Turkey's impressive economic performance The developments occurred in the world; especially in the final quarter of last century, have had deep and widespread impact. Wars, peaces, political restructuring, ethnic conflicts, invasions... followed one another in the last century. In this point, the necessity to locate the position of Turkey in the global economy appears very important. Making Turkey economically strong both inside and outside the country has already become an issue of national security and foreign policy matter.   During World War I, the Turkish economy was underdeveloped: agriculture depended on outmoded techniques and poor-quality livestock, and the few factories producing basic products such as sugar and flour were under foreign control. Between 1923 and 1985, the economy grew at an average annual rate of 6%. In large part as a result of government policies, a backward economy developed into a complex economic system producing a wide range of agricultural, industrial, and service products for both domestic and export markets. Turkey's impressive economic performance in the 1980s won high marks from Wall Street's credit-rating agencies. In 1992 and 1993, the government used these ratings to attract funds to Turkey. Services increased from a small fraction of the economy, in the 1920s, to just under half of GDP by 1994. Several factors accounted for the growth of the services sector: As defense expenditures rose; health, education, and welfare programs were implemented; and the government work force was increased to staff the numerous new public organizations, there was a major growth realized for the whole country.   As the economy developed and diversified, trade, tourism, transportation, and financial services also became more important.  In the age of financial globalization, economics and politics are interlinked in a peculiar way in the 2000's. Through commitment to the IMF program, mixed with a certain dose of pragmatic policies, Turkey's economic recovery occurred, together with an intense phase of democratic reforms. Turkey has come to play a pivotal role in the Middle East, in the Black Sea Basin, and in Central Asia. Today, Turkey's GDP is US$ 365 billion and positioned in the top 20. Turkey's dynamic economy Turkey's dynamic economy is a complex mix of modern industry and commerce along with a traditional agriculture sector that still accounts for more than 35% of employment. It has a strong and rapidly growing private sector, yet the state still plays a major role in basic industry, banking, transport, and communication. The largest industrial sector 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 2005-06. Inflation fell to 7.7% in 2005 - a 30-year low but climbed back to 9.8% in 2006. Despite the strong economic gains from 2002-06, 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 debt. Prior to 2005, foreign direct investment (FDI) in Turkey averaged less than $1 billion annually, but further economic and judicial reforms and prospective EU membership are expected to boost FDI. 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.