Turkey. Country Profile 2006

Transcription

1 Country Profile 2006 Turkey This Country Profile is a reference work, analysing the country's history, politics, infrastructure and economy. It is revised and updated annually. The Economist Intelligence Unit's Country Reports analyse current trends and provide a two-year forecast. The full publishing schedule for Country Profiles is now available on our website at The Economist Intelligence Unit 26 Red Lion Square London WC1R 4HQ United Kingdom

2 The Economist Intelligence Unit The Economist Intelligence Unit is a specialist publisher serving companies establishing and managing operations across national borders. For over 50 years it has been a source of information on business developments, economic and political trends, government regulations and corporate practice worldwide. The Economist Intelligence Unit delivers its information in four ways: through its digital portfolio, where the latest analysis is updated daily; through printed subscription products ranging from newsletters to annual reference works; through research reports; and by organising seminars and presentations. The firm is a member of The Economist Group. London The Economist Intelligence Unit 26 Red Lion Square London WC1R 4HQ United Kingdom Tel: (44.20) Fax: (44.20) london@eiu.com Website: New York The Economist Intelligence Unit The Economist Building 111 West 57th Street New York NY 10019, US Tel: (1.212) Fax: (1.212) newyork@eiu.com Hong Kong The Economist Intelligence Unit 60/F, Central Plaza 18 Harbour Road Wanchai Hong Kong Tel: (852) Fax: (852) hongkong@eiu.com Electronic delivery This publication can be viewed by subscribing online at Reports are also available in various other electronic formats, such as CD-ROM, Lotus Notes, online databases and as direct feeds to corporate intranets. For further information, please contact your nearest Economist Intelligence Unit office Copyright 2006 The Economist Intelligence Unit Limited. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of The Economist Intelligence Unit Limited. All information in this report is verified to the best of the author's and the publisher's ability. However, the Economist Intelligence Unit does not accept responsibility for any loss arising from reliance on it. ISSN Symbols for tables "n/a" means not available; " " means not applicable Printed and distributed by Patersons Dartford, Questor Trade Park, 151 Avery Way, Dartford, Kent DA1 1JS, UK.

3 ROMANIA RUSSIAN FEDERATION BLACK SEA BULGARIA GEORGIA GREECE Edirne Gelibolu Cesnie AEGEAN SEA Tekirdag Kirklareli Bandirma Canakkale Edremit Izmir Manisa Aydin Soke Sea of Marmara Yalova Balikesir Akhisar Milas Mugla Bodrum Bursa Inegol Denizli Marmaris Istanbul Izmit Kutahya L. Iznik Eskisehir Usak Afyon Fethiye Finike Bilecik L. Egridir Eregli Adapazari Egridir Burdur Isparta ANKARA L. Aksehir Konya Kulu Karabuk L. Tuz Antalya Mersin Antalya Bay L. Beysehir Bolu Bartin Zonguldak Polatli TURKEY Karaman Alanya Anamur Inebolu Cankiri Corum Aksaray Kirikkale Eregli Kastamonu Nevsehir Kirsehir Nigde Silifke Yozgat Adana Sinop Samsun Tarsus Amasya Tokat Kayseri Sivas Kahramanmaras Ceyhan Carsamba Elbistan Osmaniye Iskenderun Antakya Ordu Giresun Malatya Adiyaman Gaziantep Kilis is Gumushane Erzincan Elazig Birecik Trabzon Tunceli Bingol Diyarbakir Rize Bayburt Erzurum Artvin Mus Sarikamis Bitlis Ataturk dam Mardin Sanliurfa Viransehir Nusaybin Tatvan Batman Ardahan Kars Agri Siirt Malazgirt L. Van Sirnak Cizre Igdir ARMENIA Coru h R. Aras R. R. Kelkit R. Kizil Irmak Dogubayazit Firat R. M urat R. Dardanelles Bosporus R. Ergene Devrez R. Sakarya R. Keban dam Van Hakkari IRAQ IRAN Kizil Ir mak R. Karakaya dam Nakhichevan (AZERBAIJAN) R. Gediz R. Dicle (Tigris) R. s) (Euphrate Ceyhan R. R. Mender es Firat an Seyh Iskenderun Bay SYRIA MEDITERRANEAN SEA CYPRUS Main railway Main road International boundary Main airport 0 km miles The Economist Intelligence Unit Limited 2006 LEBANON Capital Major town Other town June 2006

4 Comparative economic indicators, 2005 Germany UK France Italy Spain Netherlands Belgium Switzerland Turkey Sweden Austria Norway Denmark Greece Ireland Finland Portugal Luxembourg Cyprus Iceland Malta Gross domestic product (US$ bn) 2, , , , , ,000 Sources: Economist Intelligence Unit estimates; national sources. Luxembourg Norway Iceland Switzerland Ireland Denmark Sweden Netherlands Austria Finland UK Belgium France Germany Italy Spain Cyprus Greece Portugal Malta Turkey Gross domestic product per head (US$ 000) Sources: Economist Intelligence Unit estimates; national sources. Turkey Iceland Ireland Luxembourg Cyprus Greece Spain Denmark Sweden Malta Norway Finland Austria Switzerland UK Belgium France Netherlands Germany Portugal Italy Gross domestic product (% change, year on year) Sources: Economist Intelligence Unit estimates; national sources. Turkey Iceland Greece Spain Malta Belgium Cyprus Luxembourg Ireland Austria Portugal UK Italy Germany Denmark France Netherlands Norway Switzerland Finland Sweden Consumer prices (% change, year on year) Sources: Economist Intelligence Unit estimates; national sources. Country Profile The Economist Intelligence Unit Limited 2006

