ANKARA - The military operation mounted by Turkish army against (terrorist organization) PKK camps in northern Iraq marked the year 2007, as it draws to a close.

Besides the success of the operation itself, observers drew attention to the fact that how the government prepared well the political ground, since there was no negative reaction neither from the USA and/or EU; nor the neighboring countries of Turkey --except a weak protest from Iraq.

During the year, prominent political figures and former foreign ministers Erdal Inonu and Ismail Cem, as well as businessmen Kadir Has and Vitali Hakko have passed away.

General elections were held on July 22nd and Justice and Development Party maintained its supremacy collecting 47 p.c. of the votes.

Hrant Dink, Turkish journalist of Armenian descent and editor-in-chief of the AGOS daily has been assassinated in Istanbul.

A brief summary of main events of 2007, as far as Turkey is concerned, follows:

-POLITICAL & SOCIAL EVENTS OF 2007-

January 9th: - A Moldovan aircraft carrying Turkish workers crashed when it was about to land in Baghdad, Iraq. It was en route from Turkish Mediterranean city of Adana to Iraq and carrying 35 people including the crew. 34 people died while one survived the crash with injuries.

January 19th: Hrant Dink, the editor-in-chief of the Turkish-Armenian weekly Agos, died in an armed attack in front of his office in Istanbul.

January 23rd: Turkish PM Recep Tayyip Erdogan and Italian PM Romano Prodi inaugurated the Bolu Mountain Tunnel on Ankara- Istanbul highway. The construction began 16 years ago and cost about 1 billion USD.

March 6th: Oguz Kagan Koksal, the governor of Aegean province of Izmir, was appointed as the new Turkish Police Chief.

March 10th: Land Forces Commander Gen. Ilker Basbug said there are around 3,500-3,800 terrorists (member of PKK organization) in the north of Iraq, most of whom are stationed close to Turkish- Iraq border.

March 29th: Turkish Culture & Tourism Minister Atilla Koc inaugurated the historical Armenian church on the Akdamar Islet in eastern city of Van after it was renovated. Mesrob II, the Patriarch of Armenians in Turkey, and Armenian Deputy Culture Minister Gagik Gyurjan also participated in the ceremony.

April 24th: Turkish FM Abdullah Gul declared his candidacy for the new president of Turkey. Gul submitted his petition to the Office of Parliament Speaker.

May 3th: Turkish parliament decided to hold general elections on July 22nd, 2007.

May 22nd: A blast in front of Anafartalar Shopping Center in Ankara's Ulus neighborhood killed six and wounded 91.

May 27th: "Yasamin Kiyisinda" (The Edge of Heaven), a film by Turkish director Fatih Akin, received the best scenario award in the 60th Cannes Film Festival.

July 4th: The death toll following May 22nd blast in Ankara rose to nine.

July 22nd: General elections were held. Justice & Development (AK) Party won 341 seats, the Republican People's Party (CHP) 112 and the Nationalist Movement Party (MHP) 71. Twenty-six independent MPs entered the new parliament.
AK Party won 46.58 percent of the valid votes and managed to form a government on its own. The Republican People's Party got 20.88 percent of votes and MHP gained 14.27 percent of valid votes.
Later, some of the independent MPs joined the Democratic Society Party (DTP).
Mesut Yilmaz, Muhsin Yazicioglu, Ufuk Uras and Kamer Genc also entered the parliament as independent MPs. However, Yazicioglu later became the chairman of the Grand Unity Party (BBP) and Ufuk Uras the chairman of the Freedom & Solidarity Party (ODP).

August 6th: President Ahmet Necdet Sezer designated Recep Tayyip Erdogan, chairman of the Justice and Development (AK) Party to form the 60th government.

August 18th: Two men hijacked an AtlasJet plane and forced the pilots to land at Antalya Airport for refuelling. The two hijackers, identified as Momnen Abdul Talikh and Mehmet Rasat Ozlu, surrendered to security forces after six-hours of standoff, holding passengers hostage.

August 28th: Foreign Minister Abdullah Gul was elected by Turkish parliament as the 11th President of Turkey. Gul sworn in to replace Ahmet Necdet Sezer.

August 29th: Justice and Development (AK) Party Chairman Recep Tayyip Erdogan formed the 60th government. President Abdullah Gul approved the 25-member cabinet list.

September 11th: President Abdullah Gul paid his first domestic visit to east and southeast Turkey.

September 28th: Turkish Interior Minister Besir Atalay and his Iraqi counterpart Jawad al Bulani signed a cooperation agreement to fight against terrorism.

October 7th: PKK terrorists attacked Turkish security forces in Mount Gabar in the southeastern province of Sirnak, martyring 14 Turkish troops including a non-commissioned officer.

