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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: 113 - (30/10/06)

Pamuk wins the Nobel Prize
Orhan Pamuk, a widely-acclaimed novelist, has won the Nobel Prize for Literature in 2006, a most satisfactory award for the Turks, who have a high regard for literature. An earlier premier, Bulent Ecevit, translated TS Eliot into Turkish. Can one imagine Bush, who knows Spanish, translating Cervantes into English or Blair, who knows French, Baudelaire into English either?
Pamuk has expressed regret for the Armenian genocide of 1915, a sensitive issue in Turkey. The French parliament, with only a minority in attendance recently passed a motion making it illegal to deny the genocide, to the fury of the Turkish government, who see it as a ploy to defer Turkey's EU bid. But it would have to pass the Senate to become law and then be ratified by President Chirac, who is certain to veto it if need be. He supports Turkish entry and French logic should object to seeking to fix or change history by current legislation.

Liberals and nationalists in Turkey face off again over freedom of speech
Another prize-winning Turkish novelist stood trial from September 21st on charges of belittling Turkishness. The case is the latest in a string of prosecutions pitting liberals against nationalists in this European Union candidate country. 
Elif Shafak's 'The Bastard of Istanbul' has topped Turkish bestseller lists since it was published in March, winning critical praise for its portrait of the friendship between two girls, an Armenian-American and a Turk. But the work's direct treatment of the mass murder of Ottoman Armenians in 1915 has also attracted the attention of Kemal Kerincsiz, the nationalist lawyer whose rise to prominence as an opponent of free speech has paralleled Turkey's EU accession process. Kerincsiz has figured prominently in a number of high-profile free speech cases, including the prosecution last December of the same Orhan Pamuk, now a Nobel laureate. 
In Shafak's case, Kerincsiz's gripe is not with something she said, but with comments made by characters in her book. Sitting in his cramped central Istanbul law office, the soft-spoken Kerincsiz doesn't take long to find one of the passages that offended him. 
"I am the grandchild of genocide survivors who lost all their relatives at the hands of Turkish butchers in 1915," he reads, quoting Dikran Stamboulian, a minor Armenian character. "There's plenty more where this came from," he adds. Turkey and Armenia have long disputed the tragic events of 1915, when over one million Armenians perished amid the upheaval of World War I. Armenians insist that the actions of Ottoman Turkish forces constituted genocide. Turkish leaders steadfastly deny this. 
Shafak is being prosecuted under Article 301 of the Turkish Penal Code. Facing a possible sentence of three years if convicted, she is fully aware of the seriousness of her situation. "Until recently, I took comfort in the fact that nobody had ever been convicted under [Article] 301," she said. "Then, in June, a higher court confirmed [the Turkish-Armenian journalist] Hrant Dink's six-month suspended sentence. That's terrible news for him, and it could constitute a precedent for me." 
Shafak gave birth to her first child on September 16 and has yet to decide whether to attend her trial. "She wants to be there to defend herself against these ridiculous charges," her husband, Eyup Can, said on the phone from the Istanbul hospital where his wife is recovering from a caesarean section. "The doctors are opposed, and so am I, to be honest." 
He hasn't forgotten the scenes outside the Istanbul courthouse where Orhan Pamuk was tried last December. Nationalists smashed the novelist's car windshield and attacked his supporters as the police looked on. 
A similar welcome could be in store for Shafak. For weeks, a website belonging to Kerincsiz's nationalist group has called on "patriots" to turn out in opposition to the "newly-chosen princess of capitulationist intellectuals." 
"I oppose all violence," Kerincsiz said, "but if you call somebody's grandfather a butcher, there is no telling what reactions will be." 
"It's an invitation to a lynching," ripostes newspaper editor Ismet Berkan, another victim of the nationalist lawyer's attention. "Let's hope the police are prepared." 
If the language in the debate over Shafak's novel is violent, it's ultimately because this trial is symbolic of a much deeper struggle going on in Turkey. For nationalists like Kemal Kerincsiz, the clash of civilizations is real, and Turkey, a Muslim country, belongs with the East. What the European Union is trying to do, he claims, is "strip away our Muslim and Turkish identity." 
Those like Shafak who support Turkey's integration into Western economic and security structures, Kerincsiz says derisively, are "world citizens, half-Turks." 
Though intended as an insult, Kerincsiz's comment doesn't seem to offend the Strasbourg-born Shafak, who has spent much of her life outside Turkey. Both in her life and her work, she is an enemy of easy categorizations. "My ideal is cosmopolitanism, refusing to belong to either side in this polarized world," she says in her perfect English. This attitude helped prompt her to agree to serve as a columnist for a religious newspaper, a move that generated considerable criticism. 
"Too many people see the world in black and white, us and them. That's wrong. Ambiguity, synthesis: these are the things that compose Turkish society, and that is not something to be ashamed of," Shafak said. 
It remains to be seen which side will win the debate. Few take Kerincsiz's claim as the voice of the Turkish people seriously - even the country's ultra-nationalist political party has been put off by the violent actions of his supporters. 
But nationalism has traditionally proven a powerful force in Turkish politics. And a growing sense among Turks that Brussels is just playing with Ankara over the accession issue has played into the hands of people like Kerincsiz. 
"Turkey has been changing rapidly over the past five years, but it hasn't yet reached the point of no return," says political analyst Umut Ozkirimli. "These are critical times."

