming to southern Antalya province by air exceeded two million since the beginning of this year, Antalya Culture and Tourism Directorate said recently, Anadolu News Agency reported. 
According to the Directorate on June 19th, 32,453 tourists came to Antalya by plane. A total of 469,896 tourists came to Antalya between June 1st and 20th while the number of tourists coming to Antalya and its vicinity reached 2.71m between January 1st and June 20th. The number of tourists visiting Antalya rose by 28% in June 2004 when compared with June 2003.

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TRANSPORT

Marmaray railway project clinches Japanese fund

The Japan Bank for International Cooperation (JBIC) and Turkish officials have made an initial agreement on a new loan tranche in the amount of 74bn Japanese yen for the Marmaray Railway Tunnel project, which will link Istanbul's rail network through a tunnel underneath the Bosphorus.
Marmaray expects more than one million people per day will use the tunnel, which is due to be constructed by a Turkish-Japanese consortium and launched in 2008.
JBIC mission and State Railway, Port and Airport (DLH) construction officials discussed the second loan tranche for the project which will construct a third link between Istanbul's European and Asian sides after the Bosphorus and Faith Sultan Mehmet bridges, Anatolia News Agency reported.
Reaching a preliminary agreement, the mission will prepare a report following the conclusion of talks.
The project will link rail networks on both sides of Istanbul and cost €2.5bn financed by international credit with the JBIC providing an initial €815m. 
After the completion of the project, the tunnel will be 13.3km in length and shorten travel time between Gebze and Halkali to 105 minutes, Halkali-Sirkeci to 28 minutes, Sirkeci-Sogutlucesme to 16 minutes, and Sogutlucesme-Gebze to 61 minutes.
A four-lane tunnel will be constructed under the Bosphorus at a depth of 55 metres and be the deepest undersea tunnel in the world. In the scope of the project, there will be four underground stations. The tunnel has been designed to withstand an earthquake measuring nine on the Richter scale and the capacity to carry 150,000 passengers per hour in both directions.
Additionally, Marmaray will be connected to the Aksaray-Ataturk railway system and Taksim-Levent subway system on the European side. A station will be built for passengers to catch transport in Yenikapi. It will also be integrated into the Umraniye-Uskudar railway system on the Asian side.

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