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                    <text>2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

Alternative Manufacturing Technique in Glass Industry for Devoloping
Countries: Fused Glass , “Zumrut Art Of Glass Model” and Its Applicability
in Bosnia Herzegovina Economy
Mesut ALBENĠ
Faculty of Economics and Administrative Sciences
Suleyman Demirel University, Turkey
mesut@iibf.sdu.edu.tr
Muhlis CAN
Faculty of Economics and Administrative Sciences
Hakkâri University, Turkey
muhliscan@hakkari.edu.tr

Abstract: Tourism industry plays an important role in the sustainable devolopment process of the
countries. Giftware (souvenir,craft) sector also forms one of the important elements of tourism
revenues.. However, finding same types of the products in many countries around the world is the
signal that the sale of goods loose their competitivines and so, some innovations are needed. In
this study, the contributions of new production techniques in glass industry, to which increasement
of the export by taking the advantage of niche market and reducement of the unemployement, are
examined for tourism oriented souvenir industry. The "Glass Fusion Technique" is discussed in
order to concretize the purpose of this study with ―Zumrut Art of Glass‖ model and the possibilty
of application into Bosnia and Herzegovina economy.
Keywords: Tourism, Souvenir, Gift, Craft, Fused Glass

Introduction
There are some sectors, playing important roles for not only devoloped countires but also devoloping ones;
such as textile industry, glass industry, otomobile industry, tourism sector. However, for all, tourism is a common
vehicle for all economies.
Tourism is a rapidly developing global industry and has great economic significance for the economy
(Gunce, 2003). It is increasing at annual growth rate between %4 - %7 (Turner &amp; Reisinger, 2001).

Table 1: International Tourist Arrivals and International Tourism Receipts Source between 1990-2008
Source: World Tourism Organization

661

�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

International tourist arrivals have continued to grow steadily from 25 million in 1950 to 684 millon in 2000,
and they have reached 922 millon in 2008. Tourism has been becoming one of the largest and fastest growing
economic sectors in the world (World Tourism Organization, 2009).
Tourism has been one of the major international trade categories. For example, the overall export income
generated by international tourism including passengers transport reached US $ 1.1 trillion in 2008,or US $ 3 billion
a day. World‘s Export of commericial services consist of 30% from tourism and overall export goods and services
6% consist of tourism. Globally, as an export category, after fuels, chemicals and automotive products tourism ranks
fourth. For many developing countries, tourism is one of the main income source and the number one export
category, providing much needed employment and opportunities for development(World Tourism Organization,
2009).

Table-2: International Tourist Arrivals by ( Sub) region
Source: World Tourism Organization
As it can be seen from the figure, Europe has %53,1 share from all international arrivals with 489,4 million
people in 2008. However, Bosnia has just 212.749 international tourist arrivals in the same year (Federation of
Bosnia and Herzegovina Federal Office Of Statistics, 2009) which is equal to ‰4 from Europe tourist arrivals.
According to UNWTO‘s Tourism 2020 Vision reports, international arrivals are expected to reach nearly
1.6 billion by the year 2020. The total tourist arrivals by regions shows that, tourism will grow and the top three
receiving regions will be Europe (717million tourists), East Asia (397 million) and the Americas (282 million)
(World Tourism Organization, 2009).

662

�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

Table 3: Forecasting of International Tourist Arrivals Between 2010-2020
Source : World Tourism Organization

The Effect of Tourism on Economy
Tourism does not only affect the countries in one way. It has also positive effects on the devolopment of the
physical, social, cultural and economic environment of a country(Gunce, 2003). Tourism has positive effects on
economy in different ways. According to the United Nations foreign exchange earnings, the contribution to
government revenues, the generation of employment, the stimulation of infrastructure investment and the
contribution to local economies are some of them (Torrent, 2008; United Nations Environment Programme).
Tourism contributes to the worldwide gross domestic products nearly 5%, also it contributes to employment directlyindirectly and it is estimated 6-7% of the overall number of jobs which are provided by tourism ( World Tourism
Organization, 2009). For developing countries, where tourism is a key economic sector, the importance of tourism
tends to be higher for economy (World Tourism Organization, 2009). There are some activities which are relavant to
the tourism and have impacts on the economy in positive way during the journey. One of them is shopping.

The Importance of Shopping During a Journey
Shopping might be the most universal activities, despite the fact that it is seldom considered as a primary
reason for travel (Turner &amp; Reisinger, 2001). Whether international or domestic tourism , for both, the second most
important expenditure item is shopping after accommodation ( Turner &amp; Reisinger, 2001). For a tourist, a tour can
not be a complete traveling experience without shopping ( Hudman &amp; Hawking,1989). Shopping is a common and
preferred tourist activity in different locations, and for today‘s travelers, tourism and shopping are integrated to each
other. Shopping activities include especially souvenir, because tourists need to bring home something tangible to
concretize and preserve their memories for their trips (Gordon, 1986). Souvenirs are related to tourism as
commercially produced and purchased object to remind the purchaser of the experience (Swanson &amp; Horridge,
2006). Souvenir products also include craft products which are called craft souvenir.
What effects tourists when they decide to buy souvenirs? Turner and Reisinger (2001) found three
important product characteristics for tourists purchasing cultural products: value (range, quality), product display
characteristics (color, display, packaging, size), and uniqueness (memory of the trip). The ease of cleaning, care, and
packing were of particular importance for travelers to reach the decision of craft buying (Hair et al.,1998).
Through crafts, tourists generally prefer the products which are valuable work of the hand. According to
UNESCO report (2007), there is a wrong impression that tourists prefer industrialized goods rather than handmade
products. Especially nowadays, mass-produced polyester products which seem very simple, are sold everywhere.
Also textile crafts can be found in every destination. Finding same types of the products in many countries around
the world signals that the sale of goods loose their competitivines and so, some innovations are needed.

663

�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

In this study, we would like to emphasize on advantage of the craft sector for devoloping countries. As
generally devoloping countries has labour intensive sectors. For production of craft, sector also needs cheap labour
force. According to UNESCO report ( 2007) the economic characteristics of the craft sectors are:
- The handicrafts sector requires minimum expenditure and infrastructure to establish as it is a home-based industry.
Therefore it can create jobs with minimum cost.
- In general this sector uses raw materials which are avaliable locally.
- Product adaptation is less expensive than investing in energy, machinery or technology becasue inputs required can
easily be provided.

The Worldwide Situation of Craft Sector
Handicrafts have been devoloping without specific political stratetegies and they directly depend on demand
gererated by tourism industry ( UNESCO, 2007). According to report released by UNESCO (2007) the national
accounts do not fully include handicraft activities. However, handicrafts are always parts of the culture of a nation
and represent a key component of socio-economic life. Many countries face to some difficulties in collecting data
about craft sector because there is an important lack of data on the craft sectors.
In some industrialized countries, craft sector plays an important role in their economy. For example in
Italy, 24% of national enterprises belong to the crafts sector in which 1/5 private sector workers are employed. In
Italian total Gross Domestic Products (GDP) ,craft exports share is %17. Morever in devoloping countries craft
sector has a great importance in economy. In Colombia, crafts production represents income of approximately US$
400 million in a year and brings in a monthly income to the workers between US$ 140 to 510. Crafts exports (not
include sales to tourists) approximately amount to US$ 40 million per year. Two-thousand shops and 400 bulk and
export trading companies, where 800,000 people are employed, affected by this important tourism market. Tunisia is
another example. Craft sector is employing 300.000 people (%11 of the active population) of whom are working 4
hours a day on a part time-time basis. Their production contribute to Gross Domestic Income an avarage of %3,8 and
provide US$ 2,400 income per household (an average of 5 members). In Morocco, Ministry of Tourism measure the
volume of the these sector at %19 of total GDP. Morocco export handcraft products approximately valued US$ 63
million.
Nowadays, there is a problem in souvenir industry. Finding same types of the products ( for example:
textile products: t-shirts, carpet, cheap polyeserin products) , in many countries around the world is the signal that the
sale of goods loose their competitivines and so, some innovations are needed.
In this study, we would like to introduce an innovation in craft, souvenir and giftware. Our main method is
Fused Glass Tecnique that is used in Turkey for touristic craft and souvenir industry. Not only for just giftware, it
can also be applicated in Tableware, Decoration, Kitchenware, Hotel Products, Electirical Equipments etc. So, this
new tecnique affects different sectors in not only domestic markets but also export markets.

