COUNTRY PROFILE: TURKEY

then ruled until the seventh century B.C. That kingdom was succeeded by a Lydian kingdom, which in turn was conquered by the Persians in 546 B.C. Meanwhile, beginning in about 1050 B.C. Ionian Greeks began founding cities along the Aegean coast of Anatolia, and in the eighth century B.C. peoples such as the Armenians and the Kurds moved into eastern Anatolia. In the late fourth century B.C., Alexander the Great of Macedonia conquered all of Anatolia. One of the city states that Alexander founded, Pergamum, became a unique center of wealth and culture. In 133 B.C., Pergamum became the center of a Roman province and remained a cultural center for several centuries. In 330 A.D., the Roman emperor Constantine established the capital of the Greek-speaking half of his empire at Byzantium, on the Sea of Marmara. The city was renamed Constantinople, and the eastern half of the Roman Empire became known as the Byzantine Empire. With its center in Anatolia, the Byzantine Empire remained a powerful entity until the eleventh century. The Patriarchiate of Constantinople, established in the fourth century, represented the Greek-speaking Roman Empire in the Christian church.

Turkish tribes began to migrate westward from China and Central Asia in the seventh century A.D. In 1071 Seljuk Turkish forces defeated a Byzantine army at Manzikert and then occupied all of Anatolia. In the next few centuries, several Seljuk states were established. Gazi warriors, tribal horsemen charged with defending the Seljuk frontier, pushed relentlessly westward, and Seljuk governments eventually followed. In 1097 the Christian world responded to this movement with the first in a series of religiously inspired military crusades, which reclaimed part of Anatolia. However, in the next two centuries what was left of the Byzantine Empire fragmented. In the fourteenth century, a new power, the Osmanli Dynasty, came to dominate Anatolia.

The Ottoman Empire: Troops of the Osmanli Dynasty, which gave its name to the Ottoman Empire, moved rapidly into southeastern Europe, defeating Serbian forces at the battle of Kosovo in 1389. Although they were temporarily halted when the Mongol forces of Timur occupied part of Anatolia in the early fifteenth century, in 1453 Ottoman forces captured Constantinople, the last outpost of the Byzantine Empire. The Ottomans renamed Constantinople Istanbul and made it the capital of a new empire and the seat of Sunni Islam as well as Greek Orthodoxy. Under Süleyman the Magnificent (ruled 1520–66), the empire expanded across North Africa to Morocco, farther into southeastern Europe, and across the Middle Eastern regions of Kurdistan and Mesopotamia. However, after Süleyman’s death the empire began showing signs of decay. The Ottoman navy lost the key Battle of Lepanto to Spanish and Portuguese forces in 1571, and succession struggles shook Istanbul.

Under the leadership of the Köprülü family, the empire made its final push into Europe in the seventeenth century. The siege of Vienna, which was lifted in 1683, marked the farthest extent of Ottoman penetration into Europe. In the years that followed, a multinational European force drove Ottoman troops southward and eastward, forcing the empire to cede substantial territory in Europe in the Treaty of Karlowicz (1699). In the early eighteenth century, Russian Tsar Peter I initiated a long-lasting goal of Russian foreign policy, to gain access to warm-water ports at the expense of the Ottoman Empire. During the next two centuries, Russia fought several wars to diminish Ottoman power. In 1774 the Treaty of Kuchuk-Kaynarja gained Russian ships access to Ottoman waterways. By the nineteenth century, the Ottoman Empire had become known as “the sick man of Europe.” The decay of its vast holdings and the nationalist forces that were unleashed in the empire were central issues for all European governments.

In 1832 the European powers forced the Ottoman government to recognize Greek independence after a decade-long Greek guerrilla war. However, Europe also recognized the need to avoid the complete destruction of the empire. In the Crimean War of 1854–56, France and Britain sided with the Ottoman Empire against Russia, which lost the war and ceded some of its power in southeastern Europe. In 1878 the Treaty of Berlin established the independent states of Bulgaria, Romania, and Serbia from former Ottoman territory. In the same period, Britain took possession of Cyprus and Egypt, and France occupied Algeria and Tunisia, further diminishing Ottoman holdings.

Internal conditions also deteriorated in the nineteenth century. Under pressure from the West, between 1839 and 1876 the Ottoman government undertook a series of reforms, collectively known as Tanzimat. Dissatisfaction with reforms stimulated the Young Ottoman movement, which sought Western-style reforms, including secular government and closer relations with Europe. However, in the late 1870s Sultan Abdül Hamid II stifled the reform movement and established a repressive regime. Meanwhile, the empire’s financial and geopolitical positions worsened.

In the early 1900s, reformist groups remained active under the repression of Abdül Hamid II. In 1907 the Committee of Union and Progress, better known as the Young Turks, united under military officer Mustafa Kemal, who later took the name Atatürk, “father of the Turks.” Between 1909 and 1912, European powers took advantage of a weak Ottoman government to occupy or liberate most of the empire’s remaining territory in southeastern Europe. In 1912 the First Balkan War deprived the empire of territory in Macedonia and Thrace. In 1913 these losses led to the overthrow of the government by Enver Pasha, who headed a dictatorial regime of Young Turks during the ensuing war period. The empire regained some European territory during the Second Balkan War of 1913.

When World War I broke out in Europe in 1914, Enver Pasha’s alliance with Germany caused Britain, France, and Russia to declare war on the Ottoman Empire. In early 1915, mass deportation of the Armenian population led to the slaughter of as many as 1 million Armenians. Atatürk defeated a British amphibious landing at Gallipoli on the Dardanelles later that year. However, in 1916 a successful British campaign cut through the empire’s Arab territory, capturing Damascus in 1918. After the empire had suffered numerous defeats, a provisional Ottoman government sued for peace with the Allies.

