By Gordon Platt
With a motivation for continuing reforms and a strong banking system, Turkey is well positioned to take advantage of the global economic recovery. Its strategic location and the security it can provide Europe as an energy transit country have thrust it onto the world stage. Beyond the attention it is receiving as host of the annual meetings of the International Monetary Fund and the World Bank, Turkey was one of the first foreign countries visited by US president Barack Obama during the opening months of his presidency. Not only is Turkey an example of a modern, moderate Islamic country, but its close relations with its neighbors give it credibility as it punches above its weight to participate in efforts to create peace in the region.
While Turkey’s likely accession to the European Union encourages it to reform its institutions and systems, the country is creating a globally competitive economy for a more basic reason: to raise the living standards of its people. The World Bank classifies Turkey as an upper-middle-income country, as well as an emerging market economy. Investors recognize its growth potential and have made it a leading recipient of direct investment in recent years.
In July 2009 Turkey and four other countries—Romania, Bulgaria, Hungary and Austria—signed an agreement to build the Nabucco natural gas pipeline, stretching 2,000 miles from the Caspian Sea to Austria. Russian prime minister Vladimir Putin visited Ankara in August and signed a deal on Russia’s South Stream gas pipeline. In return, Russia will help Turkey build its first nuclear power plants.
From home appliances to automobiles and apparel, Turkey has a diversified industrial base. With a fast-growing population of more than 72 million people with an average age of 28.5 and a developed transportation and communications infrastructure, Turkey is an appealing country for foreign investors. More than 22,500 international companies are operating in the country, and 55% of them are from EU countries.
With its strong links to the EU and an open economy, Turkey has felt the effects of the global recession. Signs of recovery are already apparent in some sectors, however, and the economy as a whole is expected to expand in 2010. Turkey has cut its red tape and put new incentives in place for investors.