Turkey

Last updated: July 2nd, 2021

The Turkish Republic stretches from the south-eastern edge of Europe eastwards to the Middle East. It borders Greece and Bulgaria to the west, the Black Sea to the north, the Mediterranean Sea to the southwest, and Syria, Iraq, Iran, Armenia, and Georgia to the southeast and east. The capital city of Ankara is located roughly in the country’s center. Istanbul – Turkey’s largest metropolis – is located on the Bosphorus with territory in both the European and Asian parts of the country. With around 82.5 million inhabitants, Turkey is about as populous as Germany; its area, however, is more than twice as large.

Turkey emerged as the successor state to the Ottoman Empire, which was dissolved after the First World War. The founder of the state is Mustafa Kemal Pasha, known as Atatürk, who proclaimed the republic in 1923 and became its first president. Until his death in 1938, he carried out numerous reforms aimed at modernising and secularising Turkey, which in the long term led to a rapprochement with the rest of Europe. In 1999, the EU Parliament elevated Turkey to the status of EU candidate country. Accession negotiations began in 2005. Economically, the EU and Turkey are already very closely intertwined.

Almost one fourth of Turkish exports go to four EU countries only, namely Germany, Italy, Spain, and France, while roughly 17 percent of Turkish imports come from Germany, Italy, and France. Turkey is one of Germany’s twenty largest foreign trade partners in terms of both import and export volume.

Since 2002, Turkey has been governed by the AK Party, which has won all elections since then. Recep Tayyip Erdoğan, who had previously led Turkey as prime minister, has been president since 2014. In April 2017, a narrow majority of the Turkish electorate voted in a constitutional referendum to change the parliamentary system into a presidential one. The Turkish economy has remained largely calm and stable since the attempted coup in July 2016.

The state of emergency was ended after two years in the summer of 2018. While economic growth has generally receded in the last few years, Turkey was one of the countries with a positive growth rate of 1.8 percent in 2020 compared to 0.9 percent in 2019. While the Covid-19 pandemic severely affected tourism and the services sector, which accounts for 55-60 percent of Turkey’s GDP, industrial production kept going and low interest rate policies also boosted economic growth. A quick and strong recovery is expected with six percent growth in 2021 despite challenges with the inflation rate. This is also due to the strong industrial base and good connectivity to European markets, which guarantees fast delivery times for the automotive industry, its suppliers, and the high-quality textile industry.

The 2020 Doing Business Index published by the World Bank attests that the country has a business-friendly business climate. It ranks 33rd in the world and is thus at a similar level as Switzerland or France.