5 Turkey 1 Contents Turkey 3 Basic data 4 Politics 4 Political background 6 Recent political developments 11 Constitution, institutions and administration 13 Political forces 17 International relations and defence 23 Resources and infrastructure 23 Population 25 Education 26 Health 27 Natural resources and the environment 28 Transport, communications and the Internet 31 Energy provision 34 The economy 34 Economic structure 36 Economic policy 39 Economic performance 42 Regional trends 43 Economic sectors 43 Agriculture 45 Mining and semi-processing 47 Manufacturing 51 Construction 51 Financial services 55 Other services 56 The external sector 56 Trade in goods 59 Invisibles and the current account 60 Capital flows and foreign debt 63 Foreign reserves and the exchange rate 65 Regional overview 65 Membership of organisations 67 Appendices 67 Sources of information 69 Reference tables 69 Population estimates 69 Labour force 69 Transport statistics 70 Gross electricity generation The Economist Intelligence Unit Limited Country Profile 2006

6 2 Turkey 70 Consolidated government finances 70 Money supply 71 Interest rates 71 Gross domestic product 71 Nominal gross domestic product by expenditure 72 Real gross domestic product by expenditure 72 Prices and earnings 72 Livestock numbers 73 Agricultural production 73 Minerals production 74 Manufacturing production 74 Construction statistics 74 The stockmarket 74 Exports 75 Imports 75 Main trading partners 76 Balance of payments, IMF series 76 External debt, World Bank series 77 Foreign reserves 77 Exchange rates Country Profile The Economist Intelligence Unit Limited 2006

7 Turkey 3 Turkey Basic data Land area Population Main towns Climate Weather in Ankara (altitude 861 metres) Language Measures Currency Time Fiscal year Public holidays 783,562 sq km (including lakes and islands), of which 30% arable, 3% orchards, olive groves and vineyards, 26% classified as forest 67,809,927 (2000 census) Population (2000 census; brackets indicate city and province combined) Istanbul 8,803,468 (10,033,478) Ankara (capital) 3,203,362 (4,007,860) Izmir 2,232,265 (3,387,908) Bursa 1,194,687 (2,106,687) Adana 1,130,710 (1,854,270) Mediterranean on the south coast, continental inland Hottest month, August, C (average daily minimum and maximum); coldest month, January, 4-4 C; driest month, August, 10 mm average rainfall; wettest month, December, 48 mm average rainfall Turkish Metric system Turkish lira. Annual average exchange rate in 2005: YTL1.344:US$1; exchange rate on May 23rd 2006: TL1.520:US$1 2 hours ahead of GMT; 3 hours in summer Calendar year January 1st; April 23rd; May 19th; three days for Ramadan and four days for Kurban (dates vary according to the Muslim calendar); August 30th; October 28th (half-day); October 29th The Economist Intelligence Unit Limited Country Profile 2006

8 4 Turkey Politics The current government was formed in March 2003 under the prime minister, Recep Tayyip Erdogan, the leader of the Justice and Development Party (AKP). As a result of the 10% threshold for representation in parliament, his party won a massive majority of 363 of the 550 seats in Turkey's unicameral parliament at the general election held in November The current AKP government has the advantage over all its predecessors since 1991 of being formed of a single party with a large majority. As former members of the Welfare Party, the leaders of the AKP have an Islamist past. As a result, there are tensions with the secularist establishment, but the government has so far generally adhered to secularist principles. Political background Modern Turkish politics have been shaped by two crucial historical experiences: the foundation by Mustafa Kemal (who assumed the surname Ataturk, "father of Turks", in 1936) of a secular, unitary republic in the 1920s and the establishment of a multiparty democratic regime since The latter has been interrupted by three periods of military rule in , in and in The establishment of the republic The 1960s and 1970s The Republic of Turkey was established in 1923 on the ruins of the Ottoman empire, which reached its zenith in the 16th century, before suffering a long period of decline. Its fate was finally sealed when it joined the German side in the first world war ( ). After the war, the victorious Entente powers detached the remaining Arab provinces and prepared an elaborate plan to divide Anatolia, the Turkish-inhabited heartland of the former empire. In 1919 Greek forces occupied Izmir (Smyrna) and fanned out into western Anatolia. The occupation triggered a nationalist resistance movement, led by Ataturk, which decisively defeated the Greeks in In November of that year the sultanate was officially abolished. Following the signature of the Treaty of Lausanne in July 1923, Turkey became a republic, with Ataturk as its president and Ankara its capital. Until his death in 1938, Ataturk presided over a single-party state. He broke with the country's Islamic past and promoted a secular national identity. A programme of state-led industrialisation was also instituted. His successor as president, Ismet Inonu, managed to maintain Turkey's neutrality during the second world war ( ). In 1945 he ended the single-party era, allowing the Democrat Party (DP), led by Adnan Menderes, to come to power in Turkey's first genuinely free election in Meanwhile, direct territorial threats from the Soviet Union had pushed Turkey into the Western camp in the cold war; it was admitted to NATO in Against a backdrop of growing economic difficulties, the military ousted the DP government on May 27th 1960, ostensibly because of its increasing intolerance of the opposition. The army held power until October 1961, when a general Country Profile The Economist Intelligence Unit Limited 2006

