Turkey Basic Information –
Fact sheet
Annual data / 2012a / Historical averages (%) / 2008-12Population (m) / 74.7 / Population growth / 1.0
GDP (US$ bn; market exchange rate) / 788b / Real GDP growth / 3.0
GDP (US$ bn; purchasing power parity) / 1,108 / Real domestic demand growth / 2.3
GDP per head (US$; market exchange rate) / 10,553 / Inflation / 8.1
GDP per head (US$; purchasing power parity) / 14,834 / Current-account balance (% of GDP) / -5.9
Exchange rate (av) TL:US$ / 1.80b / FDI inflows (% of GDP) / 2.1
a Economist Intelligence Unit estimates. b Actual.
2014
President TayyipErdogan
Prime Minister AhmetDavutoglu
Background: The Turkish Republic was formed in 1923. Nationalist resistance forces led by Mustafa Kemal (Ataturk) defeated the occupying allies after the first world war to establish the country’s current borders. Turkey oriented its political and economic structure towards the West, becoming a member of the Council of Europe (1949) and of NATO (1952) and signing an association agreement with the then European Community (1963). A customs union with the EU took effect in1996. EU-accession negotiations were opened in October 2005, but have made slow progress.
Political structure: Turkey is a secular democratic state governed under the 1982 constitution. There have been three periods of military rule: in 1960-61, 1971-73 and 1980-83. The military’s role in Turkish politics has been gradually curtailed. Parties need at least 10% of the national vote to win any parliamentary seats, but candidates can run as independents. The parliamentary term was cut from five years to four in October 2007. Parliament elected the current president, Abdullah Gul, in August 2007; his successor will be directly elected, with the poll scheduled for August 2014. Executive power will remain with the prime minister, unless this is changed in the constitution. The religiously conservative, pro-EU Justice and Development Party, led by the prime minister, RecepTayyipErdogan, won a third term in office at the general election in June 2011.
Policy issues: IMF-backed reforms after the 2001 crisis reduced macroeconomic instability. Without an IMF stand-by accord since May 2008, Turkey’s fiscal policy has remained prudent. Large external financing needs leave the economy vulnerable to sharp changes in investor sentiment. Increasing employment and reducing income inequality are key policy concerns. Resolving the Kurdish problem, which has blocked economic development in the south-east of the country, is arguably the most pressing political issue, but nationalist resistance to improving minority rights is still strong.
Taxation: The basic rate of corporation tax is 20%. Personal income-tax rates range between 15% and 35%. Tax reform to reduce evasion was one of the main elements of previous IMF reform programmes, but compliance remains weak.
Foreign trade: In 2012 exports (fob) amounted to US$163.3bn, while imports (fob) were US$228.6bn, leaving a large trade deficit, of US$65.2bn. The export figures include estimates of earnings from “suitcase trade”.
Major exports 2012 / % of total / Major imports 2012 / % of totalTextiles & clothing / 17.2 / Fuel / 14.3
Transport equipment / 10.6 / Chemicals / 12.5
Agro-industry / 9.0 / Machinery / 10.5
Iron & steel / 8.6 / Transport equipment / 8.0
Leading markets 2012 / % of total / Leading suppliers 2012 / % of total
Germany / 8.6 / Russia / 11.3
Iraq / 7.1 / Germany / 9.0
Iran / 6.5 / China / 9.0
UK / 5.7 / US / 6.0
September 16th 2013
Political forces at a glance
Present government: At the general election in June 2011, the Justice and Development Party (AKP), led by the prime minister, RecepTayyipErdogan, won close to 50% of the vote to remain in government for a third consecutive term. Because the main opposition party, the Republican People’s Party (CHP), won a larger share of the vote than in 2007 and more independents were elected, the AKP has a smaller majority in parliament.
Legislative electionsJun 2011 / Jul 2007
% of vote / Seats / % of vote / Seats
Justice and Development Party (AKP) / 49.9 / 327 / 46.7 / 341
Republican People’s Party (CHP)a / 25.9 / 135 / 20.9 / 112
Nationalist Action Party (MHP) / 13.0 / 53 / 14.3 / 70
Peace and Democracy Party (BDP)b / - / 35 / - / 20
Othersc / 11.2 / - / 18.1 / 7
Total / 100.0 / 550 / 100.0 / 550
a Including votes and seats of the Democratic Left Party (DSP) in 2007. b Called the Democratic Society Party (DTP) in the 2007 election. Pro-Kurdish candidates ran as independents to bypass the 10% vote threshold in both elections. c Including votes obtained by the BDP/DTP.
