Turkey. Country Profile 2004

Transcription

1 Country Profile 2004 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 15 Regent St, London SW1Y 4LR 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 its 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 15 Regent St London SW1Y 4LR 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) dantecantu@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, on-line databases and as direct feeds to corporate intranets. For further information, please contact your nearest Economist Intelligence Unit office Copyright 2004 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

4 Country Profile The Economist Intelligence Unit Limited 2004

5 Turkey 1 Contents 3 Regional overview 3 Membership of organisations 5 Basic data 6 Politics 6 Political background 8 Recent political developments 13 Constitution, institutions and administration 14 Political forces 19 International relations and defence 25 Resources and infrastructure 25 Population 27 Education 28 Health 28 Natural resources and the environment 29 Transport, communications and the Internet 32 Energy provision 35 The economy 35 Economic structure 37 Economic policy 40 Economic performance 43 Regional trends 44 Economic sectors 44 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 Appendices 65 Sources of information 67 Reference tables 67 Population 67 Labour force 68 Transport statistics 68 National energy statistics 70 Interest rates 71 Real gross domestic product by expenditure 71 Gross domestic product by output, at current producer prices 72 Gross domestic product by output, at 1987 producer prices The Economist Intelligence Unit Limited Country Profile 2004

6 2 Turkey 72 Prices and earnings 72 Livestock numbers 73 Agricultural production 73 Minerals production 74 Manufacturing production 74 Construction statistics 74 The stockmarket 75 Exports 75 Imports 75 Main trading partners 76 Balance of payments, IMF series 77 External debt, World Bank series 77 Foreign reserves 77 Exchange rates Country Profile The Economist Intelligence Unit Limited 2004

7 Turkey 3 Regional overview Membership of organisations North Atlantic Treaty Organisation Organisation for Security and Co-operation in Europe In April 1949, as post-war relations between the West and the Soviet Union worsened, ten west European countries Belgium, Denmark, France, the UK, Iceland, Italy, Luxembourg, the Netherlands, Norway, and Portugal plus the US and Canada formed the North Atlantic Treaty Organisation (NATO), a political and military alliance with a commitment to mutual defence in the event of attack against any of its members (Article 5 of the North Atlantic Treaty). In 1955 the Soviet Union and east European socialist states formed an alliance known as the Warsaw Pact, as a counterweight to NATO. Since its establishment the Alliance, which now has its headquarters in Brussels, has been expanded five times, bringing the current number of members to 26. In 1952 Turkey and Greece joined; in 1955 West Germany and in 1982 Spain. In 1999, after the collapse of the Soviet Union, NATO admitted three central and east European countries, Poland, Hungary and the Czech Republic. In November 2002 seven more Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia and Slovenia were invited to join and their accession took place at the beginning of April The Alliance is open to further expansion. Following the end of the cold war at the end of the 1980s the Alliance has had to undergo a major transformation to justify its continued existence. From being an alliance between countries with a common enemy, it has increasingly focused on international crisis management and peacekeeping. In 1994 NATO established a Partnership for Peace programme intended to foster co-operation with non-member states. There are currently 27 countries participating in the programme. Since 1994 the Alliance has supported the development of a stronger European Security and Defence Identity (ESDI). More recently, following difficult negotiations, the EU has begun to set up a 50,000-60,000 EU rapid reaction force (RRF), which will have access to NATO assets and capabilities. The role of the RRF will be to undertake military operations led by the EU in response to international crises, in circumstances where NATO as a whole is not engaged militarily. In the post-cold-war period NATO has undertaken several controversial military operations in the Balkans, particularly air strikes against the Bosnian Serbs in 1995 and against Yugoslavia over the question of Kosovo in The 1999 air strikes were carried out without UN approval. In the aftermath of both conflicts NATO has been heavily involved in peacekeeping in both Bosnia and Kosovo. Following the September 11th 2001 terrorist attacks on the US, NATO s secretary-general, George Robertson, invoked Article 5 of the North Atlantic Treaty; however the US did not involve NATO in the subsequent military campaigns in Afghanistan and Iraq. Established in 1972, the Conference for Security and Co-operation in Europe (CSCE) was initially a non-institutionalised multilateral forum for East-West dialogue, and served for almost 20 years as a convenient and flexible The Economist Intelligence Unit Limited Country Profile 2004