Fused Glass and “Zumrut Art Of Glass” Model
What is fused (fusing) glass? It is a process of joining pieces of glass by melting them together and the main
aim of fusing is to produce a solid glass sheet from individual pieces of glass which are arrange beside or on the top
of one another by melting together in a kiln (Eberle, 1997).

History of Zumrut Art of Glass
Zumrut Art of Glass was established in 1981. The company entered the glass sector with decorative items
by using the tecniques which are popular during that time: stained glass and sand blasting. In 1997, the company
decided to produce new products by using unique tecnique which was not avaliable in Turkey. It brought fused
(fusing) glass tecnique to Turkey. The company also desired to enter the giftware, souvenir sector by means of this
unique tecnique. After preparing the consept products and marketing, they got a lot of orders from touristic places. In
2002, the company participated giftware fair which was in Germany and this date was the starting of entrance to the
foreign markets. In 2005, the company invested to the water jet CNC machine for putting the limits away for
designs. After this investment, all the designs have been prepared in computers with benefiting from the technology.

664

�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo
In 2006, to satisfy the customers‘ request, the drop tecnique which gives opportunity to produce locational and
promotional products was applied into the production.

Product Consept
Zumrut Art of Glass product consept consist of Giftware, Tableware, Souvenir, Tea and Coffee Sets, Sugar
Plates, Candle Holders, Magnets, Key Rings, Clocks, Picture Frames, Glass Tables, Plate Sets, Fruit Bowls, Self
Service plates, Tea-Coffee Trays, Vases, Ashtrays, Chandeliers, Door Glasses, Glass Sinks, Mirror Frames, Bowls,
Dinner Sets.

Employment Situation
There are 900 sales points, which are located generally in touristic places, of the company and it has 10 own
exhibition centers. Zumrut Art of Glass is employing directly 25 workers in manufacturing department, 20 persons in
exhibition centers as salesperson position,10 staff in different departments. Also company is employing 150 persons
indirectly.

Production Process
The production steps are made up:
1-) Flat glasses are provided firstly as plates in different thicknesses for products of which their production
is carried out by utilizing fusion glass melting tecnology.
2-) The necessary glass cutting processes are performed according to design and pattern of the product that
will be produced. While the glass patterns are cut manually in the cutting workshop, the design cutting is carried out
in Water Jet CNC bench. The water jet machine is able to cut all kinds of materials as two dimentional by operating
in the CNC machines‘ principle. The cutting carried out with water is able to see thinner details and carried out
milimetric cuttings in comparison to other tecnologies.
3-) The pattern and design glasses that have been got together in the production department are then placed
into molds in the fusion glass furnaces after the necessary staining are done and the furnaces are made ready in order
to perform thermal processing. All the Works taht have been carried out in the production are hand made and all the
staining is carried out between two glasses. After 800 C thermal processing is applied, since the fusion glass furnace
is kept for cooling, tension of the glass product has been taken and it is more resisting in comparison to normal flat
glass.
4-) For souvenir industry, plastic drop process is applied into the products . Plastic drop is poured on
photographs by labeling the which are demanded with the drop label tecnique and the photographs has been
protected between the label and the drop. All kind of design, figure and logo are able to be applied on the glass with
this tecnique.

Domestic and Foreign Market Situation Of Zumrut Art of Glass
Domestic market has 60% share and foreign market has 40% in total. Many of products which are
manufactured in fused (fusing) glass tecnique are sold in Antalya, Fethiye, Bodrum, Marmaris, Kusadasi, Izmir,
Ankara, Ġstanbul in Turkey with different points. The companys‘ exports markets consists of 15% of USA, 75% of
EU and %10 others. 2 million pieces of products are manufactured and sold in both foreign and domestic market
every year. The most popular products are magnets which are very easy to pack and hold, sugar plates which reflect
the culture of the location, tea sets with different figures, mini vase and wall decoration gifts.

Discussion

665

�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

Devoloping countries, especially nowadays, try to continue their development process with different
methods. Some of them are transfering capital from agricultural to industrial production, some of them are try to
increase earnings from different industry. However, there is a hard competitiveness in all industry for all countries
and this creates a hard situation for devoloping ones. That means developing countries should find new methods
which can be a competitive to continue their development process by using their rich and cheap labour force.
Tourism is very important tool for development. Some of governments advertise their countries with
different methods to increase the number of tourist arrivals. Some of them organize festivals, some of them give
advertisements to TV programs to introduce their countries nature, the places for sight-seeing etc. Bosnia should also
use methods to introduce its unique nature, touristic opportunies and historical background.
Whether there is a little increasement in tourist arrivals, Bosnia Herzegovina with the share ‰4 from total
from Europe that has %53,1 share from all international arrivals with 489,4 million tourists, Bosnian government
should implement some policies to increase the share in the Europe. According to forecasting reports shows that
tourist arrivals will continue to grow in Europe. In the light of this information, Bosnia can increase and take
advantage of tourism sector if the government apply important policies into tourism industry for sustainable
devolopment.
Account deficit, unemployment and low income level constitue important economic problems in Bosnia.
1.708.000 persons are in the working age population and 226.000 persons are unemployed ( Federation of Bosnia
and Herzegovina Federal Office Of Statistics, 2009 ). Tourism oriented invesments to fusing glass tecniques in
souvenir industry will not only help decrease of unemployement, but also contribute to increase of the export with its
geographical advantages. Bosnia Herzegovina, which is located in the middle of Europe where the estimated tourist
arrival number will be 717 million in 2020, can use the advantage of minumun cost investment into the craft
industry, which will affect whole economy like a chain not only with retail shopping but also with export trade.