Appointment of new military chief sparks speculation on military-government relations in Turkey
The appointment of a reputed hard-liner as Turkey's new chief of the general staff has sparked speculation about the military's continued support for reforms and European Union accession. 
Gen. Yasar Buyukanit, who previously served as the military's land forces chief, was confirmed as the new head of the Turkish armed forces in late July. He will formally assume his new duties at the end of August. 
The appointment comes at a sensitive time for Turkey, which is grappling with geopolitical uncertainty connected with the deepening violence in neighbouring Iraq, Iran's nuclear program and the ongoing fighting in Lebanon. Domestically, Turkey is also gearing up for the selection of a new president, followed by parliamentary elections. Buyukanit is widely viewed as a proponent of a harder line on security issues, especially toward Kurdish militants, than the outgoing chief-of-staff, Gen. Hilmi Ozkok. In addition, Buyukanit is said to be an uncompromising secularist, seemingly placing him at odds with Turkey's moderately Islamist government, led by Prime Minister Recep Tayyip Erdogan. Given Buyukanit's reputation, some political observers have wondered whether his elevation to the top military spot is a harbinger of military-AKP discord. Some go further. Washington chatter talks of a post-election military takeover, if the election results are not to the army's liking. 
Buyukanit had been in line for the promotion, but in the weeks leading up to the announcement, rumours circulated that some members of the Justice and Development Party, which dominates the government, were trying to block the appointment. The appointment has been traditionally announced by the Supreme Military Council, but in this case, President Ahmet Necdet Sezer's office released the news days earlier than expected. 
The departure from protocol was designed to dispel speculation about behind-the-scenes political manoeuvring, some observers suggested. Erdogan insisted that the manner of the appointment represented nothing out of the ordinary. "The media does not understand the appointment process," the Zaman daily quoted Erdogan as saying. "We are not a government that acts on impulses. We use our authority within specific guidelines." 
Since the founding of the Turkish republic in 1923, the military has viewed itself as the guardian of the country's secularist tradition. This stance has prompted Turkey's generals to repeatedly involve themselves in politics. The EU membership bid, engineered by the AKP government, is forcing Turkey to make significant changes to the country's social traditions and political culture. EU requirements, for example, demand the military's subservience to civilian authority. 
Ozkok emphasized moderation and worked with the AKP government to implement EU-mandated measures. The extent to which Buyukanit will continue Ozkok's policies remains uncertain. Some worry that Buyukanit will reinforce already considerable resistance to EU integration by nationalist elements. For instance, if Buyukanit moves to toughen Turkish military tactics toward Kurdish militants, Turkey could experience a rise in tension with the EU on civil rights issues. 
Buyukanit can also potentially exert considerable influence over the national debate about religion's role in society and politics. Judging by the results of the early August meeting of the Supreme Military Council, Turkey's generals remain intent on keeping religious faith out of public life. In announcing promotions and command rotations, the council also disclosed that 17 officers had been dismissed for holding religious views that could damage the military's esteem. As the head of a moderately Islamist political party, Erdogan has favoured a more lenient stance on public expressions of faith. The religious issue stands to figure prominently in both the upcoming presidential selection process and the parliamentary vote. 
Known as a general with a penchant for outspokenness, Buyukanit has avoided making politically charged statements in recent days. On August 9, he struck a pragmatic note in announcing a five-year plan to streamline the Turkish military. "Turkey's geopolitical location, combined with the fact that the country lies in the very centre of various crisis areas, necessitates the army to assume various roles both in times of war and peace," the New Anatolian daily quoted the general as saying. 
Some political analysts predict Buyukanit will defy expectations and will essentially maintain the policies staked out by Ozkok. 
"The Turkish army, which understands trends in the world, is tied to democracy and is pro-EU. It does not tolerate hot-headed and personal outbursts that do not reflect tradition," political analyst Mustafa Unal wrote in a commentary posted on the Zaman online web site August 2. "I don't believe Buyukanit will disrupt the tradition of the army. He will not treat EU accession and the civil administration differently than Hilmi Ozkok." 
Commentator Cem Oguz, writing in the New Anatolian, praised the outgoing Ozkok for acting as a "unifying, constructive and rational figure." He went on to write that Buyukanit seems "as rational and far-sighted as Ozkok." 