8 4 Turkey arrangement for easing cold war tensions. The organisation gradually expanded in aim and strengthened its organisational structure in the 1990s. After the end of the cold war the role of the body started to change quickly, and in December 1994 the conference was officially renamed the Organisation for Security and Co-operation in Europe (OSCE). With 55 member states, the OSCE is the only inclusive pan-european security organisation. Canada and the US are also members of the organisation. The OSCE has played a major role in conflict prevention and resolution, as well as post-conflict reconstruction in Europe. Its activities embrace three dimensions: security, economy and human rights. The OSCE is engaged in preventive diplomacy, arms control and confidence-building activities. It undertakes fact-finding and conciliation missions, and carries out crisis management. The organisation is a component of the European security architecture. It is a "regional arrangement" in the sense of Chapter VIII of the UN Charter, which gives it the authority to try to resolve a conflict in the region itself, before referring it to the UN Security Council. Since the early 1990s the OSCE has been heavily involved in the Balkans and the Transcaucasus. The activities of the OSCE are performed by a web of specialised agencies. The High Commissioner on National Minorities, based in The Hague, is the primary source of "early warning", with responsibility for identifying ethnic tensions that might endanger peace. The Office for Democratic Institutions and Human Rights (ODIHR), based in Warsaw, focuses on promoting human rights, democracy and the rule of law. It monitors elections, assists in developing national electoral and legal institutions, promotes the development of nongovernmental organisations (NGOs) and civil society and conducts meetings, seminars and special projects. The Office of the Representative on Freedom of the Media, based in Vienna, assesses the implementation of the member states commitments concerning freedom of journalism, broadcasting and access to information. Organisation of the Black Sea Economic Co-operation The Organisation of the Black Sea Economic Co-operation (BSEC) began operating in 1999, several years after regional leaders established a framework for co-operation at a summit in The organisation s supreme body is the Presidential Summit, which comprises the heads of state and government of the member states (Albania, Armenia, Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania, Russia, Turkey and Ukraine). The main decisions in the BSEC are taken by the Council of Ministers of Foreign Affairs, which meets on a twice-yearly basis. The BSEC was formed with the goal of extending economic co-operation by facilitating contacts between businesses and eliminating barriers to trade. BSEC member states have set up a number of bodies to meet these goals, although results to date have been limited. The Black Sea Trade and Development Bank was established in 1999 to finance and implement joint regional projects. A BSEC Co-ordination Centre was founded in Ankara to promote the exchange of statistical data, and the Istanbul-based BSEC Business Council is charged with identifying private and public investment projects. Country Profile The Economist Intelligence Unit Limited 2004

9 Turkey 5 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 2003: TL1,500,885:US$1; exchange rate on April 28th 2004: TL1,418,296: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 2004

10 6 Turkey Politics The current government was formed in March 2003 under Recep Tayyip Erdogan, the leader of the Justice and Development Party (AKP). Thanks to 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 Initially, however, Mr Erdogan was unable to enter parliament, and thus take over the premiership, because of a court ban imposed on him in 1998 for allegedly making pro-islamist statements. Accordingly, a temporary government was set up under his deputy, Abdullah Gul. 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, but they now disavow this, and the government has 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 , and in The establishment of the republic 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 off 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. An étatiste 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 Country Profile The Economist Intelligence Unit Limited 2004

11 Turkey 7 The 1960s and 1970s The military regime, Turgut Ozal s leadership, 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 election took place following the trial and execution of 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 viewed as the successor to the DP, 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), headed 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 leader of the 1980 coup, General Kenan Evren, established a five-man junta that 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 2004

12 8 Turkey Recent political developments Mrs Ciller became prime minister in 1993 The Demirel government lasted until April 1993, when Mr Ozal died suddenly. Mr Demirel was elected president the following month. His successor as party leader and prime minister was Tansu Ciller. Serious financial and balance-ofpayments crises in the first quarter of 1994 marred Mrs 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, decided to withdraw the CHP from the coalition, following Mrs 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. About 15-20% of the country s population are Kurds. Around one-half live in their traditional homeland in the south-east, with the other half having migrated to the industrial cities of western Turkey. 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 south-east. However, the counter-insurgency campaign led to serious human rights abuses by government forces, the compulsory evacuation of thousands of villages, severe disruption of the region s economy, and a cost to the government of an estimated US$6bn per year election confirmed the rise of the Welfare Party An Islamist-led government lasted just 11 months The results of the general election of December 24th 1995 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 at the end of February 1996, which lasted only until mid-june. Put into place principally to keep Welfare from power, the coalition fell apart when the Anap leader, Mr Yilmaz, agreed to parliamentary investigations into alleged malpractice by Mrs Ciller during her time as prime minister. To avert corruption investigations, Mrs Ciller then agreed to form a coalition with the Welfare Party. The Welfare Party-DYP coalition government, headed by Mr Erbakan, took office on June 25th, bringing to power an Islamistled government for the first time 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) with 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, trades unions and women's groups. On June 18th 1997, in the face of repeated warnings from the military-dominated National Security Council (NSC), and mounting public protests, Mr Erbakan resigned. Accordingly, President Demirel passed on the baton to Mr Yilmaz of Anap, who on June 30th 1997 formed a Country Profile The Economist Intelligence Unit Limited 2004

