Tonga – Draft

Thomas Gill

Macro

3-18-2008

(GDP) KINGDOM OF TONGA

The Gross Domestic Product (GDP) is measured by taking the sum of the value added by all resident producers in an economy plus any product taxes not included in the valuation output. It is calculated without making deductions for depreciation of fabricated capital assets or for depletion and degradation of natural resources. Value added is the net output of an industry after adding up all the outputs and subtracting intermediate outputs.

GDP is the most commonly used method of measuring an economy’s output, and is meant to measure how much an economy produces in an allotted amount of time. To find it you put in the production method to measurement, it is the market value of the final goods and services produced in a country during a given period. The market value is compromised of goods and services produced in the economy, including those by the government, and excluding those that are not sold in markets from the GDP. Examples of the final goods and services that are counted in GDP are factories and machines, which are capital goods. Goods and services not counted in GDP are intermediate. Those are used up in the production of final goods and services. If any goods and services are either not produced within the country or within the given period of time the GDP is being measured for, those goods do not count towards the GDP total.

Another way to measure GDP is with the expenditure method. According to Frank and Bernanke (2007), “GDP can be measured with equal accuracy by either of two methods: (1) adding up the market values of all the final goods and services that are produced domestically or (2) adding up the total amount spent by each of the four groups on final goods and services and subtracting spending on imported goods and services. The values obtained by the two methods will be the same.” From those four groups of final goods, there are four areas of expenditure: consumption (spending by households), investment (spending by firms), government purchases (purchases by federal, state, and local governments), and net exports (exports minus imports).

A third face of GDP used to measure its total is to think of it as the incomes of capital and labor. “Whenever a good or service is produced or sold, the revenue from the sale is distributed to the workers and the owners of the capital involved in the production of the good or service. Thus, except for some technical adjustments, GDP also equals labor income [(two-thirds of GDP: wages, salaries, and incomes of self-employed)] plus capital income [( one-third of GDP: physical- factories, machines, and office buildings; intangible-copyrights and patents)]” (Frank and Bernanke, 2007).

To look more closely at GDP over different points of time, economists use a method of excluding the effects of price changes, and adjust for inflation. So, a common set of prices is used to value the quantities produced in different years, and an equation involving the information from a base year that is not current, but recent. This equation results in the estimate of the real GDP (actual physical volume of production), whereas the measure of GDP in current-year prices is defined as nominal GDP (the current dollar value of production).

A common error made by the public is to consider real GDP an estimate of a country’s economic well-being. These two are not one and the same, and do not necessarily implicate each other. An increase in GDP does not mean that the country is doing better economically, but real GDP per person can be related to a higher standard of living. Thus, it is possible for a higher real GDP to allow for greater economic well-being, but it is not a guarantee.

The Kingdome of Tonga consists of four main islands located in the south pacific. Tonga is the only archipelago in the pacific never to have been colonized. It lies southeast of Samoa and east of Fiji and is about one third the way between New Zeeland and Hawaii. Tonga is a country that relies on constant donor support. The annual real GDP growth average was slightly over two percent in 2001 to 2004. In 2005 the growth average of GDP raised to 2.8 percent. Agricultural trade was the main drive for this growth. In 2005 the inflation rate when up in Tonga. It went up to double digits because of the high commodity oil prices and the pressure on public finance. In the external region of the economy there was a big raise in public sector wages from 200 to 2001. This led to difficulties in tax administration and led to a deficit of three percent of GDP in 2003, because of this public dept declined from fifty six percent of GDP in 2003 to forty five percent of GDP in 2004.

Graph

Tonga’s economy depends mainly on agriculture. Squash is there main agricultural export by other exports such as fishing tourism and other open market trades. In 2003 the agricultural sector was widely affected by lowering squash exports prices and low fish catch rates. This was caused by poor weather conditions throughout the year. This put growth at below one percent in 2004. However in 2005 there was recovery in agriculture. They were growing better crops and catching more tuna. The Tongan economy highly depends on their squash trade; this one vegetable is the whole reasoning behind their whole export factor.

During 2005 tourist made up seven percent of the economies GDP. This was a thirty three percent increase from the previous year. Tonga’s remittance determines about twenty five percent of their GDP per year. Although Tonga’s small size economy brings challenge to their economic development they can still do allot to maximize economic growth. This has been accomplished by many small island countries and states. Some key steps to accomplishing this are strengthening their governance and accountability throughout their public sector, and focusing on government involvement in areas of comparative advantage and providing private sector development. Some other ways to go about doing this are to call for an increase and include public enterprise reform. This will improve the efficiency of the enterprise and reduce the share of public budget. In the end this will strengthen the revenue through reform of the tax system.

