The Turkish economy -- which lost most of its momentum during last year's invasion of Cyprus -- faces an uncertain future against the international forces of inflation and unemployment as well as a battery of domestic ills.
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Background: The Turkish economy -- which lost most of its momentum during last year's invasion of Cyprus -- faces an uncertain future against the international forces of inflation and unemployment as well as a battery of domestic ills.
Last year Turkey's trade deficit jumped by nearly 170 per cent to 833 million points sterling (two billion U.S. dollars). Rocketing import prices -- particularly of crude oil -- the recession in West Germany, where the bulk of Turkey's vast army of expatriate workers are employed -- and a falling off in demand for Turkey's often high-proceed exports, particularly cotton and cotton textiles, has led to the record deficit.
However, the figure will have been mostly offset by the huge invisible flow of money back into the country earned by expatriate Turks.
The invasion of Cyprus which cost the Turkish Treasury an estimated 440 million pounds sterling (one billion U.S. dollars), and the six-month-old Government crisis that it precipitated, have retarded efforts to contain the twin evils of inflation and unemployment.
Consumer prices forged ahead by 30 per cent last year -- bringing some food-and-commodity shortages -- although wages were generally able to keep up, and even go ahead.
Unemployment hovers around 14 per cent in this country of 40 million people with a work-force of about 16.3 million, mainly agricultural workers.
A major support to Turkey's economy is its foreign currency reserves which have been falling, but still total a healthy 710 million pounds sterling (1.7 billion U.S. dollars).
And, although the outlook for this year's balance of payments is not bright, Turkey has set itself an export target a third higher than last year's, and is spending more money on defence than ever before -- largely because of the withdrawal of United States' aid.
For the man-in-the-street there are certain special advantages of life in this strategic east Mediterranean country. Food is cheap -- in stark contrast to cars, cigarettes and the like -- and, although housing prices are high, there is a law which gives automatic freehold ownership of a piece of land to anyone who can erect a house on it overnight.