'Crazy Turks' of Export Obstructed by Central Bank Head

Exports in October increased by 13.1 percent in comparison with the same period last year and reached to $6.7 billion.

The level of exports within the first 10 months of the year has increased by 16.8 percent in comparison to the same period last year, rising to $60.1 billion. The level of exports achieved over the past 12 months reached $72.7 billion.

Turkish Exporters Assembly (TIM) Chairman Oguz Satici announcing the export figures in southern Turkish city of Kahramanmaras, once again criticized Central Bank Governor Sureyya Serdengecti. Satici reacted against Serdengecti's statement that "We could not achieve the necessary level in interest rate concessions" and said: "The statement suggesting 'we could not yet reach a sufficient level' preoccupied the nation while producers and exporters shouted 'don't crush us under this interest.' While we are struggling for independence in the economy and mobilizing exports, some insensitive individuals are looking at the pink picture at a macro level as if there is nothing to worry about and making judgments accordingly." TIM Chairman Satici emphasizing that Serdengecti is expected to retire next year, is aware that this situation cannot continue, said: "We want a chairman that is more proactive, works closely with the markets and who can act fast in all circumstances. Central Bank heads can quite easily find such an individual in Turkey."

Satici pointed out the increase in import of raw materials and intermediary goods and said that backbone of Turkey's production has been put out because of this.

Satici also referred to the national banking discussions. "It does not matter whether it is Germany, the UK or France that bought the companies to Turkey. What is important is to increase the national benefit and help the companies increase their production activities in Turkey."

According to the TIM statistics, the agriculture sector maintained its weight in exports in October. The 271 percent increase in olives and olive oil, 108 percent increase in tobacco, 46 percent in cereals, pulses and oilseeds, and the 45 percent in hazelnuts and its products were effective in this. The value of agricultural exports that reached 35.7 percent exceeded $1.9 billion. The total of agricultural exports for the first nine months of the year reached $7.8 billion. The increase in agriculture was followed by industrial sector at 81.6 percent. The monthly export rate of industrial sector increased by 9.1 percent and reached $5.5 billion.


02.11.2005
Abdulhamit Yildiz
Kahramanmaras
http://www.zaman.com/?bl=economy&alt=&hn=26011






Turkey Welcomes Single Digit Inflation After 30 Years

The economic administration is enjoying the fruits of the tight fiscal policies that have been followed in accordance with the International Monetary Fund (IMF).

The inflation rate has consistently dropped and for the first time in 30 years, Turkey’s inflation rate is in single-digits.

The overnight interest rates were as high as 7,000 percent during the financial crisis; however, the same figure is now below 15 percent.

Turkey discarded six zeroes from its currency and gave life to the use of the kurus, one hundredth of a lira. Over-valued though it may be, the new Turkish lira has not hindered record profits from being attained in foreign commerce. While export volume has surpassed $70 billion, the share of neighboring countries in Turkish foreign trade has gone up to 30 percent from three percent.


02.11.2005
Economy News Desk
http://www.zaman.com/?bl=economy&alt=&hn=26000

Winter Tourism New Favorite for Investors

Turkey, which attracts many foreign and local tourists with its historical and natural beauty, hopes to welcome 20 million tourists this year.

As the number of tourists exceeded 17 million in the first nine months of the year, it is expected that the end-of-the-year target will be achieved thanks to winter tourism. The tourism sector is pleased by the fact that many hotels were fully booked ahead of the winter season and many new investments are planned as a result of the increasing demand. The current investment atmosphere and incentives facilitate the construction of new hotels. While the current facilities start work to extend their capacity, many investors plan new investments in this field primarily in eastern cities. Erzurum Palandoken and Bursa Uludag are among the first places that come to mind when in regard to winter tourism in Turkey. After the Dedemen hotel group took over the running of hotel facilities belonging to the provincial administration, the Polat group constructed a hotel in the city making the city a center for winter tourism. Palandoken Mountain now has six luxury tourist accommodation facilities with a 2,500 bed capacity. According to official figures, Erzurum hosted 190,000 tourists last year. Thanks to the new facilities at Palandoken, the city received tourism income worth 12 million New Turkish Lira (YTL). In Bursa where the winter season is shorter, there are 27 tourist accommodation facilities, 12 publicly and 15 privately owned. Uludag has a 3,000 bed capacity.




The face of Erzurum, which formerly came to agenda with news about shortages due to the long winter, started to change after investments in winter tourism were made. While the construction of a five-star hotel started in Palandoken, the land allocation process was completed for the construction of further seven hotels.


ITO invests $1 billion in the region


In order to help the development of the region, the Istanbul Chamber of Commerce (ITO), which undertakes the “East Anatolia Tourism Centered Regional Development Project,” foresees making an investment of $1 billion in the region over the next decade. ITO President Murat Yalcintas underlines that the project, which includes 14 cities (Agri, Ardahan, Artvin, Bayburt, Bitlis, Erzincan, Erzurum, Gumushane, Igdir, Kars, Mus, Rize, Trabzon and Van) will provide jobs for nearly 200,000 people when completed. Emphasizing that one of the major problems facing Turkey was the inequality of development among regions, Yalcintas said that the economic and political stability, which has maintained in recent years, is of the utmost importance for the implementation of the project. “I am sure we will receive the support we need both from legislative and executive bodies. Our target is to bring the Eastern Anatolia Region to the development level it deserves,” Yalcintas admitted.


05.11.2005
Omer Sari
Erzurum
http://www.zaman.com/?bl=economy&alt=&hn=26076

'Economy on Good Course, Do not become Complacent'

The draft text of the progress report that will be issued by the European Union (EU) Commission on November 9 also includes comments on Turkey’s economic performance as well as political issues.

As Turkey’s economic progress in recent years is praised in the report draft, the Commission asks that structural reforms continue and warns that Turkey should not become complacent or lethargic. The current deficit is predicted to exceed $20 billion and is also shown as a sensitive issue that should be taken care of. The report also requests the acceleration of the privatizations of public banks. The EU for the first time ascribed Turkey a status as a “self-regulating market economy”, which is considered as a condition to being an EU member. The mentioned status, which is preferred to by investors in international markets, is expected to contribute to the acceleration of chapters on the economy during accession talks between Turkey and EU.

This new paragraph about self-regulating market status for Turkey is also seen as a confirmation of Turkey’s entrance in a new process of normalization in the economy. It is also expected to positively affect the start of membership talks and increase confidence in the market, which has strengthened thanks to the IMF-backed economic program in Turkey. Romania, whose integration to the Union is predicted to take place in 2007 or 2008, acquired the same status only a few weeks before EU leaders decided to finalize the accession agreement last year.


While the draft progress report stresses Turkey should continue its privatizations, it also urges for a series of reforms for the restructuring of enterprises, a reduction of informal economy and control of public expenditures. In addition to these, the report notes recent privatizations and developments in regulation and control of the banking system have enhanced the investment environment in Turkey. According to the draft report, Turkey will be able to compete with market forces and competitive pressures in the EU in the medium run if reforms continue. The drop in inflation was being monitored with some concern, it also underlined. But the Commission thinks that the transfer of public banks (Halk Bank and Ziraat Bak) to the private sector was conducted at a slow pace. The general evaluations in report’s chapter on economy includes the following suggestions:



“In this frame direct foreign investment reached to its peak in this period. The macroeconomic stability program in the frame of budged controlling should be sustained. The rapid increase in the present current account deficit requires careful control and the necessary precautions need to be taken. Sustaining the structural reforms especially with regard to empowering the priority of laws, increasing privatizations and continuing restructuring of institutions, abolishing the imbalance in the labor market and decreasing the informal economy will support stability policies and will make them more effective. Resources should be allocated more efficiently in the frame of improving important markets. There should be respect to the promises for strict control of the changes. The reforms on public expenses and the budget processes should be sustained.”

Headlines from the Progress Report

Strong Economic performance was supported by strong financial consolidation and strict Money policy.

The increasing privatization incomes in 2005, real estate sales to foreigners, the sales of Tupras (15 Percent), Eti Aluminum and Pektim contributed to a stable increase in direct investment.

