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

UN Fears Rights Violations in China-backed Projects

UNHCHR investigates link between financing development and ignoring safeguards for human rights More

Boko Haram Violence Tests Nigerians’ Faith in Buhari

New president has promised to stem insurgency; he’s scheduled to meet with President Obama at White House July 20 More

Social Media Network Wants Privacy in User’s Hands

Encryption's popularity in messaging is exploding; now it's the foundation of a new social network 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.
Making Music, Fleeing Bombs: New Film on Sudan’s Internal Refugeesi
X
Carolyn Weaver
July 06, 2015 6:47 PM
In 2012, Sudanese filmmaker Hajooj Kuka went to make a documentary among civil war refugees in Sudan’s Blue Nile and Nuba Mountains region. What he found surprised him: music was helping to save people from bombing raids by their own government. VOA’s Carolyn Weaver has more.
Video

Video Making Music, Fleeing Bombs: New Film on Sudan’s Internal Refugees

In 2012, Sudanese filmmaker Hajooj Kuka went to make a documentary among civil war refugees in Sudan’s Blue Nile and Nuba Mountains region. What he found surprised him: music was helping to save people from bombing raids by their own government. VOA’s Carolyn Weaver has more.
Video

Video Rice Farmers Frustrated As Drought Grips Thailand

A severe drought in Thailand is limiting the growing season of the country’s important rice crop. Farmers are blaming the government for not doing more to protect a key export. Steve Sandford reports from Chiang Mai, Thailand.
Video

Video 'From This Day Forward' Reveals Difficult Journey of Transgender Parent

In her documentary, "From This Day Forward", filmmaker Sharon Shattuck reveals the personal journey of her transgender father, as he told his family that he always felt he was a woman inside and decided to live as one. VOA’s Penelope Poulou has more.
Video

Video Floodwaters Threaten Iconic American Home

The Farnsworth House in the Midwest State of Illinois is one of the most iconic homes in America. Thousands of tourists visit the site every year. Its location near a river inspired the design of the house, but, as VOA’s Kane Farabaugh reports, that very location is now threatening the existence of this National Historic Landmark.
Video

Video Olympics Construction Scars Sacred Korean Mountain

Environmentalists in South Korea are protesting a Winter Olympics construction project to build a ski slope through a 500-year-old protected forest. Brian Padden reports that although there is strong national support for hosting the 2018 Pyeongchang Winter Olympics, there are growing public concerns over the costs and possible ecological damage at the revered mountain.
Video

Video Xenophobia Victims in South Africa Flee Violence, Then Return

Many Malawians fled South Africa early this year after xenophobic attacks on African immigrants. But many quickly found life was no better at home and have returned to South Africa – often illegally and without jobs, and facing the tough task of having to start over. Lameck Masina and Anita Powell file from Johannesburg.
Video

Video Family of American Marine Calls for Release From Iranian Prison

As the crowd of journalists covering the Iran talks swells, so too do the opportunities for media coverage.  Hoping to catch the attention of high-level diplomats, the family of American-Iranian marine Amir Hekmati is in Vienna, pleading for his release from an Iranian prison after nearly 4 years.  VOA’s Heather Murdock reports from Vienna.
Video

Video UK Holds Terror Drill as MPs Mull Tunisia Response

After pledging a tough response to last Friday’s terror attack in Tunisia, which came just days before the 10th anniversary of the bomb attacks on London’s transport network, British security services are shifting their focus to overseas counter-terror operations. VOA's Henry Ridgwell has more.
Video

Video Obama on Cuba: This is What Change Looks Like

President Barack Obama says the United States will soon reopen its embassy in Cuba for the first time since 1961, ending a half-century of isolation. VOA White House correspondent Luis Ramirez reports.
Video

Video Hate Groups Spread Influence Via Internet

Hate groups of various kinds are using the Internet for propaganda and recruitment, and a Jewish human rights organization that monitors these groups, the Simon Wiesenthal Center, says their influence is growing. The messages are different, but the calls to hatred or violence are similar. VOA's Mike O’Sullivan reports.
Video

Video Blind Somali Journalist Defies Odds in Mogadishu

Despite improving security in the last few years, Somalia remains one of the most dangerous countries to be a journalist – even more so for someone who cannot see. Abdulaziz Billow has the story of journalist Abdifatah Hassan Kalgacal, who has been reporting from the Somali capital for the last decade despite being blind.
Video

Video Rabbi Hits Road to Heal Jewish-Muslim Relations in France

France is on high alert after last week's terrorist attack near the city Lyon, just six months after deadly Paris shootings. The attack have added new tensions to relations between French Jews and Muslims. France’s Jewish and Muslim communities also share a common heritage, though, and as far as one French rabbi is concerned, they are destined to be friends. From the Paris suburb of La Courneuve, Lisa Bryant reports about Rabbi Michel Serfaty and his friendship bus.

VOA Blogs