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The events that shocked Turkey
As from the middle of last spring, Turkey has experienced great grief and tragedy linked to a whole number of the earthquakes. The most devastating earthquakes hit Turkey on August 17 and November 12, 1999. The first earthquake left vast sections of the territory equal to the area occupied by Belgium and Holland in ruins. The first earthquake claimed tens of thousands of lives, ten thousands of houses and enterprises were destroyed. The development and further upturn of economy in the most developed area of Turkey was hard hit by the act of element occurred. Large industrial enterprises are concentrated in the region of Turkey. One of basic tasks set our country in the nearest future is to remove repercussions caused by the calamity.
Last year’s another significant event was lending by foreign states humanitarian relief to Turkey and putting Odjapan, the leader of terrorists, on trial in Turkey on charges of struggling against Turkey. He was accused of killing 35,000 out citizens over the past 30 years. It is now essential to make up for time lost due to terrorism by joining forces. As from 1984 the nation faced the issue of terrorism, which became the greatest challenge in economy, education and many spheres of economy were threatened with a decline in prosperity.
An event of importance to our country at the end of 1999 was its registration as a candidate for membership of the European Union. In the next few years, Turkey will become a member of the European Union and for a short time will make great strides in various fields, in the first place, in economy. Respected Prime Minister of the Turkish Government specified the year-2004 as the target date for full membership in the European Union to start.
Prior year’s center-piece was: the signing of Package of Treaties on the Baku-Tbilisi-Ceyhan Main Oil Pipeline and Interstate Declaration on Principles of How to Deliver the Subsea Gas Pipeline construction Project, which are of great importance to Turkey and the countries of the Caspian region. The ground-breaking event was held at OSCE’s summit meeting on November 17-18 last year. A protocol of agreement between Azerbaijan, Georgia and Turkey provides for taking by the parties some moves to enter into Treaty on the mutually beneficial ground. It includes the shipping of the regional energy resources to world markets through the Dogu-Bati energy corridor, on the basis of close cooperation in moving Azeri natural gas to Turkey and world markets and development of alternative ways of delivery. The states also agreed to take imperative steps to conclude Treaty on a win-win basis and figuring on commercial interests in case if a decision is made to export Azeri gas to Turkey and world markets. In that regard, on January 18 a meeting of competent representatives of the governments running the countries involved in project for exporting Turkmen gas to Turkey. Treaty on moving Turkmen gas to Turkish market was signed.
ABOVE $1.5 BILLION INVESTED IN AZERBAIJAN ECONOMY
As from the first day of gaining by Azerbaijan its independency, Turkey has been placing great stress upon development of bilateral relations between the two countries in both political, economic and other fields. Strenuous efforts are made to further the quickest integration of Azerbaijan with global community. Turkey shared its experience with Azerbaijan that has chosen an economic model oriented to free market.
To provide the development of economic and commercial relations, a lot of joint treaties were signed. They are regulated by Treaty on trade and economic cooperation of November 1, 1992. Under the document, the parties agreed to grant most-favored-nation status to each other.
Treaty on mutual stimulation and investment protection and Treaty on avoidance of double taxation, which were entered into on February 9, 1994, has provided a legal framework for the further development of commercial and economic relations and ever-growing multilateral cooperation between the two countries.
At the moment, about 600 Turkish companies operate in Azerbaijan in such sectors as oil and gas industries, telecommunications, banking, education, construction, transport, heavy and light industries. More than 40,000 Azeri nationals are employed by enterprises that have already put up about USD$1.5 billion in direct investment for Azerbaijan’s economy. Companies with Turkish capital laid out large sums in direct and indirect investment on Azerbaijan’s market-oriented economy. So they make a momentous contribution to its reinforcement.
However, the problems, which appeared in the second half of 1998 and continued last year in Azerbaijan economy reflected unfavorably upon Turkish business in Azerbaijan and it resulted in some of companies having folded.
Specific emphasis should be laid on an important role of Turkish banks in establishing commercial relations and building up a firm banking system. Azeri-Turk Bank was first among them of the kind. It was founded with involvement of Ziraat Bank. Azeri-Turk Bank was then followed by Baybank, Royal ank, Kocbank, Egebank, Cibank and T.C.Merkez Bankasi, Yapi Ve Kredi Bankasi, Turk Iktisat Bankasi having correspondent accounts in Azeri banks.