There is a decrease in the difference between the per capita income of Turkey and the European Union (EU) on average; however there is still a lot to do.

The economy has continuously grown in 2004 and during the first half of 2005 thanks to a strong internal demand.

The increase in employment lead to a relative decrease in unemployment, however unemployment remains high .

Thanks to stable policies inflation has continued to decrease.

In the frame of developing conditions the current monetary policy lead microeconomic stability to decrease.

Financial consolidation strengthening continues and independent movement capabilities of market elements continues to increase.

Stable macroeconomic conditions have had positive effects on the economic climate and business environments.

Development in the competition policy remains limited.


05.11.2005
Selcuk Gultasli
Brussels
http://www.zaman.com/?bl=economy&alt=&hn=26085

Historical Tours Boom Tourism Investments in Canakkale

As investments boom in the historical Gelibolu (Gallipoli) Peninsula in fields ranging from tourism to healthcare, the number of tourists visiting the region doubled. The Hollywood made, “Troy” film, also increased the interest of foreign visitors to the region.

Investments in the Historical National Park in Gelibolu Peninsula, where bloody conflicts occurred during the Gallipoli battle, accelerated the investments in tourism facilities in the region. New hotels, hospitals and health care units are being opened in Canakkale. With the number of tourists increasing in the region, all rooms of the five star Kolin Hotel, one of the major investments in the region, have been reserved for every weekend for the next two summers. As a result, one of the major hotel owners, Dedeman Group has begun searching for land in the region. Kolin Hotel, which began business in September 2003, has the biggest congress and meeting hall of the Aegean Region. It is also the only five star hotel with a 600 bed capacity in the Istanbul, Bursa and Izmir triangle. Kolin Construction initially started this business to meet the need for a five star hotel in the region. Realizing that the need for a five star hotel increased more after the Gelibolu Peninsula Historical National Park Long-Run Development Project was approved and implemented, the company increased its efforts and made the hotel ready for the 90th anniversary of the Canakkale Battle. Kolin Hotel General Manager Ahmet Pinar told they first had difficulty in finding clients; however, there has been a boom in tourist number thanks to the investments in Gelibolu. The US made “Trojan” film last year, doubled the number of tourists visiting the region. Pinar told that the clients who come without a reservation cannot find rooms in even smaller hotels. Indicating that all their rooms were occupied for the summer season in 2005, Pinar noted they were semi-occupied in the weekdays. Noting they have reservations for the future, Pinar added that all the weekends were reserved by tour operators for the next two years.


06.11.2005
Muzaffer Altunay
Canakkale
http://www.zaman.com/?bl=economy&alt=&hn=26098

Paradoxical Decision on Privatization Costly for Turkey

Vehicle controlling stations were privatized in 2002; however the privatization tender was cancelled due to claims of irregularities. These stations were privatized again in 2004 and were won by the Akfen Group. The State Council approved the latest tender, however it had also approved the previous tender in 2002, and now two separate companies have emerged claiming ownership of the stations. Regardless of who the state awards the stations, it will be forced to pay a large amount of compensation to the losing party.

The privatization process of the vehicle controlling stations returned to the starting point and Mapa-Ahsen-Cartev-Tuv joint enterprise group, who applied to court upon annulment of the tender they won in 2002, have been given the green light. When the 8th Chamber of Turkish State Council failed to ratify the annulment decision that came to agenda with the former Minister of Public Works Zeki Ergezen’s remarks that “corruption occurred”, the tender took on a new dimension. As a result, the government will have to hand over the stations to one of the two groups. A second tender in December 2004 had been won by Akfen-Dogus-GermanTuvSud joint group for $613 million. Lawyers commenting on the current stage in tender process note the implementation of the State Council’s de facto decision is impossible. In case the government hands over the stations to the consortium headed by Akfen, it faces the possibility of paying compensation to the other group. Experts indicate that the amount of compensation could exceed the tender price. Circles related to the issue argue it should not be ignored that the tender may be repeated because of the compensation obligation.

Rasim Kuseyri, who is a lawyer for one of the consortium partners of Ahsen Construction, which won the first tender, claims that the Privatization Board should cancel the second tender won by Akfen-Dogus-TuvSud Enterprise in line with the court verdict. “There is an issue regarding an administrative decision. If the administration insists on “not taking a backwards step”, then we will have the right to ask for compensation, because, a tender was cancelled, which was found to be in accordance with regulations,” Kuseyri says. Kuseyri has the authority to make statements as the attorney of the company about the related issues, rejects allegations that they offered a low price in the tender they won. Claiming that the state lost money in the second tender, Kuseyri explains, “According to the first tender, in the first three years the investor will receive the $18.16 of the vehicle examination fee, which is around $60.72. The same figure is $42.50 in the second tender. The loss per vehicle is $24.34. When the increasing number of marketed vehicles is taken into consideration, the losses will be even greater. “

If the same calculation method is used to estimate earnings for the upcoming 20 years, the losses to the state will be at least $825 million, Kuseyri claims. The news published in the press about the “automobiles, which are examined without going to the stations” made the Highway Administration a target of harsh criticisms. The Highway Administration had opened a tender in 2002 with the catchphrase “We will bring the vehicle examination up to EU standards” and the joint enterprise group including MNG Holding had undertaken the project in the open auction. While the Justice and Development Party (AKP), which took office after winning the 3 November 2002 elections, started an investigation upon the allegations, Public Works and Housing Minister Zeki Ergezen had cancelled the tender saying,” I was threatened and I cancelled the tender.” Upon this, Mapa-Ahsen-Cartev-Tuv applied to the 2nd Administrative Court. While the court ruled in favor of the plaintiff, the consortium applied to the State Council 8th Court to overrule the decision. The Akfen-Dogus-TuvSud partnership won the tender in December 2004 offering $613 million. Akfen Holding, a member of the consortium has also taken over the management of Ataturk Airport for 15.5 years.


05.11.2005
http://www.zaman.com/?bl=economy&alt=&hn=26079

Turkey Has Great Potential In Banking Sector, Arapoglou


ISTANBUL - Greek Banks Union Executive Board President Takis Arapoglou said on Monday that leading banks of Greece closely monitored Turkey, and added that ''Turkey has a great potential in banking sector.''

Executive Board members of Turkish and Greek Banks Unions met in Istanbul today to improve cooperation between the bank unions of the two countries.

Speaking in a news conference, Takis Arapoglou said that the Turkish banking sector had a high growth potential and the income per capita and GNP in Turkey recorded great progress. Noting that the banking sector in Greece went through a serious transformation after Greece joined the EU, Arapoglou added that they can share their experience with their Turkish colleagues.

Takis Arapoglou also commented that if Turkish and Greek banks work together this would be in the interest of both countries and good for the Balkans region.

Turkish Banks Union (TTB) Chairman Ersin Ozince said in his part that the aim of the meeting was to share information and to increase cooperation between the banking executives of the two countries.



http://www.turkishpress.com/news.asp?id=78214

Turkey To Be Introduced With High-speed Train Next Year

ANKARA - Turkish people will be introduced with the high-speed train next year, officials of Directorate General of State Railways (TCDD) said on Sunday.
TCDD officials told A.A correspondent that Ankara-Eskisehir part of the railway would be completed next year.

According to TCDD officials, the Alarko-OHL consortium is expected to complete the Ankara-Eskisehir railway till July 2006.

On the other hand, the tender for the project, which will reduce Ankara-Istanbul railway transportation to three hours, (it is currently 6-7 hours) was held in the previous days. The Chinese-Turkish consortium ''CRCC-CMC-Cengiz Ins-Ictas Insaat'' was awarded with the tender.

The Ankara-Istanbul high-speed train service is expected to be launched in 2008, after all parts of the railway is completed.

Meanwhile, the tender for purchase of high-speed trains was concluded. Spanish CAF firm won this tender for purchase of 10 high-speed trains. The contract regarding purchase of these trains will be signed in Turkish commercial hub of Istanbul on November 8th, 2005. Under this contract, the CAF firm will hand over the high-speed train cars to TCDD within 20 months.

CAF firm will manufacture high-speed train cars in a way that they can endure 250 km/hr. Trains will be made of aluminum, comprised of six cars and have a capacity to carry 419 passengers.