Political structure
Official name
Republic of Turkey
Form of state
Parliamentary republic
Legal system
Based on European models and constitution of 1982
National legislature
Unicameral Meclis (parliament) of 550 members directly elected for a four-year term
Electoral system
Universal direct suffrage over the age of 18. Only parties with more than 10% of the national vote are eligible for seats in parliament. Individuals may run as independents
National elections
Last parliamentary election June 12th 2011; next parliamentary election by June 2015. Next presidential election August 2014
Head of state
The current president, Abdullah Gul, was elected by parliament for a single seven-year term in August 2007; the next presidential election will be by universal direct suffrage; the next president will serve a maximum of two consecutive five-year terms
National government
The present government is formed by the Justice and Development Party (AKP)
Main political parties
Islamist-liberal: Justice and Development Party (AKP); Islamist: Prosperity Party (Saadet, SP); centre-left: Republican People’s Party (CHP) and Democratic Left Party (DSP); nationalist right: Nationalist Action Party (MHP); pro-Kurdish: Peace and Democracy Party (BDP). In the 2011 election the AKP, CHP and MHP exceeded the 10% national vote threshold. Members of the BDP were elected as independents
Council of Ministers
Prime minister: RecepTayyipErdogan
Deputy prime ministers:
BulentArinc
BesirAtalay
Ali Babacan
BekirBozdag
Key ministers
Agriculture, food & animal resources: Mehmet Mehdi Eker
Culture & tourism: Omer Celik
Defence: IsmetYilmaz
Development: CevdetYilmaz
Economy: ZaferCaglayan
Education: NabiAvci
Employment & social security: FarukCelik
EU affairs: EgemenBagis
Family & social policy: FatmaSahin
Finance: Mehmet Simsek
Foreign affairs: AhmetDavutoglu
Forestry & water: VeyselEroglu
Health: Mehmet Muezzinoglu
Interior: MuammerGuler
Justice: SadullahErgin
Science, technology & industry: Nihat Ergun
Sport & youth: SuatKilic
Trade & customs: HayatiYazici
Transport: BinaliYildirim
Work & natural resources: TanerYildiz
Urban planning & development: ErdoganBayraktar
Central Bank governor
ErdemBasci
Turkish politics: No longer a shining example
Turkey’s government disappoints because of allegations of sleaze and its increasingly authoritarian rule
Jan 4th 2014 | ISTANBUL | From the print edition
GOVERNMENTS fall in Turkey either because they are massively corrupt or because generals boot them out (or both). In 2002, fed up with the greed and ineptitude of the country’s secular parties, voters chose RecepTayyipErdogan as prime minister as they propelled his mildly Islamist Justice and Development (AK) Party into government. A decade on, AK, which means “white” or “pure” in Turkish, has proven not to be so exceptional after all and finds itself mired in one of the biggest graft scandals in recent history.
On December 17th the police arrested around 50 people on suspicion of tender rigging, covert gold transfers to Iran and bribery. They included the sons of three cabinet ministers, an AK mayor, and the general manager of Turkey’s second biggest state lender, Halkbank, in whose home police found $4.5m crammed into shoeboxes. The probe drew closer to MrErdogan when prosecutors ordered a second raid that would have netted his son, who is alleged to have enriched himself through shady property deals. MrErdogan responded by reassigning hundreds of police chiefs, sacking a prosecutor involved in the investigation and rewriting laws in ways that would allow the government to stop corruption probes against its own. For a public already on the edge, thanks to MrErdogan’s increasingly authoritarian tendencies, none of this is reassuring.
A cabinet reshuffle that saw the dismissal of ministers whose sons are in jail, and of EgemenBagis, the minister for European affairs who was also caught up in the scandal, has not muted the public outcry. Meanwhile the markets’ confidence (vital for Turkey, which depends on capital inflows) has been shaken. The Turkish lira tumbled by 5% against the dollar and Istanbul’s stockmarket shed 10% of its value.
On December 31st HasanHarmiYildirim, an AK MP, resigned in protest at what he called the insults made by MrErdogan against FethullahGulen, a hard-nosed imam who runs a global empire of schools, media outlets and charities from Pennsylvania. This increased the number of recent departures from AK, which is riven by internecine strife, to seven. Even so, a full-scale split does not seem likely.
MrErdogan’s renewed tirades against “foreign mischief-makers”, led by Israel and America, whom he blamed for anti-government protests in June, seem increasingly desperate. He now claims that the corruption charges were cooked up by these forces and their local collaborators from the powerful Muslim fraternity led by MrGulen. Few doubt that many of the prosecutors and policemen involved in the case are loyal to MrGulen and may be motivated by revenge. Calling them “a parallel state”, MrErdogan has been purging followers of MrGulen from state institutions. He has vowed to phase out thousands of crammers owned by MrGulen’s movement, known as Hizmet. These act as its prime recruiting ground and cash cow. “They have collected sex tapes to blackmail our party members,” claimed a senior AK official. Hizmet members angrily deny this. Yet videos purporting to show people close to MrErdogan engaged in extramarital bedroom romps have been making the rounds.