The Republic of Turkey: After World War I, the provisional government retained control over very little of the former empire. Atatürk led strong nationalist forces seeking to retain Anatolia. In 1921 the nationalists elected Atatürk president of a new government, the Grand National Assembly. In 1922 Atatürk’s army repulsed an invading Greek force seeking to expand Greece’s postwar allotment of Ottoman territory. The 1923 Treaty of Lausanne, negotiated between the Atatürk government and the Allies, defined control of the Bosporus and the territorial extent of the new Republic of Turkey.

Atatürk’s reform program, which became known as Kemalism, aimed at establishing a secular, Europe-oriented state. European name forms and dress styles were encouraged, and the Latin alphabet was adopted. All links between Islam and the state were cut. In 1924 a new constitution guaranteed basic civil rights and prescribed a parliamentary form of government in which the Grand National Assembly would elect the president. Only one party, Atatürk’s Republican People’s Party, existed, giving the president control of all phases of government. In the 1920s and 1930s, Turkey’s foreign policy cautiously sought relations with as many countries as possible. In 1936 Atatürk was able to negotiate a resumption of Turkish control of the Dardanelles and the Bosporus.

World War II found Turkey still in a weakened state. Despite German pressure, the government of Atatürk’s successor, Ismet Inönü, maintained neutrality throughout the conflict. In early 1945, Turkey declared war on Germany to ensure it status as one of the charter members of the United Nations. During the Cold War era that followed World War II, Turkey’s foreign policy was pro-Western. The Truman Doctrine, which guaranteed the security of postwar Turkey and Greece, resulted in large-scale U.S. military and economic aid to Turkey. However, Turkey’s membership in the North Atlantic Treaty Organization (NATO), which it joined in 1952, was complicated by disputes with fellow member Greece over Cyprus and other regional issues. In the 1960s, Turkey and Greece nearly went to war twice over their conflicting views on Cyprus, and in 1974 armed conflict resulted in the partition of the island. Turkey also joined a number of other Western alliances and organizations in the 1950s and the 1960s.

In the liberalized postwar atmosphere, party politics became a source of instability and democracy in Turkey. During the 1950s, tensions between the main parties increased as the Democrat Party government of Prime Minister Adnan Menderes became more authoritarian, and the economy suffered inflation and heavy debt. In 1960 Menderes responded to protests by declaring martial law and suspending all political activity. The army, which considered itself the guardian of Atatürk’s principles, then replaced Menderes with an interim military government. In the four years following the legislative elections of 1961, the government was an unstable coalition. When the Justice Party, successor to the Democrat Party, gained a majority of seats in the elections of 1965, Süleyman Demirel formed a one-party government. In the late 1960s, the far-right Republican Peasants’ Nation Party (later the Nationalist Action Party) began instigating political violence stimulated by economic conditions and resentment of Turkey’s pro-Western foreign policy. As the strongest parties continued to lack a parliamentary majority, Turkey suffered a series of weak coalition governments throughout the 1970s, and religious sectarianism gained political influence.

After political and sectarian violence shook Turkey in 1978–79, the Turkish military took power in 1980 to prevent further deterioration. Economic conditions improved significantly in the early 1980s. Civil order was restored at the expense of measures that curtailed human rights. In response to international pressure, a new constitution was ratified in 1982. In the 1980s, the government of General Kenan Evren, leader of the 1980 coup, provided stability as power continued to shift among political parties and coalitions. Evren’s former minister of state, Turgut Özal, succeeded him in 1989. The pattern of coalition governments continued in the 1990s. When she became Turkey’s first female prime minister in 1993, Tansu Çiller initiated an ambitious privatization program that achieved mixed success. Meanwhile, in the mid-1990s the Kurdistan Workers’ Party (PKK) escalated terrorist attacks aimed at gaining Kurdish autonomy in southeastern Turkey, and the Çiller government dropped plans to expand the rights of Turkey’s Kurdish minority.

In 1996 a premiership shared between Çiller and Mesut Yılmaz of the conservative Motherland Party failed quickly. When the Yılmaz government resigned, a new coalition government, including the Islamic fundamentalist Welfare Party, took power under Necmettin Erbakan. Alarmed by the increasing social and political power of Islamic institutions, the military forced the resignation of the Erbakan government in 1997. Social tension rose as new regulations secularized public dress and education, and several political leaders were accused of corruption. In 1998 the Welfare Party was dissolved by order of the Constitutional Court for undermining the secular government. The capture of PKK leader Abdullah Öcalan in 1999 was a major event in Turkey’s efforts to subdue Kurdish insurgents in southeastern Turkey. In the late 1990s, relations with Greece began a long-term process of improvement. Tensions with Greece had remained high throughout the 1980s and 1990s, stimulated by issues such as oil drilling rights and air space in the Aegean Sea. In 1996 a dispute over islets in the Aegean, the so-called Imia-Kardak crisis, nearly led to armed conflict between Greece and Turkey.

Following the elections of 1999, Bülent Ecevit formed a new coalition government, which by 2000 had restored some stability. In 1999 and 2000, a series of trials were brought against members of the Welfare Party and other Islamic activists. The stability and economic reforms of 2000 ended with a severe economic crisis and a series of cabinet changes in 2001. In 2002 and 2004, parliament passed human rights laws aimed at promoting Turkey’s membership in the European Union (EU). In the 2002 parliamentary elections, the secular Islamist Justice and Development Party, indirect successor to the Welfare Party, won a substantial majority of seats in a major shift of parliamentary power. Party leader Tayyip Erdoğan, who became prime minister in 2003, was able to bring his Islamic party into the mainstream of political, economic, and social reform, thus quieting the bitter disputes between advocates of Kemalist secular policy and advocates of an Islamic state. Local elections in 2004 confirmed Erdoğan’s popularity. In June 2004, the PKK declared an end to its unilateral five-year cessation of terrorist activity, and the People’s Defense Forces, the military arm of the PKK, launched numerous attacks in Turkey during the following year. In October 2005, Turkey and the EU began accession negotiations for Turkey’s eventual EU membership, a goal supported by traditional enemy Greece. Talks were expected to last 10 years or more because the EU required a wide variety of reforms in Turkey.