Published: 11/7/2005



http://www.anatoliantimes.com/hbr2.asp?id=78199

Turkey: Gov't Prepares Petroleum Exploration Draft Bill

--------------------------------------------------------------------------------

14:03 - 07 November 2005 - Turkey prepared a petroleum exploration draft bill, which is in line with the European Union norms and aims at raising the activity of petroleum exploration in the country.


The draft bill divides Turkey into two petroleum exploration zones –land and sea- instead of the 18 zones of the present relevant law.
The bill includes many incentives for foreign investors in the field.

It abolishes state royalties, brings in import duty exemptions for exploration equipment, lowers the taxation ceiling from 55% to 40% and gives full tax exemption to foreign investors until they have earned the capital that they have invested in Turkey.

Big European exploration companies, with no previous activity in Turkey, were invited to Ankara a month ago and were briefed about the draft petroleum exploration bill, which has already been submitted to the Turkish Parliament and is to be debated shortly.


http://www.reporter.gr/fulltext_eng.cfm?id=51107140349

Turkey Aims To Draw Gulf Countries' Cash Surplus, Tuzmen
ANKARA - Turkish State Minister Kursad Tuzmen said on Sunday that Turkey aimed to bring 10 percent of Gulf Countries' 150 billion USD of cash surplus --which would come out annually due to the increasing oil prices-- to the country as investment.
Tuzmen welcomed United Arab Emirates (UAE) Abu Dhabi Planning & Economy Administration Chairman Shaikh Hamid bin Zayed Al Nahyan at the airport. Speaking to reporters, he said that the Turkish government aimed to draw cash surplus of Gulf Countries into Turkey and also increase the share of Turkish entrepreneurs in investments undertaken in those countries. Tuzmen stressed that last year Turkey's exports to UAE reached 1.1 billion USD.

Sheikh Al Nahyan said in his part that he would get information from Turkish officials and seek for investment opportunities in Turkey during his stay.

Al Nahyan will meet Turkish Premier Recep Tayyip Erdogan, State Minister Ali Babacan, Finance Minister Kemal Unakitan, Energy & Natural Resources Minister Hilmi Guler, Turkish businessmen and other bureaucrats during his stay in Ankara and Istanbul.




Published: 11/7/2005


http://www.anatoliantimes.com/hbr2.asp?id=78204

Turkey: Private Airlines Boost Domestic Market

--------------------------------------------------------------------------------

11:04 - 07 November 2005 - The success achieved by private airline companies in the scheduled domestic flights motivated other companies to enter the market, starting with Pegasus Airlines, purchased by Esas Holding in January, which started scheduled domestic flights as of November 1st, Zaman Daily reports.


The number of private airlines companies with domestic flights increased to four with Atlasjet, Onur Air and Fly Air.
Civil Aviation General Director Topa Bilgetin Toker said 2-3 companies applied to make scheduled domestic and foreign flights and other companies also started to think the market is profitable after Sabanci started domestic flights.

Success of private airlines, which compete with the state-run Turkish Airlines (THY) with the slogan, “flying at the cost of a bus ticket”, will be influential in the increasing number of actors in the market.

Evaluating the last developments in the sector to Zaman, General Director Toker said that the Turkish civil aviation sector is undergoing the golden era of its history.

Reminding that particularly the low-price domestic flights satisfied the Turkish public, Toker said support for the Regional Aviation Project, launched by the Transportation Minister Binali Yildirim increases every day.

Indicating that the number of private companies having scheduled domestic flights will increase more in the upcoming years, Toker told 2-3 other companies including Tarhan Tower Airlines and Golden Air based in Antalya made an application to start scheduled domestic and foreign flights.

Admiring Sabanci’s tactic in the domestic lines, “The fact that Pegasus Airlines started flights in domestic lines shows that the market is really profitable.

If the opposite was true, Sabanci would not start to run in domestic lines.

Other companies were motivated by this and took action in order to have a share in the market.

As Minister Yildirim said, it will no longer be a dream to travel by plane as the prices get cheaper,” Toker stated.

Source: Zaman Daily



http://www.reporter.gr/fulltext_eng.cfm?id=51107110406

Exports will Receive Greater Support

The cabinet has decided to give greater support to exports. State Minister Kursad Tuzmen gave export oriented information to the cabinet during the cabinet council that was held Monday.

Government spokesman Cemil Cicek, in a press conference following the council meeting, said that the state and civil economies are dependent on exports, and exports should not be cyclical but sustainable. Cicek, stressing Turkey’s adoption of a sustainable development policy, said “More budget resources should be reserved for supporting exports and the Export-Import bank (Eximbank) should be also provided with more budgetary funds. Another important point relating to exportation is the revision of the legislation relating to free trade zones. The legal arrangements on these issues will be made in the upcoming days”.

The State Minister said export has continually moved forward during the 3-years that the Justice and Development Party (AKP) came to government, and they accomplished their objectives to a large extent. The targeted export figure will be increased. It is $71 billion for 2005 and that most likely it is to reach $72 billion, he added.

Cicek asserted the point that the AKP had reached in terms of exportation was admirable. He remembered the days when Turkey’s yearly export figure was just $3 billion, Cicek said, adding that today this same figure can be achieved within 15 or 20 days In response to a question asking if the government planned to make any compromise to the exchange rates, as exporters’ find the value of the Turkish lira excessive, Cicek noted this was the responsibility of the Central Bank.


08.11.2005
Zaman
Ankara
http://www.zaman.com/?bl=economy&alt=&hn=26205

Greece, Turkey: Alpha Bank Considers Acquiring Turkish Bank

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10:08 - 09 November 2005 - Alpha Bank considers the acquisition of a Turkish bank according to sources from the Turkish Banks’ Union.


In the framework of the meeting between the representatives of the Banks' Unions of the two countries, Mr. Arapoglou stated that Greek banks follow closely the developments in the turkish banking system.
Regarding the presence of foreign investors on the stock exchange, Mr. Arapoglou stated they have a :east: 66% stake in the Turkish stock exchange while in Greece the precentage reaches 35%. :west:



http://www.reporter.gr/fulltext_eng.cfm?id=51109100856

Eni, Turkey's Calik in deal to build 560-km oil pipeline
11.09.2005, 12:16 PM

MILAN (AFX) - Eni SpA said it has reached an agreement with Turkey's Calik, a private industrial group, to build a 560-kilometre pipeline to carry oil between Samsun on Turkey's Black Sea coast and Ceyhan on the Mediterranean.

The company said the pipeline will offer a quicker, more economic, and more environmentally secure way of transporting oil than in ships through the Bosphorus and the Dardanelles straits in Turkey.

'Eni and Calik will carry out feasibility studies on the new transport system that includes construction of a marine terminal at Samsun and the 560-km pipeline link with Ceyhan,' it said.

The facilities at Ceyhan will include storage facilities, it said, adding the transport capacity will be more than 1 mln barrels per day.

The Turkish government has expressed support for the project, it said.

The project is important strategically for Eni because of its activities in the Caspian sea, as operator of the giant Kashagan field, it said.

Calik is one of Turkey's largest private industrial groups, it said.

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EU grants Turkey market economy status, concerned at pace of reforms
11.09.2005, 08:25 AM

BRUSSELS (AFX) - The European Commission has granted Turkey 'market economy status' provided it keeps up the pace of reforms, in a symbolic boost for Ankara a month after it started EU entry talks.

'Turkey can be regarded as a functioning market economy, as long as it firmly maintains its recent stabilisation and reform achievements,' the EU's executive arm said in an annual report on the country's progress toward joining the bloc.

While its value is mainly symbolic, such status is a prerequisite for joining the 25-member EU and would also boost confidence in the Turkish economy, bringing greater stability and a better climate for foreign investors.

It would also allow Ankara to begin harmonising its laws in some of the 35 chapters of EU legislation it must integrate to join.

Turkey started EU entry talks last month after the EU overcame internal differences, notably opposition by EU state Austria which wanted Ankara to be offered something less than full EU membership.

But the EU has made it clear that negotiations will last for at least a decade, and stressed that there is no guarantee that it will ultimately join the rich European bloc.

