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TURKEY


 

 
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: 086 - (30/06/04)

Prime Minister Recep Tayyip Erdogan said he didn't think the European Union will give a negative decision on granting Turkey the go-ahead to start membership talks at the December EU summit, adding, "Otherwise, it would be a huge disappointment for Turkey and a huge loss for the EU." 
Erdogan was addressing a meeting yesterday organized by the Turkish-English Chamber of Commerce and Industry in Britain where he was due to deliver a speech at the Oxford University. 
"However, it is not a must for Turkey to join the EU. If we are rejected, then we will turn the range of reforms we have undertaken into Ankara criteria and will proceed in our own way. It is that easy," Erdogan went on to say. 
Turkey has passed a series of democratic reforms to comply with the criteria, known as the Copenhagen criteria, which is required in order to join the EU. Having done much of its preparatory work, Turkey strongly expects to get the go-ahead in a December EU summit to start membership talks with the EU bloc. 
Erdogan said that when compared to the 10 new members of the EU, Turkey has been more in harmony with the EU Acquis, adding that it was unfair to keep Turkey at the door of the EU for more than 40 years. 
Erdogan was also to address Oxford University students as well as to convene with British business circles and hold talks with British Justice Minister Lord Falconer and head of British Petroleum Lord Brown. 
Prior to his Oxford speech, Britain's prominent daily newspaper The Times called on the EU to admit Turkey into the club. Acknowledging that the main reason for opposing Turkey's membership was Turkey's huge population, the daily said: "Some circles fear that admitting Turkey will cause Europe to become a place where the Muslim population will speedily increase. However, if Turkey is rejected, an unstable, radicalized and isolated population of 70 million people will be at the EU's doors." 

'Serving as a model strengthens, not weakens, us' 
Replying to a question, prior to his departure for Britain, concerning next month's G-8 summit, Erdogan said: "We have been invited to this summit as a country with a specialty. I hope positive decisions for the future of the Middle East will be made at the summit." 
The United States said it had invited Prime Minister Recep Tayyip Erdogan to attend next month's G-8 summit to discuss Washington's Greater Middle East Initiative for regional reform and to reach out for support from some Arab countries. 
Turkey apparently assumes a "pivotal role" in the U.S. initiative, representing a model case with its Muslim population and functioning democracy. 
Asked about claims of a disagreement between the government and the military concerning the Greater Middle East project, Erdogan noted that Turkey would serve as an example, adding, "Being a model country does not weaken us, it strengthens us."

The Association Agreement and EU Candidate Status
Bilateral relations between the EU and Turkey are generally conducted on the basis of the 1963 Association Agreement (Ankara Agreement), one of the earliest bilateral treaties the EU negotiated with a Mediterranean non-member country. On the basis of this agreement, a customs union entered into force in January 1996, a step which facilitated the flow of goods between the two partners considerably.
In 1999, the most important event in EU-Turkey relations was the recognition of Turkey as a candidate State for accession to the EU by the Helsinki European Council in December. The European Council conclusions state that Turkey is a candidate State destined to join the Union on the basis of the same criteria as applied to other candidate States. Accordingly, Turkey will benefit from a pre-accession strategy to stimulate and support its reforms. Special emphasis is being put on the human rights issue, which is seen as one of the crucial political criteria for accession to the Union. Dialogue and cooperation will be enhanced by means of Turkey's participation in Community programmes, agencies, and meetings between candidate States and the Union.

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AUTOMOBILES

Ford, Renault Turkish ventures to raise capacity


The Turkish ventures of major automotive groups Ford and Renault are planning to increase production capacity in the face of growing domestic and foreign demand, the companies said recently. Falling interest rates have made consumer loans for vehicle purchases more attractive and have helped sustain a market revival following a 2001 recession, New Europe reported.
Ford Otosan, the Turkish arm of the US carmaker, said in a statement to the Istanbul Stock Exchange it would invest €37.8m (US$45.3m) to raise capacity.
The two-year investment would allow the plant, located in northwest Turkey's Kocaeli province, to increase production to 240,000 vehicles from 200,000, the company said.
One of Turkey's top automakers, Otosan is a joint venture between Ford and Turkish industrial group Koc Holding.
Oyak Renault, a joint venture between French carmaker Renault and Turkey's Oyak, separately announced plans to increase annual production capacity at its Bursa plant by 38% by the end of the year.
At a news conference recently, Luc Alexandre Menard, Oyak Renault's international operations director, said the company would increase capacity to 200,000 units from 145,000 through an increase in productivity and Saturday shifts.
The plant, in northwest Turkey, aims to raise turnover to at least €1-8-1.9bn (US$2.2-2.3bn) this year from around 1.4bn last year. The company exports some 70% of the plant's production.