GEOGRAPHY

Location: Thrace, the westernmost, European segment of Turkey,

forms the southeasternmost extremity of Europe, east of Bulgaria and

Greece. Some 8 percent of Turkey’s territory is in Thrace. Anatolia,

which comprises the bulk of Turkish territory, is a peninsula in western

Asia situated between the Black Sea to the north and the Mediterranean Sea to the south. Thrace and Anatolia are separated by the Sea of Marmara and the strategic Dardanelles and Bosporus straits.

Size: The total area of Turkey is 780,580 square kilometers, including 9,820 square kilometers of water.

Land Boundaries: The land boundaries of Turkey are as follows: with Syria, 822 kilometers; with Iran, 499 kilometers; with Iraq, 352 kilometers; with Armenia, 268 kilometers; with Georgia, 252 kilometers; with Bulgaria, 240 kilometers; with Greece, 206 kilometers; and with Azerbaijan, 9 kilometers.

Disputed Territory: Turkey has ongoing airspace disputes with Greece in the Aegean Sea region that lies between the two countries, and the division of Cyprus remains an unresolved issue between the two countries. Syria and Iraq have protested Turkey’s confiscation of the headwaters of the Euphrates River, which flow from Turkey into those two countries. Turkey closed its border with Armenia in 1993 in support of Azerbaijan in the Nagorno-Karabakh conflict; the border has remained closed since that time, but in 2005 talks between Armenia and Turkey aimed at restoring normal traffic.

Length of Coastline: Turkey has 7,200 kilometers of coastline on the Mediterranean Sea, Aegean Sea, Black Sea, and Sea of Marmara.

Maritime Claims: Turkey claims coastline sovereignty extending six nautical miles in the Aegean Sea and 12 nautical miles in the Black and Mediterranean seas. Turkey has a complex set of maritime disputes with Greece in the Aegean Sea.

Topography: Turkey’s extremities are divided into the Black Sea coastline region, the Aegean coastline region, the Mediterranean coastline region, and the Arabian Platform along the Syrian border in the south. The interior is divided into the Pontus mountain range, which lines most of the Black Sea coastline; the Taurus mountain range, which extends from the Mediterranean coast north of Cyprus to east-central Anatolia; the Anatolian Plateau, which dominates the interior of western Anatolia; and the eastern highlands, which dominate far eastern Anatolia, east of the Pontus and Taurus chains.

The Black Sea region features rocky coastlines cut by rivers flowing from gorges in the Pontus Mountains. The European and Asian parts of the Aegean region are mainly rolling terrain favorable for agriculture. The narrow Mediterranean coastal region is flat farmland, separated from Anatolia by the Taurus Mountains and opening into wide plains at some points. The Arabian Platform is a region of rolling hills along the Syrian border.

The Pontus or North Anatolian Mountains are lower in the west but rise to more than 3,000 meters in their eastern reaches. The Taurus Mountains are more rugged than the Pontus, but they have fewer rivers and thus form a more complete barrier between the sea and the interior. The Anatolian Plateau extends from the Aegean coastal region between the two major mountain ranges to form the semiarid heartland of Turkey. Elevation is between 600 and 1,200 meters, with several major basins. The eastern highlands are formed by the convergence of the Taurus and Pontus ranges. Mountains here are more rugged than elsewhere in Turkey; the highest mountain, Mt. Ararat, is 5,166 meters high. Turkey’s largest lake, Lake Van, is in the eastern highlands.

Principal Rivers: Turkey's longest rivers, the Kızılırmak, Sakarya, and Yeşilırmak, flow northward from the interior of the country into the Black Sea. The Dicle (Tigris) and Firat (Euphrates) originate in the eastern mountains and flow southward across the Arabian Platform into Syria and Iraq. The Büyük Menderes and Gediz are the major rivers flowing from the Anatolian Plateau westward into the Aegean Sea. The Meric (known in Greece as the Evros and in Bulgaria as the Maritsa) forms the border between Greece and Turkish Thrace before flowing into the northern Aegean. The Seyhan flows south from the Eastern Highlands into the Mediterranean Sea.

Climate: The Aegean and Mediterranean coastal regions have cool, rainy winters and hot, moderately dry summers, with annual precipitation ranging from 580 to 1,300 millimeters. The Black Sea coastal region, whose temperature range is cooler than the other coastal regions, has the heaviest rainfall in Turkey, averaging 1,400 millimeters per year. Because it is blocked from the sea by Turkey’s mountain ranges, the Anatolian Plateau has a severely continental climate, with extreme cold in the winter (reaching –40º C) and extreme heat in summer. Rainfall there is very sparse in summer, but snowfall in winter is heavy. Annual precipitation averages 400 millimeters. The eastern highlands have hot, dry summers and very cold winters with heavy snowfall.

Natural Resources: Turkey has abundant arable land; its water resources are greater than those elsewhere in the Middle East but generally less than those in European countries. Rivers offer hydroelectric power generation and irrigation. Known oil and natural gas deposits are small, but relatively large amounts of coal are present. Other significant mineral resources are boron and chromium. Long coastlines with a temperate climate support commerce, tourism, and fishing.

Land Use: Some 31 percent of Turkey’s land is rated as arable, and another 11.5 percent is used as pasture. About 11 percent of the arable land (3.3 percent of the total) is planted to permanent crops, and 18 percent of the arable land is irrigated.

