r is textiles and clothing, which accounts
for one-third of industrial employment; it faces stiff competition
in international markets with the end of the global quota system.
However, other sectors, notably the automotive and electronics
industries, are rising in importance within Turkey's export mix.
Real GNP growth has exceeded 6% in many years, but this strong
expansion has been interrupted by sharp declines in output in 1994,
1999, and 2001. The economy is turning around with the
implementation of economic reforms, and 2004 GDP growth reached 9%,
followed by roughly 5% annual growth from 2005-07. Inflation fell to
7.7% in 2005 - a 30-year low - but climbed back to 8.5% in 2007.
Despite the strong economic gains from 2002-07, which were largely
due to renewed investor interest in emerging markets, IMF backing,
and tighter fiscal policy, the economy is still burdened by a high
current account deficit and high external debt. Further economic and
judicial reforms and prospective EU membership are expected to boost
foreign direct investment. The stock value of FDI currently stands
at about $85 billion. Privatization sales are currently approaching
$21 billion. Oil began to flow through the Baku-Tblisi-Ceyhan
pipeline in May 2006, marking a major milestone that will bring up
to 1 million barrels per day from the Caspian to market. In 2007,
Turkish financial markets weathered significant domestic political
turmoil, including turbulence sparked by controversy over the
selection of former Foreign Minister Abdullah GUL as Turkey's 11th
president. Economic fundamentals are sound, marked by strong
economic growth and foreign direct investment. Turkey's high current
account deficit leaves the economy vulnerable to destabilizing
shifts in investor confidence, however.

Turkmenistan
Turkmenistan is a largely desert country with intensive
agriculture in irrigated oases and large gas and oil resources.
One-half of its irrigated land is planted in cotton; formerly it was
the world's 10th-largest producer. Poor harvests in recent years
have led to an almost 50% decline in cotton exports. With an
authoritarian ex-Communist regime in power and a tribally based
social structure, Turkmenistan has taken a cautious approach to
economic reform, hoping to use gas and cotton sales to sustain its
inefficient economy. Privatization goals remain limited. From
1998-2005,