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© Oxford University Press 2014 Series 33, Issue 1, September 2014 1
Turkey: A bridge between Europe and AsiaBy Paul Wraight
SynopsisIn a rapidly globalising world, Turkey’s strategic position, fast-growing economy and young population are combining to make it an important regional power.
Turkey’s economic growth over the last three decades has been underpinned by government action to promote a stable economic environment and improved regional links.
Turkey has excellent connections to growing markets (the Middle East, Central Asia and North Africa). ‘Switching on’ to a globalising world economy is an important factor in Turkey’s economic success and increasing regional infl uence.
Turkey’s population structure is well suited to attracting foreign direct investment from foreign transnational corporations and its growing middle class may help encourage political stability. There are also high savings rates in Turkey, creating a pool of domestic savings to fund investment that will continue to increase productivity and incomes.
However, development also depends on loans which will have to be repaid in US dollars; this might be a problem if there is a decline in the value of the Turkish lira.
Key termscultural infl uence, fast-growing economy, foreign direct investment, globalising, newly industrialised country, regional power, strategic position, transit route
Learning objectivesAfter working through this unit you will:
• have a better appreciation of different spatial, cultural and political contexts within which a country is placed
• be able to identify important links and interrelationships between places and environments at national and international scales
• have a better contextual understanding of Turkey’s contemporary global signifi cance
• understand the changing nature of industry and investment, and the characteristics of international trade.
Exam Board Link to specifi cation
AQA Unit 3 GEOG3 Contemporary Geographical Issues, Human Options, Option 5: Development and Globalisation, Growth in the 21st Century http://fi lestore.aqa.org.uk/subjects/specifi cations/alevel/AQA-2030-W-SP-14.PDF (see page 12)
Edexcel Unit 1 Global Challenges Topic 2: Going Global; Unit 1, Globalisation, Unit 2 Global groupings, Unit 3 Global networks http://www.edexcel.com/migrationdocuments/GCE%20New%20GCE/UA035234_GCE_Lin_Geog_Issue_4.pdf (see pages 26–28)
OCR A2 Unit F763 Global Issues, Globalisation, Option B2; Development and Inequalities, Option B3 http://www.ocr.org.uk/Images/69036-specifi cation.pdf (see pages 41–44)
WJEC Unit G3 Section A Contemporary Themes and Research in Geography http://www.wjec.co.uk/uploads/publications/6312.pdf (see pages 36–39)
CCEA Unit AS 2 Human Geography, Section B, 3(a) The nature and measurement of development; 3(b) Issues of development http://www.rewardinglearning.org.uk/qualifi cations/results.aspx?g=1&t=1&c=R&s=0&v=0&f=0&q=182&d=d (see pages 15–16)
International
Baccalaureate
Geography Diploma Programme, Paper 3 – HL Extension – Global Interactions http://www.ibo.org/diploma/curriculum/group3/geography.cfm There are seven compulsory topics in the HL extension
719GEOFILE
© Oxford University Press 2014 Series 33, Issue 1, September 2014 2
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Turkey: A bridge between Europe and AsiaTurkey is positioned at the
crossroads of two continents:
Europe and Asia. This Geofi le will
assess how in a rapidly globalising
world the country’s strategic
position, the diplomatic initiatives
of the government, its fast growing
economy and young population are
combining to make Turkey an
important regional power
(Figure 1).
Geography of TurkeyFigure 2 shows Turkey located at
the junction of fi ve regions.
Turkey’s future is intricately linked
to increasing trade and cooperation
with these neighbours. Turkey
began expanding its infl uence to
the east following the collapse of
the old Soviet empire in the 1990s.
Ten years ago 60% of Turkey’s
exports went to the EU. Following
the eurozone crisis and the debt
crisis in the west, Turkey had to
actively build new markets in
Africa, the Middle East, the Gulf
region and India. Today, only 30%
of Turkish exports go to the EU. The
country’s top export markets are
now Germany, Russia and Iran
(Figure 3). Erdem Ba çı, Turkey’s
central bank governor, has
predicted that Iraq will eventually
become Turkey’s largest export
market.