9 Turkey 5 election took place following the trial and execution of Mr Menderes and two of his former cabinet members. A period of weak coalition governments followed until 1965, when the Justice Party (AP), led by Suleyman Demirel and seen as the DP's successor, won the general election. Steady economic growth maintained the popularity of the AP, which retained power in the 1969 election. However, increased left- and right-wing terrorism led to a second putsch by the military in March 1971 and the installation of a technocratic government until In democratic elections in 1973 and 1977, none of the parties succeeded in winning an overall majority. Thus, between 1974 and 1980 Turkey was ruled by five feeble coalitions, headed alternately by the AP and the centre-left Republican People's Party (CHP), led by Bulent Ecevit. By the end of the 1970s the government and the economy seemed to be heading for total collapse, and political violence claimed about 5,000 lives. A third military takeover in September 1980 was greeted with general relief. The military regime, Turgut Ozal's leadership, The leader of the 1980 coup, General Kenan Evren, established a five-man junta, which remained in power until November During this period, the military regime restored law and order through the draconian curtailment of civil rights. Economic reforms directed by the deputy prime minister, Turgut Ozal, reduced inflation and the trade deficit, and economic growth was restored. In November 1982 a more restrictive constitution, intended to provide stable government, was accepted in a national referendum, and General Evren was elected president for the next seven years. Only three parties were allowed to contest the September 1983 general election, in which Mr Ozal's new Motherland Party (Anap) won a majority. Under Mr Ozal, who stayed in office as prime minister until 1989, parties excluded from the 1983 election emerged as important players. These included most notably the Social Democrat Party, led by Erdal Inonu, which merged with the Populist Party in 1985 to become the Social Democrat Populist Party (SHP), and the True Path Party (DYP), set up by Mr Demirel. Mr Ecevit, who had been imprisoned for a time by the military after the 1980 coup, formed the Democratic Left Party (DSP), while the Islamist tendency was represented by the Welfare Party, led by Necmettin Erbakan. Following constitutional amendments, all these parties were allowed to contest the 1987 election, but Mr Ozal was returned to power with an increased majority. When General Evren retired as president in November 1989, he was succeeded by Mr Ozal, who won approval in the West for his support of Kuwait following the Iraqi invasion in August 1990, but failed to turn this to domestic political advantage. His successor as prime minister, Yildirim Akbulut, was replaced by Mesut Yilmaz in June The latter opted for an early general election in October of that year, in which Anap lost its majority. Mr Demirel thus returned to office at the head of a coalition between the DYP and the SHP, with Mr Inonu as deputy prime minister. The Economist Intelligence Unit Limited Country Profile 2006

10 6 Turkey Recent political developments Ms Ciller became prime minister in election confirmed the rise of the Welfare Party An Islamist-led government lasted just 11 months Mr Ozal died suddenly in April 1993, and Mr Demirel was elected president the following month. Tansu Ciller was his successor as party leader and prime minister. Serious financial and balance-of-payments crises marred Ms Ciller's record in office, but she did succeed in reaching an agreement with the EU on the terms of a customs union, which came into force on January 1st In early 1995 the SHP merged with the CHP under the name of the latter. On September 20th the CHP leader, Deniz Baykal, withdrew his party from the government, following Ms Ciller's refusal to meet his demands on the terms for the coalition. She resigned the same day, paving the way for a general election in December By this time, the Kurdish issue had become Turkey's major internal political problem. The war in the south-eastern provinces against militants of the Kurdistan Workers' Party (PKK) claimed around 30,000 lives between 1984 and By 1999 the army had re-established control over most of the area. However, the counter-insurgency campaign led to serious human-rights abuses by government forces, the compulsory evacuation of thousands of villages and severe disruption of the region's economy. The results of the December 1995 general election confirmed the rising popularity of the Welfare Party, which received the largest share of the vote (21.4%). After the election, the two secular centre-right parties, Anap and the DYP, formed a coalition in February 1996, but it lasted only until mid-june. Established principally to keep Welfare from power, the coalition fell apart when the Anap leader, Mr Yilmaz, agreed to parliamentary investigations into alleged malpractice by Ms Ciller during her time as prime minister. To avert the investigations, Ms Ciller agreed to form a coalition with the Welfare Party. The government formed on June 25th, with Mr Erbakan as prime minister, was the first Islamist-led government in Turkey's history. From the start, Mr Erbakan's government was wracked by dissent between its two constituent parties, on both economic and foreign-policy issues. It was further weakened by the revelation of damaging links between parts of the government (and the police service) and organised crime. Meanwhile, Mr Erbakan's moves towards creeping Islamisation (especially in education) aroused the anger of the staunchly secularist generals, as well as that of much of an emerging civil society of intellectuals, business organisations, trade unions and women's groups. On June 18th 1997, in the face of repeated warnings from the military-dominated National Security Council (MGK) and mounting public protests, Mr Erbakan resigned. Accordingly, the president, Mr Demirel, passed on the baton to Mr Yilmaz of Anap, who on June 30th 1997 formed a minority government, in coalition with the DSP and with outside support from the CHP. Mr Yilmaz's third government and Turkey's fifth since the 1991 election was hampered by its minority status and dependence on the support of the CHP. In November 1998 it collapsed when the CHP withdrew its support. In January 1999 Mr Ecevit became the head of a minority DSP caretaker government, Country Profile The Economist Intelligence Unit Limited 2006