References
Eberle, B. (1997). Creative Glass Tecniques (pp. 15). Lark Books A division of Sterling Publishing Co.
Federation of Bosnia and Herzegovina Federal Office Of Statistics, (2009), Statistical Yearbook 2009. Retrieved on April 6, 2010
from http://www.fzs.ba/Statisticki%20godisnjak%202009.pdf
Gordon, B. (1986). The souvenir: messenger of the extraordinary. Journal of Popular Culture, 20, 135–146.
Gunce, E. (2003). Tourism and local attitudes in Girne, Northern Cyprus. Cities, 20(3), 181-195
Hair, J. F., Anderson, R. E., Tatham, R. L., &amp; Black, W. C. (1998). Multivariate data analysis (5th ed.). Upper Saddle River, NJ:
Prentice-Hall.
Hudman, L. E., &amp; Hawkins, D. E. (1989). Tourism in contemporary society. Englewood Cliffs, NJ: Prentice Hall.
Swanson, K. K., &amp; Horridge, P.E. (2006). Travel motivations as souvenir purchase indicators. Tourism Management, 27, 671-683
Torrent, R. R.-I-., (2008). Sustainable development in tourism municipalities: The role of public goods. Tourism Management, 29,
883-897
Turner, L. W., &amp; Reisinger, Y. (2001). Shopping satisfaction for domestic tourist. Journal of Retailing and Consumer Services, 8,
15-27
UNESCO, (2007). Handicrafts and Employment Generation for the Poorest Youth and Women (pp. 03-50) . Retrieved on April 6,
2010 from http://unesdoc.unesco.org/images/0015/001567/156772e.pdf
United Nations Environment Programme, http:// www.unep.org
World Tourism Organization. (2009). Tourism Highlights. Retrieved on April 6, 2010 from
http://unwto.org/facts/eng/highlights.htm

666

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                    <text>2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

Alternative Manufacturing Technique in Glass Industry for Devoloping
Countries: Fused Glass , “Zumrut Art Of Glass Model” and Its Applicability
in Bosnia Herzegovina Economy
Mesut ALBENĠ
Faculty of Economics and Administrative Sciences
Suleyman Demirel University, Turkey
mesut@iibf.sdu.edu.tr
Muhlis CAN
Faculty of Economics and Administrative Sciences
Hakkâri University, Turkey
muhliscan@hakkari.edu.tr

Abstract: Tourism industry plays an important role in the sustainable devolopment process of the
countries. Giftware (souvenir,craft) sector also forms one of the important elements of tourism
revenues.. However, finding same types of the products in many countries around the world is the
signal that the sale of goods loose their competitivines and so, some innovations are needed. In
this study, the contributions of new production techniques in glass industry, to which increasement
of the export by taking the advantage of niche market and reducement of the unemployement, are
examined for tourism oriented souvenir industry. The "Glass Fusion Technique" is discussed in
order to concretize the purpose of this study with ―Zumrut Art of Glass‖ model and the possibilty
of application into Bosnia and Herzegovina economy.
Keywords: Tourism, Souvenir, Gift, Craft, Fused Glass

Introduction
There are some sectors, playing important roles for not only devoloped countires but also devoloping ones;
such as textile industry, glass industry, otomobile industry, tourism sector. However, for all, tourism is a common
vehicle for all economies.
Tourism is a rapidly developing global industry and has great economic significance for the economy
(Gunce, 2003). It is increasing at annual growth rate between %4 - %7 (Turner &amp; Reisinger, 2001).

Table 1: International Tourist Arrivals and International Tourism Receipts Source between 1990-2008
Source: World Tourism Organization

661

�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

International tourist arrivals have continued to grow steadily from 25 million in 1950 to 684 millon in 2000,
and they have reached 922 millon in 2008. Tourism has been becoming one of the largest and fastest growing
economic sectors in the world (World Tourism Organization, 2009).
Tourism has been one of the major international trade categories. For example, the overall export income
generated by international tourism including passengers transport reached US $ 1.1 trillion in 2008,or US $ 3 billion
a day. World‘s Export of commericial services consist of 30% from tourism and overall export goods and services
6% consist of tourism. Globally, as an export category, after fuels, chemicals and automotive products tourism ranks
fourth. For many developing countries, tourism is one of the main income source and the number one export
category, providing much needed employment and opportunities for development(World Tourism Organization,
2009).

Table-2: International Tourist Arrivals by ( Sub) region
Source: World Tourism Organization
As it can be seen from the figure, Europe has %53,1 share from all international arrivals with 489,4 million
people in 2008. However, Bosnia has just 212.749 international tourist arrivals in the same year (Federation of
Bosnia and Herzegovina Federal Office Of Statistics, 2009) which is equal to ‰4 from Europe tourist arrivals.
According to UNWTO‘s Tourism 2020 Vision reports, international arrivals are expected to reach nearly
1.6 billion by the year 2020. The total tourist arrivals by regions shows that, tourism will grow and the top three
receiving regions will be Europe (717million tourists), East Asia (397 million) and the Americas (282 million)
(World Tourism Organization, 2009).

662

�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

Table 3: Forecasting of International Tourist Arrivals Between 2010-2020
Source : World Tourism Organization

The Effect of Tourism on Economy
Tourism does not only affect the countries in one way. It has also positive effects on the devolopment of the
physical, social, cultural and economic environment of a country(Gunce, 2003). Tourism has positive effects on
economy in different ways. According to the United Nations foreign exchange earnings, the contribution to
government revenues, the generation of employment, the stimulation of infrastructure investment and the
contribution to local economies are some of them (Torrent, 2008; United Nations Environment Programme).
Tourism contributes to the worldwide gross domestic products nearly 5%, also it contributes to employment directlyindirectly and it is estimated 6-7% of the overall number of jobs which are provided by tourism ( World Tourism
Organization, 2009). For developing countries, where tourism is a key economic sector, the importance of tourism
tends to be higher for economy (World Tourism Organization, 2009). There are some activities which are relavant to
the tourism and have impacts on the economy in positive way during the journey. One of them is shopping.

The Importance of Shopping During a Journey
Shopping might be the most universal activities, despite the fact that it is seldom considered as a primary
reason for travel (Turner &amp; Reisinger, 2001). Whether international or domestic tourism , for both, the second most
important expenditure item is shopping after accommodation ( Turner &amp; Reisinger, 2001). For a tourist, a tour can
not be a complete traveling experience without shopping ( Hudman &amp; Hawking,1989). Shopping is a common and
preferred tourist activity in different locations, and for today‘s travelers, tourism and shopping are integrated to each
other. Shopping activities include especially souvenir, because tourists need to bring home something tangible to
concretize and preserve their memories for their trips (Gordon, 1986). Souvenirs are related to tourism as
commercially produced and purchased object to remind the purchaser of the experience (Swanson &amp; Horridge,
2006). Souvenir products also include craft products which are called craft souvenir.
What effects tourists when they decide to buy souvenirs? Turner and Reisinger (2001) found three
important product characteristics for tourists purchasing cultural products: value (range, quality), product display
characteristics (color, display, packaging, size), and uniqueness (memory of the trip). The ease of cleaning, care, and
packing were of particular importance for travelers to reach the decision of craft buying (Hair et al.,1998).
Through crafts, tourists generally prefer the products which are valuable work of the hand. According to
UNESCO report (2007), there is a wrong impression that tourists prefer industrialized goods rather than handmade
products. Especially nowadays, mass-produced polyester products which seem very simple, are sold everywhere.
Also textile crafts can be found in every destination. Finding same types of the products in many countries around
the world signals that the sale of goods loose their competitivines and so, some innovations are needed.

663

�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

In this study, we would like to emphasize on advantage of the craft sector for devoloping countries. As
generally devoloping countries has labour intensive sectors. For production of craft, sector also needs cheap labour
force. According to UNESCO report ( 2007) the economic characteristics of the craft sectors are:
- The handicrafts sector requires minimum expenditure and infrastructure to establish as it is a home-based industry.
Therefore it can create jobs with minimum cost.
- In general this sector uses raw materials which are avaliable locally.
- Product adaptation is less expensive than investing in energy, machinery or technology becasue inputs required can
easily be provided.

