28 Kasım 2011 Pazartesi

Euro crisis 'ticking bomb' for Turkey

Sunday, November 27, 2011
GÖKHAN KURTARAN
ISTANBUL - Hürriyet Daily News

The eurozone crisis is ‘a ticking time bomb’ that lies at Turkey’s doorstep, according to Daren Acemoğlu, a Massachusetts Institute of Technology professor who is ranked among the world’s top economists. Speaking to the Hürriyet Daily News, Acemoğlu urged the Turkish Central Bank to raise interest rates to create room to maneuver later



Influential economist Daron Acemoğlu warns Turkey on the eurozone crisis. DAILY NEWS photo, Emrah GÜREL

The eurozone debt crisis has turned the European economy into “a ticking time bomb” that lies at Turkey’s door, according to a top economist who has been ranked among the most influential thinkers of our time.

Speaking to the Hürriyet Daily News in an interview last week, Daron Acemoğlu, a professor at the Massachusetts Institute of Technology (MIT), also urged the Turkish Central Bank to raise interest rates from their current historic lows.

“The European time bomb lies at the door for Turkey,” Acemoğlu said. “The Turkish economy is closely connected to the European economy. Thus, it is open to all possible shocks.”

Regarding the possibility of a new global recession, Acemoğlu put the chance as high as 50 percent. “If there is a new recession in Europe, Turkey would go back to experience 2009 once again,” he said, a year when the Turkish economy contracted by 4.7 percent.

Despite the positive effects of economic reforms, Turkey should “increase interest rates” in order to put the brakes on strong domestic demand, Acemoğlu said, adding that such a move would provide the policy flexibility that would be necessary following a possible shock from the eurozone.

The Turkish Central Bank’s one-week repo rate remains at 5.75 percent, while the overnight interest rate corridor stands at 5 to 12.5 percent. Year-end inflation target is at 5.5 percent, but many analysts foresee it exceeding 9 percent. Meanwhile, Turkey’s current account deficit has neared 10 percent of gross domestic product – unsustainable in the eyes of many economists.

“Turkey aims to slow down credit expansion while keeping interest rates too low. This is not the right thing to do,” Acemoğlu said. According to the 44-year old economist, today’s Turkey has similarities with the pre-crisis period of U.S. and European economies.

“A key [sign] of an economic crisis is overspending and overconsumption, which generally is followed by a sharp decline in consumption later on, creating serious problems,” he warned.

Low savings rate the problem
Underlining the chronic current account gap, Acemoğlu recounted the booming 1990s, which ended with the 2001 crisis.

“Nearly 60 percent of Turkey’s exports are to the European market,” he said. “A possible slowdown in the eurozone could create problems regarding the financing of the current account deficit.”

The current low interest rate policy “encourages people and firms to spend rather than save,” according to Acemoğlu, who pointed toward the low savings rate of around 12 percent of gross domestic product.

Putting pressure on banks to lend less instead of raising interest rates is “a wrong method,” Acemoğlu said, adding: “A key reason that the country should raise interest rates is to have the possibility to cut the rate in case a serious crisis [in the eurozone] occurs. If you keep rates low while the economy grows by 10 percent annually, what will you do when the crisis hits?”

Regarding the possibility of being added to the BRICS grouping, Acemoğlu said it was too early for this. “Turkey needs to prove its sustainability for some four or five more years,” he said. “One cannot see Turkey as an economic model just because it has posted [high economic growth]. What matters is turning this into a sustainable and balanced economic growth.”

Acemoğlu also described Kemal Derviş, a former economy minister who steered Turkey out of the 2001 crisis, as the man who planted “the seeds of Turkey’s 10 years of economic growth.” Compared to Derviş, today’s technocrats in Italy’s Mario Monti and Greece’s Lucas Papademos have a major disadvantage in that they are “running not just the economy ministry but the whole government,” Acemoğlu said.

Proud of Turkey’s OECD offer


Reminded of Turkey’s offer to appoint him as the permanent representative to the Organisation for Economic Co-operation and Development (OECD), Daren Acemoğlu said he was “proud” of this offer. “I have not rejected it, but I prefer to write my books and continue my academic life,” he said. “Maybe I can consider this offer in the future.”

If he had accepted, Acemoğlu, who became a professor at the age of 33, would have been the first Turkish-Armenian to have been appointed to such a post.

In March, Turkish Foreign Minister Ahmet Davutoğlu confirmed the offer, saying that it was “inconceivable” for the government to discriminate between the citizens of the Turkish Republic. “We can appoint everyone [who is qualified] to represent Turkey. In this respect, the main criterion for us is qualification. Indeed, we have offered Daron Acemoğlu to represent us at the OECD a few months ago,” Davutoğlu said.
Sunday, November 27, 2011

No business retreat in east after deadly attacks


Thursday, November 24, 2011
Gökhan Kurtaran
ISTANBUL- Hürriyet Daily News




Two security personnel and an electrician were killed in an attack in Batman. DHA photo

Turkey’s plan to explore and produce oil in the country’s southeast will continue undeterred by recent terror attacks, said Energy Minister Taner Yıldız said yesterday.