European Union
To the north west lies the European
Union. The EU is an economic and
political union of 28 member states
with a population of over 500m.
Most countries in the EU are very
wealthy with advanced economies.
GDP per capita for the EU was
$34,023 in 2013. The EU provides
Turkey with a market for
manufactured goods. It is an
historic destination for Turkish
migration, in particular Germany.
The EU is an important cultural
infl uence on Turkey.
Turkey has been an associate
member since 1963, and applied for
full membership of the EU in 1987.
Membership talks began formally in
2005, but enlargement of the EU to
include Turkey is resisted by some
members of the EU. However, a
customs union was established in
1995. This means many goods can
travel between the two entities
without any customs restrictions
(there are certain exceptions such
as agriculture, services and public
procurement). Moreover, in 1996 a
free trade area was established
between Turkey and the European
Union for coal and steel.
Russia
To the north lies Russia, with a
population of 143m. Russia is very
rich in resources, especially oil and
gas, and is re-emerging as a world
power, following the collapse of the
Soviet Union in the 1990s. In 1998,
40% of Russians lived below the
poverty line. Today that fi gure is
less than 13%. The middle class is
expanding steadily. The 2008 global
Figure 1 Turkey fact fi le
Capital City Ankara
Size 783,562 km2 (37th largest country in the world)
Population 77m in 2013 (18th largest in the world)
GDP $1.4 trillion in 2012 (15th largest in the world)
GDP per capita $18,348 (54th highest in the world)
Major language Turkish (offi cial), Kurdish, other minority languages (7–12% of total population)
Major religion Muslim 99.8% (mostly Sunni), other 0.2% (mostly Christians and Jews)
Life expectancy 71 years (male), 75 years (female)
Main exports Clothing, textiles, foodstuffs, metal manufactures, transport equipment
Figure 2 Turkey and its immediate neighbours
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Turkey: A bridge between Europe and Asia ● 719GEOFILE
recession was short-lived for Russia,
compared to the EU. Its economy
has expanded every year since and
Russia is now the world’s eighth-
largest economy. The Russian
government has said $1 trillion will
be invested in infrastructure by
2020. This is an important market
for Turkish companies.
Central Asia
To the east lies Central Asia. There
is considerable instability in some
parts of Central Asia, such as
Afghanistan. However, Turkish
companies have been providing
construction and management
services to NATO there, and
continues to benefi t from
reconstruction work in the region.
Three of the world’s 20 fastest-
growing countries in 2012 were in
this region (Afghanistan,
Uzbekistan and Turkmenistan).
Moreover, Turkey is an important
transit route for Russian, Iranian
and Central Asian oil and gas.
There are currently four major
pipelines passing through the
country, of which the Baku–Tbilisi–
Ceyhan (BTC) pipeline is a good
example (Figure 4). Nabucco, a fi fth
major pipeline from Turkey to
Austria, is currently being planned.
The Middle East, the Gulf States
and India
The Middle East, the Gulf States and
India are also important neighbours
for Turkey. Turkey is heavily
involved in diplomatic initiatives in
the region. For example, the civil
war in Syria has resulted in 400,000
refugees being housed in camps
along its shared border. Turkish
businesses are deepening their ties
with the Gulf States. Furthermore,
in 2013 Turkey and India signed 11
new cooperation agreements in
education, broadcasting and
scientifi c research.
Africa
Economic and political ties between
Turkey and Africa have been
deepening ever since the Turkish
government declared 2005 ‘the year
of Africa’. Turkey now has embassies
in 30 African countries. Turkey’s
trade volume with African countries
has increased considerably, jumping
from $4bn in 2000 to $17bn as of
2011. Moreover, Turkish troops are
active in six ongoing peace-keeping
operations in Africa. Despite the
upheavals of the Arab Spring in
northern Africa, nine of the world’s
20 fastest growing economies in 2012
were African: Libya, Sierra Leone,
Niger, Cote d’Ivoire, Burkina Faso,
Chad, Ethiopia, Liberia and Rwanda.