However, the present level of the relations is still below a limit and even can be considered to be not adequate. It is essential to make every effort for still more businessmen from Turkey to arrive in Azerbaijan, who would figuring on building newer and expanding their businesses in your country without thinking of coming back to homeland. It is also necessary to take actions to minimize problems linked to customs duties, taxes, granting a visa, all possible bureaucratic formalities. Due to flaws in the republic’s economic legislature, the challenges are a main source of difficulties sometimes resulting in unequal competition on market. A position on that point and responsibility of Azerbaijan’s authorities for the matter is important.
It currently is vital to quickly build the framework of market-oriented economy in real sector and trade, to meticulously pursue investment policy in order to make business in Azerbaijan more attractive. Such an approach will allow to significantly improve the effectiveness of new, state-of-the-art plants and enterprises rigged out with the latest equipment and sophisticated technologies, built by Turkish businessmen in Azerbaijan. And Turkey is ready to lend any aid to Azerbaijan in this field.
OUTLOOKS FOR THE YEAR-2000
2000 will be the year of the accelerated development of political/economic and cultural links with Azerbaijan. Out political relations have already reached the highest level. The two countries have the same views in many regions of human activities and back each other at international meetings.
In economy the two countries show win-win cooperation and create new, manufacture-oriented links and an increase in investments. In addition, this year is highlighted by the commencement of capital concentration process in Turkey and investment flow to Turkey.
TURKEY’S NEED FOR MATURAL GAS WILL RISE FOUR TIMES TOWARD 2020
At present Turkey with its dynamically ever-increasing population exceeding 60 million goes through a process of intensive industrialization. If, as it is expected, yearly energy needs in industrialized countries rise 1.4 percent up to 2010, the figure for Turkey is 8 percent. It leads to understanding the fact that Turkey’s energy needs will treble until 2010 and by 2020 they will surge four times.
In our country the need for gas rose at a great rate from 0.5 billion cubic meters in 1987 to predictable 19 bln cu m in 2000, 55 bln cu m in 2010, in 2020 the figure will run up to the value of 82 bln cu m.
A percentage of natural gas in power generation industry is 21 percent now, and in 2010 the need for gas is expected to surge up to 37 percent. The availability of natural gas in large amounts could provide fuel for power generation and create favorable conditions for the development of natural gas-generated electric power. Now only a fourth of Turkey’s population consumes natural gas. One cannot fail to take the fact into consideration. And today it is safe to say that Turkish market is the most attractive outlet among other energy-intensive markets.
At the moment, Turkey imports natural gas from Russia, Algeria and Egypt.
BAKU-CEYHAN PROJECT WILL STRENGTHEN TURKEY’S POSITIONS
As a matter of fact, the implementation of the Baku-Tbilisi-Ceyhan oil pipeline construction project is of great importance to Caspian region and above all Azerbaijan.
The implementation of the main export oil pipeline construction project is of great value to strengthening independency and will create auspicious conditions for putting great efforts into growing standard of living and providing an economic upturn. It is a prestige project for Turkey. Being at the crossroad of the routes through which energy resources are transported, Turkey will boost its strategic positions and defend its Straits from acts of God and accidents after the Baku-Tbilisi-Ceyhan oil pipeline construction is complete.
CASPIAN OIL SHOULD BE SEEN AS NOT ONLY AN ALTERNATIVE OF IRAQI OIL
When two oil pipelines are compared, it can be noted that the Kekuk-Yumurtalik pipeline throughput is about more than double in the Baku-Tbilisi-Ceyhan pipeline capacity. In addition, the Kerkuk-Yumurtalik pipeline extension is not so long as that of the Baku-Tbilisi-Ceyhan pipeline under design. The transport of Caspian oil out to the Mediterranean through the strategic pipeline much will increase safety of Turkish Straits. Every tanker shipping oil from Novorossiysk and Supsa to markets of Bati is a real and inevitable threat to Istanbul, which is home to more than 10 million people.
In addition, the Kerkuk-Yumurtalik line is the oil pipeline linking the two countries to each other while the Baku-Tbilisi-Ceyhan pipeline traverses various countries and so will link the countries together in economic cooperation.
Turkey is at the border of two continents, in the place of the intersection of a variety of regions and surrounded by 75percent of the world’s explored oil reserves. Thus, it is becoming an unique bridge of transmitting and carrying energy resources from producer to customer by using its specific and profitable geo-strategic position. From this standpoint, Caspian oil should be seen not only as an alternative of Iraqi oil but an addition to all the above factors.