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CREDIT RATINGS

Positive outlook for Kocbank


The Turkey-based Kocbank was recently assigned B+ long-term and B short-term counter-party credit ratings by international ratings services agency Standard & Poor's. The attitude is optimistic, the agency said. "The ratings on Kocbank reflects the high-risk banking and economic environment in the Republic of Turkey. They also consider the bank's adequate financial position, strong brand name, group franchise and strong supportive shareholders," S&P's said, New Europe reported.
Turkey's macroeconomic policies make for a risky banking environment, and most of the factors behind the sovereign ratings create major risks for Turkish banks, according to the report. "Kocbank has a carefully planned strategy to adapt to the expected changing economic and banking environment in Turkey," the international agency said.

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FOREIGN ECONOMIC COOPERATION

Syrian premier calls on Turkey to boost economic ties


Syrian Prime Minister, Muhammad Naji al-Itri, recently called on Turkey to make investments in Syria. Itri said that economic and political developments, which were continuing rapidly between Turkey and Syria, were pleasing, Anatolia News Agency reported.
He said that he believed the recent visit of Turkish State Minister, Kursad Tuzmen, to Aleppo with 400 businessmen, 33 deputies, six governors and many press members contributed to further development of the relations between two countries.
Noting that trade volume between Turkey and Syria has reached nearly US$1bn, but this figure was not enough, Itri said that they wanted to increase this figure to US$2bn until the end of this year. Itri said that Syria could easily provide transfer of Turkish products to Gulf and African countries and especially in the last two years Syria has made important legal changes to draw foreign capital, adding that they observed a significant increase in coming of foreign capital following those legal arrangements.
Noting that they saw important openings in Turkey's foreign policy recently, Itri said that they were following closely the commercial and economic relations that Turkey wanted to develop with its neighbours. He added that they observed with pleasure that Turkey wanted to develop commercial relations with Syria mutually within that scope.
Itri called Turkey to make investments in Syria and said that there were language, religion, culture and relative ties between Turkey and Syria. He added that they would provide every type of facility to Turkish businessmen in their investments to Syria. He said that now there were many Turkish businessmen in Aleppo and Damascus who made investments in Syria and they were increasing their investments each day.

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FOREIGN LOANS

World Bank to release first US$0.5bn tranche to Turkey


The World Bank released its first tranche of loan of US$500m in early June. Turkish State Minister, Ali Babacan, announced the above at a recently held conference, attended by World Bank Turkey Director, Andrew Vorkink, and Treasury Under-secretary Ibrahim Canakci. Babacan said, "Negotiations on financial and public reform programme under the country assistance strategy (CAS) worth US$4.5bn with the World Bank between 2004 and 2006 have been completed."
An official statement of the World Bank stated that the World Bank and the government of Turkey completed negotiations on a US$1bn third programmatic financial and public sector adjustment loan (PFPSAL III), Anadolu News Agency reported.
The loan, called the PFPSAL III, was expected to be submitted to the board of Executive Directors of the World Bank in Washington for consideration in June, the statement noted.
The statement said that the main objective of PFPSAL III was to provide support during 2004 to the government of Turkey's financial and public sector reform priorities while ensuring that social programmes were adequately funded and increasingly better targeted.
"Key reform priorities in the financial sector include strengthening the regulatory framework for banking, building institutional capacity at the Bank Regulation and Supervision Agency (BRSA) and Saving Deposit Insurance Fund (SDIF), further restructuring of state banks in preparation for their privatisation and improving the corporate insolvency regime," the statement said, cited by Anadolu.
"Priorities for social spending include adequate expenditure for health, education and social protection in the 2004 budget and better targeting of social protection," the statement pointed out.
"The principal benefits of the loan will be to support the government's efforts to create conditions for sustained growth and macroeconomic stability, ensure adequate social expenditure and better targeted social protection, consolidate the current stability of the banking system and positioning it for accession to the EU and establish a better foundation for more effective government in line with EU directives and international best practice."

Ankara to resolve future IMF relations in August

The Turkish government will determine the country's future relations with the International Monetary Fund (IMF) in August, Economy Minister Ali Babacan said recently, Anadolu News Agency.
Turkey's €19bn IMF pact will expire by next February so the government will decide on whether or not to ask for a follow-up lending programme.
Babacan told local news station CNN Turk recently that the format of post programme relations with the Fund would become clear in August. He added that the timing of the upcoming eight review of the programme with IMF officials was already discussed, however, they have yet to confirm a date.
IMF senior resident representative in Turkey Odd Per Brekk said that there were in practice three main options for Turkey's relations with the IMF after the current stand-by arrangement ends in February 2005. "These are, first, so-called post-programme monitoring, which essentially amounts to a close policy dialogue but without financial support from the IMF; second, a precautionary stand-by arrangement under which a credit line would be available but not expected to be drawn down under normal circumstances; and third, a regular stand-by arrangement with financing," he added.
Senior IMF officials have repeatedly said that it was up to the Turkish government to decide on the issue. Babacan also said that they were not afraid of the current account deficit but will not ignore it. He noted that the floating exchange rate regime was an important assurance on the issue of the current account balance.
Unexpectedly, Turkey's current account deficit swelled to more than €2bn in February, unnerving markets and worries about emerging markets in general.

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