Tonga has been a World Bank member since 1985. Since then Tonga has received four IDA credits totaling US $21 million. Most of this money has been in health, hazard management and finance sectors. The World Bank has a growing partnership with Tonga hoping that one day the government will progress its key reforms. Tonga just like most countries has a reform agenda. A reform agenda is an agenda that sets a plan for economic growth. The World Bank believes that Tonga will fallow this agenda and this is their reasoning for standing behind Tonga and helping them get to their goal.

Tonga has many development partners which are called donor ordinations. Tonga’s main partners are Australia, the European Union, Japan, and New Zeeland. These partners aid Tonga in things such as agricultural advancements, health care, education, and training, health management, waste management, tourism management and other sources of training. Basically they stand by Tonga helping them to become a better economically advanced country aiding them in every sector.

Country Kingdom of Tonga

Prime Minister Prince Lavaka ata ULUKALALA (since February 2000)

Head of State King Taufa’ahau TUPOU IV (since 16 December 1965)

Independence June 4, 1970 (from UK protectorate)

Government Hereditary constitutional monarchy; prime minister and deputy prime minister appointed

for life by the monarch.

Land area 718 sq km; archipelago of 169 islands (36 inhabited)

Population 101,803 (2004 est.). Population growth is 0.3% (2004 est.).

Cities Capital: Nuku’alofa

Provinces Eua, Ha’apai, Niuas, Tongatapu, and Vava’u.

Languages Tongan and English.

Natural Hazards Cyclones (October to April); earthquakes and volcanic activity in Fonuafo’ou.

Natural Resources F i s h and fertile soil.

Major Products Tonga has a narrow export base in agricultural goods. Squash, coconuts, bananas, and

vanilla beans are the main crop

References

Bureau of Western Hemisphere Affairs (2007,October). Background note: Costa Rica. Retrieved November 6,2007 from http://www.state.gov/r/pa/ei/bgn/2019.htm

Central Intelligence Agency (2007). The World Factbook. Retrieved November 6,2007 from http://www.cia.gov.cia/publications/factbook

Wikapedia(2007, November)GDP of Tonga http://en.wikipedia.org/wiki/Economy_of_Tonga

WorldGDP(2007,October)Tonga GDPhttp://siteresources.worldbank.org/INTPACIFICISLANDS/Resources/H-TONGA.pdf

Bolivia – Final

Charles Delehant

March 21, 2008

ECO100

Dr. Hartman

BOLIVIA

Bolivia is located in South America. Its bordering countries are Brazil on the north and east, Paraguay and Argentina on the south, and Peru and Chile on the west. Bolivia is also called the Republic of Bolivia; it was named after Simon Bolivar who helped Bolivia fight their countries independence, on August 6, 1825.

Bolivia is the poorest country in South America. Since the colonization of Bolivia it has been known for its high levels of corruption and the imperialist role of foreign powers. The country has also been called “donkey sitting on a gold-mine” for how rich it is in natural resources. In South America Bolivia is home to the second largest natural gas field, behind Venezuela. Bolivia holds seventy percent of the world’s resources in magnesium and iron. The mines that are mining all of the magnesium and iron are located in the city of El Mutun in the Santa Cruz department of Bolivia.

In 2002, the Gross Domestic Production (GDP) of Bolivia totaled to be $7.9 billion in U.S. dollars. The economic growth is an average of about 2.5 % per year, and they expect the inflation for Bolivia to be around 3% to 4% in 2002.

Bolivia’s poor economic state can be traced all the way back to three decades from various events. The first event that hit Bolivia’s economy hard was when the price of tin drastically dropped in the early 1980’s. Tin was one of Bolivia’s major sources of income. When the price for tin went down the economy was greatly felt by this, it caused people to be laid off and resulted factories to be shut down too. The second event that devastated the economy was at the end of the Cold War when the western countries withdrew their economic aid. The help the western countries were doing was to help Bolivia’s economy from falling under to a point where they wouldn’t be able to recover. The westerns countries goal before they pulled out was to keep the economy stabile by reinstating a market-liberal regime. The last event that put a blow on Bolivia’s economy was when the United States funded the abolition of the Bolivian coca-crop. When the coca-crop was at its peak it resorted to eighty percent of the world’s cocaine production. This was by far the most damaging blow that could’ve happened to the economy for them. The abolition of the coca-crop is the main reason why Bolivia is the poorest country in South America. It forced the economy to have to cut out pretty much all of its income. It made many people lose their jobs, which resulted in them becoming even poorer than they were off. The biggest effect that this had on people was the peasant class; they were the ones who harvested the coca plant, picked the crop, and the ones who produced the cocaine.