Turkey treads carefully in negotiating an energy deal with Iran
Turkey and Iran are trying to finalize an energy deal that would open a new export avenue to the European Union. As it tries to strike a deal, Turkey is treading carefully, mindful of not wanting to upset the region's geopolitical balance. 
Following August 15-17th talks in the Turkish capital Ankara, Iranian Energy Minister Kazem Vaziri-Hamaneh announced, via the ministry's website, that the two countries had agreed in principle on a framework for Iranian gas exports to go to Europe via Turkish pipelines. 
But a Turkish Foreign Ministry source, indicated that a deal had not yet been finalized. "The talks are still under way," the official said. Experts are now trying to narrow technical differences. The commitment to keep talking does not assure that an export pact will ultimately be concluded, the official indicated. 
The Iranian-EU export concept is intertwined with issues relating to Tehran's gas deliveries to Turkey under a deal negotiated a decade ago. Turkish officials have long been dissatisfied with the terms of the pact, especially the price it must pay for Iranian gas, and have been seeking a revision for years. The wrangling is a major factor in the underutilization of a pipeline stretching from the northern Iranian city of Tabriz to Ankara that became operational in 2001. According to the 25-year agreement, Turkey is reportedly obligated to buy 8.6 billion cubic meters (bcm) of gas from Iran in 2006. But so far this year, Ankara imported only about 2.5 (bcm) during the first half of the year. 
During the August negotiations, Hamaneh reportedly pressed Turkish officials to fill the Tabriz-Ankara pipeline's excess capacity with gas destined for EU states. He also sought to secure an Iranian role in the development of the planned $5.8 billion Nabucco pipeline, which would connect Turkey with Austria. Construction of that route is scheduled to begin in 2008. Hamaneh indicated that a large share of the Nabucco pipeline's capacity might be allocated to Iran. But, there has been no official acknowledgement of such an arrangement. 
Europe's vulnerability concerning its gas supplies was exposed in early 2006, when a Russian cut-off to Ukraine caused disruptions in several EU states. As the EU strives to reduce its dependence on Russia, Iran is eager to gain a foothold in Europe as an alternate source of gas, with the apparent intention of using energy exports as a means to reduce international pressure on Tehran over its nuclear program. Turkish officials, meanwhile, see in Iran's eagerness an opportunity to rework its gas purchase agreement with Tehran. 
In addition, Ankara has its own energy agenda, which clashes with Iran's. Turkey is interested in turning itself into an energy trader, not just a transit country for exports. According to a report published by the Turkish daily Hurriyet, Turkish officials sought to establish a joint Iranian-Turkish venture that would manage European exports. Iran reportedly rebuffed the idea, and wants to maintain full control over the exports while paying Turkey transit fees. 
Iran also wants to build a refinery in Turkey. In return, Turkey asked that the Turkish state oil concern, TPAO, gain oil exploration rights on Iranian soil. Iranian officials have not provided a clear response to Ankara's request and thus these two issues remain up in the air. 
Beyond economic considerations, Turkey is proceeding cautiously out of a desire to avoid alienating two key allies - the United States and Azerbaijan. Washington, which has adopted the hardest line toward Iran on the nuclear issue, wants to keep Tehran as politically and economically isolated as possible, equating isolation with leverage to get Iranian leaders to negotiate in good faith on the country's nuclear program. Thus, any Turkish-Iranian export deal would be sure to upset the Bush administration. 
Azerbaijan would also likely be miffed by a Turkish-Iranian gas deal. Turkey and Azerbaijan are expected to open the Baku-Tbilisi-Erzurum gas pipeline soon, and Iran's entry into the European export field could potentially threaten Azerbaijani profits. 
Even if a deal is hashed out between Ankara and Tehran, the export plan would appear to face an ongoing security threat. In recent months, the Turkish-Iranian pipeline has been targeted by Kurdish militants, who have resumed their armed struggle in Turkey. The most recent Kurdish militant attack in late August disrupted the pipeline's operation for three days. 

