As is the case in all countries, the suitability of logistics network is one of the keys to economic growth. In its position as an emerging market economy, Turkey is faced with the typical challenge of upgrading its logistics infrastructure in order to meet the criteria of foreign investors. The aforementioned bus, dolmuş and taxi network is not particularly relevant to the logistic needs of modern industry.
The challenge of strengthening a country's logistics infrastructure has traditionally fallen on the back of the public sector. More recently, there has been a growing liberalization of state control over strategic assets. A deluge of worldwide private investment has ensued. Turkey's ruling AK Party has embraced this trend, having already sold off significant portions of Turkey's infrastructure portfolio. Most recently the port of Izmir was sold to Hong Kong-based Hutchison-Whampoa for $1.25 billion. Similarly, Germany's Fraport bought the operating rights to Antalya's airport for $3.2 billion. Although such sales inevitably arouse suspicion concerning whether the government received fair value, the fact remains that these infrastructure assets are better off in private hands in terms of the future investment that they will receive.
While seeking suitors for its existing assets, Turkey's government has turned its attention toward the development of the country's road system. In line with the seaports and airports, the government is trying to sell the management rights to the country's existing toll-roads and toll-bridges. This strategy of selling toll-road concessions is the key to Turkey's ability to afford the creation of new highways across the country. The construction of a highway linking Gebze-Orhangazi-Bursa-İzmir is already underway, and another such project linking Ankara with Izmir will most likely begin in 2008. When the AK Party took power in 2002, it aimed to build 15,000 kilometers of new roads. Roughly 4,000 kilometers have already been completed.
Like public works projects all over the world, the AK Party's program is not without its inequities. For example, the number of roads built in the region of Kayseri (770km), which is a traditional stronghold of the AKP, is greater than any other part of the country by more than 100 kilometers.
Beyond this type of age-old political dilemma, there exists the broader question of whether the AK Party's emphasis on roads is in fact prudent. Istanbul's traffic is already horrific and the construction of a system of wider roads elsewhere will only cause this phenomenon to spread to other locales. In light of the rising costs of petroleum of which Turkey has nearly none, this observer wonders if is truly wise to concentrate so much of the country's infrastructure investment on motorized transportation.
As it turns out, Turkey has a very long, albeit largely unfruitful, history of train transportation. British military activity in Egypt and Iraq during WWI was largely motivated by an urgent need to stop Germany's ambition to build a rail connection between Berlin and Baghdad via Anatolia. A subsequent effort by Ataturk to expand the country's rail network was cut short by the leader's death.
Therefore, the majority of Turkey's contemporary railroad network was built at the beginning of the 19th century by German engineers, who were paid by the kilometer. As a result, Turkey's rail routes are far from direct. A cross-country train voyage is not only dangerous, but it also takes an eternity. This state of affairs exists in stark contrast to the modern Mercedes coach buses and trucks, which can complete the same journey in half the time and twice the comfort, safety and reliability.
If Turkey is to improve the competitive position of its economy in the future, it ought to pay more attention to the realities of today's world. European governments are aggressively investing in linking together their rail infrastructures since they realize the economic benefits this will add to their increasingly integrated economies. Even America, which boasts the world's most impressive highway network, relies on its railways for a great deal of freight transportation. Initiatives like the Trans-Asian Railway Network are the future and are highly complimentary to Turkey's desires to function as a gateway between Europe and Asia.
Developments such as fast-train service connecting Istanbul to Ankara (and eventually Ankara with Konya) as well as the recent announcement of the reconstruction of the Baku-Tbilisi-Kars railroad in the near future are encouraging although insufficient. To meet Turkey's future economic ambitions, laying new and reliable track would not only benefit interior Anatolia's highly agrarian economy, but it will also encourage more dynamic industrial development.
The construction of more roads possesses the short term benefit of helping the country's growing automobile industry as well as the pockets of its bus company tycoons. However, this decision would appear to have unfortunate consequences for the Turkish economy's long term competitive position.