11 Turkey 7 supported externally by Anap and DYP, with a mandate to take the country to local and parliamentary elections on April 18th The 1999 election produced a three-party ruling coalition Political tensions triggered a financial crisis in early 2001 The government entered a severe crisis in July 2002 AKP won a landslide victory in the November 2002 election The April 1999 legislative election produced an unlikely coalition government, led by Mr Ecevit and comprising his DSP, the ultra-nationalist Nationalist Action Party (MHP) led by Devlet Bahceli and Mr Yilmaz's Anap. The election outcome was influenced to a considerable extent by the capture of the leader of the PKK, Abdullah Ocalan, on February 16th. The DSP topped the poll, with 22.2% of the votes cast, while the MHP, aided by strong nationalist sentiment, finished a close second. Anap, DYP and the Virtue Party (the successor to the Welfare Party, which had been banned in February 1998) were the other three parties to win representation in parliament. The CHP failed to reach the threshold of 10% of the vote required to enter parliament. Mr Ecevit's government chalked up some notable early achievements, mainly in the economic and foreign-policy fields. In December 1999 it signed a threeyear stand-by credit agreement with the IMF, but required additional emergency funding from the IMF in December 2000 to avoid a financial crisis. At the meeting of the European Council in Helsinki, also in December 1999, the EU heads of government reversed the decision taken in Luxembourg two years earlier and declared Turkey a candidate for EU accession. In April 2000 Ahmet Necdet Sezer, formerly the chief justice of the constitutional court, was elected by parliament to succeed Mr Demirel as president. Tensions emerged subsequently between Mr Ecevit and the new president and reached crisis point on February 19th 2001, triggering a collapse of international and domestic confidence. The February crisis forced the government to abandon the crawling-peg exchange-rate regime, and this was followed by a sharp devaluation of the Turkish lira and the worst recession in Turkey since the second world war. On March 2nd Kemal Dervis, a respected economist at the World Bank, was brought into the government as the new minister for the economy. He drafted a programme of economic and financial reforms that obtained substantial financial support from the IMF (see Economic policy). Although there were disagreements within the coalition over the implementation of the IMF's prescriptions, the fear of another crisis meant that most of the measures were eventually put in place. In October 2001 and August 2002 parliament passed two packages of constitutional amendments and legal changes, which met many of the EU's requirements for human-rights reforms, including the abolition of the death penalty and permission for broadcasting and education in Kurdish. Nevertheless, by mid-2002 Mr Ecevit's government had collapsed as a result of the prime minister's ill health, constant disagreements between the MHP and the other government parties, and the resignation from the party of a large group of DSP backbenchers, led by the minister of foreign affairs, Ismail Cem. An early general election held on November 3rd 2002 resulted in the elimination of virtually all the parties in the previous parliament because they failed to pass the 10% threshold and produced a landslide victory for the AKP, The Economist Intelligence Unit Limited Country Profile 2006

12 8 Turkey led by Recep Tayyip Erdogan. The AKP's victory was a clear sign of the public's disgust at the mismanagement and corruption of the old parties. Mr Erdogan, a former mayor of Istanbul, and most of his colleagues had formerly been members of the Welfare Party and its pro-islamist successor, the Virtue Party (see Political forces). However, following the closure of the Virtue Party, they had moved towards an accommodation with Turkey's secularist tradition, promoting the AKP as a modernist party committed to maintaining the secularist nature of the republic. In the new parliament, the CHP in effect became the sole opposition party, but with only 178 seats to the AKP's 363. Since Mr Erdogan was ineligible to be elected to parliament and thus unable to assume the premiership, as a result of a court decision dating back to 1998, his deputy, Abdullah Gul, formed the first post-election government on November 16th He held office until March 12th 2003, when Mr Erdogan took over, following the removal of the ban on his election to parliament by a constitutional amendment and his victory in a by-election held on March 9th. Iraq war caused difficulties in US relations There have been terrorist incidents The government suffered a serious setback on March 1st 2003, when parliament refused to allow US forces to use Turkish territory in the US's planned war against Iraq. As a result, the US withdrew a substantial package of economic aid, which increased fears of another severe financial crisis. After the war started on March 20th, a more limited set of measures in support of the US-led coalition was agreed, and the US offered Turkey a smaller financial aid package. Since then, relations have frequently been tense, mainly because of the uncertainty surrounding the situation in Iraq. However, both governments seem to recognise that, like it or not, they need to co-operate. Until November 2003 Turkey had been fortunate in escaping attacks by extremist Islamist terrorist organisations, several of which exist in Turkey. This apparent immunity was shattered on November 15th, when car bombs outside two synagogues in Istanbul killed 25 people and injured around 300 others. Five days later, on November 20th, two more suicide bombings rocked Istanbul: one directed against the British consulate-general and the other at the Turkish headquarters of a British bank, HSBC. In the second round of attacks, another 30 people were killed, including the British consul-general, Roger Short, and around 450 were injured. Several other attacks, some of which targeted Western interests, followed in , but these were less devastating and posed no threat to the country's political and economic stability. However, in mid-may 2006 the country was shaken by the murder of a judge of the Council of State, Turkey's highest administrative court, by an Islamist extremist over an earlier ruling by the court upholding the ban on women wearing Islamic-style headscarves at university, in public offices and at official ceremonies. Secularists attacked the AKP, which wants to lift the ban, saying the ruling party's criticism of the court's ruling had encouraged the attack. In return, the AKP criticised the chief of the general staff, Hilmi Ozkok, and the president, Mr Sezer, for encouraging the pro-secularist street protests that followed the murder. In mid-2004 the PKK officially renewed its struggle against the Turkish state, when it ended the unilateral ceasefire that it had kept since The scale of Country Profile The Economist Intelligence Unit Limited 2006