Russian pipeline play poses dilemma for Turkey 
Russian plans for a new natural gas pipeline are placing Turkey in a tough position. The new Russian route would use Turkey as a transit point for exports to the European Union, in effect creating a direct competitor to Turkish-controlled ventures. Given Ankara's interests in joining the EU, however, Turkish officials are reluctant to be seen as creating hurdles for the project. 
Word that Russia would proceed with plans to build the gas pipeline, dubbed Blue Stream 2, surfaced September 14 following a meeting between the chief of the Gazprom conglomerate, Alexei Miller, and Russian President Vladimir Putin. Blue Stream 2 is envisioned as having a capacity of 8 billion cubic meters (bcm) of gas per year, the bulk of which, about 5 bcm, would go to Italy. The Italian energy company ENI and Gazprom are expect to sign a strategic cooperation agreement in October, according to a September 21 report in the Russian business daily Kommersant. The Hungarian oil company MOL may also participate in the project. 
Although Blue Stream 2 could assist Turkey in becoming what Turkish Energy Minister Hilmi Guler described as "Europe's energy bridge," the Russian venture poses a difficult dilemma for Ankara. Turkish policy-makers are not keen to see Gazprom expand its share of the EU gas market, but they can't at the same time be seen as obstructionist. Such a perception could increase opposition within the EU to Turkish membership. 
Turkey clearly favours two other gas export ventures in which it is a direct participant, not merely a transit country. The first, the Nabucco Pipeline, would link Turkey and Austria, via Bulgaria, Romania and Hungary, and expand EU access to Persian Gulf and Caspian Basin supplies. Construction on the Nabucco line is slated to begin in 2008 and be completed in 2011. An associated link - the Baku-Tbilisi-Erzurum pipeline - will connect Turkey to Azerbaijan's Shah Deniz gas field. 
Ankara has not yet expressed an official opinion on Blue Stream 2. But in an interview with EurasiaNet, a Turkish official, speaking on condition of anonymity, pointed out that the Blue Stream 2 project appears to clash with the European Union's stated goal of diversifying its sources of energy. EU officials expressed a desire to reduce their dependency on Russian exports after a pricing dispute between Russia and Ukraine led to disruptions in EU supplies in early 2006. 
"Turkey supports and tries to contribute to the European Union's efforts to diversify its [EU's] routes and sources of energy," the Turkish official said. "For such a diversification, there exists the Shah Deniz pipeline, not only the Blue Stream project." 
In addition, Turkey and Iran have been conducting talks in recent weeks on the provision of Iranian energy exports to the EU. Blue Stream 2 could seriously dent Tehran's export ambitions. It could also hurt Azerbaijan's bottom line. Azerbaijani officials have announced that the Baku-Erzurum pipeline will be fully operational by the end of 2006. "Production [at Shah Deniz] will start at the end of the month [September] and will grow in the course of the year," David Woodward, president of BP Azerbaijan, said in mid-September. 
Russia, like the other players in the rapidly intensifying EU energy-supply game, feels a sense of urgency. Blue Stream 2 would be ready no sooner than 2012, according to Russian media reports. The new route would parallel an existing pipeline under the Black Sea, Blue Stream 1, to Turkey, and then connect with the EU via Greece. The projected construction cost is about US$5 billion. Blue Stream 1, which is designed to serve the Turkish market, has been plagued by underutilization and bickering over prices. 
There is a chance that Blue Stream 2 could become operational sooner than the Nabucco route, which has already experienced technical delays. "Gazprom officials said the monopoly is in hurry to implement the [Blue Stream-2] project, because its rival, Nabucco, is expected to produce [transport] 31 billion cubic meters of gas per year," a September 21 commentary in Kommersant stated. 
Beyond not wanting to add another complication to already tangled EU accession talks, Turkey may be hesitant to directly confront Russia over Blue Stream 2 because of Moscow's ability to retaliate. Commentor Mirza Cetinkaya, writing for the Zamon Online webstite September 26, noted that Russia and Greece have strengthened strategic cooperation in recent months. In addition, Russia has expressed interest in constructing an oil pipeline to Greece via Bulgaria, bypassing Turkey. A move by Ankara to block Blue Stream 2, then, could serve to solidify a Russian-Greek partnership and undermine Turkey's "energy-bridge" aspirations. "When big money from Russia, investments and tourism in Greek Cyprus are included, Greece appears to be an alternative [for Russian cooperation] to Turkey," Cetinkaya said. This factor "should be taken into consideration."

