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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: 104 - (01/01/06)

Backdrop to contemporary drama
Turkey is at the crossroads; and so is Europe in its relationship to Turkey. Formally, it is now a candidate for membership of the European Union (EU). But everyone knows that 'formally' is the key word in that sentence.
Those who want to see Turkey become a member would be well advised to admit that it is not a European country at all. It has five per cent of its territory on traditional European soil, true; but this is simply the residue of its once vast European empire in which Christian peoples were subjugated to the Porte. Islam was the dominant religion, although not propagated because Christian and other subjects could be taxed, whereas converts to the true faith could not be. It was in fact remarkably tolerant in religious matters.
Why would anyone, however, advocate its entry into the EU? It is undoubtedly a curious anomaly in the Islamic Middle East. It had an extraordinary ruler in Ataturk (1923-38), who gave it a complete make-over such as few countries have experienced. Turkey had been one of the great losers from the First World War; the Ottoman empire was finished. But under Ataturk's brilliant generalship it fought a successful war against the Greeks in 1922. He then proceeded to Westernise the country, turning its back on all things Ottoman, secularising the state and even transforming the language by giving it a new Western alphabet. But of course he could not change everything all at once. Turkey, and its population being largely rural still remains non-Western at core, even though the cities are westernised.
In this grave time of crisis between the West and Islam, it would seem gratuitous folly not to encourage the one Moslem Middle Eastern state to continue on its secular path, one which is amply demonstrated by the fact that it has a moderate Islamicist party in power under Premier Teccip Erdogan, a friend of the West for sure and a wise man. 
The military, always uppity in Turkish politics, are being held in check. A war against the thirteen million Kurdish minority, for all that in a nation of 70 million plus, is being wound down.

The conscience of the nation
There is yet another wise man in the country, its conscience and greatest writer, Orhan Pamuk. His novels, namely Istanbul and Snow explore the themes of West-East conjunction and much else. He is on the level of Pasternak and Solzhenitsyn.
On Dec. 16, however, Pamuk entered an Istanbul court to face a charge of "insulting the national identity" after he advocated open discussion of the Turkish genocide of 1.5 million Armenians in 1915 and 1916. Pamuk faces three years in prison, if found guilty. Turkey's effort to fine and imprison those who do not toe the official line convinces many, notably Frits Bolkestein, a member of the European Commission from 1999 to last year and a former Dutch minister of defence, that, as he puts it. "I was correct to oppose opening negotiations on the country's EU membership." 
Operating on the op-ed principle we now allow him to put his case, recently expounded in the International Herald Tribune:-
"In December 1999, the European Council granted Turkey the status of EU candidate-member, implying that Turkey would accede to the union at some future, unspecified date. The council subsequently asked the European Commission to decide by October last year whether Turkey had sufficiently fulfilled the political criteria -- including democracy, the rule of law and respect for the rights of ethnic minorities -- for membership. That decision was one of the last taken by Romano Prodi's commission, of which I was a member. Of its 30 members, 29 said that Turkey had fulfilled the criteria sufficiently to proceed. I was the lone dissenter. 
"The commission's own report on Turkey, prepared by Gunter Verheugen, who was then in charge of EU enlargement, shaped my decision. This report mentioned that in 2003 some 21,870 Turks submitted asylum claims in the EU, of which 2,127 were accepted. In other words, the EU's own governments acknowledged in 2003 that the Turkish government had persecuted more than 2,000 of its own citizens. 
"Meanwhile, the commission published a progress report on Turkey that granted that reforms were continuing, albeit at a slower pace, under Prime Minister Recep Tayyip Erdogan's mildly Islamic-minded government. Yet the report also presented serious misgivings: human-rights violations, including torture, continued; the military's influence remained too high; freedom of speech was not universally observed; non-Muslim religious and cultural minorities faced discrimination; and violence against women was not opposed strongly enough. 
"Not much has changed since accession talks began this October. Beyond the current persecution of Pamuk, unacceptable behaviour abounds. In March, the police violently disrupted a demonstration to celebrate International Women's Day. In May, the largest teachers' union was banned for promoting the education of Turkey's 14 million Kurds in their own language. 
"Indeed, intolerance goes right to the top of the Turkish government. Foreign Minister, Abdullah Gul, abruptly cancelled a recent press conference in Copenhagen when he spied a Kurdish journalist in the audience and the Danes refused to evict him. 
"Such actions and attitudes amply justify my dissent of October last year. But, even if these shortcomings were removed, Turkey should still not be admitted to the EU, because it is not a European country. Christianity, feudalism, the Renaissance, the Enlightenment, democracy and industrialization have made us what we Europeans are, but they have not made Turks who they are. 
"So I am not convinced that reforms in Turkey implemented at the insistence of the European Commission would continue after accession. Indeed, I suspect that there will be backsliding. 
"Moreover, Turkey's accession would lead inevitably to that of Ukraine, Belarus and Moldova, and perhaps of Georgia, Armenia and Azerbaijan. The first three of these countries are certainly more European than Turkey. Leaving the three Caucasian republics aside but including the successor states to Yugoslavia, this would mean an EU of some 35 members. What sort of union would that be? 
"The EU is not simply a club of friends. It is based on freedom of movement of goods, services, capital and people. The Commission, as the guardian of the union's treaties, must protect these four fundamental freedoms, which means that it must sometimes persuade, and if necessary force, member states to change their laws. Alcohol policy in Sweden, the Volkswagen-law in Germany, and discrimination against foreign investment funds in France are examples of cases that made the Commission unpopular. But they were necessary. 
"By the time I left the commission, I was sitting on a pile of 1,500 such infringement proceedings. In short, EU membership entails having to accept incisive measures that deeply affect a state's internal affairs. 
"That will be impossible with such disparate members. The EU would fall victim to what the historian Paul Kennedy calls "imperial overreach." The EU would become unacceptably diluted. That is why former French president Valery Giscard d'Estaing feared that Turkey's entry would lead to the EU's breakup, and it is why former German chancellor Helmut Schmidt said, "Accession of Turkey would be more than the EU could bear." 
"But the strongest reason to oppose Turkey's accession is a question of democracy: A majority of the EU's population simply does not want it."
A formidable case, indeed. But here is another point of view:-