13 Turkey 9 attacks, which have been concentrated mainly in the south-east of the country, has been minor in comparison with the full-scale campaign waged by the PKK in However, from mid-2005 the level of violence steadily increased, despite Mr Erdogan's promises to tackle the Kurdish issue by democratic means. Bomb attacks at two Aegean resorts in July 2005 and two in Istanbul in February 2006 have been blamed on Kurdish terrorist groups. In November 2005 the bombing of a Kurdish bookshop in the south-eastern town of Semdinli caused unease because of the involvement of members of the gendarmerie. In late March 2006 street protests in Diyarbakir in the south-east, following the funerals of PKK members killed in clashes with Turkish security forces, turned violent and spread to other cities and towns in the area. EU accession talks are opened, but initial euphoria is waning The two main priorities of the AKP government have been to meet the political conditions for starting accession negotiations with the EU and to maintain economic stability (see The economy). The first was achieved when the EU and Turkey overcame objections from several EU member states to reach a lastminute agreement to formally open accession negotiations on October 3rd 2005, as agreed at the end-2004 European Council. However, Turkey's EU membership negotiations will be open-ended and are likely to last at least ten years. The main obstacle in the short term to progress in the negotiations is Cyprus. Further progress is also needed in human rights, freedom of speech and protection of minorities. Opposition within the EU to Turkish accession has already contributed to a decline in public support in Turkey for membership. The AKP's management of the economy has been good. It has broadly adhered to the IMF-backed reform programme. As a result, the Turkish economy is now more robust and resilient to shocks. However, as shown by the sharp falls in the lira and the Istanbul stock exchange in May 2006, it is still vulnerable to volatility and sharp changes in investor sentiment (see The economy). Important recent events December 1999 In December the European Council meeting in Helsinki places Turkey on the list of candidates for eventual EU membership, reversing the decision taken in Luxembourg two years earlier. February-May 2001 A public quarrel between the prime minister, Bulent Ecevit, and the president, Ahmet Necdet Sezer, triggers a financial crash. The IMF and the World Bank pledge additional financial support. July 2002 The Ecevit government experiences a severe crisis, as important Democratic Left Party (DSP) ministers resign from the cabinet and over 60 DSP members of parliament leave the party. Mr Ecevit eventually agrees to hold an early election in November November 2002 In the general election, the Justice and Development Party wins a landslide victory; all other parties except the Republican People's Party are eliminated from parliament. The Economist Intelligence Unit Limited Country Profile 2006

14 10 Turkey December 2002 Meeting in Copenhagen, the European Council agrees that, if it decides in December 2004 that Turkey fulfils the Copenhagen criteria, then accession negotiations with the EU will start "without delay". March 2003 The Justice and Development Party leader, Recep Tayyip Erdogan, takes over as prime minister from his deputy, Abdullah Gul, following the removal of the ban on his running for parliament and his victory in a by-election. On March 1st parliament fails to ratify a plan to allow US forces to use Turkish territory in the imminent war against Iraq in return for a substantial aid package. Shortly after, limited measures in support of the US-led coalition are agreed. November 2003 Four suicide bombings in Istanbul carried out by Islamic fundamentalists leave 45 dead and 700 injured. Two attacks, on November 15th, are targeted at synagogues in the city. Two further attacks, five days later, hit the British consulate and the Turkish headquarters of a UK-based bank, HSBC. April 2004 In the Turkish Cypriot north of Cyprus, 65% of the voting population support the UN-sponsored plan for a solution to the division of Cyprus, the so-called Annan plan, but it is rejected by 75% of the Greek Cypriots in the south. July 2004 The Kurdistan Workers' Party (PKK) resumes its campaign of violence, ending the unilateral ceasefire that it declared in Although mainly concentrated in the Kurdish inhabited south-east and on a much-reduced scale compared with the fullscale campaign waged in , the level of violence steadily escalates. December 2004 Following a recommendation from the European Commission in its annual progress report on Turkey published in October 2004, the European Council agrees to commence negotiations on October 3rd 2005, but stipulates several preconditions. October 2005 Turkey officially opens EU accession negotiations on October 3rd, as planned. However, Austrian brinkmanship delays the decision until the last hour. November 2005 The bombing of a Kurdish bookshop in Semdinli in the south-east of Turkey causes widespread unease because of the involvement of members of the gendarmerie. December 2005 Orhan Pamuk, one of Turkey's best-known novelists, is put on trial for saying in an interview that 1m Armenians were killed under the Turkish Ottoman government during the first world war and that 30,000 Kurds died in the struggle between the state and the PKK. The case is dropped in January Country Profile The Economist Intelligence Unit Limited 2006