“Turkey will continue its investments in the country’s southeastern and eastern region with determination,” Yıldız told the Daily News. His remarks came a day after the country’s state-run Turkish Petroleum Corporation (TPAO) signed a deal with Royal Dutch Shell to conduct oil exploration in Southeast Anatolia and the outlawed Kurdistan Workers’ Party (PKK) killed three at an existing oilfield in the southeast.

The PKK killed the three workers in an attack on an oilfield in the southeastern province of Batman overnight, Anatolia news agency reported. Two security personnel and an electrician were shot dead in Şelmo field, which is operated by Dallas-based firm Transatlantic Petroleum. The field is the second largest in Turkey.

“This is not just an attack targeting oil fields and natural gas lines in the country, but also Turkey’s development,” said Yıldız.

“In total Turkey produces nearly 3,000 barrels of oil per day from 82 wells and hundreds of locals work in field operation,” said Yıldız, adding that the attacks also targeted Kurdish people living and working in the region.

“The ones killed are locals, from Elazığ and Batman, eastern provinces of Turkey; they are quarreling at the cost of locals’ livelihoods,” he said.

Previous attacks on gas and oil pipelines in the area, as well as he Nov. 23 Batman attack, target Turkey’s political stability, the minister said. “The outlawed PKK has no capacity to represent Kurdish people at all.”

The PKK is listed as a terrorist organization by Turkey, the United States and the European Union.

In 1993 and 1994, some firms stopped operations in the region due to security reasons after terrorist attacks in the area, Yıldız said. “We will increase the security measures and our investments in the region,” he added.

“I do not think the matter is that complicated,” said Yıldız on the juxtaposition of the attack and Turkey’s deal with Shell.

TPAO’s deal with Shell finalized terms on seismic research off the Mediterranean province of Antalya, as well as land-based drilling work in the southeastern province of Diyarbakır.
Thursday, November 24, 2011

Ukraine delegation invites companies for mega projects

Tuesday, November 22, 2011
GÖKHAN KURTARAN - gokhan.kurtaran@hurriyet.com.tr
ISTANBUL - Hürriyet Daily News




Attendees listen to a speech by Selçuk Tayfun, deputy secretary general of ICOC, during a business meeting in Istanbul.

Ukraine is calling on leading Turkish firms to take a share in the country’s giant projects, ranging from energy to construction initiatives worth approximately $15 billion, the top executive of a Turkish business council said yesterday.

Turkish firms have been invited to collaborate on these projects as Turkey has already proved its capacity through its investments in Ukraine, according to Ruşen Çetin, chairman of Turkish-Ukrainian Business Council of Foreign Economic Relations Board (DEİK).

The many energy, infrastructure and construction projects designed by Ukrainian President Victor Yanukovych are likely to attract Turkish firms to form consortiums.

The Ukrainian president will visit Turkey on Dec. 22 to meet Turkish Union of Chambers and Commodities Exchange (TOBB) and leading Turkish firms to finalize some of the projects, Çetin added.

“Ukraine plans to construct a liquefied natural gas [LNG] terminal in one of the Black Sea ports of Ukraine in order to receive, store and re-gasify liquid natural gas,” said Vladyslav Kaskiv, head of the Ukrainian State Agency for Investment and National Projects of Ukraine (SAINPU) while also noting the possibility of delivering the gas to Ukrainian and European consumers.

The project envisages the construction of a LNG terminal with a total capacity of 10 billion cubic meters of natural gas per year. The country aims to attract $9.5 million investment in biomass energy in the Kyiv region.

There are also separate plans for businesses from the two countries to work together on sport facilities build in preparation for the Ukrainian Winter Olympic Games bid in 2022. The project, named “Olympic Hope 2020,” would take place in the valley of Borzhava, in the southern Ukrainian Carpathian Mountains. Residence blocks, hotels and winter sport facilities would be built on a plot of nearly 350,000 square meters of land.

In addition, the Ukrainian “Clean City” project envisages the construction of 10 centers with a total capacity for household waste of up to 2 million tons per year, as well as the realization of the “Open World” initiative, which is designed to develop broadband network access for nearly 20,000 schools across Ukraine.

Ukraine is also planning to spend 40 million euros on the construction of a 10-megawatt solar power plant and 150 million euros on the construction of a 100-megawatt wind farm. On average, 1 MW of power can supply electricity to as many as 300 U.S. households per year. According to TurkStat figures, the average person in Turkey consumes 540 kW of electricity in one year.