In Turkey, discussing what once was taboo 
By Stephen Kinzer The New York Times

The 10th-century Akhtamar Church, its stone facade alive with vivid images of birds, animals, saints and warriors, dominates a small island just off the southern shore of Lake Van. For nearly a millennium, this spectacular Armenian monument was a seat of great religious and political power.
Then the Ottoman Empire expelled and wiped away the Armenian population here in the massacres of 1915, and the church fell into near ruin. Its condition symbolized the abysmal relations between many Armenians, who say their ancestors were victims of genocide in 1915, and the Turkish Republic, which rejects that claim.
This autumn, at Turkish government expense, restoration workers began repairing the church. They have cleaned the exterior and replaced the collapsed roof, and plan to return next summer to work on the interior.
Although this is an act of historical preservation and tourism promotion, it also reflects something larger. To the horror of conservative nationalists, there is a new sense of freedom taking hold in Turkey.
The government is promoting democratic reforms that will one day, it hopes, allow Turkey to join the European Union. In the process, old taboos, like admitting the "possibility" that the Christian Armenians were the victims of genocide, are falling.
Whether steps like restoring the Akhtamar Church will ease Turkey's entry into the European Union, however, is far from certain.
In Europe, resistance to Turkish membership has been growing. It was one reason that voters in France and the Netherlands rejected the union's draft constitution last spring. A magazine poll a year ago found that French opposition to Turkey's entry had risen to 72 per cent, from 58 per cent two years earlier.
Here in Turkey, even as the church reconstruction was under way, a court was giving Hrant Dink, editor of a newspaper for Istanbul's Armenian community, a suspended prison sentence for making comments "disrespectful to our Turkish ancestors." A prosecutor has indicted Turkey's leading novelist, Orhan Pamuk, on similar charges, and several other such cases are pending.
To outsiders, it sometimes seems that Turks cannot decide whether they want to embrace the standards of human rights and free speech that the European Union demands of its members.
In fact, however, many Turks say they fervently want their country to meet those standards. So, on most days, does the government of Prime Minister Recep Tayyip Erdogan. But defenders of the old order, including prosecutors, judges and officials with influence in the army and bureaucracy, fear that steps to open Turkish society will weaken national unity, and they are trying to suppress them.
Nationalists have tried to prevent serious investigations into incidents like a recent bombing in the southeastern province of Hakkari, which was made to look like the work of Kurdish terrorists but turned out to have been carried out by police agents.
Tension within Turkey's political class is intensifying as citizens begin voicing opinions that have long been anathema.
In September, for example, a group of historians and other academics, most of them Turkish, met in Istanbul to challenge the taboo on saying that the Ottoman regime committed genocide in 1915.
It turned out to be a historic conference on the fate of the Ottoman Armenians.
The event had been postponed twice, once after Justice Minister, Cemil Cicek, said it would constitute a "stab in the back" to Turkey, and again after a judge banned two universities from playing host to it. It was finally held at a third university.
Participants had to walk through a gauntlet of angry protesters, but once they found their seats, and began to speak, they observed no limits to their debate. Their papers had titles like "What the World Knows but Turkey Does Not" and "The Roots of a Taboo: The Historical-Psychological Suffocation of Turkish Public Opinion on the Armenian Problem."
The conference produced an avalanche of news coverage and led to weeks of analysis.
"I was there, and it felt like we were making history, like something incredible had suddenly happened," said Yavuz Baydar, a columnist for the mass-market daily Sabah. "Everyone was conscious of it. This is not a taboo anymore."
The response to the conference suggests that other longstanding taboos may also be ripe for challenge. If people here can now argue freely that the Ottomans were guilty of genocide in 1915, it may not be long before they promote other long-suppressed ideas, like Kurdish nationalism, with which some Europeans sympathize, or political Islam, which nearly all of them detest.
The recent rioting in France in alienated immigrant communities, however, raises new questions about Europe's willingness to accept Turkey's application in any event. The anti-immigrant French leader Jean-Marie Le Pen, for example, was quick to use the riots as a further argument for not admitting "another 75 million Muslims" into Europe.