In 1985, a long term program of macroeconomic stabilization and structural reform was put into place by the Bolivian government. The government’s goal was to achieve price stability, sustained growth and scarcity. The biggest and most drastic change to the Bolivian economy was when public sector enterprises moved to capitalizations. “Capitalization in the Bolivian context is a form of privatization where investors acquire a 50% share and managing-control of public enterprise by agreeing to invest directly into the enterprise over several years rather than paying cash to the government.”  A Bolivian oil-corporation (YPFB) capitalized three units staring the construction of a gas pipeline to Brazil.  Now Bolivia has the pleasure of saying the home the second largest natural gas reserves in South America.  Government passed a hydrocarbons law in 2005 stating higher royalties and ordered foreign firms working under risk sharing contracts to give up all production to the state energy company. This law also made the companies that were privatized to be hand back over to the state energy company too.

Bolivians exports rose from $652 million in 1991 to $1.3 billion in 2002.  Their imports were $1.7 billion in 2002 also.  Bolivian trade deficit for 2002 was around $460 million.  Bolivian set their tariffs at 10%, which is usually low and 5% for their capital equipment charge.  Bolivia is able to do free trade with Columbia, Venezuela, Ecuador, and Peru because of being a member of the Andean community.  The US is Bolivia’s largest trading partner.  The United States exported around $283 million of goods to Bolivia compared to importing roughly $162 million of goods from Bolivia.  The goods that were imported from Bolivia to U.S. were things such as gold, jewelry, tin, and wood. U.S. would export cars, computers, and machinery.

Bolivia’s GDP for purchasing power parity is estimated to be around $25.682 billion, which is 101^st in the world on list of countries by GDP (PPP).  The GDP per capita is estimated to be $2817, which is 125^th on list of countries by GDP (PPP) per capita.  Also, Bolivia’s currency is in Boliviano. Agriculture accounts for roughly 15% of Bolivia’s GDP. The amount of land cultivated by modern farming-techniques is increasing rapidly in the Santa Cruz area, where weather allows for two crops a year. Soybeans are the major cash crop, sold into the Andean Community market. The extraction of minerals and hydrocarbons accounts for another 10% of GDP and manufacturing for less than 17 %.( Wikipedia “Bolivia”)

Bolivia’s economy is based mainly on agriculture, which produces soybeans, coffee, coca, cotton, corn, rice, and sugarcane. Their location in South America makes them very well off in the agricultural field because they are so rich in soil and the climate is ideal to grow crops. The work force for Bolivia is around 4.22 million but there are no numbers stating how many people work their respective fields nor were there any percentage telling you either. The economy is also based on their industries, natural resources, exports, imports, and their trading partners. Bolivian industries range from a far fetch range of things. They do mining, smelting, petroleum, food and beverages, tobacco, handicrafts, and clothing. Bolivia is considered to be one of the richest countries in natural resources. They produce tin, zinc, silver, lead, iron, gold, natural gas, petroleum, tungsten, and antiomony.

What is GDP?

GDP is a measure of goods and services produced by an economy. But any good of service that is produced also will be purchased and used by some economic agent-a consumer buying Christmas gifts of a firm investing in new machinery, for example. For many purposes, knowing not only how much is produced, but who uses it and how, is important.

Economic statisticians divide the users of the final goods and services that make up the GDP for any given year into four categories: household, firms, governments, and the foreign sector (that is, foreign purchasers of domestic products). They assume that all the final goods and services that are produced in a country in a given year will be purchased and used by members of one or more of these four groups. Furthermore, the amounts that purchasers spend on various goods and services should be equal to the market values of those goods and services. As a result, GDP can be measured with equal accuracy by either of the two methods: (1) adding up the market values of all the final goods and services that are produced domestically or (2) adding up the total amount spent by each of the four groups on final goods and services and subtracting spending on imported goods and services. The values obtained by the two methods will be the same. (Principle of macro economics)

Bibliography

1)     CIA World Factbook”. Central Intelligence Agency. March 18 2008 <https://www.cia.gov/library/publications/the-world-factbook/geos/bl.html#top>.