October 17th: Turkish parliament authorized government to stage military operations in Iraq's northern part where the terrorist organization PKK took shelter.

October 21st: Twelve Turkish troops were martyred and 16 others were injured during a terrorist attack in Daglica in the southeastern province of Hakkari.
Eight soldiers went missing. A total of 34 terrorists were killed during and after the attack.

October 25th: Turkish Chief of General Staff said security forces killed more than 30 terrorists in the southeastern province of Hakkari.

October 29th: Turkish security forces killed 15 terrorists during an operation in the southeastern province of Tunceli.

October 31st: According to a press release issued by the Turkish General Staff, in a clash with terrorists at Mount Cudi, one non-commissioned officer and two sergeants were martyred and 15 terrorists rendered ineffective.

- Turkish Higher Electoral Council (YSK) announced the official results of a referendum (to amend the Constitution) that took place on October 21st. According to the YSK, 28,819,319 people voted in the referendum. 28,167,661 votes were valid. 19,422,714 Turks voted 'yes' while 8,744,947 voted 'no'.
According to the adopted amendment, President of the Republic will be elected by popular vote for a period of 4 years and the elected president can run for a second term. Also general elections will be held every four years instead of five.

November 18th: Turkish-Greek Natural Gas Pipeline (Nabucco Project) was inaugurated with the participation of Azerbaijani President Ilham Alivey, Turkish Prime Minister Recep Tayyip Erdogan and Greek Premier Konstandinos Karamanlis.

November 22nd: Turkish pianist Fazil Say designated as "European Ambassador" by the European Commission in order to work for "2008 Inter-cultural Dialogue".

November 30th: An Atlasjet passenger plane crashed in southwestern province of Isparta's Keciborlu town killing 57 on board, including seven crew members. The plane was travelling to Isparta from Istanbul.

December 1st: Turkish Armed Forces (TSK) conducted the first military operation after the government authorized the TSK for such operations. A terrorist group of 50-60 members was attacked within Iraqi territory and many terrorists were rendered ineffective. In a press release issued, the Turkish General Staff
announced that only the terrorist organization PKK/KONGRA-GEL was targeted. "The people living in north of Iraq were not the target of the TSK," said the General Staff.

December 5th: Turkish General Staff announced that the number of terrorists rendered ineffective in south-eastern province of Sirnak's Mount Kupeli rose to 14.

December 10th: A boat carrying illegal migrants sank off the coast of Izmir's Seferihisar town. Seven migrants were rescued by Turkish Coast Guard while 43 bodies were recovered. The boat was carrying around 85 people.

December 16th: Turkish fighter jets bombed the camps of terrorist organization PKK in north of Iraq, including those at Zap, Avasin, Hakurk regions and Qandil Mountain as of 0100 hours. Turkish land force units also bombed the same areas.
- Following the military operation, Chief of General Staff Gen. Yasar Buyukanit said that " PKK's camps in the region are like the tv show 'Big Brother' ; i.e. We know PKK's sites as well as we know our palms."

-TURKEY'S FOREIGN RELATIONS-

-TURKEY-RUSSIA-
Although political relations between Turkey and Russia recessed in 2007, the two countries broke a record in their trade relations with a volume of 25 billion USD. Turkey and Russia were planning to reach this trade volume by the end of 2008. Also, Turkish investments in Russia rose to 5.6 billion USD.

The number of Russian tourists arriving in Turkey was up 35 percent in 2007 over 2006. 2,400,000 Russians preferred Turkey as a tourist destination in 2007.

-TURKEY-USA-
Efforts to find a solution to the terrorist organization PKK problem; the draft resolution on the Armenian allegations regarding 1915 incidents and the White House meeting between Turkish PM Recep Tayyip Erdogan and U.S. President George Bush were the main topics of Turkish-U.S. relations in 2007.
The relations became tense after the terrorist organization PKK, that sheltered in the north of Iraq, infiltrated Turkey and increased its attacks. Ankara wanted Washington to take action to eradicate PKK from northern Iraq. Otherwise, Turkey said it would use its rights stemming from international law and take measures on its own against the terrorist organization.
The U.S. executives said this was a decision to be made by Turkey but the region may be destabilized if a military operation was staged on the north of Iraq -- which they saw as the most stable area in this country. Therefore, they called on Turkey not to launch a "unilateral" action.
The U.S. administration insisted that the problem should be solved through dialogue, while Turkey said U.S. and Iraqi authorities should meet to find a solution that was acceptable for both Iraq and Turkey.
On October 11th, Turkish parliament authorized the government to order a cross-border operation into Iraq due to ongoing PKK attacks. Fearing that Turkey could stage a cross-border operation, the United States increased its pressure on the Iraqi Kurds to take more effective measures against the terrorist organization.
Erdogan-Bush meeting at the White House on November 5th was the most important event of the year as far as Turkish-U.S. relations are concerned. Bush declared the terrorist organization PKK as "the common enemy of Turkey and the USA" and announced his decision to set up a mechanism for a more efficient fight against it.
According to this mechanism, Turkish Deputy Chief of General Staff Gen. Ergin Saygun, Vice Chairman of U.S. Joint Chiefs of Staff James Cartwright, and commander of multinational force in Iraq Gen. David Petraeus set up a trilateral coordination mechanism. Within this framework, the United States pledged to
provide real-time "actionable intelligence" to Turkey. Towards the end of the year, Dan Fried, the Assistant Secretary of State for European & Eurasian Affairs, said this mechanism was operational in recent days and said he was pleased to see results.