Environmental Factors: Turkey’s main environmental problems are water pollution from the dumping of chemicals and detergents; air pollution, particularly in urban areas; deforestation; and the potential for spills from the 5,000 oil- and gas-carrying ships that pass through the Bosporus annually. The most pressing needs are for water treatment plants, wastewater treatment facilities, solid waste management, and the conservation of biodiversity. The release of pollutants by neighboring countries has critically contaminated the Black Sea, and multinational cooperation has not adequately addressed the problem. Air pollution has accelerated since rapid economic growth began in the mid-1990s. The problem is especially acute in Istanbul, Ankara, Erzurum, and Bursa, where the combustion of heating fuels increases particulate density in winter. Especially in Istanbul, increased car ownership and the slow development of public transportation cause frequent urban smog conditions. Mandatory use of unleaded gas was scheduled to begin only in January 2006. Industrial air pollution comes mainly from power plants and the metallurgy, cement, sugar, and fertilizer industries, a large percentage of which lack filtration equipment. Land degradation is a critical agricultural problem, caused by inappropriate use of agricultural land, overgrazing, over-fertilization, and deforestation. Serious soil erosion has occurred in more than half of Turkey’s land surface. According to one estimate, Turkey loses 1 billion tons of topsoil annually. Large areas of Turkey are prone to major earthquakes.

The establishment of the Ministry of Environment in 1991 accelerated progress on some environmental problems such as urban air pollution. In the early 2000s, prospective membership in the European Union (EU) spurred the updating of some environmental legislation. However, in 2003 the merger of the Ministry of Environment with the Ministry of Forestry reduced the influence of environmental officials in policy making, and enforcement procedures (such as those regulating traffic through the Bosporus) are considered weak. In general, private firms have responded more fully to environmental regulation than state-owned enterprises, which still constitute a large percentage of Turkey’s economy.

Time Zone: Turkey’s time zone is two hours ahead of Greenwich Mean Time.

SOCIETY

Population: In 2005 the estimated population of Turkey was 69,661,000. The growth rate, which has decreased sharply in recent decades, was about 1.1 percent per year. In 2000 some 65 percent of the population was classified as urban (compared with 27 percent in 1960), and the process of urbanization is expected to continue for the foreseeable future. In 2005 overall population density was 90.4 people per square kilometer. About 25 percent of the population is concentrated around the Sea of Marmara. The fastest rate of growth is in the southeast, which in 2003 accounted for about 10 percent of the total population. In 2005 immigration and emigration rates were equal.

Demography: In 2005 some 26 percent of the population was 14 years of age or younger, and 6.7 percent was 65 or older. The birthrate, which has declined significantly in recent decades, was 16.8 births per 1,000 population. The fertility rate was 1.94 children per woman. The death rate was 5.96 deaths per 1,000 population, and the infant mortality rate was 41 deaths per 1,000 live births. Life expectancy, which has increased rapidly since 1960, was 69.9 years for males and 74.9 years for females.

Ethnic Groups: Approximately 80 percent of the population is Turkish, and an estimated 17 percent, concentrated in the southeast, is Kurdish. Smaller minority groups include Arabs, Armenians, Greeks, Jews, and Dönme (a small, separate group of Muslims, concentrated in Edirne and Istanbul, whose forbears converted from Judaism). In recent decades, the Armenian, Greek, and Jewish populations have declined steadily. Because of their numbers and their geographical concentration, the Kurds have been by far the most significant ethnic minority. Key issues are the Kurds’ demand for autonomy and complaints that they are forbidden to learn Kurdish and forced to abandon their customs.

Languages: The official language is Turkish; Kurdish, Arabic, Armenian, and Greek also are used. The Latin alphabet has been in use since it superseded the Arabic alphabet in 1928.

Religion: More than 99 percent of the population is Muslim, mostly Sunni. Christianity (Greek Orthodox and Armenian Apostolic) and Judaism are the other religions in practice, but the non-Muslim population declined in the early 2000s. Beginning in the 1980s, the role of religion in the state has been a divisive issue, as influential factions challenged the complete secularization called for by Kemalism and the observance of Islamic practices experienced a substantial revival. In the early 2000s, Islamic groups challenged the concept of the secular state with increasing vigor after the Erdoğan government had calmed the issue in 2003. The Alevi community, a group of non-orthodox Muslims that make up 10–25 percent of the population, has suffered discrimination and occasional massacres.

Education and Literacy: In 2003 Turkey’s overall literacy rate was 86.5 percent, but the rate was only 78.7 percent for females. Eight years of primary education are mandatory between the ages of six and 14, and in 2001 the enrollment of male students of those ages was nearly 100 percent. Female enrollment was substantially lower in some rural areas. Three or more years of secondary education are available in general, open, and vocational high schools. Islamic Imam Hatip secondary schools expanded rapidly and achieved elite status in the 1990s, but the government has discouraged them since the late 1990s, and their popularity dwindled in the early 2000s. The high-school dropout rate in Turkey has been high compared with Western countries. Below university level, about 95 percent of students attend public schools, but inadequacies of the public system increasingly motivate middle-class parents to seek private education. The public program generally needs curriculum updates and suffers from over-reliance on rote memorization and standardized examinations. Teachers are poorly trained and paid, and classes are large. Rural schools generally are poorly equipped. In 2001 some 1,273 institutions of higher learning were in operation. Except for the Open University, entrance is by national examination, which limited university attendance to about 18 percent of the population in 2002. In 2004 the state budget allocated US$6.7 billion, about 6 percent of total expenditures, for education.

Health: Health care in Turkey is dominated by a centralized state system run by the Ministry of Health. However, in 2003 the governing Justice and Development Party introduced a sweeping health reform program aimed at increasing the ratio of private to state health provision and making health care available to a larger share of the population. In its initial stages, the reform program has encountered significant opposition. At 3.5 percent of gross domestic product (GDP) in 2001, Turkey’s public expenditure on national health was substantially below average for a developed country. In the early 2000s, about 63 percent of health expenditures came from public sources. In 2003 there was one doctor for every 700 people, one nurse for every 590 people, and one hospital bed for every 400 people. The rural population is poorly served by the health-care system, which is much more developed in the western half of the country. Between 80 and 90 percent of the population, including self-employed workers, have health care provided by the national pension system, but the low quality of care encourages the use of private health providers in urban areas. Although the private health industry has grown rapidly since the 1990s, only about 2 percent of the population, mainly in urban areas, has private health insurance. In 2005 about 75 percent of private health expenditures were out-of-pocket rather than being covered by insurance.