15 Turkey 11 January 2006 Turkey is the first country outside East Asia to report human infection with the virulent H5N1 avian influenza virus, causing the deaths of four children in a remote village in the south-east of the country. March 2006 Following the funerals of PKK members killed in clashes with Turkish security forces, street protests in the south-eastern city of Diyarbakir turned violent and quickly spread to other cities and towns in the area. May 2006 Tensions between the AKP and secularists increase following the murder of a judge of the Council of State, Turkey's highest administrative court, by an Islamist extremist over a ruling by the court supporting the headscarf ban. Constitution, institutions and administration Turkey is a unitary, secular republic, in which power is exercised by a unicameral parliament (Meclis) and the prime minister. The prime minister is designated by the president and is customarily the leader of the largest party. The Meclis elects the president, who may serve only one seven-year term. He can delay, but not veto legislation. The president is supposed to be a neutral figurehead and is obliged to resign from a political party before assuming office. In practice, he may exercise substantial influence behind the scenes, particularly in periods of governmental crisis. The term of the current president, Ahmet Necdet Sezer, ends in April 2007, and under the constitution, he cannot run for a second term. Since the AKP government is expected to be in power at the time and only a simple majority in parliament is needed, it will probably have its own preferred candidate elected as president, which is causing tensions with secularists in Turkey. Constitutionally, the prime minister must be a member of parliament, but cabinet ministers can be appointed from outside. The parliament must also authorise any deployment of Turkish troops abroad or of foreign forces on Turkish soil, except in performance of Turkey's treaty commitments to NATO. The constitution can be altered only by a two-thirds majority in the Meclis, with a subsequent referendum if this is ordered by the president, or by a three-fifths majority, followed by a compulsory referendum. Parliament Parliament currently has 550 members with a parliamentary term of five years, although an early election can be held if the Meclis votes to this effect. The electoral system is based on multi-seat constituencies, with parties that fail to exceed a threshold of 10% of the national vote being excluded. The 10% threshold does not apply to independent candidates. As a result of the threshold, over 45% of the votes cast in the November 2002 election have no representation in parliament. Elections are usually conducted fairly, but groups considered by the secular establishment to endanger the unitary, secular nature of the state (in effect, Kurdish nationalist parties or pro-islamist parties) have been banned periodically (see Political forces). In principle, Turkey accepts the European Convention on Human Rights and other international human-rights instruments. If properly implemented, recent The Economist Intelligence Unit Limited Country Profile 2006

16 12 Turkey reforms should give effect to this: they include the abolition of the death penalty; the alteration of statutes affecting criticism of the government or the armed forces, or alleged incitement to ethnic or religious hatred; and permission for broadcasting and education in Kurdish, albeit on a limited scale. The main remaining restriction is on activities seen as endangering the territorial integrity of the state (in effect, Kurdish separatism). The regular torture of suspects by the police is another serious abuse, although it has been curtailed in recent years. The judiciary The ministries The administrative system The independence of the judiciary is respected in Turkey, and rulings by the constitutional court can overturn acts of parliament. The judiciary contains many conservative elements that, like the military, are suspicious of the AKP and pro-kurdish political groupings. The EU has been calling for reforms to increase the efficiency and effectiveness of the judicial system. A major criticism of the system has been that because of highly different interpretations of the law, particularly those regarding human rights and freedom of expression, decisions differ significantly from court to court. In , through a programme sponsored jointly by the European Commission, the Council of Europe and the Ministry of Justice, the government intensified its efforts to improve the knowledge of European and international human-rights standards among a greater number of Turkish judges and public prosecutors and ensure that the European Convention of Human Rights and the rulings of the European Court of Human Rights are implemented effectively. Among the important ministries, the Ministry of Foreign Affairs has traditionally enjoyed a respected and non-partisan position, while the Ministry of Finance, the Ministry of the Interior and the Ministry of Education have often been weakened by partisan appointments and interference. The Ministry of Defence has little real control over the armed forces. These are in effect controlled by the chief of the general staff, who theoretically reports to the prime minister, but in practice enjoys wide autonomy, although reforms aimed at meeting the Copenhagen criteria for EU accession have begun to reduce the military's influence over the civilian authorities. The administrative system is highly centralised. Turkey is divided into 81 provinces, each under a governor appointed by the central administration, and into districts within these. Since the 1980s elected municipalities have been given more powers and resources, but these are still fairly limited. Between 1987 and 2002 a special emergency regime was in place under a regional governor in the Kurdish-inhabited provinces in the south-east, but this has now been wound up. Although believed to be widespread in Turkey, corruption was not a major source of instability until the second half of the 1990s, as past corruption investigations tended to be either inconclusive or directed at the lower levels of government. However, episodes of corruption involving parts of the administration emerged between 1995 and 2002, resulting in several ministerial resignations. In the 2002 election, the AKP's declared commitment to "clean government" and the eradication of corruption was a powerful vote winner, Country Profile The Economist Intelligence Unit Limited 2006

17 Turkey 13 but this does not appear to have been a priority during the three and a half years that the party has been in government. It has not shown a willingness to relinquish opportunities for intervention and patronage and has failed to do away with the extensive immunity from prosecution enjoyed by members of parliament under the constitution, as promised, despite the main opposition party's pledge of support. In early 2006 Mr Erdogan was facing mounting pressure over corruption allegations against members of his cabinet. Political forces Election results Dec 1995 Apr 1999 Nov 2002 May 2006 Seats % of votes Seats % of votes Seats % of votes Seats Justice and Development Party (AKP)a Republican People's Party (CHP) Democratic Left Party (DSP) Nationalist Action Party (MHP) Felicity Party (Saadet)a Virtue Party (Fazilet)b Welfare Party (Refah)c Motherland Party (Anap) True Path Party (DYP) People's Democracy Party (Hadep)d Democratic People's Party (Dehap) Independents/others Totale a Formed in 2001, following the closure of the Virtue Party. b Formed in 1998, following the closure of the Welfare Party. c Dissolved by court order in d Dissolved by court order in 2003; competed in the 2002 election as People's Democracy Party (Dehap). e Including vacant seats. Source: Economist Intelligence Unit. The centre right The centre left The centre-right has traditionally attracted most support in Turkey, but was weakened by its division into two rival parties, the Motherland Party (Anap) and the True Path Party (DYP), originally founded by Suleyman Demirel and Turgut Ozal respectively. With its victory in the 2002 election, the Justice and Development Party (AKP) in effect took over this share of the electorate. Although most of its leadership has Islamist origins and belonged to the banned Welfare and Virtue parties, the AKP also incorporated former members of other centre-right parties, notably Anap. However, several of these, notably the minister for tourism and culture, Ercan Mumcu, left in early 2005 to rejoin Anap. The AKPs policies can best be described as moderate-conservative, but the secularist establishment which includes the army, the president and the judiciary continues to view the AKP and Mr Erdogan with distrust because of their Islamist roots. In the light of the AKP's good performance in government so far and its growing support, it will be difficult for Anap or DYP to return to prominence in the next election, due by November In the March 2004 local elections, the DYP polled about 9% and Anap less than 3%. Following Mr Ecevit's poor performance as prime minister, especially in 2002, his party, the Democratic Left Party (DSP), suffered a crushing defeat, with about 2% of the vote in the November 2002 election. Following Mr Ecevit's The Economist Intelligence Unit Limited Country Profile 2006

