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TURKEY


 

 

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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)

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Update No: 118 - (29/03/07)

Looming presidential election in May
Turkish political debate is dominated by a single issue right now: Will Prime Minister Recep Tayyip Erdogan, once jailed for pro-Islamist statements, become president? Erdogan has shown restraint and moderation in office, but he heads a religious party. Erdogan's Justice and Development Party, known as the AKP, controls parliament, which elects the president. If he wants the job, it is there for the asking

The thought of Erdogan and his headscarved wife, Emine, welcoming heads of state at the presidential palace in Ankara alarms Turkish secularists, who say he would make Turkey more like neighbouring Iran. Those secularists include many members of the military, which has led three coups since 1960. But Erdogan is no Khomeini or even Khameini. He has respected the secular state, enshrined as such since Kemal Ataturk in the 1920s and 1930s, although he is certainly a devout Muslim. But then so are many Turks.

Concern that the legislature will elect him as president in May, possibly provoking a confrontation with the generals, has kept interest rates high and curbed stock prices in Turkey, an ally of the U.S. and a candidate for European Union membership. ''If Erdogan insists on becoming president it will create great tension in Turkey,'' Ilter Turkmen, who was foreign minister following the 1980 military coup, said in an interview. ``Institutions like the army will make it clear that this is not something they can look at with magnanimity.'' 

To many, Erdogan, 53, as a devout Muslim, is too divisive to head the Turkish republic, where secularism is enshrined in the constitution. In 1999, Erdogan spent four months in jail for ''inciting religious hatred'' after reading out a poem at a political rally that said ''the mosques are our barracks, the domes our helmets, the minarets our bayonets and the faithful our soldiers.'' 

Wife barred by the President 
Erdogan's wife, Emine, 52, has been barred from many state functions by President Ahmet Necdet Sezer, 65, a staunch secularist, because she wears an Islamic-style headscarf. Erdogan's roots are in a pro-Islamic political party that was forced from power in 1997 amid military pressure. 

''What's at stake here is the political regime in Turkey,'' Onur Oymen, deputy head of the main opposition Republican People's Party, said in an interview. ''Erdogan's main intention is to make Turkey a moderate Islamic state, instead of a secular country.'' 

If chosen as president for a seven-year term, Erdogan would appoint judges to the Constitutional Court and be able to veto laws passed by parliament. The assembly can override a veto by passing a law a second time unchanged. 

Market Impact 
Tensions over Erdogan's potential bid are already having an impact on equities and the lira. ''Prices on Turkish markets have been hurt by Erdogan's possible candidacy and the uncertainty over who will run,'' said Yarkin Cebeci, an economist at JPMorgan Chase & Co. in Istanbul. ''If he fields an acceptable candidate, then we'll definitely see a rally.'' 

Even though Erdogan is the country's most popular politician, only 35 per cent of Turks want him to be president, according to a February poll of 2,403 people by Ankara-based research company Metropoll. Still, most investors expect him to succeed Sezer, according to a January survey commissioned by Goldman Sachs Plc. 

If Erdogan doesn't run, potential candidates include Defence Minister Vecdi Gonul and State Minister Mehmet Aydin, both members of Erdogan's party whose wives don't wear headscarves. State Minister for Women's Affairs Nimet Cubukcu is also a potential candidate and would be Turkey's first woman president. 

After the Ottomans 
The presidency is of deep symbolic importance to many Turks as a pillar of the Western-oriented state founded by Mustafa Kemal Ataturk after the collapse of the theocratic Ottoman Empire following World War I. 

Ataturk, a war hero, aimed to wrench Turkey from its past and integrate it with the West. He changed the Turkish alphabet from Arabic to Latin script and banned religious clothing, such as fez and the headscarf, in government buildings. 

After Ataturk died in 1938, the army appointed itself as guardian of the secular democracy he created. In 1982, a military-led government introduced a constitution that referred to Ataturk as Turkey's ''immortal leader and the unrivalled hero,'' and stated that ''there shall be no interference whatsoever by sacred religious feelings in state affairs and politics.'' 