The most frequent causes of death, in order of frequency, are infectious and parasitic diseases, cancer, heart disease, and cerebrovascular diseases. Since the 1980s, the occurrence of measles, pertussis, typhoid fever, and diphtheria has decreased sharply because of improved availability of potable water. More than 80 percent of one-year-olds received inoculations against childhood diseases in 2004. Between 1980 and 2004, the infant mortality rate decreased by 65 percent. In 2002 an estimated 1,515 adults in Turkey were infected by the human immunodeficiency virus (HIV); more recent statistics are not available. Reportedly, in 2002 sexual activity was the cause of 58.4 percent of HIV cases, and drug abuse was the cause of 6.9 percent of cases. No cause is given for the remaining cases; commercial blood donation has been abolished in order to eliminate that cause of HIV transmission.

Welfare: The state welfare and pension system provides health, welfare, and pension payments to a large majority of citizens. The Social Insurance Law prescribes maternity, illness, on-the-job injury, retirement, and death insurance for all workers except those in agriculture and those who are self-employed. Self-employed workers, including those in agriculture, receive similar coverage under the Social Security Organization for the Self-Employed. In 2000 compulsory unemployment insurance was added to the coverage of the existing law. In the early 2000s, reforms were introduced to make Turkey’s system comply more fully with European Union standards. In 2002 a voluntary private pension system was established as a supplement to the mandatory state system. Contributions in the private system are invested in personal retirement accounts, making pension payments dependent on account performance. However, in 2005 mandatory social security contributions remained high, equaling one-third of gross salaries. In 2003 an estimated 29 percent of Turkey’s population lived below the poverty level, which was about US$130 per month for a single individual. However, the poverty rate was disproportionately high in the population of the rural east.

ECONOMY

Overview: Non-agricultural economic activity is concentrated in four regions, centered respectively around the Sea of Marmara, Edirne on the west coast, the Adana-Mersin-İskenderun triangle along the Mediterranean Sea, and Ankara. In 2005 a large share of Turkey’s major enterprises remained in state hands. These included all of the transportation, utilities, and communications infrastructure, many basic industries, and about 30 percent of the banking sector. After failing to fulfill earlier privatization plans, in 2004 Turkey announced plans to privatize a wide range of industries, including tobacco and sugar processing, communications, and energy. No target dates were set, however. The economy has been plagued by high inflation and high fiscal deficits. Those conditions improved somewhat in 2004, when private investment increased significantly and the inflation rate declined. Beginning in 1999, the International Monetary Fund (IMF) has exerted strong pressure to reform the economic system. The IMF responded to Turkey’s serious economic crisis of 2001 with stand-by assistance programs contingent on reduced state spending and debt, banking reform, accelerated privatization, and reduced inflation.

Gross Domestic Product (GDP): In 2004 Turkey’s GDP of US$307.5 billion showed a real increase of 8.8 percent over the previous year, when the total was US$239 billion. In the first half of 2005, the GDP grew at a rate of 4.5 percent. The growth between 2002 and 2003 was 5.8 percent. Between 1999 and 2002, the average annual GDP increase was 2.9 percent, but the economy recorded decreases in 1999 and 2001. In 2004 the per capita GDP was US$4,414. The sectoral contribution to GDP was as follows: services 59.6 percent, industry and construction 29 percent, and agriculture 11.4 percent. In the early 2000s, the share of agriculture has decreased, the share of industry and construction has remained approximately constant, and the share of services has increased.

Government Budget: In 2004 Turkey’s state revenues totaled US$86.4 billion, and its expenditures totaled US$108.1 billion, creating a deficit of US$21.7 billion. In 2003 revenues were US$66.8 billion and expenditures were US$93.3 billion, resulting in a deficit of US$26.5 billion. In 2002 the deficit was US$21.1 billion. An important component of the budget deficit has been the 40 percent of state expenditures devoted to interest payments on debt.

Inflation: Inflation has been a chronic problem in Turkey’s economy. The rate for 2004, estimated at between 8.6 and 9.3 percent, was the lowest since 1982. For the first three quarters of 2005, the rate was about 8 percent. Between 1988 and 1999, the annual inflation rate varied between 60 percent and 90 percent.

Agriculture: Turkey is self-sufficient in most foods, although some agricultural commodities are imported. The principal agricultural exports are cotton, fruits, hazelnuts, tobacco, and wheat. Other important agricultural products are barley, corn, oilseeds, olives, potatoes, sugar beets, and tea. The most important livestock are cattle, chickens, goats, and sheep, but livestock raising has declined significantly since the 1980s. The efficiency of the agricultural sector is limited by the predominance of small, non-mechanized farms on which a disproportionately large segment of the population depends for its livelihood. Output varies substantially according to weather conditions. The Southeastern Anatolia Project is an extensive series of dams and canals in the Firat (Euphrates) Valley, scheduled for completion in 2010. The project will provide irrigation to improve agricultural productivity in the southeast. State support, an important component of agricultural enterprises, often has been poorly distributed and without proportionate returns. In the early 2000s, the government reduced agricultural support and began restructuring marketing systems.

Forestry: In 2000 the extent of Turkey’s forests was estimated at 10.2 million hectares. However, the forests of eastern Anatolia are not suitable for harvesting. The only usable timber comes from the Black Sea coastal region, and timber does not make a significant contribution to the economy. Because poor management and infrequent cutting have left many forests over-mature, only about 20 percent of the total forested area is classified as commercially exploitable. In 2003 Turkey’s timber industry produced a total of 16 million cubic meters of wood products, about 32 percent of which was fuelwood. Forest protection by the state is handicapped by the dependence of local populations on trees for fuel. In 2004 forestry contributed 0.4 percent of GDP.