“Turkish construction firms have nearly $20 billion in contracts in nearly 90 countries,” said Selçuk Tayfun, deputy secretary general of Istanbul Chamber of Commerce, noting that the Ukrainian construction projects of Turkish firms were worth $3.7 billion.
Tuesday, November 22, 2011

Iraq-Turkey air link cut by debt dispute

Monday, November 21, 2011
GÖKHAN KURTARAN
ISTANBUL- Hürriyet Daily News



Turkey bans state-owned Iraqi planes to land on the Turkish soil in a reaction to a similar decision by its neighbor starting from midnight Nov 20 over a debt row. Company photo

A relatively tiny Iraqi debt to Turkey, compared with the developing mutual trade volume, has resulted in a diplomacy problem that has frozen flights between the two countries.

Turkey decided to ban state-owned Iraqi planes landing on its soil in a reaction to a similar decision by its neighbor starting from midnight Nov. 20. In response, Turkish exporters switched air traffic routes to road freight.

“Already dense traffic on Turkey’s Iraqi border may turn worse if the conflict between the states is not resolved in the short run,” said Alp Doğan of the International Transportation Association.

Especially trucks departing from Istanbul and from Turkey’s southern province of Mersin contribute heavily to the traffic at the border gates, Doğan told the Hürriyet Daily News yesterday. “Turkey should open the two planned border gates to lessen the traffic as the some trucks wait for nearly five days at the Habur gate.”

Solving the problem might take days, according to Ercüment Aksoy, head of the Turkish-Iraqi Business Council at Foreign Economic Relations Board of Turkey (DEİK).

“Unfortunately, Iraqi authorities reacted in an emotional way by banning Turkish planes from landing on Iraqi soil,” he said. “Turkey’s trade with Iraq is too valuable to be ruined with such moves.”

Iraq has banned all Turkish flights from landing in the country starting from 11:45 p.m. on Nov 20 in response to a dispute over millions of dollars owed by an Iraqi government oil company to Turkey. Iraqi Transportation Ministry spokesman Karim al-Nuri said the decision to block Turkish planes from Iraq was in response to a Turkish threat to seize Iraqi planes over a two-decade-old debt.

“In return, Turkey has also banned the landing of Iraqi Airways planes,” said Aksoy after a meeting with Iraqi officials.

“The Turkish Foreign Ministry formed a crisis desk at the weekend to solve the problem,” he said, adding that many Turkish businessmen could not travel to Iraq to participate in business meetings and to bid on tenders in Iraq due to canceled flights.

However, Aslan Kurt, chief executive of MNG Cargo, one of four Turkish carriers flying to Iraq, said he was hopeful for a quick resolution. “The temporary conflict will not harm much of our business,” Kurt said after a press meeting in Istanbul yesterday.

Previously four Turkish companies launched a case in a Turkish court demanding $20 million in return for unpaid debts dating to 1990, and they obtained an order to take possession of planes owned by Iraqi Airways, said Zafer Çağlayan, Turkey’s economy minister, in a statement yesterday. “Two out of four Turkish firms have dropped the case,” said Çağlayan, adding that negotiations with two firms were ongoing, as of yesterday evening.

He said the total amount of debt to these two countries was $18 million.

Talks between both countries’ foreign ministries continued yesterday evening as parties were still working on existing mutual agreements to find a solution to the problem, the Daily News learned.

Iraq was Turkey’s fifth largest export market in 2010, following Germany, the U.K., Italy and France. Turkey’s exports to Iraq have increased more than sevenfold from $718 million in 2003 to $6 billion last year, according to Turkey’s Foreign Trade Under secretariat data. The volume reached $10 billion in the first half of 2011.
Monday, November 21, 2011

20 Kasım 2011 Pazar

Greece plans to connect islands to Turkish grids

Friday, November 18, 2011
GÖKHAN KURTARAN - gokhan.kurtaran@hurriyet.com.tr
ISTANBUL- Hürriyet Daily News


Connecting Greek islands on the Aegean Sea to Turkish electricity grids may help overcoming recent political problems between the two countries, Greek Energy Minister Giorgos Papaconstantinou tells the Daily News.



Connecting Greek island to Turkish electric grids is technically easer than feeding them from the Greek mainland, minister says. Hürriyet photo

The Greek Energy Ministry’s new plan to tap into Turkish grids to meet Greek islands’ electricity needs could boost flagging Ankara-Athens relations that have been strained by offshore Greek Cypriot gas exploration, Greece’s energy minister has said.

“We have talked with Turkish officials previously on connecting Greek Islands to Turkey [for electricity] and we are still considering this,” Giorgos Papaconstantinou, Greece’s energy and environment minister, said Nov. 17 on the sidelines of the Atlantic Council Black Sea Energy and Economic Forum in Istanbul.

