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Turkey Defence and Security Report Q4 2009Published by: Business Monitor International Published: Sep. 16, 2009 - 67 Pages Table of Contents
AbstractFundamentally, Turkey remains one of BMI’s favourite macroeconomic stories in the emerging Europeregion. While Turkey will face a sharp economic contraction in 2009, we contend that its strong bankingsystem, relatively low leverage ratios, large domestic market and pro-reform government will betterenable the economy to take advantage of the improvement in foreign investor risk appetite andstabilisation of international credit markets. Moreover, we maintain that the trough of the recession isalready behind us, with the pace of contraction expected to moderate significantly through H209.In political news, Turkish Prime Minister Tayyip Erdogan's May 1 cabinet shuffle is a strong indicationof his government's commitment to market reforms. The elevation of Ali Babacan to an enlargedeconomy portfolio, in particular, signals a broad continuation of economic policies. While we still believefiscal policy will be expansionary in 2009 and 2010, we hold that core policy foci, including economicliberalisation in the long term, remain on the cards. Turkey remains one of the world’s largest arms importers and has the second-largest armed forces in theNorth Atlantic Treaty Organization (NATO). The size of its army and arms expenditure is unlikely tochange in the near future. However, Turkey’s defence budget and number of troops are likely to fall in thecoming years, owing to the combined effects of a weakened economy, EU pressures and shifts in thenature of threats to the country. The country’s defence industry is small, but is likely to grow andimprove. Its export industry is also likely to increase over time as local design and production leads to thedevelopment of competitive products. We believe that momentum is building towards some form of political settlement in Turkey's longstandingconflict with the terrorist Kurdistan Worker's Party (PKK). That said, we stress that a quickresolution is not part of our core scenario and highlight several key risks which suggest that recent movestoward conciliation remain tentative at best. Efforts to end the long-standing conflict between the terroristKurdistan Worker's Party (PKK) and the Turkish government appear to be slowly gaining momentum. Get Full Details About This Report >> |
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