3.1 Introduction
Turkey is in an interesting geographic position straddling Europe and Asia.  The European part of the country borders on Greece with which Turkey shares some similarities - though relationships with Greece are not good.  The Asian section of Turkey, known as Asia Minor, is the larger eastern most portion of the country.

By virtue of its geographic position, Turkey provides an ideal ‘bridge’ between Asia and Europe.  Its integration into the European economy is evidenced by the fact that Turkey is actively seeking membership of the European Economic Community - the European Common Market.

The Turkish People and System of Governance
With a population of 64.8 million Turkey has almost three times the population of Malaysia of 22.2 million.  The geographical size of Turkey is correspondingly much larger than that of the Malaysian peninsular.

The Turkish population is growing at 2.1% while the Malaysian population is growing at 2.4%.  Life expectancy - one measure of social development - is 68 in Turkey while it is 72 in Malaysia.  Another measure of social and technological development is the number of people for each telephone in the country.  The Turkish figure of 4.4 is considerably better than the Malaysian figure of 5.5.

The Turkish population is more urbanized at 70% than the Malaysian population of 47% urban.

The Turkish people are 99% Muslim whereas Malaysia is more diverse in religion and culture.  However, Turkey is not an Islamic state.  Turkey is fiercely secular.  The social law is secular, based on Swiss law in contrast to the Shari law, which applies to Muslims in Malaysia.

The Turkish Economy
Turkey, like Malaysia, is classified as an emerging market economy.  The latest figures on growth rate of the economy show that Turkey has not suffered the recession plaguing Malaysia.  Turkey still has a positive growth rate of 2.6% whereas Malaysia has slipped into negative territory at -6.8%

The size of the Turkish economy at $US424 billion is nearly twice that of Malaysia at $US 253 billion (measured in Purchasing Power Parity terms).  However, given its larger population this works out at $6,655 per-capita for Turkey which is a little over half of the Malaysian figure of $11,700 per-capita.

Turkey has excepted the economic difficulties of East Asia and is generating positive economic growth.  With its links to Europe, which will only grow stronger in the future, Turkey is a viable airline connection with East Asia.

Perhaps the only cautionary note is the Turkish inflationary rate.  Recently, it was announced that inflation had been brought DOWN to an annual rate of 76.4% and this contrasts very unfavorably for Turkey with the annual inflation rate in Malaysia currently at 5.5%, which itself is thought to be uncomfortably high in Malaysia.  Inflation in Turkey is reminiscent of the worst rates seen in South America.  Yet, as Argentina has proven, inflation can be brought down and this must be a priority for the Turkish government.

3.4 Recommendation
In summary, the Turkish economy appears viable enough to sustain a new airline link which, when eastern Asian economies recover, can be expected to be even more viable.