Erdogan's party says it respects secularism. ''We won't do anything that might hurt political stability in Turkey,'' Reha Denemec, one of the AKP's deputy leaders, said in an interview. 

Presidential Clashes 
Erdogan has already fought with the secular establishment. In 2004, parliament approved a law making it easier for graduates of Islamic schools to enter university. It shelved the bill after the military objected and Sezer blocked it. 

Last year Sezer, the former head of the Constitutional Court, rejected Erdogan's nomination of Adnan Buyukdeniz as central-bank governor. Buyukdeniz is chief executive of Albaraka Turk, a lender that follows Islamic rules barring interest rates. 

Party members including the speaker of parliament, Bulent Arinc, have urged changes to the constitution to lift curbs on religion, including the ban on headscarves. 
At the same time, the AKP has reduced the army's influence over political decision-making, which helped Turkey win membership talks with the EU in October 2005. 

''The old guard in Turkey are afraid of losing their power and they don't want to lose the presidency,'' said Dogu Ergil, a Turk who is professor of politics and sociology at Uppsala University in Sweden. ''While Erdogan has Islamist leanings, I think he has learned the limitations of the system. If he hasn't, then hell will be raised.'' 

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AUTOMOBILES

Pegasus Airlines to launch budget air carrier


Turkish Pegasus Airlines said it has teamed up with Georgian Industrial Group (GIG) to launch a low-cost air carrier in Georgia, website reporter.gr said on February 20th.
The new airline will be based in Tbilisi and will operate domestic flights in Georgia, Pegasus said in a statement on February 20, 2007. GIG has interests in the media, energy, cement, transport and pharmaceuticals sector. It also owns charter air carrier Vipavia.

Kanuni Motor plans to start exports in 2008

Turkish motorcycles maker Kanuni Motor said it will start exports in 2008, seeking to enter new markets as part of plans to expand outside Turkey, New Europe reported.
Target markets are countries on the Balkans, in the Middle East, Europe and Africa and more particularly Romania, Albania, Cyprus, Egypt, Bosnia and Syria, company sales and marketing director, Said Orhan, said on March 13th.
Kanuni sold 43,000 motorcycles in 2006 and expects sales to reach 50,000 units this year, as it also plans to grow on the domestic market as well. Turkey's motorcycle sales are seen going up to 400,000 units in 2007 compared to 330,000 last year, Orhan said adding that the market has the potential to reach a value of some US$ one billion (760 million Euro) in the next few years, up from the current level of US$500 million (379.6 million Euro).
Domestic producers that suffered from the cheap Chinese imports started to recover after the introduction of higher import taxes which also forced many motorcycle importers to seize operations, bringing their number down to 50 from 200 at the beginning of 2006. Kanuni Motor is part of local industrial group Kuralkan Holding. 

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BANKING

Bank Asya net profit jumps 57% in 2006

It was a very good year in 2006 for Turkish Islamic lender Bank Asya, which said its net profit jumped 57 per cent year-on-year from 2005 to 146 million Turkish Lira (US$101.4 million) in 2006, it was reported on March 7th by bank officials who were delighted with the results.
The bank's profit before taxes stood at 196 million Lira (US$136.9 million) and total assets expanded 60 per cent to 4.18 billion Lira (US$2.93 billion), the bank said.
Bank Asya cash loans rose to 3.06 billion Lira (US$2.14 billion) and shareholders' equity surged 114 per cent to 633 million Lira. The bank expanded its network to 92 branches and the number of employees to 2,365 last year, general director Unal Kabaca said.
Other Islamic lenders active in Turkey include Turkiye Finans, Albaraka Turk and Kuveyt Turk. Islamic banks operate in compliance with the Islamic religious law Sharia, which bans the payment and receipt of interest. Instead they use a system of sharing profit from returns on approved investments to make the financial structure work. 