However, the commission voiced concern that the pace of reform in Turkey has slowed, urging the vast mostly-Muslim EU candidate state to boost efforts notably on human rights.

In an annual report, the commission noted that Ankara's 'political transition' is continuing.

'Important legislative reforms have now entered into force and should lead to structural changes of the legal system, particularly in the judiciary,' said the commission, the EU's executive branch.

'However the pace of the reforms has slowed in 2005. Although human rights violations are diminishing, they continue to occur and there is an urgent need to both implement legislation and take further legislative initiatives.'

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6:40pm (UK)
Turkey under pressure over reforms


Turkey is under mounting pressure to step up political and economic reforms to be fit for European Union membership.

Just weeks after formal entry talks were launched in a fanfare in Luxembourg, a new European Commission report said Ankara's progress towards qualifying was not good enough.


Getting Turkey into the EU has been championed by Prime Minister Tony Blair for years, and the successful opening of talks with the Ankara government was hailed as a victory for Britain's current EU presidency.

The first Commission analysis since then has dampened the mood: the new report says significant improvements on freedom of speech and human rights, including women's rights and religious equality, are urgently needed in Turkey.

Trade Union rights must also be extended and a "zero tolerance" policy adopted towards torture.

Turkey gets praise, though, for developing a functioning market economy which is a key condition for EU membership.

But the Commission's overall negative tone about the pace of Turkish change has bolstered the voice of politicians increasingly concerned about the potential economic and social impact of a 70-million strong secular Muslim state joining the EU.

The leader of the Socialist Group in the European Parliament Martin Schulz, said: "We supported the opening of negotiations with Turkey. But we now expect the Turkish government to deliver, especially in the areas that are of concern to us."

He added: "The pace of reform in Turkey concerning the rule of law, respect for minorities and human rights has slowed down significantly. Reform is also needed in Europe, through the constitutional process, before any further enlargement of the Union can take place."

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http://news.scotsman.com/latest.cfm?id=2218832005

Turkey's Exports Cars Mainly To E.U. Countries


BURSA - Turkey's automotive sector, which has become the driving force of the economy, has exported 67.8 percent of its output to 24 countries of the European Union (EU) in the first ten months of 2005, it was reported on Tuesday.

While no exports were made to Greek Cyprus, the share of EU in Turkish car exports reached 71.6 percent, when the exports to EU candidate countries --Romania and Bulgaria-- are taken into consideration.

According to the data released by Uludag Exporters Union (UIB), Turkish automotive industry exported to 174 countries and 15 free trade zones in the world in Jan-Oct. 2005 period.

Turkish car industry earned 7.16 billion USD by exporting to EU countries. The sector's total exports amounted to 10.57 billion dollars.

Turkey's automotive exports to Germany, Italy, France, Britain and Spain reached 5.33 billion USD, constituting more than half of the total car exports.



http://www.turkishpress.com/news.asp?id=78461

Dr. Lopez-claros: Turkey Will Become A Member Of The E.U.
Published: 11/8/2005


ISTANBUL - Chief Economist of the World Economic Forum and Global Competitiveness Program Director Dr. Augusto Lopez-Claros has indicated today that Turkey will become a member of the European Union (EU) some day. ''Turks should disregard discussions on Turkey's qualifications to join the EU'', said Dr. Lopez-Claros.

Dr. Lopez-Claros was a guest speaker at a Competition Congress in Istanbul that was sponsored by the Turkish Industrialists & Businessmen Association (TUSIAD)-Sabanci University Competition Forum and Federation of Sectoral Associations (SEDEFED).

''Inflation was a great problem in Turkey until recently. Although it is not a major problem any more, inflation rates in Turkey seem to be higher compared to international standards. Turkey ranks 66th in the competitiveness list of the world. The weakest link in Turkish economy is the macro economic index,'' added Dr. Lopez-Claros.

Dr. Lopez-Claros remarked that Turkey has received great sums of credits from the International Monetary Fund (IMF), which it must pay back in the near future. ''(Most of) Turkey's income is used towards paying back IMF credits. Due to large credits obtained from the IMF and obligation to pay back, the Turkish government cannot invest in areas such as education, public health and general welfare'', reaffirmed Dr. Lopez-Claros.

According to Dr. Lopez-Claros, improvement has been witnessed in Turkey in dealing with corruption, in the last 5-10 years. ''Nonetheless, Turkey is going through a difficult financial program,'' noted Dr. Lopez-Claros.

''A country like Turkey that has done its homework will join the EU some day'', commented Dr. Lopez-Claros. ''Turkey is willing to become a full member of the EU. If necessary reforms are made and higher standards in conformity with EU standards are reached, Turkey will become a full member to the EU,'' affirmed Dr. Lopez-Claros.


http://www.turkishpress.com/news.asp?id=78471

Turkish 8 mths foreign direct investment 2.9 bln usd vs 1.9
11.08.2005, 11:13 AM

ISTANBUL (AFX) - The value of direct foreign investment in Turkey expanded to 2.9 bln usd from January to August this year from 1.9 bln in the same period last year, Economy Minister Ali Babacan said.

He said the figure does not take account of recent major privatizations, so the final tally for 2005 will be much higher.

'More (foreign-financed) companies have been established in Turkey in the last three years than in the previous 48 years,' Babacan said as he opened a conference on investment in Turkey attended by heads of multinational corporations.

He said 6,000 businesses had been created in Turkey between 2003 and the present, against 5,600 between 1954 and 2002,

Babacan appealed to Turks to back the opening of the national economy to foreign capital.

'With a population that grows by a million a year, with 500,000 to 700,000 people looking for work every year, romantic or ideological approaches have no place. We must be realistic and pragmatic,' he declared, in remarks carried by the Anatolia press agency.

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Bulgaria, Turkey: Ankara Interested in Belene Plant Construction

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16:24 - 09 November 2005 - Ankara is interested in the construction of the Belene N-plant, Economy and Energy Minister Roumen Ovcharov said after returning from a two-day working visit to Turkey, BTA news agency reports.


During his talks with Turkish Prime Minister Recep Erdogan, Minister of State Kursad Tuzmen, Finance Minister Kemal Unakitan and Energy and Natural Resources Minister Hilmi Guler Ovcharov discussed the building of a dam along the Toundzha River, the winding up of the Infrastructure against Electricity Agreement and the Nabucco Project for building a gas pipeline connecting Turkey, Bulgaria and Romania.
He did not specify, however, how the Turkish side was interested in the building of the N-plant.



http://www.reporter.gr/fulltext_eng.cfm?id=51109162433

Bulgaria: Bulgaria and Turkey Cancel Electricity Agreement

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14:28 - 10 November 2005 - Bulgaria and Turkey decided to find a way out of the intergovernmental power-for-infrastructure agreement that the two signed in 1998, because it is turning into a hindrance for the economic development of the two countries, Sofia news agency reports.


The announcement came from Economy and Energy Minister Rumen Ovcharov upon his return from an official visit to Ankara.
Among the additional topics that were discussed in Turkey was the building of the dam at the Tundzha River, a question that Turkey felt strongly about in view of the heavy floods that the country suffered in the last winter.

The problems with the dam were mainly in the areas of the economic expedience of the project and the financial issues around it.

Currently there are six options for the building of the dam - three of them were prepared by Energoproekt Sofia and three came from Turkey's side.

Ovcharov also discussed the possibility of signing a new transport agreement between the two countries.

Source: Sofia News Agency

Mekkevi: Stock Market and Real Estate Sectors are Attractive in Turkey

Top level administrator at the Bank of Dubai, Ziyad Mekkevi, said Turkey presents “very attractive” opportunities in the stock market and real estate sectors.

“We are thinking to enter Turkey [market] by evaluating these opportunities. I personally think Turkey is one of the most interesting markets before us,” he said.

The accumulation of money due to increases in oil prices will be transferred to some other countries as investment, Mekkevi said, and that with its incredibly rapid development Turkey introduces attractive investment terms in many fields. In order to undertake investment, building trust is crucial, the Dubaian banker said. “We don’t want to become lost in political dilemmas when we are willing to make investments. If this happens, you scare away the investors. The world is such a big [place]. Countries such as China and India also attract investments.”