The Worldwide Situation of Craft Sector
Handicrafts have been devoloping without specific political stratetegies and they directly depend on demand
gererated by tourism industry ( UNESCO, 2007). According to report released by UNESCO (2007) the national
accounts do not fully include handicraft activities. However, handicrafts are always parts of the culture of a nation
and represent a key component of socio-economic life. Many countries face to some difficulties in collecting data
about craft sector because there is an important lack of data on the craft sectors.
In some industrialized countries, craft sector plays an important role in their economy. For example in
Italy, 24% of national enterprises belong to the crafts sector in which 1/5 private sector workers are employed. In
Italian total Gross Domestic Products (GDP) ,craft exports share is %17. Morever in devoloping countries craft
sector has a great importance in economy. In Colombia, crafts production represents income of approximately US$
400 million in a year and brings in a monthly income to the workers between US$ 140 to 510. Crafts exports (not
include sales to tourists) approximately amount to US$ 40 million per year. Two-thousand shops and 400 bulk and
export trading companies, where 800,000 people are employed, affected by this important tourism market. Tunisia is
another example. Craft sector is employing 300.000 people (%11 of the active population) of whom are working 4
hours a day on a part time-time basis. Their production contribute to Gross Domestic Income an avarage of %3,8 and
provide US$ 2,400 income per household (an average of 5 members). In Morocco, Ministry of Tourism measure the
volume of the these sector at %19 of total GDP. Morocco export handcraft products approximately valued US$ 63
million.
Nowadays, there is a problem in souvenir industry. Finding same types of the products ( for example:
textile products: t-shirts, carpet, cheap polyeserin products) , in many countries around the world is the signal that the
sale of goods loose their competitivines and so, some innovations are needed.
In this study, we would like to introduce an innovation in craft, souvenir and giftware. Our main method is
Fused Glass Tecnique that is used in Turkey for touristic craft and souvenir industry. Not only for just giftware, it
can also be applicated in Tableware, Decoration, Kitchenware, Hotel Products, Electirical Equipments etc. So, this
new tecnique affects different sectors in not only domestic markets but also export markets.

Fused Glass and “Zumrut Art Of Glass” Model
What is fused (fusing) glass? It is a process of joining pieces of glass by melting them together and the main
aim of fusing is to produce a solid glass sheet from individual pieces of glass which are arrange beside or on the top
of one another by melting together in a kiln (Eberle, 1997).

History of Zumrut Art of Glass
Zumrut Art of Glass was established in 1981. The company entered the glass sector with decorative items
by using the tecniques which are popular during that time: stained glass and sand blasting. In 1997, the company
decided to produce new products by using unique tecnique which was not avaliable in Turkey. It brought fused
(fusing) glass tecnique to Turkey. The company also desired to enter the giftware, souvenir sector by means of this
unique tecnique. After preparing the consept products and marketing, they got a lot of orders from touristic places. In
2002, the company participated giftware fair which was in Germany and this date was the starting of entrance to the
foreign markets. In 2005, the company invested to the water jet CNC machine for putting the limits away for
designs. After this investment, all the designs have been prepared in computers with benefiting from the technology.

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�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo
In 2006, to satisfy the customers‘ request, the drop tecnique which gives opportunity to produce locational and
promotional products was applied into the production.

Product Consept
Zumrut Art of Glass product consept consist of Giftware, Tableware, Souvenir, Tea and Coffee Sets, Sugar
Plates, Candle Holders, Magnets, Key Rings, Clocks, Picture Frames, Glass Tables, Plate Sets, Fruit Bowls, Self
Service plates, Tea-Coffee Trays, Vases, Ashtrays, Chandeliers, Door Glasses, Glass Sinks, Mirror Frames, Bowls,
Dinner Sets.

Employment Situation
There are 900 sales points, which are located generally in touristic places, of the company and it has 10 own
exhibition centers. Zumrut Art of Glass is employing directly 25 workers in manufacturing department, 20 persons in
exhibition centers as salesperson position,10 staff in different departments. Also company is employing 150 persons
indirectly.

Production Process
The production steps are made up:
1-) Flat glasses are provided firstly as plates in different thicknesses for products of which their production
is carried out by utilizing fusion glass melting tecnology.
2-) The necessary glass cutting processes are performed according to design and pattern of the product that
will be produced. While the glass patterns are cut manually in the cutting workshop, the design cutting is carried out
in Water Jet CNC bench. The water jet machine is able to cut all kinds of materials as two dimentional by operating
in the CNC machines‘ principle. The cutting carried out with water is able to see thinner details and carried out
milimetric cuttings in comparison to other tecnologies.
3-) The pattern and design glasses that have been got together in the production department are then placed
into molds in the fusion glass furnaces after the necessary staining are done and the furnaces are made ready in order
to perform thermal processing. All the Works taht have been carried out in the production are hand made and all the
staining is carried out between two glasses. After 800 C thermal processing is applied, since the fusion glass furnace
is kept for cooling, tension of the glass product has been taken and it is more resisting in comparison to normal flat
glass.
4-) For souvenir industry, plastic drop process is applied into the products . Plastic drop is poured on
photographs by labeling the which are demanded with the drop label tecnique and the photographs has been
protected between the label and the drop. All kind of design, figure and logo are able to be applied on the glass with
this tecnique.

Domestic and Foreign Market Situation Of Zumrut Art of Glass
Domestic market has 60% share and foreign market has 40% in total. Many of products which are
manufactured in fused (fusing) glass tecnique are sold in Antalya, Fethiye, Bodrum, Marmaris, Kusadasi, Izmir,
Ankara, Ġstanbul in Turkey with different points. The companys‘ exports markets consists of 15% of USA, 75% of
EU and %10 others. 2 million pieces of products are manufactured and sold in both foreign and domestic market
every year. The most popular products are magnets which are very easy to pack and hold, sugar plates which reflect
the culture of the location, tea sets with different figures, mini vase and wall decoration gifts.

Discussion

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�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

Devoloping countries, especially nowadays, try to continue their development process with different
methods. Some of them are transfering capital from agricultural to industrial production, some of them are try to
increase earnings from different industry. However, there is a hard competitiveness in all industry for all countries
and this creates a hard situation for devoloping ones. That means developing countries should find new methods
which can be a competitive to continue their development process by using their rich and cheap labour force.
Tourism is very important tool for development. Some of governments advertise their countries with
different methods to increase the number of tourist arrivals. Some of them organize festivals, some of them give
advertisements to TV programs to introduce their countries nature, the places for sight-seeing etc. Bosnia should also
use methods to introduce its unique nature, touristic opportunies and historical background.
Whether there is a little increasement in tourist arrivals, Bosnia Herzegovina with the share ‰4 from total
from Europe that has %53,1 share from all international arrivals with 489,4 million tourists, Bosnian government
should implement some policies to increase the share in the Europe. According to forecasting reports shows that
tourist arrivals will continue to grow in Europe. In the light of this information, Bosnia can increase and take
advantage of tourism sector if the government apply important policies into tourism industry for sustainable
devolopment.
Account deficit, unemployment and low income level constitue important economic problems in Bosnia.
1.708.000 persons are in the working age population and 226.000 persons are unemployed ( Federation of Bosnia
and Herzegovina Federal Office Of Statistics, 2009 ). Tourism oriented invesments to fusing glass tecniques in
souvenir industry will not only help decrease of unemployement, but also contribute to increase of the export with its
geographical advantages. Bosnia Herzegovina, which is located in the middle of Europe where the estimated tourist
arrival number will be 717 million in 2020, can use the advantage of minumun cost investment into the craft
industry, which will affect whole economy like a chain not only with retail shopping but also with export trade.

