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TUSIAD Turkey Letter: October 29-Nov 5 2012

THIS WEEK: 

TOP STORY
• Fitch upgrades Turkey to investment grade
FOREIGN POLICY
• UN- Turkey using anti-terrorism law to quash debate
• German FM urges fresh push for Turkey to join EU
• Turkey backs away from no-fly zone in Syria
•Turkey warned Iraqi Kurds that autonomy would not be applied in Syria: PM
ECONOMY / ENERGY
• Turkey signs $350 million Iraq oil drilling deal
• Uganda: Trade deal sealed with Turkey
DOMESTIC POLITICS
• Police clash with Kurds in Turkey

TOP STORY

Fitch upgrades Turkey to investment grade

Fitch Ratings has upgraded Turkey’s long-term foreign currency issuer default rating (IDR) to BBB- from BB+ and the long-term local currency IDR to BBB from BB+. The outlooks on the long-term ratings are stable. The agency has also upgraded Turkey’s short-term foreign currency IDR to F3 from B and the country ceiling to BBB from BBB-.

The upgrade to investment grade reflects a combination of an easing in near-term macro-financial risks as the economy heads for a soft landing and underlying credit strengths including a moderate and declining government debt burden, a sound banking system, favorable medium-term growth prospects and a relatively wealthy and diverse economy.

TUSIAD President Ümit Boyner issued a statement in regards to the credit rating announcement, stating that the increase in credit rating by Fitch is a positive step for Turkey’s economy.

Meanwhile, Turkey’s trade deficit narrowed for an 11th consecutive month in September, as slowing growth hit demand for imports and gold exports continued to increase.  The gap declined to $6.8 billion from a record $10.5 billion for the same month a year earlier, the statistics office in Ankara said on its website today. It was expected at $6.2 billion, according to the median estimate of three economists surveyed by Bloomberg.

Turkey’s inflation rate fell to the lowest in 11 months as a slowing economy outweighed the impact of government price increases on gas and electricity. Inflation slowed to 7.8 percent from 9.2 percent the month before.
~~~
Business Week, 31 October 2012, Turkey’s Trade Deficit Narrows for 11th Month in September Fitchratings, 5 November 2012,Fitch Upgrades Turkey to Investment Grade 
TUSIAD Press Release, 5 November 2012
Bloomberg, 5 November 2012, Turkey’s Inflation Rate Dropped to One-Year Low in October

FOREIGN POLICY

UN- Turkey using anti-terrorism law to quash debate

Turkey is using a vague counterterrorism law to prosecute many activists, lawyers and journalists, often holding them for long pre-trial periods without access to a lawyer, United Nations human rights experts said on Nov. 1.  The UN Human Rights Committee said after reviewing Turkey’s record for the first time that the right to due process is sharply curbed under its 1991 Anti-Terrorism Law and that some of its provisions are incompatible with international law.
~~~
Reuters, 1 November 2012, Turkey using anti-terrorism law to quash debate –UN

German FM urges fresh push for Turkey to join

EU

Turkish Prime Minister Recep Tayyip Erdoğan stated that the European Union will lose Turkey if it doesn’t grant it membership by 2023 on Oct. 30. It was the first time Erdoğan has given an indication of how long Ankara might continue down the path towards EU entry, and his comments came at a time of growing alienation between Turkey and a political entity it feels has cold-shouldered it.

German Chancellor Angela Merkel told Erdoğan on Oct. 31 that the EU would pursue accession talks with Turkey in good faith, despite some persistent disagreements. German Foreign Minister Guido Westerwelle says it is in the interest of both the EU and Turkey to give the talks a ‘‘new push’’ in 2013.
~~~
Reuters, 30 October 2012, EU will lose Turkey if it hasn’t joined by 2023: Erdogan
Boston, 30 October 2012, German FM urges fresh push for Turkey to join EU 
Reuter, 31 October 2012, Merkel reassures Turkey on EU talks, Erdogan raps Cyprus 

Turkey backs away from no-fly zone in Syria

Warplanes fired missiles at opposition strongholds around Damascus and in the north on October 31 as Turkey appeared to distance itself from an earlier call to impose a no-fly zone. Turkish Prime Minister Recep Tayyip Erdoğan, a harsh critic of Syrian President Bashar Assad, said the decision to set a no-fly zone would need to come from the Security Council, adding that the experience of imposing a no-fly zone over Iraq to strike at Saddam Hussein had shown it came at a high price.
~~~
Washington Post, 31 October 2012, Syrian regime keeps up heavy air bombardment of rebels, Turkey backs away from no-fly zone

Turkey warned Iraqi Kurds that autonomy would not be applied in Syria: PM

Turkey gave a clear warning to Masoud Barzani, president of the Iraqi Kurdistan Regional Administration, that the autonomous region in northern Iraq would not be applied to Syria. “We cannot let playing of such a scenario here [in Syria]. We told this to Barzani too. We wanted him to know this,” Prime Minister Recep Tayyip Erdoğan said on Oct. 31 in an apparent reference to the possibility of the founding of an autonomous Kurdish entity in northern Syria.
~~~
Hurriyet Daily News, 2 November 2012, Turkey warned Iraqi Kurds that autonomy would not be applied in Syria: PM

ECONOMY/ENERGY

Turkey signs $350 million Iraq oil drilling deal

Turkey has signed a $350 million deal on drilling 40 oil wells in the southern Iraqi Basra area and is in talks with Baghdad on drilling 7,000 wells across Iraq, Energy Minister Taner Yıldız said Nov. 2.  Details of the timeframe or companies involved were not immediately available.
~~~
Reuters, 2 November 2012, Turkey signs $350 mln Iraq oil drilling deal 

Uganda: Trade deal sealed with Turkey

Trade between Uganda and Turkey has been bolstered further following the signing of an agreement between the Turkish Trade Union (HAK-IS) and the National Organization of Trade Unions (NOTU) from Uganda. The two leading trade unions agreed to boost cooperation in the areas of socio-economic life of the citizens of the two nations.
~~~
All Africa, 30 October 2012, Uganda: Trade Deal Sealed With Turkey 

DOMESTIC POLITICS

Police clash with

Kurds in Turkey

Kurdish protesters clashed with police on Oct. 30 near a prison in southeastern Turkey where some inmates are on a hunger strike.  Several thousand people joined a protest march to a prison in the city of Diyarbakır, and police used tear gas and water cannon to drive back groups of demonstrators who threw stones and firebombs from side streets. Shops were shuttered and many families did not send their children to school in line with calls for a boycott.
~~~
ABC News, 30 October 2012, Police clash with Kurds in Turkey 

 

These news items are compiled by TUSIAD Washington Representative Office (TUSIAD-US) from major news publications. They do not necessarily reflect the views or positions of TUSIAD. To subscribe or unsubscribe from this electronic publication, please send an e-mail to [email protected]. These materials may be reproduced and/or distributed, in whole or in part, provided that its source is properly indicated as “TUSIAD-US Web site: www.tusiad.us”.