2)     Bolivia.” Wikipedia, the Free Encyclopedia. 17 Mar 2008, 09:46 UTC. Wikimedia Foundation, Inc. 18 Mar 2008 <http://en.wikipedia.org/w/index.php?title=Bolivia&oldid=198822974>.

3)     Bolivia: History, Geography, Culture”. Infoplease. March 18 2008 <http://www.infoplease.com/ipa/A0107345.html>.

4)     Frank, Robert H., and Bernanke Ben S. Principles of Macro Econmonics. New York, NY: McGraw-Hill Irwin, 2007.

Croatia- Final

Max Kantor

Macroeconomics 100

Dr. Hartman

03-21-08

Croatian Economy

The Republic of Croatia is a small country in Central Europe that steadily increases as an economic power in Europe and the world. As Croatia struggled to gain independence from the former Communist Yugoslavia, the once prosperous nation suffered economic losses during its revolutionary war that started in 1991. After coming out of a recession at the turn of the millennium, the Croatian economy has become increasingly successful. In the world rankings, gross domestic product is an indication of the wealth and prosperity of a nation. GDP is used as a base of comparison indicating nations’ wealth comparable to other countries. Currently Croatia ranks seventy-seventh highest GDP in the world with a purchasing power of 69.4 billion dollars. Croatia has a population of 4.5 million people, ranking 121^st in the world. The gross domestic product per person is rough $15,500 found in 2007, ranked seventy-first on the international scale. (CIA)

Croatian internal industries play a huge part in making its economy excel and prosper. An indicator of economic growth is the comparison of monetary value to other surrounding countries in terms of an individual country’s currency. Although currently the Euro, Pound and a few other currencies are more valuable than the US dollar, it is still common to compare currency valued in American dollars. Croatia uses a Kuna, which is worth roughly 5.5 American dollars (CIA). Economists then compare this number to countries surrounding the one in question. Croatia is surrounded by Slovenia, which adapted the Euro in 2007, but is still a great indicator of Croatian prosperity because Croatia has $15 billion more dollars of purchasing power the Slovenia. Hungary, another bordering nation, has their currency, the Forints, set at 186 per US dollar (CIA). By these measurements you can see that it would take Croatia much less Kuna to make one American dollar then Hungary, which is a possible indication that Croatian Kuna is worth more the Hungarian Forints. Serbia, another bordering nation to Croatia, uses the Serbian Dinar which is about 56 to 1 American dollar. By comparing the currency exchange rates of Croatia’s bordering nations, one can see the Croatian Kuna is worth more than most of its boarding countries’ currencies. Currency exchange rates can be skewed as well because goods and services in Croatia may be more expensive than those in bordering countries. Economists also consider this skew in their data, and allow the exchange rate to only play a small role as an economic indicter. (CIA)

Croatia, like many other nations, continues to use gross domestic product as an indication of economic growth in the nation. Gross domestic product is a hard measurement to make. “The GDP can be expressed equally as well as the market value of goods and services, total expenditures (consumption, investment, government purchase, and net exports), and total income” (Bernanke and Frank, 128). These figures are important as they factor into the most accurate GDP Croatia can come up with. For example, the Croatia’s GDP can be measured as the total value of market goods and services. This however leaves out the services and goods the nation trades that are not valued or priced. Many economists argue that this type of GDP measurement is skewed because it does not take into consideration the time the non-labor force uses to do other productive things that are not priced. This is an important consideration for Croatia because it has a population of 4.5 million people but only a labor force of 1.714 million people. Economists would argue that the difference of people that do not work or produce final goods or service in the labor force still have a large unmeasured effect on gross domestic production.

The next measurement of GDP is expenditures, and this method is more realistic for Croatia’s use. As Croatia’s economy is based majorly off of services, Croatia can more accurately count its total gross domestic product by adding consumption prices, investment amounts, government purchases and net exports together (Bernanke). Consumption indicates any products or services absorbed by Croatia in a given span of time, usually yearly. Investment is the next variable in the expenditure equation for GDP, and according to the CIA World Factbook Croatia’s investment is rather high, about 30.8% of the GDP. In this instance, investment refers to capital goods, or goods that are used to make another, and investing in new equipment and into banks. Croatia is ranked 17^th in gross investments making it a leading country in this region of gross domestic production. This again indicates Croatia’s positively growing economy. Government expenditures buy capital goods, produce investment projects, build infrastructures and government business and are collected in taxes, tariffs and fees citizens pay. Croatian net exports are the dollar amounts of exports subtracted by the dollar amounts of imports. In Croatia’s instance exports are $12.11 billion and the net imports are $25.78 billion resulting in a $13 billion deficit. The expenditure method of measuring GDP is much more concise and better recognizes a country like Croatia who has money flow, but not necessarily out of the country.