References
Eberle, B. (1997). Creative Glass Tecniques (pp. 15). Lark Books A division of Sterling Publishing Co.
Federation of Bosnia and Herzegovina Federal Office Of Statistics, (2009), Statistical Yearbook 2009. Retrieved on April 6, 2010
from http://www.fzs.ba/Statisticki%20godisnjak%202009.pdf
Gordon, B. (1986). The souvenir: messenger of the extraordinary. Journal of Popular Culture, 20, 135–146.
Gunce, E. (2003). Tourism and local attitudes in Girne, Northern Cyprus. Cities, 20(3), 181-195
Hair, J. F., Anderson, R. E., Tatham, R. L., &amp; Black, W. C. (1998). Multivariate data analysis (5th ed.). Upper Saddle River, NJ:
Prentice-Hall.
Hudman, L. E., &amp; Hawkins, D. E. (1989). Tourism in contemporary society. Englewood Cliffs, NJ: Prentice Hall.
Swanson, K. K., &amp; Horridge, P.E. (2006). Travel motivations as souvenir purchase indicators. Tourism Management, 27, 671-683
Torrent, R. R.-I-., (2008). Sustainable development in tourism municipalities: The role of public goods. Tourism Management, 29,
883-897
Turner, L. W., &amp; Reisinger, Y. (2001). Shopping satisfaction for domestic tourist. Journal of Retailing and Consumer Services, 8,
15-27
UNESCO, (2007). Handicrafts and Employment Generation for the Poorest Youth and Women (pp. 03-50) . Retrieved on April 6,
2010 from http://unesdoc.unesco.org/images/0015/001567/156772e.pdf
United Nations Environment Programme, http:// www.unep.org
World Tourism Organization. (2009). Tourism Highlights. Retrieved on April 6, 2010 from
http://unwto.org/facts/eng/highlights.htm

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                    <text>2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

Universities That Bring About Change In A Changing World: A
Model Suggestion

M. Nurettin ALABAY
Turgut Özal University
Economics and Business Administrative Science Faculty
Business Department
Ankara, Turkey
nalabay@gmail.com
Yavuz KAHRAMAN
Fatih University
Ankara Vocational School
Business Management Department
Ankara, Turkey
kahramanyavuz@yahoo.com

Abstract:A closer examination of history reveals that humanity has been undergoing a
constant development, particularly after the discovery of writing, numerals and zero. Alvin
Toffler in his book ―The Third Wave‖, describes three great revolutions that occurred since
the creation of the world: the agricultural revolution, the industrial revolution, and the
information revolution. Education/training, particularly higher education, has come to be
regarded as the most important factor that changes, improves, and shapes the society. It is also
known that with this fact in mind, governments may tend to establish universities in the
regions which they want to change and improve. Why would students and parents still choose
the universities that are far away from their hometowns or located in other regions? It may be
suggested that qualities of universities play an important role in their decisions. But are people
motivated solely based on the qualities of universities? Are there other factors involved? Also,
can the high preferableness of a university be considered as the only criterion for its success?
Which factors are more effective in students‘ university preferences?Do such factors as
qualification of university lecturers, the number of students per lecturer, the employment
opportunities after graduation, and prestige play a role in students‘ choosing a particular
university? If yes, to what extent? What should be the measurement metrics for a university?
Are ―quality of education,‖ ―internationalization,‖ ―research,‖ and ―prestige‖ sufficient
metrics in this regard? Why does a specific country attract more international students than
others? Why do other countries send students to that specific country? What are the numbers
of universities of countries? What are the capacities of these universities and are these
capacities adequate?In order to measure the performances of university lecturers, is it
adequate to assign some scores to their academic works, particularly asking lecturers to
publish works in a foreign language as well as encouraging them having works published in a
way to get more citations. This study evaluates the strategic positions of the universities
around the world and discusses their projections. It examines such issues as the qualities of a
good university, criteria of performance measurement, qualities required for attracting
international students.

Introduction
The important turning points such as industrial revolution and information society in the process which has come
so far has turned universities into means of global change. While universities derives strength from the society
which they are in and at the same time they are main factors which affect the capacity of change in the society
However all universities are not the same. The efficiency degrees of universities are different from each other.
Which sub values are these differences based on?
In this context, main reasons of why students prefers universities located in other regions, the degree of
importance of these,
The qualities of academicians
The number of students per academician

339

�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

The possibilities or opportunities of finding a job after graduation, prestige of the university
When efficient factors and measurement criterion for the preferableness of universities are considered, education
quality, internationalisation, the number of universities, which internationally cooperated with, the number of
research publications, prestige of university could be seen.
Why does a country attract more international university student than others?
Why do countries send students to universities in other countries?
Two factors play main role in international student mobilisation. These are 1) the impulsive factors in students‘
country (difficulties) 2) the attractive factors of the specific country (facilities). What are the numbers of
universities of those countries? What are the capacities of these universities and are these capacities adequate?
In order to measure the performances of university lecturers, is it adequate to assign some scores to their
academic works, particularly asking lecturers to publish works in a foreign language as well as encouraging them
having works published in a way to get more citations?
The main difference established by this model is that we use the term education to denote some
different qualities, including occupational capabilities, moral modeling and behavioral modeling (AJZEN, I.
1988; TAJFEL, H. and Turner, J. C. 1986).
When we approach universities as a system, it is seen that the system is a higher education system with
its inputs, process and outputs. This study is based on results, which have come by looking at only outputs in
order to evaluate an university university (ARWU, 2009; PENN State University, 2006; Webometrics Ranking
of World Universities; THES - QS World University Rankings). As it is seen on figure 1, total quality of outputs
for a system is related with the qualities of inputs and process (ENQA, 2005). According to this, when the output
is measured, the quality of input and process will be understood. Many factors are developed in order to
measure the efficiency and outputs of university (KETTUNEN, Juha and Mauri Kantola, 2007).
Efficiency measurement in university is related to how much the level of inputs‘ quality increase. Therefore, as a
methodology, the comparison between the levels of students when they were and the levels of final year and
after graduation is adopted.

External Environment

INPUT

PROCESS

OUTPUT

Internal Environment
Feedback
Figure 1: System and Components

Teaching and Education in Universities
To measure the level of education in universities, the parameters in Table 1 could be used.

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�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

A
A
A
A
B
B
B
B
C
C
C
D
D
D
D
D
D
D
D
D
D
D
D
D
D
D
D
D

Indicator-1: Education-Training
1. Total number of registered students
2. The average of scoring during the registration
3. The number of beneficiary students and their percentage
4. The percentage of international students
5. The Number of students‘ projects
6. The number of students who are awarded
7. Percentage of graduation on time
8. Percentage of students academic success
9. The percentage of placement of graduates
10. Average of Graduation Degree
11. The Level of wages that graduates earn
12. The percentage of student/academician
13. The length and duration of student-lecturers‘ meeting outside lectures
14. The percentage of student/academic adviser numbers
15. The percentage of student/computers
16. The duration of Internet access per lecturer
17. Duration of internet access per student
18. Percentage of international academician
19. Number of books in the library
a. The number of books per lecturer
b. The number of books per student
20. The number of electronic library membership
21. Indoor space (square meter)
22. Outdoor space (square meter)
23. Students‘ Income
a. The rate of incomes from national students to budget
b. The rate of incomes from international students to budget
24. The number of foreign languages in which education is carried on
Table 2: Indicator-1: Education-Training
The indicators, which show the potential of newly registered student, are shown in first chapter.
In second chapter, the indicators of advantages students gain at the university are taken place.
In third chapter contains the criteria for the measurements of success of the students during and after the
graduation time
In the four chapter includes factors which will discover the success of university‘s first, second and
third sections.

