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TURKEY: GETTING ITS GROOVE BACK
by Daniel Dombey
http://blogs.ft.com/beyond-brics/2012/06/22/turkey-getting-its-groove-back/#ixzz1yXcPxThl
June 22, 2012 3:43 pm
Turkey getting it back internationally? The country has been through
a few squalls in the last 12 months - who hasn't? - but its current
account deficit, widely seen as the economy's weakest point, is
moving down.
And aside from the Moody's upgrade, there are other signs that things
are getting back to normal.
First the political. This week Recep Tayyip Erdogan, Turkey's powerful
prime minister, had a brief but amiable meeting at the Rio+20 summit
with president Francois Hollande of France, the man who replaced
Ankara's bete noire, former Elysee resident Nicolas Sarkozy.
Turkey slapped 'sanctions' on France - basically a freeze of bilateral
political and military ties - earlier this year in response to
Sarkozy's support for a law that made it a crime to deny that the
Ottoman Empire, Turkey's predecessor state, carried out a genocide
of Armenians almost 100 years ago. Ankara objects vehemently to such
descriptions of the mass killings that undoubtedly took place.
In the event, the law never took effect, because it was deemed
unconstitutional, but relations with Sarkozy remained icy cold. No
sooner had the Hollande-Erdogan meeting taken place, by contrast,
than Ahmet Davutoglu, Turkey's foreign minister, announced that the
sanctions were a thing of the past.
So ended - or at least halted - an affair that had at one time raised
questions about Turkey and France's trade and investment ties.
Nor is that the end of it. In a move that many in Ankara associate
with the change of order in Paris, on Thursday, Turkey and the EU
made progress on an issue that is a huge bugbear for many Turks -
namely the cumbersome EU visa procedures that immensely irritate
Turkish executives and many of their fellow citizens.
At a meeting in Brussels, the two sides initiated a deal the EU
wants for Turkey to readmit unwelcome migrants to the bloc, a move
that allows negotiations on visa liberalisation to begin. Turkey-EU
relations are about to get a big jolt when Cyprus, Ankara's old
adversary, takes over the bloc's presidency for six months as of July
1, so the agreement came just in time.
There was also some substantial investment news on Friday, with
reports that Turkven, a Turkey-dedicated private equity group, was
taking a $500m stake in the retailer Koton. Turkven, which has no
Turkish investors, did not immediately respond to requests for comment.
So is everything going swimmingly? No, of course not. In a sign of
continuing problems raising infrastructure finance, the sale of two
bridges over the Bosphorus was delayed for a third time. (Not to be
confused with the recent successful tender to build a third bridge
over the Bosphorus.)
In an uncertain world, Turkey's soft landing from the go-go years
of 2010 and 2011, when growth topped 8 per cent, is still a work
in progress. But at a time when a lot worse is happening elsewhere,
it was none too shabby a week.
by Daniel Dombey
http://blogs.ft.com/beyond-brics/2012/06/22/turkey-getting-its-groove-back/#ixzz1yXcPxThl
June 22, 2012 3:43 pm
Turkey getting it back internationally? The country has been through
a few squalls in the last 12 months - who hasn't? - but its current
account deficit, widely seen as the economy's weakest point, is
moving down.
And aside from the Moody's upgrade, there are other signs that things
are getting back to normal.
First the political. This week Recep Tayyip Erdogan, Turkey's powerful
prime minister, had a brief but amiable meeting at the Rio+20 summit
with president Francois Hollande of France, the man who replaced
Ankara's bete noire, former Elysee resident Nicolas Sarkozy.
Turkey slapped 'sanctions' on France - basically a freeze of bilateral
political and military ties - earlier this year in response to
Sarkozy's support for a law that made it a crime to deny that the
Ottoman Empire, Turkey's predecessor state, carried out a genocide
of Armenians almost 100 years ago. Ankara objects vehemently to such
descriptions of the mass killings that undoubtedly took place.
In the event, the law never took effect, because it was deemed
unconstitutional, but relations with Sarkozy remained icy cold. No
sooner had the Hollande-Erdogan meeting taken place, by contrast,
than Ahmet Davutoglu, Turkey's foreign minister, announced that the
sanctions were a thing of the past.
So ended - or at least halted - an affair that had at one time raised
questions about Turkey and France's trade and investment ties.
Nor is that the end of it. In a move that many in Ankara associate
with the change of order in Paris, on Thursday, Turkey and the EU
made progress on an issue that is a huge bugbear for many Turks -
namely the cumbersome EU visa procedures that immensely irritate
Turkish executives and many of their fellow citizens.
At a meeting in Brussels, the two sides initiated a deal the EU
wants for Turkey to readmit unwelcome migrants to the bloc, a move
that allows negotiations on visa liberalisation to begin. Turkey-EU
relations are about to get a big jolt when Cyprus, Ankara's old
adversary, takes over the bloc's presidency for six months as of July
1, so the agreement came just in time.
There was also some substantial investment news on Friday, with
reports that Turkven, a Turkey-dedicated private equity group, was
taking a $500m stake in the retailer Koton. Turkven, which has no
Turkish investors, did not immediately respond to requests for comment.
So is everything going swimmingly? No, of course not. In a sign of
continuing problems raising infrastructure finance, the sale of two
bridges over the Bosphorus was delayed for a third time. (Not to be
confused with the recent successful tender to build a third bridge
over the Bosphorus.)
In an uncertain world, Turkey's soft landing from the go-go years
of 2010 and 2011, when growth topped 8 per cent, is still a work
in progress. But at a time when a lot worse is happening elsewhere,
it was none too shabby a week.