Turkey

Because of its geographical location, many businesses have operated from Turkey since early modern times, and the cities of Constantinople (now Istanbul) and Smyrna (now Izmir) were some of the busiest ports in [Page 1624]the eastern Mediterranean. Many of the early western and central European trading companies operated through the Ottoman Empire, which then ruled the region from Constantinople, the most well-known being the British Levant Company and the Austrian Danube Steam Navigation Company.

Workers sort through paper at a Turkish recycling plant. Turkey's economy has remained fairly strong with government involvement in the economy, particularly in the areas of banking, transportation, and communications.

Because of its pivotal position in terms of communications, the Ottoman Empire was one of the earliest countries to establish a telegraph line, the first being built in 1847. In 1881, the first telephone service was opened in Constantinople, but it was not until 1931 when telephone lines were run to Sofia, and then through to Berlin, that international calls were possible. And from the 1880s through to the early 20th century, the Austro-Hungarian, French, German, Italian, Romanian, and Russian governments all operated post offices in the country, mainly on the basis of ensuring regularity of business mail.

The loss of most of what was left of its European territories in the early 20th century, and its defeat in World War I, transformed the country and led to the creation of the Republic of Turkey in 1923, with its capital at Ankara. Constantinople was renamed Istanbul, but remained the center of much of the commerce in the country. By that time the Turks had won a war against the Greeks, and the victorious Turks had captured Smyrna and the other largely Greek port cities, expelling or killing the Greeks and causing most of the third country nationals to flee.

Modernizing Turkey

Under Ataturk, the new leader of Turkey, the country was modernized and transformed, dropping the script based on the Arabic script and using the European script. In 1930, the central Bank of the Republic of Turkey was established. Ataturk's aim was to build a new and vibrant country, and although he set the scene for what was to follow, most of the real economic transformation came after his death in 1938. Turkey remained neutral in World War II, and benefited from the U.S. investment in the country following Turkey's joining NATO and its use to station U.S. missiles. Turkey became a founding member of the Organisation for Economic Co-operation and Development (OECD) in [Page 1625]1961. The 1960s and the early 1970s were periods of economic growth, although Turkey had three military coups—in 1960, 1970, and 1980. The third one, on September 12, 1980, followed a long period of economic problems with inflation running at 130 percent a year, and political and criminal gangs acting with seeming impunity, frightening foreign investment, especially after Turkey's military intervention in Cyprus in 1974.

Following the restoration of democracy gradually during the 1980s and the reemergence of Suleyman Demirel, a former prime minister, as the president of the country in 1993, moves were made to bring the Turkish economy in line with those in Europe. Turkey began trying to get membership of the European Union, and became a member of the EU Customs Union on December 31, 1995. Although major unresolved political issues in the country remain, the economy has remained fairly strong with government involvement in the economy, with banking, transport, and communications being significant. There is wide disparity in wealth, with figures for Forbes Magazine in March 2008 showing that Istanbul had 35 billionaires, the fourth highest in any city after Moscow, New York City, and London.

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