Human rights blues
Two Turkish professors face up to five years behind bars for publishing a report urging Turkey to overhaul the way it treats minorities and approaches its own to national identity, Anadolu News Agency reported.
Prosecutors in Ankara indicted Ibrahim Kaboglu and Baskin Oran over opinions published in a report for the Human Rights consultative board - a board formed by Prime Minister Tayyip Erdogan, whose government had also originally commissioned the report.
The prosecution would seek prison sentences on the grounds that the two academics had "attempted to spread hatred and enmity among the people," according to the indictment.
The report published in October 2004 had called for the official recognition of minorities in Turkey such as Moslem Alawites and Kurds.
It also suggested to change the way people describe themselves from the ethnic term "Turks" to "citizens of Turkey."
At the time, right-wing politicians condemned the report and death thresats were made against the authors.
The government of Recep Tayyip Erdogan, which had commissioned the report, distanced itself from the board and has not acted on any of its recommendations.
The indictment issued recently included a lengthy explanation why the changes should not be made, and cited France's refusal to recognise minorities as a reason why Turkey should not change its position on the matter.
Neither were people from France being described as "French" and not "citizens of France," the indictment said, dismissing the suggestion to adopt a different reference for the term "Turks."
Based on the 1923 Treaty of Luasanne that formed the basis for the establishment of the modern Turkish republic, Turkey currently only recognises a small number of non-Moslem minorities, such as members of the Greek and Armenian Orthodox communities.

Turkey stays as hot potato of discussions 
"An ever expanding Union?" the subject focusing on the European Union enlargement policy was dealt with expertise by Maurice Guyander from DG Enlargement, the information branch of the European Commission. Mentioning Croatia, Macedonia, Albania, Serbia and Montenegro, Bosnia and Herzegovina and Turkey, Guyander pointed to "odd relations" between the EU and "big" Turkey with differences in culture, politics and economy. Taking the debate further Markus Ferber, German Member of European Parliament asked very pertinent questions like, "Does the EU has a capacity to expand?" "Is Turkey a democratic stable state?" and that "The EU already has problems within 25 member states."
Pinpointing the presence of "National Security Council," a body having powers to overrule the "democratically elected national parliament" in Turkey, Ferber warned, "We will enlarge EU to death." On the other hand, Bahadir Kaleagasi, Director of Brussels office of Tusiad - Turkish Business and Industry Association, went to great lengths explaining Turkish position vis-a-vis the EU enlargement. Referring to why Turkey needs time before joining, he cited the factors as agricultural sector occupying 10 per cent of the economy, one-fourth of the total population and one-third of the active population engaged in farming. He also agreed the human rights issues and education being interrelated and lamented that with all the progress, one-third of the population is still backward. Another journalist Sabine Goeb from Germany highlighted the poor integrating efforts by Turks in Germany in spite of many projects launched by Berlin in this direction. French counterparts, Olympia Nemet, and, Mathilde Auvillain, who had been to Berlin recently endorsed Goeb's version. In a discussion on "Can Europe's social model survive?" Ann Mettler, Executive director of the organisation "Lisbon Council," questioned, "Do we have one?" After a long diatribe, when asked her version, she put the basics of European social model as inclusion, opportunity and sustainability in labour markets, environment, public deficit and social security. 