18 14 Turkey retirement in 2004, the DSP, now led by Zeki Sezer, faces extinction. The Republican People's Party (CHP), with 19.4%, is the main representative of the centre left in parliament. However, the party, led by Mr Baykal, has not shaken off public suspicions that it is still wedded to dirigiste, étatiste methods. It has performed poorly in opposition since the November 2002 general election and failed to increase its share of the vote in the March 2004 local elections (it won about 18%). There has been strong opposition within the party to Mr Baykal, whose authoritarian style of leadership is seen by his critics to be damaging the CHP. Other centre-left parties are thinly supported and unlikely to play more than a marginal role so long as the centre-left remains fragmented. Ahead of the next legislative election, some members of the centre-left parties are expected to try to launch alliances, but Mr Baykal is unlikely to participate. Pro-Islamists The ultra-nationalist right Kurdish political movements In February 1998 the Welfare Party, under Mr Erbakan, Turkey's veteran Islamist leader, was closed down, and Mr Erbakan was excluded from official participation in politics for five years. The Islamists then regrouped to form the Virtue Party (Fazilet). In June 2001 the party followed its predecessor in being closed down by the constitutional court. In its place, two successor parties were established, in the shape of the AKP and the Felicity Party (SP), nominally led by Recai Kutan, but in fact controlled by Mr Erbakan from behind the scenes. Although Mr Erbakan became leader of the SP following the expiry of the ban, the party's heavy defeat in the 2002 election, Mr Erbakan's advanced age and a new conviction in late 2003 for financial irregularities in his party make it unlikely that he will stage a comeback. The SP could revive if the more pro-islamist element in AKP were to decide to leave the party, but there are currently no signs that this will happen. The ultra-nationalist right is mainly represented by the Nationalist Action Party (MHP) under the leadership of Mr Bahceli. It became the second-largest party, with 18% of the vote, in the April 1999 general election, but obtained only 8.3% of votes cast in In the March 2004 local elections the MHP polled about 9%. A maverick party, the Youth Party (GP), led by a millionaire businessman, Cem Uzan, cut into the MHP's vote in the 2002 election on a platform of strong nationalism and economic populism. However, his family's financial and legal difficulties have put an end to Mr Uzan's political career. In the next election, the MHP may benefit from the recent rise of nationalist sentiment and the decline in support for EU membership. Kurdish nationalism was previously represented in parliament by the Democracy Party (DP), originally a splinter group of the Social Democrat Populist Party (SHP). DP was closed down by court order in 1994 and was succeeded by the People's Democracy Party (Hadep). Hadep failed to overcome the 10% threshold in the 1995 and 1999 elections, but won an important role in municipal government in the south-east in Following its closure in March 2003 for allegedly supporting the Kurdistan Workers' Party (PKK), Hadep was in effect succeeded by the Democratic People's Party (Dehap). Although Hadep/Dehap denounced the use of force, many of its grassroots supporters were probably sympathetic to the PKK. Threatened by another closure case, DEHAP formally wound itself up, and its leading members joined forces with Country Profile The Economist Intelligence Unit Limited 2006

19 Turkey 15 the Democratic Society Movement (DTH) set up in 2004 by three prominent Kurdish politicians Leyla Zana, Hatip Dicle and Orhan Dogan who had just been released after almost ten years' imprisonment, also for allegedly supporting the PKK. The merger under a new name, Democratic Society Party (DTP), will not necessarily be an easy one, since apart from personal rivalries, the former DTH leaders tend to adopt more radical positions than Dehap. The PKK, which is classified as a terrorist organisation by the US and the EU, waged a campaign of violence and terrorism against the government between 1984 and It suffered a major setback in February 1999, when its leader, Mr Ocalan, was captured in Nairobi, Kenya, by Turkish security agents. In April 2002 the PKK officially renamed itself first the Kurdistan Freedom and Democracy Congress (KADEK), then the People's Congress of Kurdistan (Kongra-Gel), before reverting in early 2005 to its original name, PKK. After the capture of Mr Ocalan, the PKK announced a ceasefire. On September 1st 2003 the PKK (then KADEK) officially ended its ceasefire, and it resumed its campaign of violence in mid The Turkish authorities have never accepted the PKK's demand that it should be treated as a legitimate negotiator for a peaceful settlement of the Kurdish problem. Main political figures The army Among non-party actors, the army has played a crucial role in the recent past, staging three coups between 1960 and It was instrumental in the removal of the Welfare Party-led government in June 1997 and considers itself the guardian of the secular republic. So far, the army has wielded power mainly through the National Security Council (MGK), which is supposed to advise the government on security questions, but in practice has exercised considerable influence on a wider range of issues, especially in opposing Kurdish nationalism and political Islamism. As part of the package of constitutional reforms passed in October 2001, the composition of the MGK was altered to provide for a majority of civilian members, and its officially stated authority was reduced. Following the AKP's election, the armed forces chiefs reluctantly acknowledged the verdict of the voters and adopted a wait-and-see attitude towards the new government. In the second half of 2003 the army backed down from its opposition to essential human-rights reforms and further changes to the MGK because the changes were deemed necessary to advance Turkey's bid to start EU accession negotiations. The AKP leadership has generally been anxious to avoid a clash with the military. Tensions rose following the murder in May 2006 of a judge of the Council of State, Turkey's highest administrative court, by an Islamist extremist over a ruling by the court supporting the headscarf ban. Secularists attacked the AKP saying its criticism of the court's ruling had encouraged the attack. However, the army could not easily force the AKP from power. Ahmet Necdet Sezer Mr Sezer was unexpectedly elected president in May At the time of his election by parliament, he was the chief justice of the constitutional court, making him the first president of Turkey to have been neither a prominent politician nor a former senior military commander. He is widely respected and a strong advocate of political reform and improvements in human rights. Between 2000 and 2002 he acquired an unexpectedly important political role through his challenges both to The Economist Intelligence Unit Limited Country Profile 2006