Research and Publication in Universities
The criteria in selection and promotion of academic personnel that is the most important human
resource for a university is shown Table 2.

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�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

Indicator-2: Research-Publication
1. Number of Articles in National Refereed Journals
2. Number of Articles in Internationally Cited Journals
3. Number of National Paper
a. Number of national papers per academic personnel
4. Number of International Papers
a. Number of international papers per academic personnel
5. Number of Books
a. Books with Editing
b. Chapters in Book
c. Books in Foreign Languages
d. Books per lecturers
6. Number of Projects
a. Number of National Projects
b. Number of International Projects
c. Number of Local Projects
d. Projects per academic personnel
7. Total Number of Citations
a. Number of Citation per academic personnel
8. Number of Copy Rights, Licences, Patent and Innovations
a. Number of patents per academic person
9. Annual Income from Research and Publications
a. The percentage of Annual Income from Research and Publications in the
budget
Table 3: Indicator-2: Research-Publciation
In this chapter, the factors, which show scientific image of university, the successes in the post
graduation level and the acceptance of higher-level students, are pointed out.
The activities in this section could be classified as national, international activities and scientific
publications and projects. These activities could be sum up as the studies, which academic personnel carry out in
order to improve themselves and contribute the world of science (ELTON, Lewis ,2008). Consequently, these
efforts contribute to universities. As a result, the scientific level and image of a university becomes apparent.
This situation provides the applications of high-level undergraduate and postgraduate students and offers
opportunities for students with potential to join the scientific studies and projects.

Universities’ Services to Society
The factors in this chapter are the ones that cause the integration of university with the society and
embracement of university by the society. Components that provide universities sufficient possibilities to
develop strong relations with partners and joint owners are examined in this chapter. In the widest meaning,
whole humanity is universities‘ natural partners. Therefore, solution suggestions of academicians for every kind
of problems, which are in regional, national or international level, are expected. It is possible to separate
indicators, which are shown at Table 3, into three main sections for the purpose of service to society. These can
be classified as A) to find solutions to problems, B) In cooperation with partners, improvement and development,
C) the components of income. While generating solutions to problems is being fulfilled after problems emerged
in the form of intervention, collaboration with partners with an empathetic approach means works with future
projection before the problems arise. Final chapter also analyses the donations and services of university in
return of income.

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�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

A
A
A
B
B
B
B
B
B
B
B
C
C
C
C

Indicator-3: Service to Society
1. Number of Suggestions for Solutions of the Local and Regional Problems
2. Number of Suggestions for Solutions of National Problems
3. Number of Suggestions for Solutions of International Problems
4. Number of Projects for the Cooperation of University and Society
a. Number of people who are served in the university hospitals
b. Number of People who are benefited from the services towards disadvantages groups.
5. Number of Projects about cooperation of University and Industry
6. Numbers of Project for the Cooperation of university and NGO‘s
7. Number of Projects for the cooperation of University and State
8. Number of Hours for the Education open to Public
9. Number of Participants for the Education open to Public
10.Proportion of Incomes from the Social Service Projects in the University‘s Budget
a. Proportion of Incomes from the State in the Budget
b. Proportion of Incomes from the donations in the Budget
c. Proportion of other incomes in the budget
Table 4: Indicator-3: Service to Society

The Moral (Ethical) Values in the Universities
Indicators that are obtained by analysing moral and ethical values in universities in terms of students
and staff are taken place in Table 4. The basic reason for measuring these values in terms of personnel is related
to the necessity of setting example for students 37.

A
A
A
A
A
A
A
B
B
B
B
B
B
B

Indicator-4: Moral Values
1. Staff number and ration of alcohol dependents
2. Staff number and ration of drug addicts
3. Intended disciplinary staff ratio
4. Staff number and ratio who committed an offence or crime
5. Staff number and ratio of smokers
6. Number and ration of personnel involved in an ideological event
7. Number and ration of personnel carrying cutting tools, and lethal weapons
8. Student number and ration of alcohol dependents
9. Student number and ration of drug addicts
10. Intended disciplinary student ratio
11. Student number and ratio who committed an offence or crime
12. Student number and ratio of smokers
13. Number and ration of students involved in an ideological event
14. Number and ration of students carrying cutting tools, and lethal weapons
Table 5: Indicator-4: Moral modeling educational indicators

Values that we wish to transmit to students via leading by example
There are some values in universities that cannot be digitalised therefore cannot be measured. However
according to Likert scale, it is possible to obtain some ideas about these values. These values can be seen in
Table 5. These values contribute the enrolment of qualified students to universities. The values classified in
three sections. These are A) Values related to university‘s name and brand which look at external environment,
B) Values that develop university and productivity of staff and students are related with internal affairs. C)
High values which separates university from others.
Below mentioned list of values cannot be teached or quantized readily. They only can be transmitted by
behavioral leading by example to students. These positive qualities cannot be dictated in any way but they can be
embraced by the students solely due to their free will if the staff can establish an attractive and positive image.

37

Akademisyenin anlattıklarını kendisi yaĢayarak verdiğinde daha etkili olduğu bilinmektedir.

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�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

A
A
A
B
B
C
C
C
C

Indicator-5: Values that cannot be digitalised
1. Institutional Culture (Values, Beliefs, attitudes, the way of thinking and moral sense)
2. Prestige
3. Brand recognition and awareness
4. The presence of Academic Freedom
5. The presence of Freedom of Thought
6. Existence of Ethical Values
7. The presence of universal humanist values
8. The presence of sense of solidarity
9. Presence of Confidence and Trust
Table 6: Indicator-5: Values that we wish to transmit to students via leading by example

Conclusion
In this study, the proposition of university model that contains values, which are expected to be in a
university could contribute positively to the changes in the world is developed. This proposed model is built on
outputs since it would be too difficult and to wide to analyze whole university system. To measure outputs will
give us important information about the inputs and the process since quality outputs depend on quality inputs and
process.
In this model the reasons of university preference have been analyzed from different dimensions such as the
quality of education, research and publications, the popularity of the university and the culture of institution
The question of why any university is more attractive than other universities for international students
and why students do not prefere domestic universities but go to foreign universities was answered by the model
as a result of international publications and projects, and academic freedom which are essentials for international
popularity.
Proficiency level of universities will be assessed with comperative analyses of the number and capacity
level of both domestic and foreign universities
Many methods have been developed so far to measure the efficiency of universities. These measures
mostly depend on education and research-publication measures. Many times even education was out of
measurement. But differing from other models, this model supplies new measures in respect to social service,
role model of academics to students in the education process and moral values beside of education and researchpublication measures.
The essential point of this model is the acceptance of positive behavioral moods via academic and administration
stuff who are complete exampler for students and society rather than unflexible administrative rules. It is clear
that enforced and administrated changes are not permanent but self-preferred and beloved changes are
permanent.