Fishing: Despite Turkey’s long coastline, fishing is not an important contributor to the economy. The fishing industry is concentrated on the coasts of the Black Sea and the Sea of Marmara, where output has been cut by pollution and over-fishing. In 2002 Turkey’s fish catch totaled 567,000 tons, a substantial decrease from the annual totals of the 1990s. Anchovies accounted for more than 60 percent of the catch. A small aquaculture industry also exists. In 2004 fishing contributed 0.4 percent of GDP.

Mining and Minerals: Turkey’s major mining operations, formerly controlled by state-owned companies, have been increasingly privatized in the early 2000s. During that period, aluminum, chrome, copper, and silver mines have moved into the private sector. By far the most important mineral product is lignite coal, of which Turkish mines yielded nearly 50 million tons in 2002 and of which reserves are estimated at 8.4 billion tons. Turkey’s low-quality lignite, burned mainly in power stations, is highly polluting. The output of hard coal has declined in the early 2000s, reaching 3.3 million tons in 2002. Hard coal reserves are estimated at 1.1 billion tons. The most important non-fuel mineral is boron, of which Turkey has an estimated 60 percent of world reserves, and production of which remains in state hands. Gold, of which Turkey is estimated to have 450 tons of reserves, is receiving increased investment. Marble is the most important mineral export.

Industry and Manufacturing: Turkey’s diverse manufacturing sector satisfies domestic demand for a wide variety of products; the main manufactured exports are consumer goods. Most manufacturing enterprises are privately owned, but the size of such enterprises varies greatly, and the state has influenced the relative growth of industries by providing disproportionate investment and incentives. Multinational companies are present in many light and heavy industries. Foreign auto companies—Fiat, Honda, Hyundai, Renault, and Toyota—have plants in Turkey. Other industries such as appliances are mainly Turkish-owned. A large proportion of the appliances, consumer electronics, and vehicles manufactured in Turkey are exported. The largest privately owned industrial company is the Arcelik firm, which manufactures a wide variety of consumer products. Textiles and clothing are by far the largest products of light industry, accounting for about one-third of exports. However, much of this production is unreported because it is in the “informal” sector. The most important textile product is cotton cloth. Besides textiles, the most important consumer items produced are televisions, automobiles, refrigerators, washing machines, and vacuum cleaners. The most important heavy industrial products are processed fuels, steel, cement, tractors, and fertilizers.

Traditionally, the construction industry has made an important contribution to the economy. However, the share of construction’s contribution has declined since the late 1990s because of a reduction in demand for domestic and foreign building projects and because of Turkey’s 2001 economic crisis. Expansion resumed at a moderate rate in 2004. In 2003 the construction industry earned US$900 million in foreign contracts. In the early 2000s, the industry’s foreign operations expanded, particularly in Russia, Turkmenistan, Kazakhstan, Saudi Arabia, and Afghanistan.

Energy: Coal is the only fossil fuel that Turkey possesses in abundance, meaning that large amounts of oil and natural gas are imported. In the early 2000s, the domestic distribution of fuels and electricity has been reformed to meet European Union standards. Distribution of natural gas, nearly all of which is imported, is to be privatized by 2009. Since the 1990s, Turkey has attempted to substitute cleaner natural gas for highly polluting domestic coal. In the early 2000s, about two-thirds of the 1.1 billion cubic feet of natural gas that Turkey imported was used by the electric power industry. In 2005 authorities reduced their predictions of rapidly increasing natural gas consumption for the rest of the decade. Russia is the main supplier of natural gas; its share of total imports is expected to rise from the 2003 figure of 25 percent to 58 percent in 2010. Other major suppliers are Iran and Azerbaijan. In 2004 Turkey’s domestic oil output was 43,000 barrels per day, about half the level of 1990. Turkey imports about 90 percent of its oil, mainly from Iran, Iraq, Russia, Saudi Arabia, and Syria. The demand for oil is expected to grow steadily during the next decade. Turkey’s location along several international oil and gas pipelines eases transport. Ceyhan, on the Black Sea coast, is the terminus of the newly completed Baku-Tbilisi-Ceyhan oil pipeline, which may gain Turkey substantial transit fees. However, recent downward revisions of the Caspian’s estimated potential oil deposits may reduce the value of that line.

Because the demand for electric power doubled in the 1990s, Turkey became a net importer of electricity as domestic generating capacity was unable to keep up with demand. Although in 2004 Turkey’s generating capacity of 32,000 megawatts exceeded demand, another 13,000 megawatts of capacity was being added in anticipation of increased demand in the following 10 years, and some power is imported from Turkmenistan. In the early 2000s, domestic power supply was inefficient because new plants came online slowly and industry privatization stalled. Turkey abandoned plans for its first and only nuclear power plant in 2000. Since 2002 an independent Energy Market Regulatory Authority has overseen privatization and distribution. This agency is considered an important improvement in Turkey’s energy management.

Services: Banking, the most important of Turkey’s financial services, has undergone significant changes in the early 2000s. The current system is based on the banking law of 1999, which calls for transparency and accountability. The financial crisis of 2001, for which the banks were partly responsible, had a severe impact on the sector. The resulting rationalization of the banking system reduced the number of banks by about one-third to 36, leaving the five largest banks with more than 50 percent of total assets. Those five private banks are part of large conglomerates with interests in many other sectors. Three state banks control about 30 percent of the industry’s assets. In 2004 government securities constituted about 40 percent of the assets of Turkish banks. Bad loans accounted for 14 percent of assets, a very high figure. Long-term loans such as mortgages are rare, and both credits and deposits are mostly very short-term. Since the 1990s, the Istanbul Stock Exchange has been quite active, although political developments have caused substantial volatility. In 2004 the exchange listed 309 companies, including most of the largest in Turkey. Most of Turkey’s large insurance companies are connected with banks or international insurance firms. Per capita insurance expenditures are the lowest in the industrialized world. In 2004 total premiums reached US$4 billion after a 20 percent increase in 2003. In 2005 a new agency was expected to replace the National Treasury in regulating the insurance industry.