10.11.2005
Economy News Desk
Istanbul
http://www.zaman.com/?bl=economy&alt=&hn=26248

Fuel complex in Ceyhan
By Orhan Coskun - Reuters

ANKARA - Turkey is planning a $10 billion (8.5-billion-euro) project to build an oil refinery, an LNG terminal and a petrochemicals plant at the port of Ceyhan on its Mediterranean coast, an energy official told Reuters yesterday.

Turkey wants to promote Ceyhan as a hub for regional oil and gas trade, partly as a way to avoid crowding in the narrow, congested Bosporus strait and the passage through Istanbul, the only outlet for Russian and Caspian oil output.

Ceyhan is already the terminus of a 1.5-million-barrels-per-day (bpd) pipeline and a terminal for Iraqi crude. Another line with a 1-million-bpd capacity from Baku on the Caspian through Tbilisi will come on stream in early 2006.

The terms of the project will be announced by the end of the year, the energy official said.

“The government has started talks with leading international energy companies to build the project,” said the official, speaking on condition of anonymity.

“A total investment value of $10 billion has been calculated for the three plants,” he said.

The plan is likely to be discussed by Russian President Vladimir Putin, Italian Prime Minister Silvio Berlusconi and his Turkish counterpart Recep Tayyip Erdogan when they inaugurate a gas pipeline from Russia in the Black Sea town of Samsun next Thursday, he said.

Italian energy company ENI said on Wednesday it and Turkish company Calik would evaluate an oil pipeline project, linking Samsun to Ceyhan to carry “over 1 million barrels per day.”

But Russia has so far favored a line that will link the Black Sea port of Burgas to the Aegean port of Alexandroupolis through Bulgaria and Greece.

“A total of nearly 200 million tons of oil a year (4 million bpd) will converge at Ceyhan from Iraq, Caspian as well as Russia through the proposed Samsun-Ceyhan line,” the official said, adding the Samsun-Ceyhan line might carry 1.4 million bpd.

Russian and Italian energy companies expressed interest in the Ceyhan project, the official said without naming any company.

Turkish energy officials said earlier this week Russia also wanted to take part in a project by Turkey’s gas and oil pipeline concern Botas to build a gas storage facility under the Tuz Golu (Salt Lake), near the capital Ankara.

“The three leaders will also discuss some other projects that are of interest to their countries,” said the official, without giving further details.

Oil analysts said the construction of a refinery at Ceyhan would be timely given the tightness of refinery capacity in Europe. But it was not clear when the refinery could be operational.


ekathimerini.com

TMSF Sells Uzan's Adabank

The date of tender of Adabank, which was impounded by Savings Deposit Insurance Fund (TMSF), will expectedly be determined during the Fund Committee to be held on November 17.

A counseling company is examining the sale process of Adabank Shares. Adabank has 22 shareholders. Kemal Uzan has 39.5 percent of the shares and Cem Uzan has 30.5 percent of the shares. Ninety-nine point nine percent of the shares of Adabank, the tender of which is being prepared, will be sold.

State Minister Abdullatif Sener said TMSF and the Banking Regulation and Supervision Agency (BDDK) should work cooperatively for Adabank’s share and prepare the process in coordination.

The Fund had previously announced the shares of Adabank could be sold and this initiated the discussions whether this meant giving a new banking license or not, the minister said. Adabank's sale will not be an economic sale like cement factories or media groups but, it will be a sale of the shares.

TMSF will also sell Camlica Residences, which were seized from Balkaner Group and a news conference will be held about the issue on November 16.


12.11.2005
Zaman
Ankara
http://www.zaman.com/?bl=economy&alt=&hn=26339

Credits Boom, Payments Received Properly

Citizens rushed to purchase automobiles last year after the decline in interest rates of loans along with the economic stability. A record has been broken in the Republic’s history with the purchase of 692 thousand vehicles. This year the publics demand has diverted to housing. According to the data from the Banking Regulation and Supervision Agency (BDDK), the number of those using housing credits reached a record level. While 60 thousand citizens used housing credits in March 2004, this figure reached to 220 thousand citizens by a 366 percent increase in August 2005. While there is boom in the number of loans barrowed, there are no problems in payments backs. Only 6,000 of the citizens out of 921, 720 taking housing credits, did not pay their loans regularly. In other words, the rate of housing loans, which was not paid back, remained at six per thousand.

On the other side, 1, 3 percent of the automobile loans were not paid back. While 3,270 million people used credits to purchase automobiles since March 2004, 42,796 of them did not make payments regularly. The amount of the loans taken from the banks reached 10 billion New Turkish Liras (YTL) only in 2005 after monthly credit interests receded to 1.19 percent and the term of payment was extended to 25 years. While the banks gave credits to an average of 500 citizens in the New Year, this figure reached 1,200 in September. Deputy Prime Minister Abdullatif Sener and BDDK Chair Tevfik Bilgin had warned the citizens about the boom in housing credits. Explaining that even a monthly interest of one percent is too high, Sener said interest rates around 1.20 percent correspond to an annual interest rate of 14.4 percent. “If the fact that inflation is under eight percent taken into consideration, the margin should be around seven percent, “Sener added. BDDK Chair Bilgin advised those who used credits, to pay at least half of the housing price with their own resources and warned “Do not forget that it is a monthly interest rate.” The amount of housing credits taken from the banks exceeded YTL10 billion. Most of the credits are taken from Istanbul and the biggest demand comes from the European side. Ankara, Izmir and Adana have a share of 30 percent. The average term of payment was extended to nine years.


13.11.2005
Fatih Atik
http://www.zaman.com/?bl=economy&alt=&hn=26359

Intel CEO's Vision of Turkey as Regional Leader

Intel CEO Craig Barrett will come to Turkey on November 14 to view the developments in information and communications technologies.

Barrett will meet with Turkish Education Minister Huseyin Celik and Transportation Minister Binali Yildirim and will attend the meeting “e-transformation Turkey: on the way to Information Society.” Barret, who believes Turkey can become a regional leader if it efficiently benefits from the developments in the fusing information technologies and internet technologies, is expected to bring investment offers. Intel Turkey General Manager Ege Ertem says that Barrett attaches particular importance to Turkey among the developing countries. Intel is the world’s leading processor producer and is active also in the fields of data- transfer and network products. Barrett is expected to select Turkey as the base for Middle East operations if he finds the communicational infrastructure adequate.


Barrett had been an object of public attention with his statement, “henceforth, we can make it without any American in our staff.” Ertem notes that important investments will come along with Barrett’s visit. “Our chairperson will make very important announcements. He will announce that Intel will support the local entrepreneurs, education and software developers within the scope of the e-transformation initiative.” In his 2003 visit, Barrett had stressed that information technologies could play the role of a catalyst for Turkey’s development and noted that the economic stability and the government programs required for the development of the education system, which would push Turkey’s future growth further, were present. Barrett had asked Turkey to take into account Turkey’s future generations: “The gist of the matter is to familiarize Turkey’s future generations with information technologies; consequently to form a labor force that is inclined to test new technologic solutions, mathematically and scientifically competent, and competitive in the global digital economy.” Ertem says that qualified human resources should not be overlooked. “What we mean by investing in a country is ensuring that that country uses the information technologies effectively and thereby making a contribution for the fast development of its economy. If we can raise the efficiency, Turkey will become an attractive investment center for many firms. Barrett will be here to support the informatics that has a foot in education. He will actively invest to use the internet infrastructure and communication technologies.”


13.11.2005
Zelis Yildiral
Istanbul
http://www.zaman.com/?bl=economy&alt=&hn=26358

JOINT ENERGY PROJECT OF RUSSIA, TURKEY AND ITALY
[November 14, 2005, 17:57:47]

On November 17, the city of Samsun, Turkey, will host opening ceremony of Blue Stream gas pipeline project and the Heads of three countries will sign corresponding records on joint energy project. Russian President Vladimir Putin, Italian Prime Minister Silvio Berluskoni and Turkish officials will attend the ceremony.