20 16 Turkey high-handed actions by the government and to its failure to follow up serious charges of corruption. Similarly, his opposition to the US-led war against Iraq (on the grounds that it was not supported by the UN) won widespread support. He has adopted a cautious approach to the Justice and Development Party (AKP) and its popular leader and prime minister, Recep Tayyip Erdogan, making use of his powers as president to oppose any AKP policies that he considered to be undermining the secular nature of the state as enshrined in the constitution. Since 2003 he has returned several bills to parliament for reconsideration, but the AKP has generally sought to avoid outright confrontation with the president. Mr Sezer's main weakness is that he has no direct experience of party politics, nor personal influence within parliament. However, the high level of popularity and respect that he enjoys has provided a counterbalance to the AKP's huge parliamentary majority. His mandate ends in April Recep Tayyip Erdogan As a successful and popular mayor of Istanbul in , Mr Erdogan won the approval of many voters who did not support his Islamist political attachments. Nevertheless, he was ejected by a court from the mayoralty in 1998 and sentenced to four months' imprisonment. Subsequently, he sought to rebuild his political career by breaking with the leader of the Welfare Party, Necmettin Erbakan, and launching the AKP as a mainstream party of the liberal right. At the time of his party's victory in the general election of November 2002, the 1998 court decision prevented him from running for parliament and hence becoming prime minister. However, this ban was removed by a constitutional amendment passed in December This allowed him to be elected to parliament in a by-election and assume the premiership in March In the crisis over Turkey's policy towards the impending war against Iraq, which preceded his becoming prime minister, he did not come out clearly in favour of supporting the US and failed to prevent parliament from voting against allowing the US to launch a second front against Saddam Hussein into northern Iraq from Turkey. After becoming prime minister, he sought to patch up Turkey's differences with the US administration, but he has been highly critical of US policy on Iraq and the Middle East in general. Motivated by a desire to further Turkey's bid to join the EU, he was a driving force behind efforts to revive the unsuccessful UN-sponsored settlement talks between the Greek and Turkish Cypriots in In making appointments to crucial economic posts, he has been criticised for reverting to traditional methods of political favouritism, rather than respecting the standards of impartiality demanded by the IMF. Although his judgment has been questionable on some issues, for example, backing a proposal by AKP conservatives in 2004 to re-criminalise adultery, Turkey has made considerable progress towards economic and political stability under his leadership. Abdullah Gul As deputy leader of the AKP, Mr Gul served as prime minister while Mr Erdogan was excluded from parliament between November 2002 and March 2003, after which he became deputy prime minister and minister of foreign affairs. Originally trained as an engineer, he worked as an economist in the Islamic Development Bank, based in Saudi Arabia, between 1983 and He was first elected to parliament in 1995 as a member of the former Welfare Party, serving as a minister of state and government spokesman in the ill-fated coalition of the Welfare and True Path (DYP) parties in Following the closure of the Welfare Party in 1998, he joined its successor, the Virtue Party. In May 2000 he emerged as a leader of the modernist wing of the party, being narrowly defeated in a race for the party leadership by Recai Kutan, the protégé of Mr Erbakan, at a special party convention. This propelled him into the second slot in the AKP, behind Mr Erdogan, when the party was launched in August While he has firm local support in his home city of Kayseri, he does not enjoy the same nationwide grassroots appeal as his party leader. Like Mr Erdogan, he has shown an unwavering commitment to bringing Turkey closer to the goal of EU membership. Deniz Baykal As the chairman of the Republican People's Party (CHP), Mr Baykal is leader of the opposition in parliament. Originally a member of the CHP when the latter was led by Bulent Ecevit in the 1970s, he served as minister of energy in 1973, emerging as a potential rival to the party leader and the standard-bearer of the left wing of the party. After the military takeover of September 12th 1980, he suffered a short period of detention, but in 1987 he re-entered parliament as a member of the Social Democrat Populist Party (SHP), led by Erdal Inonu. Following several unsuccessful attempts to dislodge Mr Inonu from the leadership of the SHP, Mr Baykal broke away from the party to re-establish the CHP in In February 1995, after Mr Inonu's retirement, the SHP, which was then part of a coalition government under the DYP leader, Tansu Ciller, merged Country Profile The Economist Intelligence Unit Limited 2006