Ironically, Hizmet and AK were until recently allied in the fight to defang Turkey’s generals. Gulen-linked prosecutors and police are widely believed to have rigged evidence in the Ergenekon case that helped convict hundreds of generals and other senior officers for allegedly plotting a coup. MrErdogan didn’t seem to mind then, but now bitterly complains about the infiltration of the judiciary by Gulenists.
The crisis is not just about a power struggle between AK and the Gulenists. It highlights the chronic weaknesses of Turkey’s wobbly democracy: a shackled media; a politicised judiciary; a flawed, illiberal constitution; and a lack of independent scrutiny of public accounts. Re-elected in 2011, MrErdogan had a real chance to fix these shortcomings. His failure to do so has left his more liberal supporters feeling frustrated and betrayed. His increasingly authoritarian rule has prompted comparisons to Vladimir Putin, Russia’s president. It now seems that MrErdogan’s main goal is to plot his path to the presidency when it comes free in August.
The latest ructions make it less likely that he can fulfil his presidential dreams. Much depends on the outcome of the nationwide municipal polls that will be held in March. The main opposition, the pro-secular Republican People’s Party (CHP), believes it now has a real chance of taking Istanbul, the country’s largest city. And the Gulenists suggest they may back the CHP. MrErdogan’s safest bet, it seems, would be to call snap elections and run for a fourth term. He would need to change AK’s rule of a maximum of three terms to do so. But the way things are going, parliamentary immunity (from prosecution) may prove MrErdogan’s only way out.
Yet those now clamouring for AK’s demise should think long and hard. The CHP remains weak and divided. Nobody knows just what it stand for, least of all its leaders. The antediluvian far-right Nationalist Action Party is even worse. The country’s Kurds would surely want the AK to remain in charge, because, for all his faults, MrErdogan is the first Turkish leader to talk openly to Abdullah Ocalan, the imprisoned Kurdish rebel boss. A ceasefire struck in March is still holding.
When Turks next go to the polls they will probably have to choose the lesser evil. That is still likely to be the AK.
Economic growth
(%)2013 / 2014 / 2015
US GDP / 1.7 / 2.6 / 2.3
OECD GDP / 1.2 / 2.1 / 2.2
World GDP / 2.0 / 2.7 / 2.8
World trade / 2.9 / 5.2 / 5.0
Source: The Economist Intelligence Unit
The Turkish economy
Strong but vulnerable
Turkey remains highly exposed to loss of confidence by foreign investors
Jun 15th 2013 | ANKARA | From the print edition
A KEY selling-point for RecepTayyipErdogan to voters is Turkey’s economic performance. After a volatile 1990s and a huge bust in 2001, his Justice and Development (AK) government has presided over steady high growth and modest inflation. In 2010 and 2011 the economy grew by a China-like 9%, leading to serious fears of overheating.
GDP growth slowed to 2% in 2012. Despite surprisingly strong first-quarter figures this week, it is likely to be only 3-4% this year, not enough to keep unemployment down in a growing population. But defenders of the government (and the central bank) maintain that Turkey has engineered a soft landing.
Yet the country remains heavily dependent on capital inflows, and thus on foreign investors’ confidence. That is why the financial markets’ swoon since the protests began in Taksim Square earlier this month matters. By mid-week the Istanbul stockmarket index was down by 20% from its all-time peak on May 22nd.
Mehmet Simsek, the finance minister, insists the economy is more robust than it was a decade ago. He points to a solid fiscal position (gross public debt is just 36% of GDP); low household and corporate debt; a good record of job creation; strong banks, with average capital at twice the Basel minimum level; and large and rising foreign-currency reserves.
Turkey has structural economic weaknesses, however, including an overregulated labour market, high minimum wages, a big unproductive informal sector, low female participation in the workforce and poor education. MrSimsek says the government is reforming, investing in education (teacher numbers have risen by 350,000 in a decade) and spending a lot on infrastructure. But the protests suggest there is widespread opposition to mega-projects.
The biggest concern about Turkey is external. A slowing economy has trimmed the current-account deficit (see chart). But it will still be 6% of GDP this year. Worse, the deficit is largely financed by short-term capital inflows. As one economist notes, Turkey is like a high “beta” economy: strong growth and good returns, but at the price of excessive volatility. That makes it unsurprising that the Turkish lira has fallen to its lowest level in 18 months (like other emerging-market currencies, see article).
The government touts decisions by two big rating agencies to raise Turkey to investment grade. But domestic political unrest, recession in the euro zone (still Turkey’s biggest export market) and turmoil in Syria and the region could easily dent confidence. That makes it an especially foolish moment for MrErdogan to launch an attack on foreign speculators and what he calls the “interest-rate lobby”, as he did this week. With low domestic savings, his country sorely needs foreigners’ capital—maybe more than ever after the past two weeks.