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ENERGY

Oil refiner Tupras 2006 profits up 22%

Turkish oil refiner Tupras said its profits rose 22 per cent last year, its first under its new ownership of Turkey's Koc group and Shell, website reporter.gr said on February 21st.
Tupras said it sold a total of 26.14 million mt of refined products in 2006, up 4.7 per cent on the 24.97 million mt it sold in 2005 and posted a net profit of US$480 million up 22 per cent on the US$376 million it recorded the previous year.

Zorlu Enerji in talks to build power plants in Israel

Head of energy group of Zorlu Holding, Murat Sungur Bursa, said that Zorlu Enerji was holding talks for building two power plants that run on natural gas, New Europe reported. 
The power plants will have energy production capacities of 100 MW and 50 MW, Bursa added.
Last year, Zorlu Enerji acquired a 25 per cent stake in Dorad Energy Limited of Israel, which builds an energy power plant with 800MW capacity in the city of Ashkelon. Zorlu took part in the construction of the power plant and will undertake the maintenance works of the power plant for 20 years. Bursa again said that Zorlu Enerji might bid in the tender for the construction of two thermal power plants at Afsin Elbistan.
According to the public announcement for the tender, each unit will have a minimum installed capacity of 1,200 megawatt and the winning company will operate the thermal power plant units for 30 years. Currently there are two thermal units at the power plant (with installed capacities of 1,355 mw and 1,440 mw).
The thermal power plants are expected to cost US$ four billion. In January, the deadline to submit bids was delayed by two months to Mar 27th; however energy minister Hilmi Guler said that any further extension to place bids was possible.

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FOREIGN COOPERATION

S. Korea, Turkey to celebrate diplomatic ties

South Korea's Defence Minister, Kim Jang-soo, is coming to Turkey to attend functions to mark the 50th anniversary of normalisation of ties between the two countries, Defence Ministry officials said. He was accompanied by 16 delegates including officials from the Ministry of Foreign Affairs and Trade, the Defence Acquisition Programme Administration (DAPA) and the Ministry of Culture and Tourism, TurkishPress.com reported. 
Kim will meet with Turkish National Defence Minister, Vecdi Gonul, to discuss ways to promote relations between the two nations and arms sales, ministry officials said. While in Ankara, Kim is expected to promote South Korea's first domestically-made battle tank featuring an auto-loaded 120-millimeter cannon and the ability to cross shallow rivers. South Korea has applied for the Turkish tank acquisition bid with its next-generation amphibious tanks codenamed "XK2." The underwater tank is described by the Defence Ministry as the world's best in defending against aircraft. Turkey is a main weapons trading partner with South Korea. Seoul is now delivering 350 K-9 self-propelled guns to Turkey under a 2001 contract and negotiating Korea's export of K-1 tanks, XK2 main battle tanks and KT-1 trainer jets. Kim is also scheduled to pay a courtesy call to Turkish Prime Minister, Recep Tayyip Erdogan. 

Tradesmen exchange agreement between Turkey and Italy

A cooperation agreement for the exchange of tradesmen between Turkey and Italy was signed on March 6th by the executives of Italian Chamber of Commerce and Union of Credit Cooperatives of Turkish Tradesmen & Craftsmen (TESKOMB), website thenewanatolian.com reported. 
"Within the framework of the agreement, obstacles encountered by Turkish tradesmen and craftsmen while exporting their products to EU countries, will be removed," said Kadir Akgul, chairman of TESKOMB. 

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TELECOMMUNICATIONS

Turkcell to ink US$3bn loan

Turkey's largest cell-phone operator Turkcell will sign an agreement on February 26th for US$ three billion syndicated loan, website reporter.gr said on 
Turkcell in January mandated Akbank, Citibank NA Garanti Bankasi, HSBC Bank, JP Morgan and Standard Bank as lead arrangers for the unsecured syndicated loan. The company had announced that it would use the loan for possible international investments and in the company's general funding requirements. Turkcell, later, stated it was holding talks for setting up a consortium that will bid in the third GSM licence tender in Saudi Arabia after local media speculated that Turkcell formed a consortium with Alwaleed bin Talal's Kingdom Holding to bid jointly in the tender, the website reported. The deadline to bid for Saudi Arabia's third GSM licence expired on February 24th.

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