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

    Multimedia Obama Calls on Americans to Help the Families of Its War Dead

    In last Memorial Day of his presidency, Obama lays wreath at the Tomb of the Unknown Soldier at Arlington National Cemetery

    The Strife of the Party: Will Trump Permanently Alter Republicans?

    While billionaire mogul's no-holds-barred style, high-energy delivery are what rocketed him to nomination, they also have created rift between party elites and his supporters

    China's Education Reforms Spark Protest

    Beijing is putting a quota system in place to increase the number of students from poor regions attending universities

    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.
    Chinese-Americans Heart Trump, Bucking National Trendi
    X
    May 27, 2016 5:57 AM
    A new study conducted by three Asian-American organizations shows there are three times as many Democrats as there are Republicans among Asian-American voters, and they favor Hillary Clinton over Donald Trump. But one group, called Chinese-Americans For Trump, is going against the tide and strongly supports the business tycoon. VOA’s Elizabeth Lee caught up with them at a Trump rally and reports from Anaheim, California.
    Video

    Video Chinese-Americans Heart Trump, Bucking National Trend

    A new study conducted by three Asian-American organizations shows there are three times as many Democrats as there are Republicans among Asian-American voters, and they favor Hillary Clinton over Donald Trump. But one group, called Chinese-Americans For Trump, is going against the tide and strongly supports the business tycoon. VOA’s Elizabeth Lee caught up with them at a Trump rally and reports from Anaheim, California.
    Video

    Video Reactions to Trump's Success Polarized Abroad

    What seemed impossible less than a year ago is now almost a certainty. New York real estate mogul Donald Trump has won the number of delegates needed to secure the Republican presidential nomination. The prospect has sparked as much controversy abroad as it has in the United States. Zlatica Hoke has more.
    Video

    Video Drawings by Children in Hiroshima Show Hope and Peace

    On Friday, President Barack Obama will visit Hiroshima, Japan, the first American president to do so while in office. In August 1945, the United States dropped an atomic bomb on the city to force Japan's surrender in World War II. Although their city lay in ruins, some Hiroshima schoolchildren drew pictures of hope and peace. The former students and their drawings are now part of a documentary called “Pictures from a Hiroshima Schoolyard.” VOA's Deborah Block has the story.
    Video

    Video Vietnamese Rapper Performs for Obama

    A prominent young Vietnamese artist told President Obama said she faced roadblocks as a woman rapper, and asked the president about government support for the arts. He asked her to rap, and he even offered to provide a base beat for her. Watch what happened.
    Video

    Video Roots Run Deep for Tunisia's Dwindling Jewish Community

    This week, hundreds of Jewish pilgrims are defying terrorist threats to celebrate an ancient religious festival on the Tunisian island of Djerba. The festivities cast a spotlight on North Africa's once-vibrant Jewish population that has all but died out in recent decades. Despite rising threats of militant Islam and the country's battered economy, one of the Arab world's last Jewish communities is staying put and nurturing a new generation. VOA’s Lisa Bryant reports.
    Video

    Video Meet Your New Co-Worker: The Robot

    Increasing numbers of robots are joining the workforce, as companies scale back and more processes become automated. The latest robots are flexible and collaborative, built to work alongside humans as opposed to replacing them. VOA’s Tina Trinh looks at the next generation of automated employees helping out their human colleagues.
    Video

    Video Wheelchair Technology in Tune With Times

    Technologies for the disabled, including wheelchair technology, are advancing just as quickly as everything else in the digital age. Two new advances in wheelchairs offer improved control and a more comfortable fit. VOA's George Putic reports.
    Video

    Video Baby Boxes Offer Safe Haven for Unwanted Children

    No one knows exactly how many babies are abandoned worldwide each year. The statistic is a difficult one to determine because it is illegal in most places. Therefore unwanted babies are often hidden and left to die. But as Erika Celeste reports from Woodburn, Indiana, a new program hopes to make surrendering infants safer for everyone.
    Video

    Video California Celebration Showcases Local Wines, Balloons

    Communities in the U.S. often hold festivals to show what makes them special. In California, for example, farmers near Fresno celebrate their figs and those around Gilmore showcase their garlic. Mike O'Sullivan reports that the wine-producing region of Temecula offers local vintages in an annual festival where rides on hot-air balloons add to the excitement.
    Video

    Video US Elementary School Offers Living Science Lessons

    Zero is not a good score on a test at school. But Discovery Elementary is proud of its “net zero” rating. Net zero describes a building in which the amount of energy provided by on-site renewable sources equals the amount of energy the building uses. As Faiza Elmasry tells us, the innovative features in the building turn the school into a teaching tool, where kids can't help but learn about science and sustainability. Faith Lapidus narrates.

    Special Report

    Adrift The Invisible African Diaspora