References
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Dorsey Press.
AVRUPA Yüksek Öğretimde Kalite Güvencesi Birliği, (2005), Avrupa Yüksek Öğretim Alanında Kalite Güvencesi için
Standartlar ve Ġlkeler, Helsinki, Finlandiya. (ENQA, Standarts and Guidelines for Quality Assurance in the European Higher
ARWU, Academic Ranking of World Universities - 2009 http://www.arwu.org/ARWUMethodology2009.jsp
BALDRIGE National Quality Program, 2009-2010 Education Criteria for Performance Excellence, Leadership, Ethics,
Competitiveness, www.baldrige.nist.gov
BARROW, Clyde W. (1996), ―The Strategy of Selective Excellence Redesigning Higher Education for Global Competition
in a Postindustrial Society‖, Higher Education, Vol. 31, No. 4, (Jun.), pp. 447-469. http://www.jstor.org/stable/3447820
24/07/2008
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                    <text>2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

Role and Importance of CRM
in Global Competitive Environment
M. Nurettin ALABAY
Turgut Özal University
Economics and Business Administrative Science Faculty
Business Department, Ankara, Turkey
nalabay@gmail.com
Abstract: Information and communication technologies (ICT) which has flourished due to
spread of microchip technologies during 1970s, created internet which interconnects entire
world and eliminates the classical understanding during 1990s. The fact that electronic trade
and several other transactions could be performed through internet which developed as a
result of widespread use of internet, created a global economy. The knowledge in the global
economy, left behind the production factors which are known as labor, capital, natural
resources and entrepreneurship, has become a standalone production factor. The developed
information technologies caused human-oriented approaches to flourish and production
processes to restructure. With the emergence of customer-oriented approaches, the production
process has become "discovering what the customer wants and produce that thus makes
profit by satisfying the customer in this fashion". Marketing function within the enterprise
became a leading factor even more than the production process and marketing position has
become the function of all employees of the enterprise. The enterprises which fail to satisfy
their customers, have become weaker economically and cannot survive. As a result, while
developed information and communication technologies enabled globalization, the customer
has become the most important element in the global economy and those enterprises which
can sell whatever they produce, have been replaced by those enterprises who produce and sell
whatever the customer wants and competition has been increased leading to global
competition which influence entire world. The enterprises which have been deprived of
competitive power through the classical marketing mix (product, price, distribution,
promotion) now have a tendency towards customer relationship management (CRM). CRM is
now used as a new name of the marketing.

Introduction
Rapid advancement and development in knowledge and communication technologies (ICT) are the most
distinctive characteristics of the significant development, which has been fulfilled during the last decade of the 20th
century, in the civilization history. This rapid advancement and development, being experienced, have changed the
construction methods of commerce and businesses, affected the economical and social life profoundly and caused
some concepts and templates to be questioned. The developments in ICT are also one of the most significant factors,
lying behind the spread of the phenomenon of globalization.
Today, not the fullest extent of the effects that would be created by the innovations in the knowledge and
communication technologies and by the usage of these technologies, has been revealed. As Drucker (1995) states, the
age we live in is an age of transition in every field. Knowledge and communication technologies shall be able to
provide incredibly significant economic and social benefits. New technologies help increase the effectiveness of the
economy, create new business opportunities, spread the technical advancements and ideas more easily, establish the
simultaneous communication between the people and institutions in different countries and regions. Together with
globalization, technological developments have found a usage area in every area and some definite effects occured
in every sector. Definite effects and advantages of information technologies are available in all sectors, which use
customer satisfaction as base (Drucker, 1995).
By this way, the role which is imposed on the mass medium is being included in new development-reconstruction
theories as the innovations, which constitute the source of the basic element and growth that determine the change of
technology, by being given to the technology (BaĢaran, 2005).

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In the light of these developments, the statement of information society, which is entitled by population
scientists like A. Toffler, is based on the effects to be made by ICT on the whole social structure, as well.
Developments in technology have contributed to the development of globalization. The apprehension of
quality products and increasing customer satisfaction, which emerged as a result of the development of
technology by the businesses of the whole world, thrusted the inter-enterprise competition to the forefront. The
accomodation of the businesses to the new global conditions is called global competition (Elibol, 2005:155).
Since the whole world has become a market for the customer together with the increase of both technology
and globalization, the expectations of the customers increased and concordantly, customer-based concept became
dominant in marketing. At the end of this process, on the other hand, marketing emerged as a new conception under
the name of the customer relations management. This new conception is the new name of marketing now.

Factors that Play a Role in Change
Beginning with the development of technology and continuing with globalization, the factors of the change
could be organized as follows:
 Developing Knowledge and Communication Technologies
 Developing Global Economy
 Increasing Global Competition
 Developing Conception of Marketing
 Developing Human-Based Processes
 Developing Customer-Based Approaches and New Conception of Marketing: Customer Relations
Management (CRM)
Developing Knowledge and Communication Technologies
The development of human capital (intellectual capital), which is described as qualified (intellectual) labor
force, together with the increase of the knowledge in terms of economy, established the ground for the rise of new
concepts and values like “knowledge economy”, “new economy”, “digital economy”. Rapid and extensive
development in information technologies affected the economic and social life profoundly. Gathering the potential
producers, suppliers, users and consumers together on the web carried the economic communication and activities
into the electronical environment.
Knowledge economy and B2B, which emerged as a new e-business method in this economy, also known as
from company to company e-commerce model, are among the most significant factors.. In this context, they enabled
the integration into the global economy and the rise of the obligations to make changes in the strategies, directed at
having a share from the extending global commerce size, from the aspect of the affects, that would be actualised by
BIT on the whole global economy due to its general features that affect the structures outside of their own areas and
also from the aspect of the developing and underdeveloped countries together with the new operation style of the
global economy (Kıyan, 2008).
Knowledge shall become much more important in the future. Some evaluations related to the future
economy are already being made. Rottberg and Erickson (2005) state that in transition from the current economy to
the future economy; intelligence, which is acquired through processing the knowledge, shall come into prominence
instead of knowledge. Because knowledge is a value. Intelligence, on the other hand, has power.
Through benefitting from the opportunities of knowledge and communication technology, preventing the
elimination of the information which often repeat in conventional documents and preventing the bureaucracy /
officialism, simplifying the distribution of goods, it is seen that competition and employment move towards new
goods with high value added tax and continuous service types and the employment, which increases by this way,
enables economic prosperity and growth.
Compiling, analysing the knowledge at the right time and through right methods and using the human and
capital sources by leaning on these knowledge without wasting, providing the chance of ―enlightenment on the
instant‖ for the individual / organization with an increasing quality and effectiveness on the face of new
developments, increase the efficiency in sourcing.
Rapid developments in information technologies have caused our age to be described as the information
age. Rapid technological advancements cause significant changes in the micro and macro economic basis. The basic
characteristics of this knowledge and communication-based new economy could be organized as follows (Tan and
Uijttenbroek, 1997):