“We have always wanted to connect the island to mainland Greece, but there is a possibility that we might connect islands to Turkish grids.” The minister said the move may be more affordable and efficient for Greece.

Speaking about the tensions related to Greek Cyprus’ offshore exploration, Papaconstantinou said, “I can see the nervousness of Turkey, but it will recede with time.”

Turkey’s state run oil company’s decision to ink a deal for onshore and offshore exploration with Dutch energy giant Shell next week is “no threat for Greece,” he added.

As long as the exploration is carried out according to international laws, “Turkey should go ahead,” the Greek minister said.

Greek energy privatization
“Turkish companies can also take part in Greek energy tenders,” said Papaconstantinou.

As Greece’s budget crisis drags on, the Greek state-owned natural gas company, DEPA, is preparing for privatization. Under a proposed plan, the state will sell a bulk of the 65 percent of shares it currently holds in the company; Hellenic Petroleum (ELPE) will take over the remaining 35 percent.

“We have no discriminative rule against Turkish firms,” Papaconstantinou said, adding that Socar, the State Oil Company of Azerbaijan, was among the possible bidders.

The minister also said tenders would take place by December for the privatization of DEPA. The Greek government may unbundle DEPA, which also owns natural gas administrator company DESPA and continue the privatization process as planned, he said.

DEPA repaying BOTAŞ
DEPA is also beginning to pay back some of the money it owes Turkey’s state-run pipeline company, BOTAŞ, following an increase in prices due to changes in the energy relationship among Azerbaijan, Turkey and Greece, DEPA Chief Executive Officer Harry G. Sachinis told the Hürriyet Daily News on the sidelines of the conference.

“Turkey has had some disagreements with Azerbaijan regarding gas prices for over three years. Once the price was agreed between Turkey and Azerbaijan, [Turkey’s state-run pipeline company] BOTAŞ claimed additional capital from Greece for previous gas purchases,” he said.

The total amount was nearly $300 million and DEPA paid nearly 60 percent of the sum in the last month, he said.

Sachinis said DEPA’s profits increased by nearly 20 percent this year and “basically the firm has enough funds to pay the total sum to Turkey.”

“The Nabucco [pipeline project] is too big to handle due to its size and investment return time,” Sachinis said, adding that the Interconnector Turkey-Greece-Italy natural gas pipeline project (ITGI) would be the “best plan.”

The ITGI project aims to establish a gas transportation capacity of nearly 12 billion cubic meters a year. “The capacity of the line could be increased to up to 20 billion in a few years’ time,” he added.

Friday, November 18, 2011

Terror threatening European energy’

Thursday, November 17, 2011
GÖKHAN KURTARAN - ISTANBUL




Europe should understand the importance of security in order to transfer Iraqi gas and oil to markets, says Yıldız. DAILY NEWS photo, Emrah GÜREL

Terror attacks in Turkey’s southern region, which carry a significant importance in country’s transit role in transferring Iraqi and Caspian oil and gas to European markets, risk not only Turkey’s position but also energy security of European countries, according to energy minister.

“The energy security is not just Turkey’s problem, but also carries a great importance for European countries,” said Taner Yıldız told the Hürriyet Daily News on the sidelines of Atlantic Council, Black Sea Energy & Economic Forum in Istanbul yesterday.

“European countries should also understand the necessity of maintaining security in the region in order to transfer Iraqi gas and oil to European markets,” he said.

Turkey’s role in transferring Iraq’s resources to European countries recently reduces energy dependency on Russia, Yıldız said, adding that “in that sense, security in the region means energy security for Europe,” concerning the southern corridor.

Yıldız said Turkish government closely monitors the developments in the region, adding that, “Turkey expects the disputes between Northern Iraqi government and central government of Iraq to find resolution.”

Turkey would increase the capacity of the Kirkuk-Ceyhan crude oil pipeline between Iraq and Turkey, which was initially made operational for the export of crude oil without taking the risk of passing through the Persian Gulf from 1980 to 1988.

“We want to use this line to full capacity,” Yıldız said. The total capacity of the pipeline is 1.6 million barrels a day with length of 970 kilometers. The pipeline has been under attack and subject to prolonged closures, however a considerable amount of investment has been made for the repair and refurbishment operations on this pipeline.

“Nabucco pipeline responsibility is not just on the shoulders of Turkey, but on other countries as well,” said Yıldız referring to European energy companies including OMV of Austria, MOL of Hungary, Transgaz of Romania, Botaş of Turkey, RWE of Germany, Bulgargaz of Bulgaria, each with a share of 16.67 percent in Nabucco consortium.

“There is no change in Turkey’s position regarding to transferring no gas from northern Iraq through Turkey without Bagdad’s permission.” Yıldız said response to a statement by Hussein al-Shahristani, Iraqi Deputy Prime Minister on Nov.13 cautioning to Exxon against pursuit of oil deals in Northern Iraq.

