By Christian Himmighoffen

Istanbul spans both sides of the Bosporus and thus has one foot in Europe and one in Asia. This role between two worlds also applies to Turkey as a whole, whose history is closely connected with Europe’s, but is also a part of the Islamic cultural community.

The political relationship between Ankara and Brussels is treading dangerous waters, and the Presidential race has thrown Turkey into a difficult political crisis this past spring. However, Turkey’s domestic and foreign troubles have not harmed the fast growth on the Bosporus. Last year, the Turkish economy grew by 6.1 percent, and the OECD predicted a growth of 5.7 percent for 2007, with a bullish tendency. From 2008 to 2012, the Turkish economy expected to grow by an average of 7.2 percent per year, according to OECD experts.

The Turkish economy is opening up and modernising, to which foreign investors are contributing. New industries are gaining importance, and Turkish companies are becoming more international. The automotive and supplier industry has replaced the textile and clothing industry – which has suffered from Chinese competition – as the most important export industry. Mechanical engineering is already the third-most important export industry. Despite the strong international competition, local production grew last year by roughly 14 percent and exports climbed almost one-quarter. Exports have meanwhile become the catalyst of the economic boom. While domestic demand has lost its momentum, Turkish exports have climbed in the first half of 2007 by 24 percent to nearly 50 billion US-Dollars.

More and more Turkish companies are taking the plunge into foreign countries. “It is a fairly new phenomenon that Turkish companies are going international”, says Marc Landau, Managing Director of the German-Turkish Chamber of Commerce and Trade (DTIHK) in Istanbul. The Turkish electronics company Beko, together with a British partner, just bought the bankrupt television manufacturer Grundig, and the Eczacibasi Holding took over the majority share of the tile division of Villeroy & Boch. “The large players have understood that they must build brands”, added Marc Landau. “Turkey is opening up”, confirms Arnold Hornfeld, who worked for Siemens in Turkey for several decades and now leads the energy committee of the “Turkish Industrialists’ and Businessmen’s’ Association” TÜSIAD. “Economically speaking, Turkey is already a part of the EU.”

The brilliant victory of the Islamic-conservative AKP of Prime Minister Recep Tyyip Erdogan in July is due to the economic boom of the past few years. This economic boom is, too, a result of the government: Under Erdogan, Turkey has experienced a boost in political and economic reforms since November 2002; a “silent revolution”, as the Prime Minister calls it.