13 Turkey 9 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, 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 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 was excluded since it failed to reach the 10% vote threshold. Mr Ecevit s government chalked up some notable early achievements, mainly in the economic and foreign policy fields, and in particular reforming the social security system and thereby helping to pave the way for approval by the IMF of a three-year stand-by credit in December Simultaneously, there was a crucial turning-point in Turkey's relations with the EU. At the meeting of the European Council in Helsinki 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. However, besides laying down important conditions regarding Turkey's relations with Greece and settlement of the Cyprus problem, the EU also made it clear that accession negotiations could not begin until Turkey met the political conditions, especially human rights improvements, stipulated by the Council in June The political conditions are the first of the three so-called Copenhagen criteria necessary for accession. Full compliance with the other two criteria "a functioning market economy and an ability to take on the obligations of membership, including adherence to the aims of political, economic and monetary union" is not necessary for starting negotiations. 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 between Mr Ecevit and the new president subsequently emerged and reached crisis point on February 19th 2001, when an open argument between the two triggered a collapse of international and domestic confidence, less than three months after Turkey had avoided a crisis thanks to emergency funding from the IMF to supplement its existing stand-by agreement. The February crisis forced the government to abandon the crawlingpeg exchange-rate regime, and this was followed by a sharp devaluation of the Turkish lira and the suspension of the disinflation strategy. The appointment on March 2nd 2001 of Kemal Dervis, a respected economist at the World Bank, as The Economist Intelligence Unit Limited Country Profile 2004

14 10 Turkey the new minister for the economy helped to restore a degree of confidence. On March 15th he drew up a programme of financial and economic reforms that obtained substantial financial support from the IMF (see Economic policy). However, as the crisis receded his influence diminished, reflecting the fact that he did not belong to any political party and that the IMF-backed measures that he sponsored were increasingly unpopular with the electorate. The government entered a severe crisis in July 2002 AKP won a landslide victory in the November 2002 election Although there were initial disagreements within the coalition over the implementation of the IMF's prescriptions, most of them were eventually put in place, and in February 2002 Turkey reached a new, three-year stand-by agreement. In October 2001 and August 2002 parliament passed two packages of constitutional amendments and legal changes, which met most 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 a landslide victory for the AKP, led by Mr 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 with no more than Islamist tinges. 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 to assume the premiership as a result of a court decision dating back to 1998, his deputy, Abdullah Gul, formed the first postelection government on November 16th This 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 byelection held on March 9th. The government suffered a serious setback on March 1st 2003, when parliament refused to allow US forces to use Turkish territory in its planned war against Iraq. As a result, the US withdrew a substantial package of economic aid, which increased fears of another severe financial crisis. When the war started, a far more limited set of measures in support of the US-led coalition was agreed to on March 20th and April 2nd 2003, and the US offered Turkey a smaller financial aid package, the details of which were finally agreed in August. Relations remained tense in the intervening period because of the uncertainty surrounding the situation in Iraq (see International relations and defence), but by April 2004 close ties with the US appeared to have been restored. Country Profile The Economist Intelligence Unit Limited 2004