Small enterprises have dominated retail trade. However, in the early 2000s large Turkish chains such as Migros, Gima, and Tansas and foreign companies such as Metro of Germany, Carrefour of France, and Tesco of Britain occupied an expanding share of the retail sector. Turkey has taken advantage of its wide variety of scenic and historic locations, particularly along its southern and western coasts, to build a substantial tourism industry based on local ownership of hotels and restaurants. Some 17.5 million tourists visited Turkey in 2004, an increase of 25 percent over 2003. This activity generated revenues estimated at US$15.9 billion and provided an important source of foreign currency.

Labor: In 2004 Turkey’s labor force was estimated at 24.3 million. However, a large part of this labor force works in the “informal sector,” making measurement of its activities difficult. In 2003 about 34 percent of the official workforce was occupied in agriculture, 43 percent in services, and 23 percent in construction and industry. Industrial labor is heavily unionized, and unions exert strong political influence. In the first half of 2005, unemployment was estimated at 10.5 percent overall, the same rate as in the previous three years, but unemployment among the youngest workers was estimated at 20 percent. Another 6 percent of the workforce was considered underemployed. Despite substantial wage increases in the 1990s and the early 2000s, the real value of wages has been depressed by inflation. However, in the early 2000s a series of sharp increases brought the 2005 minimum wage to US$360 per month. Wage disparities are great between eastern and western Turkey. Women account for only about one-quarter of the overall workforce but for 60 percent of the agricultural workforce. Remittances from Turks working abroad, chiefly in Germany and Saudi Arabia, have been an important source of national income. However, after reaching a peak of US$5 billion in 1998, remittances in the early 2000s have been substantially lower. In 2004 an estimated 3 million workers remitted slightly less than US$1 billion.

Foreign Economic Relations: Beginning in the late 1970s, Turkey has liberalized what was a policy of import substitution and protection of domestic industries by import restrictions. In the 1990s, export subsidies were abolished. Beginning in the early 1990s, trade with the European Union (EU) has increased slowly and steadily. Turkey was admitted to the World Trade Organization (WTO) in 1995. In 1996 a customs union was established between Turkey and the EU, abolishing tariffs on industrial products for both sides. An agreement on agricultural products retains tariffs on some agricultural imports from EU countries. In 1999 Turkey revised its customs legislation in accordance with EU standards. Between 1990 and 2004, the EU share of Turkey’s exports remained steady between 51 and 55 percent, and the EU share of Turkey’s imports also remained steady between 44 and 47 percent. Throughout that period, Germany remained Turkey’s primary trade partner, although that country’s percentage of total trade (13.9 percent of exports and 13.6 percent of imports in 2004) diminished steadily in the early 2000s. The level of trade with the United States generally has increased since the late 1990s. In 2003 exports to the United States increased by 11.5 percent over 2002, and imports increased by 10.4 percent. In 2004 the export share of the United States decreased slightly, and its import share remained the same as in 2003. In 2004 the United States accounted for 7.7 percent of Turkey’s exports and 5 percent of its imports. In the early 2000s, a larger share of Turkey’s imports came from the Commonwealth of Independent States (CIS), mainly because of reliance on natural gas from Russia, than had been imported during the 1990s. In 2003 and 2004, Russia accounted for 7.9 percent of Turkey’s imports, and the CIS as a whole accounted for 6.3 percent of exports.

In the early 2000s, agricultural products dropped below 10 percent of Turkey’s exports. Minerals and mineral products accounted for about 5 percent. In 2004 finished textiles accounted for about 28 percent. Other important exported manufactured products were steel, construction materials, appliances, televisions, and motor vehicles. The main customers for Turkey’s exports were the EU countries, the United States, countries of the Middle East, CIS countries, and Turkey’s neighboring countries in southeastern Europe.

Substantial unofficial trade occurs with neighboring countries of the Middle East and the CIS. The value of such trade in 2004 was estimated at US$4 billion. Fuels are the leading “official” imported commodity. Others are chemical products and machinery and transport equipment. Russia and Saudi Arabia are the chief suppliers of fuels. Other major suppliers of imports are the EU countries, Switzerland, Japan, and China. Between 2002 and 2004, imports from China increased by 170 percent.

Trade Balance: In 2004 Turkey’s imports had a total value of US$94.5 billion, and its exports were valued at US$69.5 billion. Thus, the trade deficit for 2004 was US$25 billion, continuing a persistent trend. Between 2000 and 2003, the trade deficits were, respectively, US$26.7 billion, US$10.1 billion, US$15.5 billion, and US$21.8 billion.

Balance of Payments: In the early 2000s, Turkey’s balance of payments has varied widely, although it was negative every year from 2000 through 2004. The financial crisis of 2001 increased the balance-of-payments deficit to US$12.9 billion, but in 2002 the deficit was only US$214 million. In 2004 the current account showed a deficit of US$15.3 billion, and the capital and financial account showed a surplus of US$12.9 billion, creating a negative overall balance of US$2.4 billion.

External Debt: In 2004 Turkey’s medium- and long-term foreign debt totaled US$129.8 billion, compared with US$124 billion in 2003 and US$116 billion in 2002. In the same year, short-term foreign debt increased from US$23 billion to US$31.9 billion.

Foreign Investment: Foreign direct investment has been relatively low, exceeding US$2 billion in only one year since 1999. The total for 2004 was about US$2 billion. Portfolio investment, however, increased substantially in 2004 over previous years. A reform of foreign direct investment laws in 2003 streamlined procedures and improved the investment climate. A US$1.5 billion power plant near İskenderun, completed in 2004 by the STEAG utilities company of Germany, is the largest direct investment ever by a German company in Turkey. Automotive companies in France, Italy, Japan, South Korea, and the United States have plants in Turkey. In 2005 a Japanese consortium will begin building a railroad tunnel under the Bosporus. The United States-based General Dynamics Corporation has invested substantially in fighter plane manufacture in Turkey.