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CONSTRUCTION

Turkish company wins 42m Turkmen contract 

A Turkish company, ABKA Construction and Foreign Trade Co. Ltd, won an international tender in Turkmenistan to construct a fishery complex worth 42 million Euro in the country, reported Turkmenistan.ru. 
The winner of the tender was announced by the State Committee for Fisheries on October 2nd. Turkmen President, Saparmurat Niyazov, also approved the decision of the tender commission and the conclusion of the expert commission. The Istanbul-based company is to design and construct a complex for breeding sturgeons and producing fishery at Kiyanly port, in the Balkan province on the basis of "turn-key" principle. The construction is to be launched in October, and the complex is to be completed in May 2008. 

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ENERGY

Turkey's Q2 2006 electricity output up 9.01% 

Turkey's gross electric power output went up by 9.01 per cent year-on-year to 41,660 GWh in the second quarter of 2006, news website reporter.gr cited the Turkish Statistics Institute (TUIK) as announcing. 
The output dropped by 2.05 per cent compared to the first quarter of 2006. State-run power producer Elektrik Uretim AS (EUAS) and its subsidiaries produced 48.72 per cent of the total. Thermal power plants ranked first with 29,690 GWh, followed by hydroelectric plants with 11,947 GWh. The production of wind power plants stood at 22 GWh. In the second quarter of 2006, electricity consumption went up by 9.21 per cent on the year to 30,875 GWh. The industrial sector consumed 42.79 per cent of the total and household consumption accounted for 25.34 per cent.

Project to build pipeline from Samsun to Ceyhan

Royal Dutch Shell has joined a consortium of two Turkish energy companies, Calik Group and ENI, in a project to build an oil pipeline from the northern Anatolian province of Samsun to the southern Anatolian town of Ceyhan. The project, expected to cost between US$1.5 billion and US$1.8 billion, is expected to alleviate oil-based sea traffic in the Bosphorus and Dardanelles. The pipeline should become operational by 2009, setimes.com reported. 

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INFORMATION TECHNOLOGY

Cisco to invest up to US$275m in 5 years in Turkish market 

Cisco Systems Inc, a leading supplier of networking equipment and network management, said on September 26th that it would invest US$275 million to promote technology projects in Turkey over a five-year period, news website reporter.gr said. 
Cisco CEO, John Chambers, visited Turkish Prime Minister, Recep Tayyip Erdogan, in Ankara where they held a 50-minute private meeting. Before meeting Erdogan, Chambers visited the Turkish Union of Chambers and Commodities Exchanges (TOBB). 
Cisco's Turkey programme includes increasing Cisco personnel in the country to 400 employees from 80, establishing an institute to foster entrepreneurial ventures and providing network technology to help connect smaller businesses and communities. Cisco, the largest US network equipment maker, set up operations in Turkey in 1996 and has offices in Istanbul and Ankara. A company announcement said that the pledge to open 200 Cisco Networking Academy Programme centres in the country was an important boost for Turkey's IT industry.
It was also reported that Cisco believed that, like many emerging markets, Turkey is in a period of transformation. At this point in Turkey's development, technology could be a great enabler for both social and economic change. Accordingly, Chambers met with senior figures in business and government to discuss the opportunities for IT advancement in the private and public sectors. Through this visit and the investments Cisco was making in Turkey, the company hoped to work with the country to accelerate technology innovation, education and economic growth, it was reported.

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PETROCHEMICALS

Turkey's PA signs deal for adviser in Petkim privatisation 

Turkey's Privatisation Administration (PA) has signed a deal with Ak Investment Securities and Raiffeisen INV AG to advise on the sale of petrochemicals company Petkim, news website reporter.gr cited the company as saying on September 25th. 
Sector officials said earlier in September that Turkey was expected to carry out a block sale for at least part of the remaining stake. It is noteworthy that 38.2 per cent of Petkim is traded on the stock market, while the state holds 54.8 per cent. The civil servants pension fund Emekli Sandigi holds a seven per cent stake, which will also be sold with the government's stake.

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TRANSPORT

High speed Ankara-Istanbul rail 

The high-speed railway links between Ankara and Istanbul will be launched at the end of October with the completion of the Ankara-Eskisehir track, Italian News Agency ANSA reported. 
The news was reported by the Turkish State Railways on the occasion for celebration of the 150th anniversary of its establishment. 
The project, which began 30 years ago, was interrupted for lack of funds and was re-launched in the past three years thanks to an investment of some three billion Euro.

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