Under the terms of Russian-Turkish intergovernmental agreement signed on December 15, 1997, there was started construction of gas pipeline between two states at the extension of 1213 km, and since 2003 gas from Russia to Turkey has been transporting. Planned production capacity of pipeline is 16 bln. cubic meters per year. Blue stream pipeline with 373 km passing via the territory of Russia, 396 km through the bottom of the Black Sea and at 444 km from Samsun to Ankara, expected to run from Turkey to Italy.

As agreed, for the period of 25 years Russia will provide Turkey with gas to the amount of 3,5 bln USD.


http://www.azertag.com/en/index.shtml?lang...eid=&news_page=

Turkey has reached a new level, says World Bank
Monday, November 14, 2005

ANKARA - Turkish Daily News


ARTICLE SUMMARY

World Bank country director Andrew Vorkink responded to last week’s progress report issued by the European Union Commission, saying that Turkey has not only moved to another level in government policy, but also to another level economically.


http://www.turkishdailynews.com.tr/article.php?enewsid=28157

'Turkey Passes Political and in Economics Tests'

The Turkish government is continually praised for its economic policies.

As soon as it was revealed that the progress report by the European Union (EU) on Turkey gave the appearance of it having ”a market economy at work,” Andrew Vorkink, country director of the World Bank Turkey, also expressed similar views on Turkey’s economic performance.


“Turkey did not only go up a level in politics, but also in economics,” noted Vorkink giving a broader description of the economic improvement in Turkey.


The report underlines the continuous efforts by the Turkish administration to meet the political requirements on a substantial level, said Vorkink, confirming the expression “market economy at work” for the first time.


“The EU actually affirms by this definition that Turkey can currently keep up with EU countries,” said the director.


Such a definition will
give Turkey a better fame in the international economics,
decrease the rate of external borrowing Turkey is subject to, © attract foreign investors,
cause interest rates to come down by means of growing liquidity figures and credibility, and
increase the credit rating, according to the World Bank official.


Release of report on corruption waited


The World Bank will release a set of determinations about corruption and possible ways of combating such tendencies in Turkey on Monday. This report is prepared on a global scale in association with the European Investment Bank (EIB) in relation to corruption-related activities.


Turkey’s current competence in the fight against corruption is reasonable; however these efforts still require greater commitment in order for corruption to disappear, Vorkink said.


The notion of corruption, according to Vorkink, constitutes a major problem to social as well as economic progress. This is the reason foreign investors shy away from realizing their projects, for the unequal allocation of public resources among institutions, and for instability as well as unrest in society.


14.11.2005
Anadolu News Agency (aa)
Ankara
http://www.zaman.com/?bl=economy&alt=&hn=26392

Erdogan: Capital has no Religion, Race, or Tongue

Turkish Prime Minister Recep Tayyip Erdogan invited businessmen from Qatar to invest in Turkey during his official visit to the country.

Both domestic and foreign investors have equal opportunities in Turkey, the prime minister emphasized, and these executives, he suggested, should make investments in energy, food, civil aviation, and telecommunication.


“Capital has no religion, language, or race,” said Erdogan, using the metaphor “money resembles mercury; it easily finds a course to flow.”


Erdogan met with Qatar Prime Minister Abdallah bin Halia al-Tani in the capital Doha Sunday and later he attended a meeting of businessmen from both counties.


Qatar plans to invest $90 billion within the next five years, said Erdogan, and Turkish investors should have a share in these investments. The Turkish economy has adopted a sustainable improvement, the prime minister told regarding the economic developments in the country. “Come to Turkey. Enter the Turkish market. Both countries will win,” said Erdogan re-iterating his invitation to Qatar’s businessmen. In the field of privatization especially, considerable investments are on the way, Erdogan also noted that he does not like the use of the expression “foreign investment” preferring to refer to investments as “global capital”. Tremendous interest shown toward the Middle East said prime minister and therefore, Turkey and Qatar should have cooperation.


For further information please visit http://www.cihannews.com


14.11.2005
Cihan News Agency
Doha
http://www.zaman.com/?bl=economy&alt=&hn=26393

Retirement Age to be Pulled up in 2036

The retirement age will be gradually increased after 2036, told Murat Basesgioglu, the Minister of Labor and Social Security, Zaman regarding forthcoming projects. A new reform package is needed to reduce the Social Security Organization (SSK) deficit, the Social Insurance for Self-Employed (Bag-Kur) Bag-Kur and the Pension Fund for Civil Servants (Emekli Sandigi).

The Minister emphasized on the quality of this program being designed to earmark the expenses on an equal basis between the next generations. The use of the latest technology in official organizations will be the most significant reform, revealed Basesgioglu, relating his bright hopes for the future.


The system just mentioned will do away with the health booklets, and an individuals’ citizenship record number will be enough to track any personal information by hospitals or doctors. It will also be used as a social security number. When a citizen meets the requirements to retire, they can be awarded an old age pension within minutes.


Minister Basesgioglu said regarding the retirement age, the most debatable issue is that the retirement age will be raised to 68 in 2075 with a gradual transformation from 2036. The life expectancy in Turkey, minister noted, is to increase in 2036 and therefore the gradual retirement age increase will be the issue from that time on.


14.11.2005
Huseyin Sumer
http://www.zaman.com/?bl=economy&alt=&hn=26402

Russia Asks Cooperation in Refinery and Pipelines

Russia and Italy lead the countries that Turkey conducts the highest level of export with. At the top of the list bringing these three countries together is the Blue Stream carrying Russian natural gas to Turkey using Italian technology for the pipeline laid under the Black Sea.

Russian President Vladimir Putin, who will come to Turkey for the official opening of the Blue Stream pipeline, will bring plans for joint investments in Ceyhan, the region that Turkey creates projects for in order to transform it into an “energy terminal”. Oil refineries to be built by the Russian Gazprom company in either Mersin or Ceyhan, an oil pipeline construction stretching from Samsun to Antalya, (from the north to the south of Turkey), and underground natural gas storage facilities are among Putin’s plans. Russians are also extremely interested in tourism investments in Turkey. Putin is to ask for “facilitation” but not “special treatment” from Turkish Prime Minister Recep Tayyip Erdogan. Turkey is highly disturbed by the level of tanker traffic in the Istanbul straits and seeks to find an alternative route with the Samsun-Ceyhan oil pipeline. The Baku-Tbilisi-Ceyhan oil pipeline will carry Caspian crude to Turkey that will be processed at the Ceyhan facilities. Building natural gas storage facilities to prevent interruptions during the winter months is also another project being assessed. Putin will meet with Erdogan and Italian Prime Minister Silvio Berlusconi Thursday to officially open the Blue Stream oil pipeline in Samsun, a northern Black Sea region city.


The Blue Stream project agreement signed in December 1997 between Turkey and Russia proposes the transfer of 16 billion cube meters Russian crude yearly for 25 years. Its total cost is given as $3.5 billion and was completed in three years. The 1,265 kilometers long pipeline first pumped the gas in February 2003 and it is the first pipeline laid 2,150 meters under the sea.


Following the completion of the Blue Stream project, Turkey-Russian trade relations have started to dwindle, this is a negative sign for Turkey in particular. Rolling up their sleeves to boost bilateral economic relations, Turkey has invited Russian businessmen to invest in Turkey. The number of tourists coming from Russia has reached two million within this context; moreover, the Turkish construction sector invested more than eight billion dollars in this country.


14.11.2005
Ismail Altunsoy
Istanbul
http://www.zaman.com/?bl=economy&alt=&hn=26403

Foreigners Allowed Limited Acquisition of Turkish Land

A new legal amendment bill that would enable foreigners to acquire real estate in Turkey is under consideration following the cancellation of the Turkish Constitutional Court of the former amendment.

Through the amendment bill that is before the parliament and which envisages changes in the current Land Registry Act, taking into account the grounds of the Constitutional Court’s previous cancellation, foreigners will be allowed to acquire real estate in Turkey. According to the new amendment bill foreigners can acquire at most 25,000 square meters (2.5 hectares) of land in Turkey, an area equal to the total area of five football fields. However, the cabinet will have the authority to increase the amount of land allowed up to 30 hectares. The amount of land that foreigners will be able to acquire must not exceed five thousandth of the area of the province in which it is located. Foreign nationals will thereby have permission to acquire immovable property zoned for residential and industrial use in conformity with the principle of reciprocity and legal limits, and in the areas under the authority of the building development regulations and the local building development regulations. The corporate entities that are established according to the laws of foreign countries can acquire “limited real rights” upon the immovable property ownerships and immovable properties.