15 Turkey 11 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 the British bank, HSBC. In the second round of attacks another 30 people were killed, including the British consul-general, Roger Short, and around 450 injured. The AKP intensifies efforts to start EU accession negotiations Besides concerns about developments in Iraq and tackling the threat of Islamist terrorism, the AKP's main priorities in government have been to try to meet the political conditions to start accession negotiations with the EU and to maintain economic stability (see The economy, Economic policy). In 2003 the government continued to implement the IMF-backed reform programme, which helped to generate strong economic growth while lowering inflation. In December 2002 the European Council agreed to start accession negotiations with Turkey "without delay" after December 2004, provided Turkey was deemed to have met by then the Copenhagen political criteria. The government has continued to reform Turkish laws to bring them into line with EU practices. Although further legislative changes were still needed at the beginning of 2004, the biggest obstacle to persuading the EU to start negotiations remained the implementation of reforms introduced in recent years to improve the human rights regime and ensure the protection of minorities, specifically the Kurds. Also, to try to improve Turkey's chances of starting accession negotiations, in early 2004 Mr Erdogan led efforts to reach a settlement of the Cyprus problem based on a plan drafted by the UN (see International relations and defence). Although support for the AKP fell short of that indicated in opinion polls, Mr Erdogan and his party received a major boost to morale in the March 28th 2004 local elections, winning about 43% of the national vote (compared with 34% in the November 2002 parliamentary vote), 57 of Turkey's 81 provincial councils, and the mayorship of two of Turkey's three largest cities. Important recent events June-December 1999 In June the Democratic Left Party (DSP), the Nationalist Action Party (MHP) and the Motherland Party (Anap) form a government with a clear majority of 351 out of 550 seats in parliament, and Bulent Ecevit as prime minister. In December the European Council meeting in Helsinki places Turkey on the list of candidates for eventual EU membership. February-May 2001 A public quarrel between Mr Ecevit and the president, Ahmet Necdet Sezer, triggers a financial crash. The government appoints Kemal Dervis, a respected economist from the World Bank, to formulate a new programme of economic reforms. The IMF and the World Bank pledge additional financial support. The Economist Intelligence Unit Limited Country Profile 2004

16 12 Turkey October 2001 Parliament passes a package of 24 constitutional amendments, aimed at bringing Turkey into line with the Copenhagen criteria stipulated by the EU as a precondition for the start of accession negotiations. July 2002 The Ecevit government experiences a severe crisis as important 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 August 2002 Parliament enacts changes to the Penal Code and other statutes fully abolishing the death penalty, improving freedom of speech and allowing limited broadcasting and education in Kurdish. November 2002 In the general election the Justice and Development Party (AKP) wins a landslide victory; all other parties except the Republican People s Party (CHP) are eliminated from parliament. Since the AKP leader, Recep Tayyip Erdogan, is prevented by a court decision dating back to 1998 from running for parliament, a temporary government is formed under his deputy, Abdullah Gul. December 2002 Meeting in Copenhagen, the European Council agrees that if it decides in December 2004 that Turkey fulfils the Copenhagen political criteria, then accession negotiations with the EU will start "without delay". March 2003 Mr Erdogan becomes prime minister, following the removal of the ban on his running for parliament and his victory in a by-election. His government is virtually a continuation of that of his predecessor. Parliament fails to ratify a plan to allow US forces to use Turkish territory in the forthcoming war against Iraq in return for a substantial aid package, but later agrees to a limited raft of measures in support of the US-led coalition. 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. In another attack in March 2004 only the two bombers are killed January-March 2004 Determined to persuade the EU to start accession negotiations with Turkey in early 2005, Mr Erdogan leads efforts to bring about a settlement in Cyprus based on a plan drafted by the secretary-general of the UN, Kofi Annan. April 2004 In the Turkish Cypriot north 65% of the voting population support the Annan plan, but it is rejected by 75% of the Greek Cypriots in the south. Country Profile The Economist Intelligence Unit Limited 2004

17 Turkey 13 Constitution, institutions and administration Turkey is a unitary 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. 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 The judiciary 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 reforms should give effect to this: they include the abolition of the death penalty (except in time of war or the imminent threat of war), 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 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 which, 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 very 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 The Economist Intelligence Unit Limited Country Profile 2004

18 14 Turkey 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. The ministries The administrative system Among the important ministries, the Ministry of Foreign Affairs has traditionally enjoyed a respected and non-partisan position, while the Ministry of Finance and the Ministry of the Interior and 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 political criteria 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 government resignations. In the 2002 election campaign the AKP announced a strong commitment to "clean government" and the eradication of corruption, but this does not appear to have been a priority in its first 16 months in office. Political forces Election results Dec 1995 Apr 1999 Nov 2002 Seats % of votes Seats % of votes Seats % of votes Justice & 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 Total 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). Country Profile The Economist Intelligence Unit Limited 2004

