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Friday, September 30 2005 @ 08:38 AM Central Daylight Time
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 The unclear picture presented by the European Union on starting Turkey's accession talks on October 3 continued Thursday as well and Ankara is trying to clear its strategy about October 3.
The worst scenario is that relationships with the EU will break off on Monday.
It is being discussed how the Turkish economy will be affected by this possibility.
The business world and the economic administration expressed a joint view that there is no need for uneasiness. The continuance of foreign capital interest in the privatization tenders and banking sector is considered to be "an important trump against bad surprises to come from the EU."
Market experts also agree with the Treasury circles, who think that economic balances will not be shaken by a surprise decision that may come from the EU. Reportedly, if the bad scenario takes place on October 3, there will be activity in the Stock Exchange, foreign exchange and interests but, this will not have a permanent effect.
Economists, who emphasize that the sale of Telsim, the privatization of Erdemir and the activity in the construction sector may increase foreign capital, say, "Long term decisions instead of momentary reflexes will enable the continuance of the stability."
According to the businessmen, “Whatever the result is, the economy can overcome this," and the Turkish economy reached a solid ground with structural reforms after the crisis of 2001.
With the political stability succeeded after the elections on 3 November 2002, a unique success was achieved in inflation, growth and export.
"The economy has today a much more dynamic and stronger structure in comparison with 2001. The best example of this was seen in the Iraq War that took place nearby two and a half years ago. The estimations did not come true and the economy continued to grow. Investments continue full speed today as well. Instead of acting with momentary reflexes, taking decisions for the long term will make the stability continue, " economists say.
The roof institution of the business world, Turkish Union of Chambers and Commodity Exchanges (TOBB) Chairman Rifat Hisarciklioglu said it is not the end of everything for Turkey if the negotiations do not start.
Akfen Holding CEO Hamdi Akin, while summarizing his views about the real sector, said, "Let alone October 3, we do not even have any worries about the 10 years ahead of us."
Akin shows the investments and privatizations thus far realized as the best examples that they do not have any worries about the future of the Turkish economy. According to Akin, who expressed that local and foreign investors did not invest in Turkey by considering October 3, things will not break off if the result is negative. Akin, who said the business world does not even want to hear this kind of negativity, stressed the market dos not find this kind of developments noteworthy.
Kayseri Chamber of Industry Chairman Mustafa Boydak thinks that markets will not show a serious reaction to any negative result. The markets deepened so much that they won't be affected by anything and the fact that many European and world companies invest in Turkey is the best example of this.
Its affect on the market is temporary
Turkey has now been introduced to a totally different platform, said Abdullah Kigili, the owner of Kigili Clothing.
"The Europeans are coming to make investments in Turkey. There is no reason why they would come if you could not inspire enough confidence in them. Retails are in large amounts. New stores are constantly being opened in malls. Hotels are filled to their capacity at this time of the year. The boost in the housing market is evidently striking," explained Kigili, emphasizing that they are in progress of making investments.
"The possibility that Turkey's economic instability will get worse in case some dismal news come from the European Union (EU) on October 3 should actually drive us crazy. But, nobody should have a pessimistic point of view. Our children will enjoy their lives more comfortably in the near future."
Turkey's economic stability is strong enough to overcome a possible political crisis between Turkey and the EU, emphasized Ibrahim Kefeli, owner of Bisse Shirts.
"Are we getting support from the EU right now? The fact is that there is still economic stability," said Kefeli: "We can have enough strength to get up even if we happen to face some instability at first."
Should some bad news come from the EU, the possible effect of such a thing on the money as well as capital market will not be negative, said the national treasury officials, adding that the rate of inflation and economic growth are fine.
The import of foreign capital and privatizations in Turkey is evidence that Turkey has made it possible to make financial contacts with foreign companies, asserted the officials, assuring possible disadvantageous news from the EU will not constitute a serious threat to Turkey, which is acknowledged to have good prospects by foreign capital centers.
On the other hand, the result of October 3 will possibly stop market growth if it happens to lead to a halt in the course of relations between the two sides, suggested Ahmet Cimenoglu, chief economist of Yapi Kredi Bank.
In this case, foreign exchange values, interest rates and the stock market will be among the first things to be affected severely.
"If the market manages to hold out hope for future restoration of the current economic growth, then a possible economic crisis will not be able to have large scale negative effects," voices Cimenoglu, concluding that no matter what the results of October 3 is, Turkey will not be bound to have the kind of crises that had occurred before; the economic system will only be affected temporarily. There is very little likelihood of us observing a tremendous boost in the short run, in Cimenoglu's opinion, since positive expectations have already been bought to a large extend.
Should the negotiations begin seamlessly, that will eventually lead to an increase in profits, commented Gokhan Kolay from Ziraat Investments.
However, a negative conclusion of EU officials on October 3 will terribly shake Turkey's economy, argued Professor Esfender Korkmaz.
Economic stagnation will be the sheer result of the lack of resources for production, Korkmaz defended adding, the stock market will be on the decline and Turkish currency will be largely devalued against foreign currencies. |
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