The date that the amendment is expected to come into effect has been determined as 26 July 2005, the date the Constitutional Court’s cancellation came into effect, so that no legal vacuum arises.

According to the information received from land registry circles, the bill does not allow foreigners to acquire land in villages, as the law will only enable foreigners to acquire land or properties zone as residential and industrial for use in the areas that fall under the authority of the building development regulations. This point is said to forbid the acquirement of agricultural lands by the foreigners. The amendment will thereby preclude the criticism that Eastern and Southeastern lands of Turkey are being taken over by foreigners. Another reason for disallowing foreigners to acquire agricultural lands in Turkey is to prevent the division of these lands by foreigners, following the example of other European Union candidates.

Communities are not allowed to acquire immovable property

Foreign companies will be entitled to real estate ownership and limited rights under special clauses. Foundations, societies, cooperatives, associations, groups and communities, other than real and corporate persons, will not be allowed to acquire unmovable properties in Turkey, and will not be accorded limited real rights for their benefit. In the case of the death of the citizens of foreign states in relation to which the reciprocity principle does not hold, their estates will be liquidated and transfer procedures will be followed. In the determination of reciprocity the legal and the factual circumstances will be taken into account.


15.11.2005
Ercan Baysal
Ankara
http://www.zaman.com/?bl=economy&alt=&hn=26437

'Natural Gas to Israel Through Turkey' only an Idea

The Blue Stream natural gas pipeline’s Russian counterpart, Gasprom CEO Spokesman Sergey Kupriyanov, said no particular concrete development has been made to transfer Russian gas to Israel so far.

Kupriyanov emphasizing they have spoken about the issue with Prime Minister Ariel Sharon reminded of the natural gas resources close to Israel. For political and other issues, however, Israel is unable to access gas from these reserves, the Russian spokesman said, and it is for this reason that the Israeli government is interested in Russian natural gas. “Selling gas through Turkey still remains just an idea,” Kupriyanov said.

Ministers in Ankara and Moscow had previously spoken of transferring Russian energy sources to third world countries. To this end, Turkey has brought to the agenda the notion of selling Russian natural gas to the other countries via Turkey; however, Russia has rejected the idea.

Related News: Russia Asks Cooperation in Refinery and Pipelines


15.11.2005
Economy News Desk
http://www.zaman.com/?bl=economy&alt=&hn=26428

Oger Takes over Turk Telekom

Following the Turkish Council of State’s approval, the Privatization Board and Oger Telecom signed a transfer contract through which 55 percent of Turk Telekom shares have been transferred to Oger Telecom in return for $6.55 billion.

In the first Turk Telekom administrative board meeting held after the transfer Monday, Paul Doany became the new chair, and Mehmet Ekinalan has been appointed back as Turk Telekom General Manager.

With the signing of the contract, the Turkish Treasury received $1.31 billion as part of the first installment, the treasury also transferred Turk Telekom’s surplus cash of $1.9 billion, which had accumulated prior to the transfer deal, to a separate bank account. Hence, in just one day, the Turkish state secured total cash inflow of $3.7 billion.

Finance Minister Kemal Unakitan, who together with Saudi Oger Group deputy chair Mohammed Hariri and Turk Telekom General Manager Ekinalan signed the transfer deal, said they signed the most important privatization deal of the Republic’s history.

Unakitan noted the bloc sale of 55 percent of the Turk Telekom shares was an indicator of the trust in Turkey’s future; a privatization that was mulled over for years was realized through the determined attitude of the Justice and Development Party.

Global financial circles followed this privatization, Unakitan said. “There was the wide spread opinion that Turkey cannot accomplish a privatization. Thank God, Turkey has competently accomplished this one.”

Transportation Minister Binali Yildirim noted the beginning of a new era. He highlighted the government’s expectation that the 168-years-old Turk Telekom conducts studies to accommodate advanced technology and to invest in information technologies. The government will watch over Turk Telekom in that regard, Yildirim assured. As for the lawsuits filed against the Turk Telekom privatization, he said: “Even though the general proceedings on the lawsuits filed by the non government organizations are still underway in the Council of State, the Council did not find it appropriate to suspend the process. A decision to the contrary would have delayed the deal. The Council ruled within the legal framework in a manner that took into account the future of the country and the general course of the economy.”

‘Turk Telekom deal marks the beginning of our investment in Turkey’

Saudi Oger Group Deputy Chairperson noted that economic growth and the telecommunication sector were directly linked to each other. He highlighted their commitment to invest in Turkey and in Turk Telekom. “This is not just a take over operation. This marks the beginning of our investment in Turkey and confirms our confidence in Turkey’s future.”


15.11.2005
Selim Kuvel
Ankara
http://www.zaman.com/?bl=economy&alt=&hn=26423

Turkey Ahead of UK-France in Corporate Financial Transparency

Turkey turned out to be ahead of many European Union (EU) countries in adherence to International Financial Reporting Standards (IFRS), adopted by the EU on 1 January 2005.

France based company Mazars conducted research in Turkey in cooperation with the Turkish firm Denge for the IFRS, the use of which is an indicator of financial transparency. The research covered 50 Turkish firms, publicly traded on the Istanbul Stock Exchange (ISE). The research conducted in Turkey was part of a general European survey which covered more than 550 firms from 12 European countries. According to the results of the European survey, Turkish firms are ahead of many European firms in readiness for the IFRS. Eighty six percent of Turkish firms are ready for the IFRS, whereas this rate is 84 percent in Britain, 82 percent in Italy and 80 percent in France. German, Dutch and Spanish firms; however, are better prepared than Turkish firms.

Eighty percent of Turkish firms do not regard the adoption of the IFRS as an unnecessary measure. This the second largest rate in Europe in that regard. Eighty percent of Turkish firms informed their share holders about the adoption process; and eighty four percent think that the standard will facilitate comparisons among the firms. Through the adoption of IFRS, Turkish firms will increase their competitiveness in the global market and will have the means to compare themselves with their global opponents. Furthermore, following financial statements will become easier for the foreign investors who envisage investments or mergers in Turkey.

Necessities imposed in order to update the accounting arrangements include: The globalization of financial markets, the emergence of multi-national companies, the activity and competition among international audit firms, different country blocs' objectives to form economic unions and scandals arising from irregularities. For this reason, the EU required all establishments whose shares are transacted on stock exchanges or other organized markets to keep consolidated financial sheets in conformity with International Accounting Standards (IAS), newly named "IFRS."

The International Accounting Standards Board (IASB), the institution that developed International Financial Reporting Standards (IFRS) was set up in 1973.

The IASB foundation includes a board of trustees, an administrative board, a Standards Advisory Council, an International Financial Reporting Interpretations Committee, a Director of Technical Activities and a commercial director.

The trustees play an important role in the governance of IASB and are representative of the world's capital markets, as well as boasting a diversity of geographical and professional backgrounds.

The Turkish Capital Market Board and the Banking Regulation and Supervision Agency are among the institutions that paved the way for the implementation of this system in Turkey. With International Financial Reporting Standards, the aim is to enable local companies to have an accounting system and balance sheet that can be compared internationally, and thus increase the interest and demand from local and foreign individual/institutional investors for the company shares on the stock exchange. The financial reporting standards also fulfill an important criterion in terms of attracting foreign capital, which in turn increase the companies' transparency degree as well as the possibility of collecting funds from international markets.

Parties that are responsible for preparing balances sheets, income sheets, cash flow statements and equity assets change statements within the framework of the IFRS include: Companies whose stock is traded on the stock exchange, investment partnerships, all intermediary institutions whether publicly traded or not, portfolio management companies and the partnerships of these companies, and their natural partnerships with joint administration and share holding companies.


What advantages does international financial reporting bring to companies?


Transparency degree rises.

Competition level increases.