Turkish business is benefi ting from
this developing partnership.
The role of government Turkey’s economic growth over the
last three decades has been
underpinned by government action
to promote a stable economic
environment and improved regional
links. Prior to this, the republic had
a volatile history. As shown in
Figure 5, the main thrust of the
reforms involved government
stepping back from funding and
running companies, exposing
companies to competition. As a
result productivity and customer
Figure 3 The destination of Turkey’s exports and origin of its imports (2011)
Figure 4 Baku–Tbilisi–Ceyhan (BTC) pipeline
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Turkey: A bridge between Europe and Asia ● 719GEOFILE
service improved. The government’s
attempts to join the EU are ongoing,
but a valuable trading relationship
has been developed.
Brief history
By the beginning of the 20th
century, the Ottoman Empire had
been in decline for centuries. It
fought on the side of Germany and
Austria-Hungary in the First World
War and collapsed following its
eventual defeat. The remnants
of the empire were briefl y
administered by the victorious Allied
Powers but the Turkish National
Front won the Turkish War of
Independence against the Allies in
1922. As a result the Republic of
Turkey was established in 1923.
Mustafa Kemal Atatürk, the
Republic’s fi rst president, launched a
series of political, legal, cultural,
social and economic policy changes
that were designed to create a
secular, modern nation-state. Central
to these reforms was the belief that
Turkish society would have to
westernise itself both politically and
culturally in order to develop.
Economic reforms
During the fi rst 60 years the
government sought to plan the
economy. There were limitations on
the actions of private companies,
foreign trade, foreign currency
exchange, and foreign direct
investment. However, in 1983
Prime Minister Turgut Özal initiated
a series of reforms designed to shift
the economy from this insulated
system to a more private-sector,
market-based model.
The reforms, combined with
unprecedented amounts of foreign
loans, spurred rapid economic
growth of 4% per annum between
1981 and 2003. However, an overly
complex taxation system, combined
with large and growing public
sector defi cits and widespread
corruption, resulted in high
infl ation, a weak banking sector
and an economic crisis in 2001.
Further reforms were carried out by
fi nance minister Kemal Dervis,
including the relaunch of the
Turkish currency, the ‘New Turkish
Lira’, in 2005. As a result, infl ation
fell to single-digit numbers, investor
confi dence and foreign investment
have soared, and unemployment
has fallen. The currency was
renamed, ‘Turkish Lira’ in 2009.
During this period, Turkey
gradually opened up its markets
through economic reforms by
reducing government controls on
foreign trade and investment and
the privatisation of publicly owned
industries.
Politics
The Justice and Development Party
(AKP) has been in government
since 2002. Its leader, Recep Tayyip
Erdo an, is Prime Minister, while
fellow former party member and
PM Abdullah Gül is President.
Founded in 2001 by members of a
number of existing conservative
parties, the party won a landslide
victory in the 2002 election,
winning over two-thirds of
parliamentary seats. In 2011, the
AKP further increased its share of
the popular vote to 49.8% and
secured 327 parliamentary seats to
form a third consecutive majority
government. The AKP portrays
itself as a pro-Western and pro-
American party that advocates a
liberal market economy, including
Turkish membership of the
European Union. This government
has long been seen as moderate and
welcoming for foreign direct
investment.
The Turkish economy At $1.4 trillion, Turkey’s GDP is the
15th largest in the world. It grew at
an average rate of 5.2% a year
between 2002 and 2011. The OECD
has forecast that the economy will
continue to grow on average by
6.2% per year until 2017. Turkey is a
newly industrialised country (NIC).
One half of economic activity in
Turkey is classed as service industry,
one quarter secondary industry and
one quarter agriculture and mining.