Protests, deaths
At least five people were killed and around 20 injured in a violent protest in southeast Turkey over the failure of authorities to properly inform the public concerning a bomb attack in southeast Turkey that was allegedly planted at the behest of members of the military.
More than 1,000 people took part in a protest in Yuksekova which quickly descended into violence when riot police, backed by armoured personnel carriers, attempted to disperse the crowd.
The private NTV television station reported that two protesters had been killed and around 20 injured in the clashes.
The protest was the latest in a string of demonstrations across the southeast by Kurds angry over the alleged involvement of the military in the bombing of a bookstore in the town of Semdinli near the border with Iraq. One person was killed in the bomb blast.
A Kurdish Workers' Party (PKK) informant and a non-commissioned officer have been arrested in connection with the attack. They have been charged with murder and attempted murder.
In the immediate aftermath of the blast one person was shot dead by police as locals attempted to lynch a man they believed was behind the blast.
In a car allegedly used by the bomber, police found Kalashnikov rifles, grenades and documents linking the bombing to paramilitary police, raising fears that Turkey's security forces may again be retuning to the carrying out of extra-judicial murders, common in the 1990s in the fight against the PKK.
The bookstore where the bomb exploded was owned by a man previously convicted of being a member of the PKK. The man was not injured in the attack.
Opposition figures have called for a parliamentary inquiry into the attack. There was also a rare public attack on the government's handling of the case by its own backbench members at a party meeting in Ankara who said they had learnt more about the incidents from the media than from their own leaders.
While government leaders have released almost no information regarding the case, Prime Minister Recep Tayyip Erdogan has called for calm and has promised that those responsible will be punished.
Recently, Erdogan chaired a meeting which brought together the country's top military, intelligence and police officers to discuss the Semdinli bombing and subsequent violence. No details of the meeting were released.

Turks woo Italians 
Italian President, Carlo Azeglio Ciampi, arrived in the Turkish capital Ankara recently for an official visit. Ciampi was welcomed by Foreign Trade Minister, Kursat Tuzmen, at Esenboga Airport. Accompanied by hundreds of Italian businessmen and ministers, Ciampi expressed their conviction in Turkey, "The major Italian investors and financial companies, with a total endorsement of over US$400 billion, and the hundreds of people in this hall representing small, middle and large scale establishments are the proof of this belief." 
Italy's Productive Activities Minister, Claudio Scajola, delivered a speech at the Turkey-Italy Business Forum held at the Ciragan Palace, wherein he pointed out the energy transportation cooperations between Turkey and Italy already in the Caspian region, Russia, and the Middle East; and their importance towards carrying these resources to Europe. "Both countries can prepare joint projects against the problems in the region. There are several countries we can work with together internationally. We could spread to Central Asia, towards the Middle East and the Gulf with joint initiatives and by other co operations," the Italian minister said. Earlier, Italy's biggest energy distribution company Enel announced they are planning a 15 billion Euro investment (24 billion new Turkish liras) towards worldwide expansion in 2006, and Turkey is on the agenda as the most probable candidate to benefit. 
The Italian company is interested in the sale of the power stations, especially in distribution privatisations; however, "We do not know what amount of investment we will make in Turkey," Ziegler said, "because the tender process and value assessment have not been determined yet." In Ankara the Turkish Minister of Energy Hilmi Guler, after he hosted the Italian businessmen, said Italy's biggest distribution company Enel is very interested in energy distribution privatisations in Turkey; specifically in Istanbul and Ankara. Zeigler confirmed their interest in the privatisation of distribution regions, and said that they could unite these regions if they were to win the tenders of a few regions. 
According to the strategy document accepted by the World Bank, Turkey was supposed to launch tenders in March 2005 for electricity distribution privatisations; however, since the amendments are incomplete the tenders have not yet started. In early November, the government sent Parliament a related bill to pave the way for these privatisations. Ziegler said they obtained a clue from Prime Minister Recep Tayyip Erdogan that the natural gas distribution affair currently conducted by the municipalities in Ankara and Istanbul might be privatised too. "We would definitely be interested in this as well," Italian Banks Union President, Maurizio Sella, said.