The probability of collecting funds from international markets arises.

Fund costs fall.

Possibility of international investment and comparison arises.

As the liquidity increases, an important obstacle facing the efforts to form an economic unity disappears.


16.11.2005
Huseyin Sumer
Ankara
http://www.zaman.com/?bl=economy&alt=&hn=26468

World Bank Report: Reform in Higher Education Council Necessary

The "Higher Education Report" prepared by the World Bank after an examination of universities in Turkey, showed that the Council of Higher Education , or YOK, must absolutely be reformed and the Student Selection Examination (OSS) must be changed in a way to better test the aptitude of students.

The higher education system was under discussion in the report prepared by the bank experts on the country.

The report also shed light on the "International Higher Education Conference" held by YOK, "The higher education system in Turkey must absolutely be reformed in order to contribute more to the country's development in the 21st century," the report said, emphasizing the reforms should meet "the demand of the students and the business market."

The World Bank report also proposed changes in the Council to make it a strategic institution, and stressed that the Council should not interfere in the administrative details of every university.

The new model suggests the Council should work closely with the Ministry of Finance on financial issues as well. According to the report, YOK must establish an advisory committee and the majority of this committee should consist of employers. In addition it must also conduct detailed studies of the business market.

The World Bank foresees a reduction in the number of staff at YOK, but aspires for a higher level of analytical skills in the remaining personnel. More autonomy must be given to universities for them to anticipate and respond successfully to changes within economy and society; however, this increased autonomy should be balanced by consequences. The report also attaches a special importance to vocational schools, and suggests that these schools focus more on local business market needs, as well as practicing more autonomy.


16.11.2005
Ibrahim Asalioglu
Ankara
http://www.zaman.com/?bl=national&alt=&hn=26463

Putin visit tells of growing clout
By Louis Meixler - The Associated Press

ANKARA - Russian President Vladimir Putin flies to Turkey today to inaugurate a multibillion-dollar pipeline project, a symbol of his country’s economic clout that has grown so strong that Russia is now Turkey’s second-largest trading partner and Russian gas heats most cities in this NATO ally.

Putin will meet with Turkish Prime Minister Recep Tayyip Erdogan today near the Black Sea port of Samsun to inaugurate the $3.2 billion (2.6-billion-euro) “Blue Stream” natural gas pipeline which runs under the sea to link Turkey with Russia’s gas fields.

Italian Prime Minister Silvio Berlusconi will also attend the ceremony. Italy’s Eni SpA was a key partner in the construction of the pipeline.

Including Blue Stream, Russia now supplies 60 percent of Turkey’s gas and 20 percent of its oil.

Washington had balked at proposals to build the pipeline and has warned Turkey about its dependence on Russia.

But Turkish officials say that in a world of tight gas supplies they have little choice but to increase their dependence on Russia, which has become the world’s largest oil exporter.

“It is never good to be this dependent on one country,” said Necdet Pamir, former deputy manager of Turkey’s state-run oil and gas exploration company. “We are trying to diversify, but how?”

Neighboring Iran is also a key gas supplier, but increasing dependence on Iran is also politically problematic.

The ceremony near Samsun will also highlight the growing business ties between the two countries and their burgeoning political relationship. Erdogan and Putin have met five times since Erdogan came to office.

The ceremony will officially inaugurate the project, the world’s deepest undersea pipeline, but comes more than two years after gas began to flow.

The pipeline and the accompanying gas deals have been plagued with charges of mismanagement and corruption and gas purchases have had to be renegotiated.

In May, Parliament voted down an opposition motion to censure Energy Minister Hilmi Guler that said that Guler caused billions of dollars of losses by agreeing to pay inflated prices for Russian gas.

“It was impossible for a long time to have a ceremony,” Pamir said. “There was nothing to celebrate.”



ekathimerini.com

Iran-Turkey trade to exceed $5b this year: official

Thursday, November 17, 2005 - ©2005 IranMania.com

LONDON, November 17 (IranMania) - The value of Iran-Turkey trade will exceed $5e bln , said Iran?s ambassador to Ankara Firuz Dolatabadi, MNA said.

In 2004, he added, bilateral trade exchanges between Iran and Turkey totaled $2.8 bln, implying that the figure is projected to be over four billion dollars (excluding services exports).

Pointing to the recent dispute between Iran Khodro and the Turkish automaker Tofas, he noted, ?This is not an important issue. It is something that should be resolved by these two companies.?

Each side has the right to bring the case to an international tribunal if negotiations fail or if the other side violates the agreement, he added.

According to an agreement signed between Iran?s major carmaker Iran Khodro and the Turkish company, Tofas had to supply Fiat gearboxes and engines for the Iranian company, which wanted to use them in the Peugeot RD production line. However, the Turkish company seems to be shrugging

the issue off probably because the Italian company, which is a GM subsidiary, owns the largest part of the company?s shares.

Therefore, Iran Khodro has warned that that it would take the issue to an international court if the Turkish company does not fulfill its pledges, which are written down in their 10-year valid contract.




http://www.iranmania.com/News/ArticleView/...rrent%20Affairs

Turkish Lira not Overvalued

Mehmet Simsek, Emerging Market Economist and Strategist at Merrill Lynch, one of the world’s leading investment banks, said he does think the Turkish lira is overvalued.

Simsek said the lira overvalue is a complicated matter. "According to the effective exchange rate index of the OECD, the lira appears to have a value of about 40 percent, but according to the index that takes into consideration the unit labor costs, it does not appear to be so overvalued. We think it is between these two and the lira is not overvalued."

The value of the Turkish lira is more important to sectors such as textiles, who meet their inputs from within the country, according to Simsek, while it is not as important for those that import inputs such as white goods and automobiles.

A valuable lira plays a role in the high current deficits, the economist claims, and the main factors according to him originate from high oil prices and growth.

The high current deficit is reasonable when one looks at the developments in Turkey’s economic growth, he said. If the capital outflow from developing countries including Turkey, as well to developed countries such as the US and the UK, the current deficit can be a problem, even if the foreign capital inflows directly.

Merrill Lynch do not expect a crisis like those seen in 1994 and 2001 even though Turkey is among countries that will be most affected from a shock that may take place in the world next year due to a liquidity crisis.

In response to a question asking why he does not expect a crisis, Simsek replied: "A financial discipline and consolidation is established in Turkey. The fragility has diminished. Conducting membership negotiations with the European Union and the International Monetary Fund-supported policies are very important gains."

Simsek, however, said, the floating exchange rate policy conducted by the Central Bank is "one of the biggest obstacles before this crisis' taking place and economic crises generally occur at periods of controlled and constant exchange rate policies.

There are three different shock scenarios facing the world for 2006, the Merrill Lynch economist informed, "growth, commodity prices and liquidity." Turkey would be affected less by a slowing down of economic growth in the US. In a shock in commodity prices, countries such as Turkey, which do not have a high level of commodity sales, they will be affected the least. "But if a liquidity shock occurs,” Simsek added further, “Turkey will be a country that would be most affected by this, since the country has an extremely high need of foreign debt, its current deficit is high and its debt amount is very high. Since the current deficit is high, that could be a risk in terms of sustainable financing, but sufficient direct foreign capital entry will reduce this risk."


17.11.2005
Economy News Desk
http://www.zaman.com/?bl=economy&alt=&hn=26502

Gazprom to build natural gas liquefaction plant in Turkey
19:56 | 17/ 11/ 2005




SAMSUN, November 17 (RIA Novosti) - Russian natural gas monopoly Gazprom is considering partnering with Turkey to build a natural gas liquefaction plant in the Turkish cities of Ceyhan or Izmir, the head of the company said Thursday.

Alexei Miller said the projected output of the plant might amount to five million metric tons per year.

Miller said Gazprom had discussed various aspects of cooperation in the oil and gas sector with Italty's ENI and with Turkish partners, particularly Botas. They discussed the possible transit of gas via Turkey to southern Europe, namely to southern Italy, Bulgaria, Austria, and Yugoslavia, as well as to Israel.

The sides also discussed the possibility of delivering gas to Turkey for liquefaction and further shipment to other countries.



http://en.rian.ru/business/20051117/42128200.html