“Energy security should have the top priority of all the nations in the region, should not be seen as a source of fighting but cooperation,” said Prime Minister Recep Tayyip Erdoğan addressing to the participants of the top level energy meeting.

Thursday, November 17, 2011

European leaders fear social unrest in Greece will spread

Wednesday, November 16, 2011
GÖKHAN KURTARAN - gokhan.kurtaran@hurriyet.com.tr
ISTANBUL - Hürriyet Daily News





Protesters attack barricades during an austerity protest in Thessaloniki on Oct 28. REUTERS photo

European leaders are fearful that the social unrest that has befallen Greece will spread to their countries due to the continent’s ongoing economic crisis, according to a top executive at the European Economic and Social Committee.

“European leaders fear that the same protest and strikes [in Greece] will take place in their own countries,” Dimitris N. Dimitriadis, chairman of the Euromed Follow-Up Committee, told the Hürriyet Daily News yesterday on the sidelines of the Euromed Summit of Economic and Social Councils and Similar Institutions, which was hosted by the Turkish Union of Chambers and Commodities Exchanges (TOBB) in Istanbul.

European leaders are concerned that the same scenes that started on May 5 following the Greek government’s cut in public spending and tax hikes could take place in other European countries, paralyzing states that have already been hit by debt, he said.

“This problem is not just related to Greece,” Dimitriadis said, adding that if the Greek economy imploded, Portugal, Spain and Italy would likely experience similar problems.

“The lives of those who demonstrated have changed drastically in Greece,” he said.

The lack of leadership in Europe has sparked a fire of instability during the global economic crisis, he said, adding that the European Union had to rise from the ashes like a phoenix by implementing the correct fiscal and monetary policies among its member states.

“The European crisis stems from political reasons more than economic reasons,” Turkish Development Minister Cevdet Yılmaz told participants at the Istanbul meeting.

Europe’s problems accumulated like a “snowball” due to the vast negligence among European leaders, Yılmaz said.

Political changes in the Middle Eastern and North African countries could serve the interests of both European and Turkish economies in the long run despite the temporary financial loss, he said.

There is a lack of leadership in Europe, Staffan Nilsson, president of the European Economic and Social Committee, told the Daily News on the sidelines of the meeting.

Civil society organizations in Europe might formulate new ideas to solve the economic crisis, he said. “There is growing fear among employees, employers, entrepreneurs and chambers in Europe,” said Nilsson in reference to the continent’s social unrest. “The increasing cost of living and low incomes are creating serious problems.”

Today’s European Union lacks the vision of its founding fathers, Robert Schuman, Jean Monnet and Konrad Adenauer, said TOBB President Rifat Hisarcıklıoğlu, adding that a “lack of leadership” was preventing successful economic integration within Europe.

Wednesday, November 16, 2011

16 Kasım 2011 Çarşamba

Local firms annoyed by north Iraq ‘kamikazes’


Tuesday, November 15, 2011
Gökhan Kurtaran
ISTANBUL- Hürriyet Daily News

Turkish companies criticize Iraqi authorities for handling reconstruction businesses to incapable companies. These ‘kamikaze firms’ bid with the lowest offer and eventually win tenders but cannot fulfill their responsibilities, they say. ‘We need more foreign investment to recover,’ Iraqi public works minister tells the Daily News



Security forces inspect a bomb attack site in Baghdad in April 2010. The country is seeking partners to support its reconstruction. AP photo

Iraqi government officials are handing urban development and construction projects to “kamikaze firms,” which are insufficient for low prices, according to a group of executives from Turkish firms.

“Kamikaze firms bid with the lowest offer and eventually win the tender,” said Mustafa Toprak, business development director of Kayı Construction, which opened a representation office recently in Bagdad.

These firms are generally unqualified and are incapable of finishing projects on time successfully, he told the Hürriyet Daily News on the sidelines of the two-day Iraq Urban Development Summit, which started yesterday in Istanbul.

“This is one of the reasons some Turkish firms like us are losing contracts in Iraq as those bidders do not even worry about the timing and the quality of the project.”

There are nearly 600 Turkish construction companies running projects in Iraq, and some of them lose tenders due to competitors who take significant risk without planning for real costs, according to Naili Musabeyli, group manager of Yüksel Construction.

“Recently Iraqi officials have also started to understand this situation and are preparing to make changes in the tender specifications,” he told the Daily News.

His company is building the main road connecting Iraq’s northern province Arbil to northern provinces Kora and Şaklava. The road is expected to cost nearly $180 million. Musabeyli said Yüksel Construction is also interested in bidding for water and sewage tenders in central and southern parts of the war-torn country.

Ministry encourages Turkish firms
The Iraqi government is encouraging more Turkish construction companies to take part in rebuilding the country, said Adel Mhodr Radi, Iraqi minister of municipalities and public works.