The main industries in the country
include textiles, food processing,
vehicles, electronics, tourism,
mining (coal, chromate, copper,
boron), steel, petroleum,
construction, timber and paper.
Tourism in Turkey has experienced
rapid growth in the last 20 years,
and constitutes an important part of
the economy. In 2012, 35.5 m
foreign visitors arrived in Turkey,
which ranked as the 6th most
popular tourism destination in the
world. These visitors contributed
$25.6bn to Turkey’s economy.
Alongside tourism, there are two
main drivers of economic growth in
Turkey. First, Turkey has a number
of home-grown industries and
companies that are developing their
own technology and expanding
globally. Secondly, Turkey is
attracting foreign direct investment
from TNCs that are driving
improved productivity though
technology transfer.
2013 Taxsim Square protests
2005 Relaunch of Turkish currency
2002–4 Dervis reforms to control infl ation
2001 Turkish economic crisis
1995 EU-Turkey Customs Union established
1983 Özal Reforms to create market economy
1923 Republic of Turkey established
Figure 5 Timeline of economic reforms
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Turkey: A bridge between Europe and Asia ● 719GEOFILE
Domestic TNCs
Key sectors for Turkish TNCs
include consumer electronics, the
automotive industry, textiles and
ship-building. BEKO and Vestel are
Turkish TNCs operating in the
consumer electronics sector. Turkey
now produces 50% of the TVs, 18%
of the white goods and 15% of the
digital devices sold in Europe.
Turkey had clothing exports worth
$13.98 bn in 2006. In 2008 Turkey
produced 1,147,110 motor vehicles,
ranking as the sixth largest
producer in Europe and the 15th
largest in the world. Turkish
companies like TEMSA, Otokar and
BMC are among the world’s largest
van, bus and truck manufacturers.
Turkey is also one of the world’s
leading shipbuilding nations. In
2007 Turkish shipyards ranked
fourth in the world (behind China,
South Korea and Japan) in terms
of the number of ordered ships,
and also fourth in the world
(behind Italy, USA and Canada)
in terms of the number of ordered
mega-yachts.
Foreign direct investment
Turkey entered into a customs
union with the European Union in
1995. This means goods can travel
between the two without customs
restrictions. This is a key attraction
for TNCs that locate in Turkey. They
can benefi t from lower labour costs
(relative to EU countries) and still
sell into the EU market of 500m
wealthy consumers. Turkey’s
excellent connections to growing
markets (Iraq, Central Asia and
North Africa) are also very
important in attracting FDI.
Global network theory
Geographers use networks to study
the connections that exist between
different places. A place that is
connected is called a node.
Connections between nodes are
called fl ows. Nodes which have
many connections to other nodes
are called hubs. It has been proven
that the greater the quantity and
quality of connections the greater
the potential economic
development. Turkey has been
actively improving the quality and
quantity of its domestic and
international connections. This
process of ‘switching on’ to a
globalising world economy is an
important factor in explaining
Turkey’s economic success and
increasing regional infl uence.
PopulationA fi nal factor that helps explain
Turkey’s recent success is its young
population and skilled, growing
middle class. According to
government estimates in 2011, over
two thirds of Turks are aged 15–64.
One quarter of the population is
aged 14 or under. Only 7% of Turks
are aged over 65. 71% of Turks live
in urban areas. This population
structure is ideal for attracting FDI
from foreign TNCs and a growing
Case Study – BEKOBeko was established as a food canning business in 1950, but moved into white goods in the early 1980s. At this time Turkey began to open up its economy and BEKO also looked abroad to new markets. The company embraced the goal of ‘Being a World Brand’. Today, Beko branded products are sold every two seconds in over 100 countries. It has 14 production plants in fi ve countries and employs 22,000 staff. BEKO has its own in-house research facility. It has developed the machinery and technology for highly productive factories. It also owns the technology for its white goods, and doesn’t have to pay high fees to use the technology of others.