19 Turkey 15 Political forces at a glance The centre right The centre left The centre right The policies of the ruling Justice and Development Party (AKP), led by Recep Tayyip Erdogan, can best be classified as moderate-conservative. The True Path Party (DYP), formerly led by Tansu Ciller, failed to reach the 10% vote threshold for representation in parliament in the November 2002 elections. But it now has several members of parliament, who were elected as independents. The centre left This is dominated by the Republican People s Party (CHP), which was founded by Ataturk in The party's current leader is the controversial Deniz Baykal. Pro-Islamist If the AKP is classified as a centre-right party, the only significant party currently classifiable as Islamist is the Felicity Party, under Recai Kutan. The ultra-nationalist right The Nationalist Action Party, led by Devlet Bahceli, was part of the government during , but failed to surpass the 10% threshold in the 2002 election. Pro-Kurdish political groupings These are currently represented by the People s Democracy Party and the illegal Kurdistan Freedom and Democracy Congress (formerly the Kurdistan Workers Party). 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 electoral market. Although most of its leadership has Islamist origins and belonged to the banned Welfare and Virtue parties, the AKP also incorporates former members of other centre-right parties, notably Anap, and its policies can best be described as moderate conservative. 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 short to medium term. In the March 28th 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 less 2% of the vote in the November 2002 election. The Republican People s Party (CHP), with 19.4%, is currently the sole representative of the centre left in parliament. But the party led by Deniz 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 increased opposition within the party to Mr Baykal, whose authoritarian style of leadership and chequered political past are seen by his critics to be damaging the CHP. When the ageing Mr Ecevit retires (on December 1st 2003 he announced his impending retirement), the DSP faces extinction. Other centre-left parties, such as Ismail Cem s New Turkey Party The Economist Intelligence Unit Limited Country Profile 2004

20 16 Turkey (YTP), are thinly supported and unlikely to play more than a marginal role so long as the centre-left remains fragmented. Pro-Islamists The ultra-nationalist right Kurdish political movements In February 1998 the Welfare Party, under Necmettin 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 by 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 make a comeback. The SP could revive if the pro- Islamist element in AKP were to decide to leave the party, but there are no current signs that this will happen. The ultra-nationalist right is mainly represented by the Nationalist Action Party (MHP) under the leadership of Devlet Bahceli. This 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 Following the election Mr Bahceli said he would step down, but has not yet done so. In the March 2004 local elections the MHP polled about 9%. A maverick party, the Youth Party (GP) led by the millionaire businessman, Cem Uzan, cut into the MHP s vote in the 2002 election by securing 7.3% on a platform of strong nationalism and economic populism. In 2003 opinion polls suggested that growing support for the GP might pose a threat to the AKP. However, the Uzan family's financial and legal difficulties appear to have ended any hope of mounting a major challenge. Kurdish nationalism was previously represented in parliament by the Democracy Party, originally a splinter group of the Social Democrat Populist Party (SHP). This 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 has in effect been succeeded by the Democratic People s Party (Dehap). However, its existence is threatened by another closure case, which is expected to be decided by mid Although Hadep has denounced the use of force, many of its grass-roots supporters were probably sympathetic to the PKK. This was the most militant of the Kurdish political groupings and waged a campaign of violence and terrorism against the government between 1984 and It suffered a major setback in February 1999, when its leader, Abdullah Ocalan, was captured in Nairobi, Kenya, by Turkish security agents. In April 2002 the PKK officially wound itself up, renaming itself first the Kurdistan Freedom and Democracy Congress (KADEK), then the People's Congress of Kurdistan (Kongra-Gel). Following the capture of Mr Ocalan the PKK announced the end of its armed campaign. On September 1st 2003 the PKK (then KADEK) officially resumed its armed campaign, although it appeared to play down the Country Profile The Economist Intelligence Unit Limited 2004

21 Turkey 17 significance of the decision immediately after its announcement. The PKK's demand that it should be treated as a legitimate negotiator for a peaceful settlement of the Kurdish problem has never been accepted by the Turkish authorities. 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. In early 2004 the generals agreed to put aside their reservations regarding the UN settlement proposals for Cyprus so that negotiations could resume. The AKP leadership has generally appeared anxious to avoid a clash with the military. Although tensions are likely to continue, the military is unlikely to take decisive action to undermine the position of Mr Erdogan's government unless they think that it is seeking to revive an unacceptable pro-islamist programme in education, or on other cultural issues. Ahmet Necdet Sezer Mr Sezer was unexpectedly elected president in May At the time of his election 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 highhanded 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. Following the November 2002 election he adopted a cautious approach to the Justice and Development Party (AKP) and its popular leader, Recep Tayyip Erdogan, suggesting that he would make full 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. In 2003 he 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 before the Erdogan government was that he had no direct experience of party politics, or 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. 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 with only a tinge The Economist Intelligence Unit Limited Country Profile 2004