The last measurement of GDP Croatia could use is called income gross domestic product. This method is probably not the best measure of GDP for the nation, as it measures the labor income and capital income. Labor income is the total gross amount Croatian laborers earn each calendar year. Since Croatia has only half its population in the labor force, this number would be inherently smaller then it would show up in other measurements of GDP; this is because although the labor force does accurately measure revenues, this limits the money retired people have saved, and money that is invested and made greater by interest and other investment means. Capital income indicates Croatia’s capital income owners, and the revenue the pay for maintenance of capital goods. Since Croatian industries are primarily industries, it may not take into proper account the physical labor and social labor put forth. The Republic of Croatia probably would choose to use the first two methods of GDP measurement rather then this particular one because the income method would probably drop Croatia’s GDP unreasonably.

On top of choosing between the three methods of measuring GDP, Croatia can also choose to measure their GDP as real GDP or nominal GDP. Real GDP is based on the value of all goods and services in terms of base year prices, while nominal GDP is based on the value of all goods and services in terms of the current year prices. Croatia favors real gross domestic product because it measures the overall productivity and can be compared and weighed against each individual year. Croatia uses 2000 as a base year indicator because it is when the nation fell out of its recession. In 2000, Croatia had a GDP of roughly 18.4 billion dollars. The following measurement was taken in 2003 and then again in 2004, raking in roughly 24 billion and 34 billion dollars respectively. In 2007 Croatia again measure its real GDP, coming in at roughly $69 billion dollars. The growth displayed by using the real gross domestic product is more beneficial to Croatia because it indicates the economic successes they achieved while rising out of a recession. Real GDP indicates more success in this respect because if Croatia showed its growth in nominal GDP, the numbers would be rather inflated as the total inflation rate over these four year indicators was about 3.5% every year. This inflation would have made the nominal GDP look higher than it actually was. However, by using real GDP, Croatia’s economic growth is more significant, because even though nominal GDP would have bigger numbers, Croatia’s real GDP indicates a significant advance since 2000, advancing from 18 billion dollars to today’s current measurement of 69 billion dollars. According to these numbers, based on Croatia’s total products and services, the nation has economically grown about 300% over the last eight years. (CIA)

Croatia has many facets in its economy. Industrial progressions, agriculture and services are three major industries in Croatia. More specifically, agriculture obtains about 7 percent of the economy, industrial projects about 30 percent and services about 60 percent. Agriculture is important to Croatia; however it is the small industry in the nation. The biggest agriculture products produced in Croatia are corn and wheat, followed by a limited number of vegetables, livestock and dairy animals. Industries take up the next biggest chunk of Croatia’s economy. Chemical products and plastic products are the most populous item in the nation, followed by metal production, and the industries that are based around steel, iron and aluminum production. Services provide the largest percent of the economy and its development. Services in a large part deal with tourism, food industries, customer services, and other ventures on the same page.

Croatia overcame many obstacles in the past century as it struggled with bordering nations to break for Austria-Hungary, and struggled for its own independence from the Communist Yugoslavia. Croatia may still be considered a developing nation economically, continuing growth and development. Croatia has made leaps and bounds from its original place amongst the world’s market, and will continue to grow as the country picks itself up after the recessions and wars of the past and pushes forward in the future economical market.

Bibliography

Bernanke, Ben S. & Frank, Robert H. Principles of Macro Economics. New York: McGraw-

Hill/Irwin, 2007.

Cartoon Stock. 03-03-2007. CSL Cartoon Stock. 04-03-08

http://www.cartoonstock.com/directory/g/gdp.

CIA World Factbook. 03-20-2008. United States Central Intelligence Agency.

03-22-2008 <http://en.wikipedia.org/wiki/Croatia.>

Wikipedia. 04-03-2008. Wikimedia Foundation, Inc. 03-03-2008

http://en.wikipedia.org/wiki/Croatia

Bulgaria – Final

Bulgaria-gdp

Thank you.