Case Study: Turkish Airlines
Turkish airlines is the world’s fastest-growing carrier. It operates scheduled services to 41 domestic and 202 international airports in Europe, Asia, Africa, and the Americas. With 243 destinations, the airline is the fourth-largest carrier in the world by number of destinations. Its growth underpins the connections that Turkey is building in its neighbouring regions. This eases the way for Turkish trade. As a result, the Turkish government is building a new airport in Istanbul. It will be the largest in the world, with a capacity of 150m passengers annually.
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Turkey: A bridge between Europe and Asia ● 719GEOFILE
middle class may help encourage
political stability. Economic growth
in Turkey’s fi ve neighbouring
regions means more opportunities
for young Turks, who are thinking
globally. The history of Turkey is of
an entrepreneur culture trading
along the old Silk Road. Turkey is
an oriental country, which is
comfortable with western culture.
This has been called ‘Islamic
Calvinism’: moderate Islamic faith
combined with a strong work ethic.
There were only two shopping
centres in Turkey in 1994, but now
there are 300. This shows how
consumer culture is driving
domestic growth. However there
are also high savings rates in
Turkey, which is creating a pool of
domestic savings to fund
investment that will continue to
increase productivity and incomes.
Concerns for the futureIn May 2013 protests contesting the
development of Istanbul’s Taksim
Gezi Park rocked Turkey. The protests
were sparked by outrage at what
protestors perceived as a brutal
eviction of a sit-in at the park.
Subsequently, supporting protests
and strikes took place across Turkey
raising a wide range of concerns, at
the core of which were issues of
freedom of the press, of expression,
assembly, and the government’s
encroachment on Turkey’s
secularism. Commentators have
begun to ask questions about political
stability in Turkey, in particular about
feuding within the ruling AKP.
Moreover, Turkey has a high
current account defi cit, funded by
borrowing US dollars. US dollars
are currently cheap due to
quantitative easing in the USA
(printing money to support
economic growth). However, these
loans will have to be repaid in US
dollars, which might be a problem
if there is a decline in the value of
the Turkish Lira.
SummaryTurkey is located at the crossroads
of fi ve regions: Europe, Russia,
Central Asia, Gulf/Subcontinent
and North Africa. Turkey has begun
to benefi t from strong trade and
diplomatic links with all fi ve
regions. It has been able to do so
because of government reforms to
modernise its economy and
improve its international
connections. Strong domestic
investment from emerging Turkish
TNCs has driven economic growth.
An openness to foreign direct
investment has helped to accelerate
this growth. Turkey’s young
population and growing middle
class provide a sound demographic
base for future prosperity. However,
there are concerns for the future.
Recent protests against the ruling
AKP suggest that political stability
may not last. The protests also hint
at underlying problems of
corruption and authoritarian
government. Moreover, all
emerging economies are vulnerable
to exchange rate crises as
quantitative easing in the US is
unwound.
Further readingBBC Country Profi le for Turkey
http://www.bbc.co.uk/news/world
-europe-17988453
‘Mint condition: countries tipped as
the next economic powerhouses’
The Guardian http://www.
theguardian.com/business/2014/
jan/09/mint-condition-countries-
tipped-economic-powerhouses
Focus questions
1 Research the geography of a Turkish TNC from its website. What does it sell? Where does it produce its goods? In which markets does it operate?
2 Explain how trade, investment and government reforms have helped Turkey narrow the development gap with its EU neighbours.
3 There are a range of theories that can be used to explain unequal levels of development such as modernisation (Rostow), dependency (Frank) and core/periphery (Myrdal). Which theory best explains Turkey’s recent economic growth and why?
Checkpoint
While you’re reading, consider the following questions:
Summarise Turkey’s geographical position in relation to the European Union and regions elsewhere:
Is its location benefi cial, or otherwise?
What policies has Turkey’s government adopted in order to benefi t from its location?
The Republic of Turkey was established in 1923. How has its economy developed since then?
What do you understand by ‘global network theory’?
What factors other than location are important to Turkey’s future?