“Iraq has been widely damaged due to war and we need more foreign investment to recover,” he told the Daily News, noting that Turkish construction firms rank among the top companies in terms of the quality of their work.

After years of war and sanctions, Iraq is now in a position to rebuild its social infrastructure of housing, road networks and power and utility installations. Iraq’s investment budget needs to increase to 60 trillion dinars ($51 billion) from a planned 40 trillion dinars to ensure funds for new projects, said Ali Al-Shukr, Iraqi minister of planning, in a June report.

SAUDI FIRM SEEKS TURKISH PARTNERS FOR TENDER
The Al Turki Group, a family-owned Saudi investment and development company, could bid for the right to construct the Riyadh and Jeddah metro lines in concert with Turkish firms, said a top executive.

Majdi Khayyat, vice president of Al Turki Group, told the Hürriyet Daily News yesterday on the sidelines of the Iraq Urban Development Summit that his company had proposed that some Turkish construction firms, including Yüksel Construction, enter a joint bid with the Saudi firm for the Riyadh and Jeddah metro lines.

“We are already running many projects with Turkish firms in Saudi Arabia, and I am interested in bidding for tenders in Iraq with Turkish firms,” Khayyat said.

Last year, Saudi Arabia announced that the country would open a tender for a 180 km-long Jeddah metro which would consist of three lines and connect Old Makkah Road, King Abdulaziz International Airport and Palestine Road.

Tuesday, November 15, 2011

Exporters eye recovery in turmoil-hit regions


Wednesday, November 9, 2011
Gökhan Kurtaran
ISTANBUL- Hürriyet Daily News

Turkish exporters are getting big returns from the recovering Egyptian and Tunisian economies but things are not the same in the other ‘Arab Spring’ nations. Official exports figures say there is still much to do


Passengers carried by Turkish Airlines arrive at the Libya’s Tripoli airport on Nov 8 only two days after the relaunch of flights there since the start of the civil war in the country. Turkish businesses, especially contractors, are looking for ways to return to their one-time top market following the process of normalization in the country. AFP photo

Turkish exports to Syria, Libya, Bahrain and Yemen fell $1.17 billion in the first 10 months of the year, and now exporters are looking for ways to compensate for their losses amid increasing unpredictability in the Middle East and North Africa.

Turkey’s exports to Egypt and Tunisia, the first countries that faced the ongoing Arab Spring, have already recovered with a jump of $606.6 million liras during the January-October period, according to official figures.

“The turmoil has openly hit Turkish exporters selling products to Syria and Yemen,” said Sadık Yıldız, vice chairman of the Turkish-Syrian Business Council and chairman of the Turkish-Yemen Business Council at the Foreign Economic Board of Turkey (DEİK). According to him, exporters were projecting a nearly 30 percent rise in Turkey’s exports to Syria this year. “Unfortunately, the expectations have not come true”

Turkey’s exports to Syria fell $35 million in the first 10 months of this year. Still, the moderate decline “demonstrates the strong business bonds,” according to Yıldız. Turkey exported $1.46 billion worth of goods to Syria from January to October in 2010.

“Unpredictability harms Turkish exporters in the Middle East, North Africa and Gulf countries,” Yıldız said.

According to Yıldız, mass protests calling for Yemeni President Ali Abdullah Saleh to resign in Yemen this year have also slowed the bilateral trade relations between the Middle Eastern country and Turkey. Turkey’s total exports to Yemen were worth $81 million in this first 10 months this year, down from $210 million last year.

“Turkey recovered well from the Egyptian revolution,” said Zuhal Mansfield, head of the Turkish-Egyptian Business Council at DEİK. “Turkey’s political approach to Egypt bared fruit in bilateral trade between both countries.”

Mansfield said Turkish business delegations have visited Egypt three times since September and established new bonds with Egyptian business leaders.

“We aim to increase the total volume of bilateral trade to $10 billion and Turkey’s investment in Egypt to $5 billion in three years’ time,” Mansfield said.

Libya still problematic
Turkish exporters experienced the largest contraction in Libya, which was once the major market for Turkish construction firms. Turkey’s exports to Libya tumbled by $1 billion in the first 10 months of this year. The total volume of Turkey’s exports slumped to $558 million in the first 10 months of this year, down from $1.58 billion in the same period of last year.

“Lack of authorities and legal structure enables Turkish businessmen to return the war stricken Libya,” said Ersin Takla, head of the Turkish-Libyan Business Council at DEİK, speaking to the Hürriyet Daily News during a recent phone interview, noting that interim government officials do not feel themselves to be legitimate authorities to approve or regulate international business deals.

