News / Europe

Turkey Shows Robust Growth, But Warning Signs Are Ahead

Istanbul store front (file photo)
Istanbul store front (file photo)
Dorian Jones

While most of Europe struggles to secure economic growth, the Turkish economy has been booming. The country's economy has recovered rapidly from the ongoing economic crisis, posting 10.3 percent growth in the second quarter, tying China for the fastest growth in the G-20. But, analysts warn, dark clouds could be on the horizon.

At one of the many factories of Aydinlar Construction, business is booming. The company not only builds large construction projects, it also produces construction materials and is a supplier of such things as turbines and pumps.

One of the executives Omer Aydinlar says its success comes from Turkey's deepening ties with its Middle Eastern neighbors.

"[The] Middle East is very important for us. There is a big change actually, more and Middle Easterners especially from the UAE, are coming to Turkey. And with the changing laws and environment in Turkey there is a lot of investment coming to Turkey and there is a lot of partnerships being established with the Middle Easterners. And of course once they come to Turkey and establish those partnerships and [do] business with Turkey, they pull those Turkish investors and businessmen back to their country, back to the region as well."

Analysts say the Turkish government's fostering ties with its Middle Eastern neighbors is a part of wider initiative to diversify Turkey's dependence on the European markets. But it’s not only the Mideast that Turkey has its eyes on.

A special trade promotion video has been produced by the Turkish business confederation Musiad, aimed at African markets. Omer Bollat, former head of Musiad, says Turkey has managed to successfully weather the world economic turmoil partially by diversifying its target markets in business.

"Turkey has also been opening up to Eurasia markets, the Middle Eastern Gulf countries and African countries --  particularly North African countries."  

That policy is paying dividends resulting in record exports.

The robust nature of Turkey's recovery also lies in the strength of its financial sector, says chief economist Emre Yigit of the Turkish trading house Global Securities.  

"We learned our lessons from the crisis in 2001 to 2002, when we underwent our own little banking collapse, which cost us something like 30 to 35 percent of [our] GDP, by the time we cleaned up all the mess."

The country's banking sector after the introduction of IMF policies following its banking crisis, is among the best regulated and controlled banks in the world. The levels of private debt too are among the lowest in the G20 and the government this year has cut its budget deficit.

Yigit says now , things are about as good as they can get, but warns of storm clouds on the horizon.

"The fact that we are outgrowing our European trading partners by a factor of between five to 10 times this year means our current account has plunged to a deficit and is likely to widen further next year -- at which point we will be running the third or fourth current deficit in the world. I am not sure that is sustainable even in the medium term."

Analysts agree that while its recovery has been impressive, Turkey's dependence on imports and domestic demand is magnifying a potentially fatal flaw: a blossoming deficit financed by speculative investments. That could mean the end of the Turkish economic party followed by a severe hangover.

NEW: Follow our Middle East stories on Twitter
and discuss them on our Facebook page.

You May Like

Analyst: Joint-Arab Military Force Poses Perilous Challenge

Although international forces are desperately needed to counter the threat of the Islamic State group, analysts say conflicting alliances could escalate fighting More

Asia’s Middle Class Changes Demand for Wheat Grain Exporters

Changes in tastes and diets are boon for wheat exporters such as Australia and the United States More

S. African Comedian Taking Over Popular TV Show

Mixed-race comedian Trevor Noah, who is loved for his edgy jibes about race and language, is taking the helm from Jon Stewart at The Daily Show in US More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Film Tells Story of Musicians in Mali Threatened by Jihadistsi
X
Greg Flakus
March 30, 2015 6:48 PM
At this year's annual South by Southwest film and music festival in Austin, Texas, some musicians from Mali were on hand to promote a film about how their lives were upturned by jihadists who destroyed ancient treasures in the city of Timbuktu and prohibited anyone from playing music under threat of death. As VOA’s Greg Flakus reports from Austin, some are afraid to return to their hometowns even though the jihadists are no longer in control there.
Video