The so-called Armenian allegations also had an important place in Turkish-American relations in 2007. Nancy Pelosi (Democrat), the new speaker of the U.S. House of Representatives, said she would back Armenian allegations regarding the incidents of 1915, in the direction of the promises she made before the elections.
A non-binding draft bill regarding the Armenian allegations was submitted to the House of Representatives in January. Abdullah Gul, who was the then foreign minister of Turkey, visited Washington D.C. in February and warned that the draft may harm Turkish-American relations --if adopted.
The Bush administration lobbied against the draft. However, the Committee on Foreign Affairs of the U.S. House of Representatives adopted it. Despite this, the draft was not brought up to the full house, confirming an expression "the most effective lobby in Washington is the administration."
Even though the ratification of the draft is prevented in 2007, it may be brought up again in 2008.

Iran's nuclear programme also was a major issue in relations between Turkey and the U.S. as Washington has engaged in renewed efforts to intensify international embargoes on Tehran. Turkey and Iran signed an agreement on energy cooperation, which caused uneasiness on the American side whereas Ankara said that its economic and commercial relations with neighbors should be seen as normal.

-TURKISH-FRENCH RELATIONS-
French opposition against Turkey's adhesion to the European Union affected negatively relations between the two countries in 2007.

A draft bill, which was approved by French parliament, criminalizing the denial of Armenian allegations on the events of 1915, heightened tensions in Turkish-French relations. In the face of Turkey's strong reaction, French government refrained from bringing the draft to the Senate floor. But the parliamentary approval of the draft made a major impact on relations in several fields, particularly in commerce. The draft bill is likely to come onto the agenda as French people are set to vote in 2008 in local elections.

Nicolas Sarkozy, the main candidate for French president, won the elections.
Sarkozy looking for the support of extreme rightist parties (during his election campaign), promised that he would oppose Turkey's membership and even stop accession negotiations if he were elected.

France forced EU foreign ministers to coin the phrase "inter-governmental conference" to replace "accession conference" in a final declaration of a December 10 meeting in Brussels. France also insisted for the removal of the phrase expressing that "negotiations aimed at membership." The French proposal was accepted with backing from Germany although several countries, particularly Britain, opposed the proposal.

-TURKISH ECONOMY AT A GLANCE -

In the third quarter of 2007, Turkey's economy grew by 2 percent, which was below expectations. The year-end growth rate is also estimated below the target of 5 percent.
Turkey's exports reached 96.5 billion USD during the first eleven months of 2007, while it is almost certain that the year-end figure will exceed 100 billion USD, a benchmark set by the government.
The country's imports stood at 137.3 billion USD in January- October period with a foreign deficit of 50.8 billion USD.
Budget deficit between January-November 2007 was 9.7 billion USD and the inflation rate was expected to remain at single-digit but higher than an initial target of 4 percent.
According to figures of the Turkish Statistics Board, gross national product (GNP) was 348.4 billion USD during the first nine months of 2007. GNP in 2006 was 399.6 billion USD.
Unemployment rate was 9.3 percent in September 2007 whereas the number of jobless was 2.4 million.

-Balance of payments-
According to the balance of payments report of the Central Bank, current account deficit reached 29.6 billion USD in January- October 2007. It was 26.7 billion USD in the same period last year.
Current account deficit is expected to be 36.4 billion USD at the end of this year.

-Domestic debt stock-
251.5 billion YTL domestic debt stock in 2006 reached 257.5 billion YTL at the end of October. Thus, rise in domestic debt stock in the first 10 months was 2.4 percent.

-Foreign debt stock-
Turkey's foreign debt stock grew 9.0 percent as of end June 2007 and amounted 226.4 billion USD. In the same period of previous year, Turkey's foreign debt stock was 207.8 billion USD.