Noting that Turkish businessmen were secure under the “shield of overthrown Moammar Gadhafi,” Libyan officials might also review construction contacts that Turkish companies had won, Takla said. “Moreover, Turkish businessmen also still wait for payments from Libya in return for completed projects by Turkish constructors, expected to be worth nearly $1.4 billion.”
Wednesday, November 9, 2011

No plan without Turkey in Med, says minister

Friday, November 4, 2011
GÖKHAN KURTARAN - gokhan.kurtaran@hdn.com.tr
ISTANBUL - Hürriyet Daily News

Tension between Turkey and Israel continues on as Israel and Greek Cyprus develop bonds on gas drilling. A Turkish minister challenged Israel’s Peres, saying Turkey could not be left out of the plans in the region



An offshore oil platform off the coast of Guiana is seen in this file photo. Yıldırım says Turkey is the security insurance for the Middle East, the Balkans and the Caucasus and adds that ‘the approval of Turkey has to be obtained’ for gas drilling. AFP photo

Israel would step over the line by threatening Turkey in the eastern Mediterranean Sea, a Turkish minister said Nov. 4 while evaluating the Israeli president’s visit to Greek Cyprus on Nov. 3 to discuss natural gas exploration in the maritime region.

“Israel would not dare threaten Turkey,” said Binali Yıldırım, Turkey’s minister of transport, maritime and communications told the Daily News at the Ericsson Academy opening ceremony in Istanbul.

“Turkey’s road map on this matter is already certain, “said Yıldırım, adding that there would be no project formed and run in the Eastern Mediterranean “without Turkey’s consent.”

Yıldırım said Turkey was the security insurance for the Middle East, the Balkans and the Caucasus and “the approval of Turkey has to be obtained” for oil and gas drilling in the region.

“We are not going to threaten anybody and we’re not going to be afraid of threats. What we have to do really is to bring it to the international level and behave like responsible countries, too,” Israeli President Shimon Peres said, the Associated Press reported Oct.4.

A tripartite summit among U.N. Secretary-General Ban Ki-moon, Eroğlu and Greek Cypriot leader Demetris Christofias took place in New York on Oct. 30 and 31. The next summit will take place in January 2012.

Following a meeting at Çırağan Palace in Istanbul with Turkish Foreign Minister Ahmet Davutoğlu, Turkish Cypriot President Derviş Eroğlu said northern Cyprus continued its pursuit of a solution at the Cyprus talks held in New York.

“We want negotiations, ongoing for 43 years, to be concluded and a lasting agreement to come out,” Eroğlu said at a press conference after the Istanbul meeting.

Eroğlu said they were continuing with good will and made constructive proposals at every meeting. “We will keep seeking solutions for Cyprus. I hope talks will be concluded at the next summit in New York,” he said.

Turkish Foreign Minister Davutoğlu said peace on the island would be a part of the peace in the East Mediterranean region. He said they hoped the Greek Cypriot administration would approach the negotiation process with this perspective, stating that peace, tranquility and stability would be restored.

Davutoğlu said the U.N. secretary-general would call the two parties to talks again in January and this was a pleasing development. He added that it would be the “end game.”

“If the term ‘end game’ is used, we are happy with this result as we have insisted on this since the Geneva talks,” Eroğlu said “We propose that negotiations will not last forever and there should be an end to this in the Greentree summit.”

Additional AA report from Istanbul was used in this story.
Friday, November 4, 2011

3 Kasım 2011 Perşembe

Not with local operator, Japan nuclear firm says

Wednesday, November 2, 2011
Gökhan Kurtaran
ISTANBUL- Hürriyet Daily News

Mitsubishi is interested in building nuclear plants in Turkey but dismisses the possibility of leaving operation of such plants to locals lacking know-how, a top executive says


This photo shows Japan’s Ikata nuclear power plant, one of the world’s most seismologically risky plants, built by Mitsubishi. ‘We can build and operate nuclear power plants in Turkey with France’s Areva, as we did in the United States,’ Arihara says. AP photo

Mitsubishi Heavy Industries (MHI) has expressed interest in bidding for Turkey’s nuclear power plant projects but dismissed the option of working with a Turkish operator due to lack of nuclear know-how.

“Operating a nuclear plant could not be left in the hands of the countries that lack the nuclear technology and know-how, such as most of the Middle Eastern countries including Turkey,” Masahiko Arihara, senior vice president of MHI, told the Hürriyet Daily News yesterday, after signing a distributorship agreement with Form Companies Group, a Turkish leader in the sector of air conditioning and renewable energy. “If Turkey would like a plant generating 1 million kilowatt-hours, we can do that,” he said.

Arihara said due to security measures the operation of a nuclear plant should be carried out by professional companies with extensive knowledge and experience in nuclear power technology.

“We are interested in taking part in the nuclear projects of the country,” he said, adding that Mitsubishi built 25 of the 50 nuclear power plants in Japan. “Mitsubishi has the power and the capability to construct nuclear stations in Turkey.”