Currency and Exchange Rate: In January 2005, a currency reform established the new Turkish lira, which was worth 1 million of the previous unit, the Turkish lira. In January 2006, the exchange rate was 1.34 new Turkish liras to the U.S. dollar. Thus, in 2005 the new lira was stronger against the dollar than the old lira had been in 2002 and 2003, when the average rate was slightly more than 1.5 million to the dollar.

Fiscal Year: Turkey’s fiscal year is the calendar year.

TRANSPORTATION AND TELECOMMUNICATIONS

Transportation Overview: The development of efficient domestic transportation systems in Turkey has been slowed by long distances, difficult terrain, and low investment. Major investment projects are expected to improve the national road and railroad systems by 2010.

Roads: Roads are Turkey’s most important domestic transportation system, although only 130,000 kilometers of paved roads were in service in 2004, and little expansion has occurred since the 1950s. More than 250,000 kilometers of existing roads are unpaved. The state and provincial system includes about 65,000 kilometers of roads, of which 1,900 kilometers are classified as highways. Main highways radiate from Ankara in central Anatolia; Istanbul and İzmir in the west; Adana in the south; and Erzurum and Diyarbakır in the east. The most important recent addition to the system is the Ankara-Istanbul toll road. Because the number of motor vehicles increased by more than 5 million between 1983 and 2004, Turkey’s city streets are very congested. In 2004 several major road and bridge projects were under discussion to link Anatolia more effectively with Europe.

Railroads: In 2004 Turkey had only 8,671 kilometers of railroad, all standard gauge and mostly in service for more than 60 years. Most major population centers are connected by rail. From a ring around the Anatolian Plateau, rail lines radiate to Zonguldak and Samsun on the Black Sea; Istanbul, İzmir, and Bandırma in the west; and via Adana to Syria and Iraq in the south. Three lines go into eastern Anatolia. The state-owned system is slow and unprofitable. In 2004 only 4 percent of freight transport and 2 percent of passenger transport were by rail. Between 1990 and 2003, passenger trips decreased by 50 percent. Planned improvements include limited privatization, upgrading of the Istanbul-Ankara trunk line to include high-speed trains, and improved rail links between Anatolia and Thrace. The Marmaray project, scheduled for completion in 2008, aims to improve rail transportation through Istanbul. It will include a railroad tunnel under the Bosporus. Plans call for some private railroad operations to supplement the state system in the future. Ankara, Istanbul, and İzmir have metro systems; lines in Ankara and İzmir were expanding in the early 2000s.

Ports: Turkey’s ports have suffered from overcrowding and inefficiency. The main facilities are located at Antalya, İskenderun, and Mersin on the Mediterranean; Gemlik, Istanbul, and İzmit in the Marmara region; İzmir on the Aegean Sea; and Hopa, Samsun, and Trabzon on the Black Sea. The ports of Istanbul, İzmir, İzmit, and Mersin are particularly vital because they are outlets for large industrial regions. The state railroad manages all the largest ports, but six of them were on the government’s privatization list in 2005. In the early 2000s, Turkey’s 11-million-ton merchant marine has carried a decreasing share of the total freight passing through its ports; in 2004 less than 30 percent of port traffic was under the Turkish flag. Passenger ships in Istanbul are important commuter carriers.

Inland Waterways: Turkey has about 1,200 kilometers of inland waterways, none of which offers a vital line of transportation. Not included in that amount is the channel formed by the Dardanelles, the Sea of Marmara, and the Bosporus, linking the Black Sea with the Mediterranean Sea and forming one of the most important water connections in the world. In the early 2000s, safety and environmental factors have made expansion of traffic through this heavily traveled route problematic.

Civil Aviation and Airports: Of Turkey’s 87 mainly state-owned airports with paved runways, 16 have runways longer than 3,000 meters. Some 14 heliports were in operation in 2004. The three largest airports are located at Istanbul, Ankara, and İzmir. Istanbul-Atatürk, the largest airport, was expanded in 2000, as was the primary tourist airport at Ankara. The state-owned national airline, Turk Hava Yollari (THY, Turkish Airlines), is a state-controlled enterprise that flies from Ankara and Istanbul to 79 international destinations, including major cities in Europe and the United States. In 2004 THY, which is scheduled for privatization, flew 11.4 million passengers. Private airline activity increased in the early 2000s, carrying about 2 million passengers in 2004.

Pipelines: In 2004 Turkey had 3,177 kilometers of natural gas pipelines and 3,562 kilometers of oil pipelines. In the early 2000s, controversial pipeline issues were Turkey’s role in new routes bringing oil and natural gas from the flourishing Caspian Sea region into Europe and the configuration of a new pipeline that would connect Russia with the Mediterranean and bypass the Bosporus. The potentially lucrative Baku-Tbilisi-Ceyhan (BTC) line, 1,000 kilometers of which passes through Turkey, began bringing oil from the Caspian in 2005. That line is advantageous because it bypasses both Russia and the crowded Bosporus corridor. Because the BTC line is considered insufficient for future volume, Turkey is involved in international discussions of several other pipeline routes that would bypass the Bosporus.

Telecommunications: In the 1980s and 1990s, Turkey’s telecommunications systems underwent substantial modernization, including nearly complete digitization and advanced intercity trunk lines. In 2004 some 19 million main telephone lines were in use. A satellite system links users in remote areas. The use of cellular telephones has increased rapidly since the late 1990s, reaching more than 50 percent of the population in 2004. In the early 2000s, three private mobile services, the largest with more than 20 million subscribers, were operating. However, in the early 2000s demand has exceeded the supply of Internet and data services. In 2005 an estimated 10.2 million people were using the Internet. Initial steps for the privatization of Turk Telekom, the state-owned telecommunications monopoly, were taken in 2005.

Index for Turkey:
Overview | Government

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