-Privatization-
Turkey's privatization revenues in 2007 amounted to 7.7 billion USD. 8.9 billion USD revenue was collected in 2006.
Mersin Port; a land plot belonging to the Highways Dept. in Levent district of Istanbul; Bursa Celik Palas Hotel belonging to Turkish Retirement Fund; THY-USAS (64 percent share) came forefront in 2.3 billion USD block sale this year.
Total amount of the projects whose tenders were completed reached 3.5 billion USD.
Turkey earned 17.7 billion USD from privatization between 1986 and 2005 (20 years). However, it obtained 8.1 billion USD in 2006 and 3.5 billion USD so far in 2007.

Here are some comparative macroeconomic indicators related to 2007 :

MAJOR MACROECONOMIC 2006 2007
INDICATORS (RECENT FIGURES)
---------------- ------------- -------------------
Growth Rate (%) 6.0 3.8 (9
months)
GNP (million USD) 399,673 290,103 (9
months)
Inflation (producer) 11.58 5.65 (x)
Inflation (consumer) 9.65 8,40 (x)
Dollar Price 1.4145 1.1798
Import (billion USD) 137.0 137.0 (10
months)
Export (billion USD) 85.1 86.2 (10
months)
Trade Balance -51.9 -50.9 (10
months)
Export/Import 62.1 62.9 (10
months)
Balance of Current Accounts
(billion USD) -32.9 -29.1 (10
months)
Central Budgetary Income
(billion YTL) 171.3 174.7 (11
months)
Central Budgetary Expendit. 175.3 184.4 (11
months)
Central Budgetary Balance -3.9 -9.7 (11
months)
Internal Debts(billion YTL) 251.5 226.4 (10
months)
Ext.Debts Serv.(billion USD) 19.8 17.8 (11.5
months)
External Debts(billion USD) 207.8 226.4 (6
months)
International Reserves 101.2 116.5 (11
months)
Central Bank Reserves 60.8 69.6 (11.5
months)

(x) Recent annual inflation rate as of November 2005.

-FROM THE PARLIAMENT...

The presidential election, which was held at the Turkish parliament in March
2007, gave rise to discussions in Turkey.
Abdullah Gul, who was the only candidate for presidency during the first
round of the ballot, could not get the necessary 367 votes required by the
constitution to be elected president.
A total of 361 MPs cast their votes in the first round of presidential
election.
Among those, there were 351 MPs from the ruling Justice & Development (AK)
Party, 1 from the Republican People's Party (CHP), 2 from the Motherland Party
(ANAVATAN), 2 from the True Path Party (DYP) and 5 independent MPs.
During the election, Abdullah Gul got 357 votes out of the total 361.

Following the overruling decision of the Turkish Constitutional Court in May
2007 --which cancelled the first round of the ballot--, the parliament failed to
elect the president again.

Gul withdrew his candidacy as 367 MPs were not present at the General
Assembly hall during the first round of voting.

On the other hand, the constitutional amendment bill, which envisaged
holding parliamentary elections every 4 years and electing the President by
popular vote, was later adopted at the parliament and became law.
On June 3rd, the parliament recessed due to the upcoming general elections
to be held on July 22nd.
The new parliament formed right after the elections of July 22nd, first
finalized the election process of the President and the Parliament Speaker.
The parliament of the 23rd term elected Foreign Minister and Deputy Premier
Abdullah Gul as the 11th President of the Republic of Turkey and Justice and
Development (AK) Party's Zonguldak MP Koksal Toptan as the Parliament Speaker.
The 60th government received a vote of confidence from the Turkish
parliament in September.

On the other hand, the motion authorizing the government for a period of
one-year to send Turkish Armed Forces (TSK) to the north of Iraq, (where
terrorist organization PKK is settled), was adopted at the parliament. A total of
507 MPS voted in favor of the motion, while 19 voted against it.

Furthermore, Turkish parliament hosted a historical meeting in December
2007.
Israeli President Shimon Peres and Palestinian President Mahmoud Abbas met
under the roof of the Turkish Parliament.

-SPORTS-
In the first two months of 2007, the most important event as far as Turkish
sports community is concerned was the assignment of the organization of 2011
<25th World University Winter Games> to eastern province of Erzurum, by
International University Sports Federation (FISU).

On the other hand, during the 31st FIFA Congress in January, French soccer
player Michel Platini was elected president. Platini chose Turkish Senes Erzik as
deputy president.

In March, Turkey's national soccer team defeated Greece, 4-1, in the 13th
European Championship eliminations in Athens.
In May, Fenerbahce soccer club completed the 2006-2007 soccer season (Super
League) as the champion, while Besiktas soccer club won the Turkish National
Cup.

Bahri Tanrikulu won a gold medal at the World Taekwando Championship held in
People's Republic of China and Sumeyra Kaya became the European boxing champion.

Finally Turkey's national soccer team won the right to compete in the
European Championship finals in 2008.

(IMB-BRC-DO-SOL-AY-EO-OZG-TC-ULG)