Negotiations on nuclear

Turkey has recently been negotiating with several countries including Finland to operate its second nuclear power station to be built in the Black Sea province of Sinop. After Tokyo Electric Power Company (TEPCO) withdrew its bid to run the nuclear plant, Mitsubishi became interested in building power plants in Turkey, Ariahara said. “Because almost 100 percent of the nuclear plants that TEPCO runs use boiling water technology, a type of light water nuclear reactor used for the generation of electrical power, our technology does not match with TEPCO’s one.”

MHI might build and operate nuclear plants in Turkey with French operator company Areva, said Arihara. MHI and French nuclear giant in 2009 agreed to start a new joint venture called ATMEA to build and operate nuclear power plants in the United States. “A similar model can well be used in Turkey,” he said. He also noted that the current negotiations between Japanese and Turkish officials continued on the issue.

MHI investments in the US
The joint venture will produce nuclear fuel for advanced pressurized water reactors (APWR) to be sold by MHI in the U.S. Japanese Kansai Electric Power might also be among the candidates for the Sinop plant, according to the executive.

The Japanese operator of the tsunami-hit Fukushima Daiichi plant decided to withdraw from Japan’s bid to join Turkey’s second nuclear plant on Aug. 4.

Turkey agreed with Russian RASOTOM to build the first nuclear plant in the northern province of Mersin, and the government plans to build nuclear plants in Sinop and İgneada.
Wednesday, November 2, 2011

1 Kasım 2011 Salı

Raw material disputes harming steel business


Monday, October 31, 2011
GÖKHAN KURTARAN
ISTANBUL- Hürriyet Daily News

Steel rolling plants accuse Kardemir, the ingot steel supplier in Turkey’s north, of sparing the majority of the limited raw material for companies owned by its board members.



Kardemir, the manufacturer of nearly 400,000 tons of ingot steel annually, says the rolling plants in the region are trying to counteract the raw material prices. The rolling firms lack up-to-date technology, says the general manager of Kardemir. AA photo

A raw material dispute between one of Turkey’s main iron and steel manufacturers and local rolling plants is increasingly becoming a national issue as plants in the country’s steel capital close down one after another.

“Kardemir, which is one of the main suppliers of ingot steel, sells a majority of its production to three families who both have their own rolling plants and have seats on Kardemir’s board,” said Tayfun Çebi, the chairman of the Karabük Private Sector Rolling Plants’ Association (KAHDER). The northern province of Karabük is the center of Turkey’s steel production. “They are selling almost 80 percent of the ingot steel to those families without making a tender,” he told the Hürriyet Daily News yesterday in an interview.

Out of 25 rolling plants in Karabük, 18 have already closed down due to a lack of raw materials, he said, adding that importing ingot steel was not feasible for businesses in the province. He said Kardemir was essentially the sole actor in the sector.

Kardemir manufactures nearly 1 million tons of liquid steel, 600,000 tons of rebar and nearly 400 tons of ingot steel annually, he said, adding that nearly 320,000 tons of ingot were purchased by Kardemir executives. “Only the remaining 80,000 tons of ingot is shared by the rolling plants in the region, which is not enough.”

Çebi said KAHDER applied to the Capital Market Board of Turkey last week and officially complained about the supplier, Kardemir. “Nearly 1,700 people lost their jobs due to rolling plants closing down in Karabük,” Çebi added.

The association placed an announcement on the dispute in daily Hürriyet yesterday, calling on Kardemir to change its sales practices.

In the first quarter of the year, Kardemir posted a consolidated profit of $29.2 million, seven times more than the profit recorded in the same period last year. The rise is mainly due to higher sales prices.

Rolling plants colluding

However, Fadıl Demirel, general manager of Kardemir, denied the accusations. “All the rolling plants, in order to counteract the raw material prices, are acting collaboratively, which is against competition law,” Demirel said.

“The plants raising such claims could also import ingot steel from Russia and Ukraine,” he said, denying the claims on the involvement of the executives of the company into raw material purchases. “Anyone who has a stake in our company has the right to purchase raw materials from a 40 percent specially allocated portion of the production.”

The main reason for the plants closing day by day is their outdated technology and poor capital stocks, he said.

Turkish rolling plants in the region have entered into “some collusive agreements” in order to push Kardemir to mark down the prices, he said.

“How could we start a tender when iron and steel prices are experiencing great volatility?” Demirel asked in response to accusations.

Some people are disturbed with Kardemir’s economic performance and aimed to “weaken the public traded company’s prestige.”

The dispute between both Kardemir and the rolling plants in the region is greatly harming Turkey’s iron and steel sector, Pehlivan Baylan, the head of the Karabük Chamber of Commerce, told the Daily News yesterday. “The dispute needs to be resolved between the parties urgently as the continuation of tension leaves many people jobless and strikes the steel business.”

Monday, October 31, 2011