Video Film Tells Story of Musicians in Mali Threatened by Jihadists

At this year's annual South by Southwest film and music festival in Austin, Texas, some musicians from Mali were on hand to promote a film about how their lives were upturned by jihadists who destroyed ancient treasures in the city of Timbuktu and prohibited anyone from playing music under threat of death. As VOA’s Greg Flakus reports from Austin, some are afraid to return to their hometowns even though the jihadists are no longer in control there.
Video

Video With Coalition Airstrikes, Iraq Entering 'Last Page' of IS Battle

American warplanes joined Iraq's battle against the so-called 'Islamic State' in northern Iraq late Wednesday, as Iraqi ground troops launched a massive assault on Tikrit. Analysts say the offensive could take the coalition a step further towards Mosul, the largest city held by Islamic State forces. Others say it could also deepen already-dangerous sectarian tensions in the region. VOA's Heather Murdock has more from Cairo.
Video

Video Philippines Wants Tourists Spending Money at New Casinos

Tourism is a multi-billion dollar industry in the Philippines. Close to five million foreign visitors traveled there last year, perhaps lured by the country’s tropical beaches. But Jason Strother reports from Manila that the country hopes to entice more travelers to stay indoors and spend money inside new casinos.
Video

Video Civilian Casualties Push Men to Join Rebels in Ukraine

The continued fighting in eastern Ukraine and the shelling of civilian neighborhoods seem to be pushing more men to join the separatist fighters. Many of the new recruits are residents of Ukraine made bitter by new grievances, as well as old. VOA's Patrick Wells reports.
Video

Video Islamic State Prisoners Talk of Curiosity, God, Regret

Islamic State fighter, a prisoner of Kurdish YPG forces, asked his family asking for forgiveness: "I destroyed myself and I destroyed them along with me." The Syrian youth was one of two detainees who spoke to VOA’s Kurdish Service about the path they chose; their names have been changed and identifying details obscured. VOA's Zana Omer reports.
Video

Video Germanwings Findings Raise Issue of Psychological Testing for Pilots

More is being discovered about the co-pilot in the crash of Germanwings Flight 9525 in the French Alps. Investigators say he was hiding a medical condition, raising questions about the mental qualifications of pilots. VOA's Carolyn Presutti reports.
Video

Video Hi-tech Motorbike Helmet's Goal: Improve Road Safety

In cities with heavily congested traffic, people can get around much faster on a motorcycle than in a car. But a rider who is not sure of his route may have to stop to look at the map or consult a GPS. A Russian start-up company is working to make navigation easier for motorcyclists. Designers at Moscow-based LiveMap are developing a smart helmet with a built-in navigation system, head-mounted display and voice recognition. Zlatica Hoke has more.
Video

Video DOJ: Illinois National Guard Soldier Tried to Join ISIS

U.S. federal law enforcement agents arrested two suburban Chicago men accused of trying to join ISIS overseas, while also plotting attacks in the United States. As VOA’s Kane Farabaugh reports from the Midwest state of Illinois, one of those arrested is a soldier of the Illinois National Guard.
Video

Video New Wheelchair Is Easier to Use, Increases Mobility

Traditional push-rim wheelchairs create a lot of stress for arm, shoulder and neck muscles and joints. A redesigned chair, based on readily available bicycle technology, radically increases mobility while reducing the physical effort. VOA’s George Putic reports.
Video

Video Liberia's Almost Last Ebola Patient Grateful but Still Grieving

Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Cambodian Land Grabs Threaten Traditional Communities

Indigenous communities in Cambodia's Ratanakiri province say the government’s economic land concession policy is taking away their land and traditional way of life, making many fear that their identity will soon be lost. Local authorities, though, have denied this is the case. VOA's Say Mony went to investigate and filed this report, narrated by Colin Lovett.
Video

Video Space Program Status Disappoints 'Last Man on the Moon'

One of the films that drew big crowds last week at the annual South by Southwest festival in Austin, Texas, tells the story of the last human being to stand on the moon, U.S. astronaut Eugene Cernan. It has been 42 years since Cernan returned from the moon and he laments that no one else has gone there since. VOA’s Greg Flakus reports.

VOA Blogs

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More