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FOREIGN COOPERATION

India, Turkey sign MoU for cooperation in oil, gas field
 

A Memorandum of Understanding (MoU) for cooperation in the field of oil and natural gas was signed between Indian Minister of Petroleum and Natural Gas, Mani Shankar Aiyarn and Turkish Minister of Energy and Natural Resources, Hilmi Gulern on November 24th, New Europe reported.
After signing the MoU both the ministers expressed the hope that India and Turkey would further enhance bilateral cooperation and strengthen relations between the two countries. According to the agreement, the area of cooperation would be enhanced for tie-ups between Indian and Turkish companies in undertaking E&P initiatives in Turkey and bidding by Turkish companies in various NELP rounds for participating in the Indian E&P sector. The MoU would also encourage execution of large engineering and construction contracts, including oil and gas pipeline projects, in Turkey, India and other countries by Turkish and Indian companies. They would also exchange training, expertise and technical assistance. India and Turkey would also cooperate in oil and gas power market development, specific tools for operation, risk management. Both the countries would cooperate in manufacturing, upgrading and supply of drilling rigs and petro-chemical processing units under the agreement.
It would also encourage taking up of LNG-Refinery projects by Turkish and Indian companies in Turkey, India and third countries. The agreement would also encourage basic and applied research and development regarding oil and natural gas. Both of them would also enhance cooperation in environmental protection, including oil spill emergency response systems. 

Romania, Turkey cooperation 

A special emphasis is laid on the Romanian-Turkish cooperation under the Nabuco project for the supply of natural gas from the Caspian Sea region, said Economy and Trade Minister, Ioan Codrut Seres, ACT Media News Agency reported. 
The Energy sector is the main component for the development of the economic cooperation and of the bilateral commercial relations between the two countries. Both sides have examined the current stage and perspectives of the economic and commercial ties in strategic fields such as energy, agriculture and rural development, transport, environmental protection, health, tourism. In carrying out transport networks of natural gas and oil towards Europe from the Caspian Sea region Romania has expressed its participation with Turkey. The volume of bilateral commercial exchanges between the two countries might hit, until the end of this year, a record-high of around US$ four billion. Turkey is among Romania's best commercial partners. By the end of August 2005, there were approximately 8,705 Turkish companies registered in Romania with a total invested capital worth US$470 million. The Romanian exports to Turkey worth US$1.6 billion and imports from Turkey US$1.4 billion have already exceeded the level registered later last year.

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FOREIGN LOANS

WB grants Turkey US$325m for gas sector support 


According to the Zaman Daily, the World Bank approved a Gas Sector Development Project for Turkey with a loan of US$325 million, whose lending tool is a Fixed Spread Loan (FSL) with a seven-year grace period and a 13-year final maturity. 
Boru Hatlari ile Petrol Tasima A.S. (BOTAS) will be in charge of the overall implementation of the project whose target is to increase the reliability and stability of the gas supply in Turkey by putting into place critically needed gas storage and network infrastructure, and supporting BOTAS in strengthening its operations as a financially stable and commercially managed corporation. 
Tuz Golu underground gas storage facility of about 960 million cubic meters of working gas and 460 million cubic metres of cushion gas and network expansion are the two components of this project. 
The project will also finance two compressor stations for BOTAS at Erzincan and Corum as well as other network infrastructure. The Corum station will have a capacity of 30-mega watt and is required in order to enable increased supply from Russia, while the Erzincan Station will have 39-mega watt of compression capacity and will enable the import of natural gas from Azerbaijan. 
Natural gas consumption has grown rapidly in Turkey over the past two decades - with an average annual growth rate of 24 percent. "The World Bank is pleased to help the Government of Turkey in building the first gas storage facility in the country," said Andrew Vorkink, Country Director for Turkey. 
Considerable amounts of environmentally friendly and less costly natural gas are used in industry, commerce and increasingly, households; therefore, storage of gas in the country is extremely important. The energy sector, particularly the natural gas sector is a key driver in Turkey's economic recovery. 
"Natural gas storage facilities constructed under this project will help keep the cost of natural gas more stable across the seasons, give better security of supply, and encourage the construction of gas distribution networks," Vorkink continued.

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