Turkey – Draft

Rutledge, Taylor

Macro Economics

B. Hartman

March 24^th, 2008

Gobble-Gobble

Turkey is located in Southeastern Europe and Southwestern Asia, bordering the Black Sea between Bulgaria and Georgia. It also shares border with the Aegean Sea and the Mediterranean Sea between Greece and Syria. Being slightly larger than the state of Texas, Turkey has a temperate climate; they experience hot, dry summers with mild, wet winters. (CIA)

Modern day Turkey was founded by the national Hero Mustafa KEMAL (A.K.A. Ataturk or “Father of the Turks”) when he defeated what was left of the Ottoman Empire in 1923. The country did well under one-party rule; infused in their new government were wide-ranging social, political, and legal reforms, but in 1950 when the experiment with multi-party politics the election victory was in favor of the opposing Democratic Party, leading to a vast multiplication in Turkish political parties. Their Democracy had at times been overtaken by periods of instability and intermittent military coups, this took place in the years: 1960, 1971, and 1980, thankfully for the country, each case resulted in a return of the country’s political power to the civilians. More recently, in 1997 the military helped to rid the capital of the then Islamic-oriented government which had been dubbed a “post-modern coup”. In the mid 80’s up until recently the country has had to deal with separatist insurgency groups who ended up withdrawing largely into northern Iraq in 1999. There had been a long ceasefire, but in 2004 one of the groups known as KGK had again started to attack. Turkey joined up with the UN in 1945 and in 1952 it joined NATO as a member. Today, Turkey is an associate member of the European Community; however, it is striving to begin accession membership with the European Union. This membership status depends widely upon its reforms to strengthen its democracy and economy. (CIA)

Turkish economy is a mix of industry and commerce, as well as its traditional agriculture, which is responsible for nearly half of its employment. The private sector in Turkey is gaining strength and its growth rate is on the rise, however, the state still takes command with the basic necessities of the simple industry, for example communication, banking, transportation, etc… The sectors of the industry that are now rising more and more are the automotive and electronics industries adding to Turkey’s export mix. These sectors however do not push aside the countries greatest industrial sector which is textiles and clothing, both of which account for one third of the country’s industrial employment. It is this information that enables economists to measure the status or worth of a country, and that is what I will be reporting on here. The figures that are recorded are all based of the exchange of the services of Turkey and those that deal with them. (CIA, Investopedia)

The status of a country is determined by economic production and economic growth and typically, a healthy country will have low unemployment and increases in wage as businesses demand labor to meet the booming economy. Economists measure this growth; however, in some cases there can be a decline, in GDP (Gross Domestic Product) which is calculated by either calculating the sum of what people made in a period, or what they had spent in the period. It has been reported that for the most part, the real GNP growth for Turkey’s economy has been greater than six percent in many years, due to steep declines in output in 1994, 1999, 2001 this strong expansion has been interrupted. Taking a look into the past, the GDP for 2003 was 5.3 percent with a real growth rate of 8.2 percent, however due to the implementation of economic reforms in 2004, the GDP real growth rate reached up to nine percent. There followed an annual growth of about five percent annually from 2005 through 2007. (Travelblog; world facts)

The future for Turkey is not a grim one, there is conflicting evidence about the inflation situation of Turkey, one resource states that inflation had been at 9.3 percent in 2004, which was a 30 year low, and the other states that the 30 year low was 7.7 percent. My choice is to use the more reputable source which is the second one, 7.7 percent in 2004. This inflation low, however, is on the rise and there are some things Turkey has working in its advantage. (Travelblog; world facts, CIA)

In 2006 oil began to flow through the Baku-Tblisi-Ceyhan pipeline which would produce about 1 million barrels of oil per day, bringing that much more oil to the market. Also, the country is showing rigor in times of hardship, this has been exemplified when in 2007 the financial markets struggled to stand during domestic political turmoil over the controversy of the selection of the former Foreign Minister Abdullah GUL as the country’s 11^th president.

The basic principles and fundamentals of the economy in Turkey are sound, and this is due largely by strong economic growth and foreign direct investment. Yes, the country is has its weaknesses and must keep things in check, i.e. high current account deficit, but these vulnerabilities can be avoided but careful attention must be paid.

Works Cited

CIA. 20 March 2008. The World Fact Book, Turkey. https://www.cia.gov/library/publications/the-world-factbook/print/tu.html

Investopedia. 2008. A Forbes Media Company. http://www.investopedia.com

Travelblog. 2008. Turkish Economy. http://www.travelblog.org/World/tu-econ.html

The Economist Newspaper Limited. 2008. Country Briefings, Turkey. http://www.economist.com/countries/Turkey/profile.cfm?folder=Profile-FactSheet