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1) Continuously accelerating technological developments,
2) Intense activities of increasing information and knowledge,
3) Entering into the shortening market and shortening of the periods of product/service life cycle,
4) Globalization of the markets,
5) Dimming of the differences between the industry branches.
In the publication, prepared by the New Zealand government, which is called Knowledge Economy, the
most impressive characteristic of the knowledge technologies (knowledge and communication technologies) is that
their technological abilities continuously increase, whereas their expenditures continuously decrease. Three rules,
expressing this relation, have been set forth.
1) Moore Rule: The speed of a microchip doubles in every 18 months without a price increase.
2) Gilder Rule: The total tape extensity of communication systems rises threefold in every 12 months
without the change of the unit price.
3) Metcalfe Rule: The value of a communication network is proportional with the number of nodes in the
network. Therefore, while the value of being connected to a network increases exponentially, the price
per user remains constant; it even decreases.
In a study, which takes place in one of the most prominent B2B sites of the world, alibaba.com, the
advantages to be acquired by enterprises through B2B model could be organized as follows:
An increase in the sale and profit proportions,
 Competition superiority in the internal market,
 Taking share from the global markets,
 Increase in the market diversity,
 Decrease in per-piece costs,
 Removal of time limit in terms of requirements,
 Opportunity in terms of company growth,
 Chance of acquiring new knowledge and experience.
In this structure, which developed in a more different way than conventional commerce, some remarkable
declines are observed in the expenditures of some goods and services; while new jobs are constituted, some of them
loses their significance; customer satisfaction is brought to the forefront and transparency of the market, on the other
hand, strenghtens the constitution of the open market for now. In parallel with these developments, globalization of
the competition forces the enterprises to make more investments in knowledge, intellectual staff and knowledge
technologies. Because, the most important conditions of competing are constituted in the basis of the knowledge.
Spread of electronic commerce affects areas like international commerce, employment, education, culture and social
life; rapid innovations, which are almost impossible to estimate, emerge.
Development and fall of information technologies provide the enterprises the opportunity to be able to do
business on global level. Today, where the computer technologies and internet usage increase, electronic commerce
can address to the global market more easily, therefore, market potential could be greater compared to conventional
commerce.
The basic parameter of the condition that knowledge and knowledge technology terms the era we live in, is
the fact that knowledge is the source of prosperity. The investments, which are made in knowledge and knowledge
technologies provide positive effects for the growth of the countries in the long term.
Spread and fall of the internet bring a significant time and expenditure possession in providing the valuable
information, which are difficult to acquire. The fact that internet is more rapid and cheap compared to other mass
medium, increases the opportunities for the enterprises of developing countries to acquire competitive environments
more easily.
The increase of the strength and efficiency in the resource distribution by electronic commerce could also be
provided through the decline of production costs. It is observed that electronic commerce has a cost- diminishing
effect in the commercial relationships of the enterprises with customers and other enterprises.
Developments in knowledge and communication technologies increase the significance of services sector in
the economic structure and they reveal structural changes in labour-markets. As a result of this change, some
developments in favor of knowledge and communication technologies and services sector occur, while reductions in
other employment areas may arise.
On the other hand, the development of electronic commerce causes the increase of the need for qualified
labour force with a higher education in the field of knowledge and communication technologies. The enterprises,
which perform operations such as introduction, distribution and inventory tracking in the electronic environment, can
easily meet the consumer requirements thanks to the flexibility of the virtual environment.

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Developing Global Economy
The correlative connection between knowledge and communication technologies is frequently
emphasized. Knowledge and communication technologies have enabled globalization by increasing the
communication speed and decreasing the expenditure, providing a much more rapid and cheap integration,
facilitating the distribution through territorialising many products and activities with the help of integrated
networks. Through establishing direct and rapid communication connections, knowledge and
communication technologies decreased the economic distances, acquired possession from the time which
is required for the coordination of the activities of the business world, declined the conversion
expenditures and made the financial markets active for 24 hours in the size of countries and continents. In
brief, knowledge and communication technologies is a strong factor that functions in favor of the
integration of the world economy.
The increase of the technological developments made the whole world a single market. Today, the
globalization, which establishes strong and correlative connections between individual economies and
societies and consequently, which makes psychological and economical distances and differences between
the societies meaningless, is a concept, which describes the new tendencies, that emerged during the last
quarter of the twentieth century within the world economy. In a much more special context, it is a concept,
required for international dependence and international cooperation.
Knowledge and communication technologies depict its effect on the growth through different channels
because of its multi-dimensional nature:
1.
Total production increases through producing new products and services (such as
computer equipment, digital equipment, magnetic card machines and applications, fax
machines, mobile phones, satellite broadcastings and new financial services). New
business opportunities occur rapidly in these sectors.
2.
Efficiency increases through new methods, that find field of application in the
production processes such as electronic commerce and computer-aided robots. Within
this context, knowledge and communication technologies could be accepted as a
significant production factor, which contributes to the growth of the total production
factors together with unqualified labour force, physical capital, human capital and land.
3.
Economic efficiency increases through internet sales, digital advertisement, crossborder production, new marketing, organization and management techniques.
The number of the new products and services, which is executed in connection with knowledge
and communication technologies, geometrically increased in the last decade.

Increasing Global Competition
Together with the increase of the market size, the elements of competition change and enterprises have to
recheck their competition strategies. Sometimes, a cooperation with opponent companies may be compulsory and
sometimes the companies, which carry on their activities in different sectors could become opponents in the virtual
environment. The fact that entering into electronic commerce market has a low cost, strengthens the possibility of
coming across with new opponents at any moment.
As the competition increases, marketing CEOs continue to reveal new human requirements through
developing more aggressive methods. There is no way of competing with product, price, distribution and promotion
tools, known as marketing composite, any more. Therefore, the rate of meeting the human requirements by new
pursuits and products in a better way, the quality of products, customer-based approaches shall gradually increase.
Competition has increased the numbers of market segments, as well, and nich marketing, which addresses to very
attentive features, is developing since classical market segment methods could no longer respond.
Increasing competition changed the marketing process, as well as the organizational structure. Beginning
with the determination of the customer necessities, marketing changed as producing the most convenient product for
the customer requirements and presenting them to the customer and by this way, acquiring profit. On the other hand,
together with embedded marketing understanding, marketing became the task of everyone in the enterprise. Kotler
stated as, ―marketing is a too large subject to be left only to the marketing department‖ (Kotler, 2000).

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Since enterprises go into a cutthroat competition in the whole world market in order to find demand for the
increasing amount of production and supply of product variety, global competition emerged. Today, where
expanding into international markets have become easy, and even the direct investments have come to the levels of
convenience in the home country, the global competition has increased. While country borders are not considered as
a problem in production and marketing, it is seen that in which country the product is produced is no longer
considered to be significant. Because on condition that what the future scientists have already stated comes out right,
China, where 25% of today‘s production is made, shall become a country on which 50% of the economy of the world
countries would be dependent, in 2025.
Concerning this subject, the following information are included in Global Trends 2025:A Transformed
World (2008):
Economy giants of Asia – China and India – are going back to their positions prior to two centuries, when
they produced respectively 30% and 15% of the world prosperity. For the first time since the 18th century, China and
India have been determined as the countries, providing the greatest contribution to the economic growth worldwide.
It is possible that these two countries overpass the GSMH of other economies, except of USA and Japan, until 2025,
however they shall keep dropping behind for years, from the aspect of the income per capita.

Changing Marketing concept
As a result of the development of technology and global developments, enterprises had to change their
organizational structures and marketing became the most important function through getting ahead of production. By
this way, production systems started to begin with marketing, rather than production.
Some changes occurred in the marketing concept through the development of the consumer market, which changes
with the increase on the educational levels of the consumers, technology and globalization. This new marketing
concept has more different characteristics than that of ―Conventional Marketing‖.
Changes in the marketing developed depending upon the development of technology, globalization and the
increase of the educational level of the consumer. Depending on this change, the description, composite and role of
marketing and the organizational structure of the enterprise changed, as well. In the period of change, relation
marketing developed, the customer was placed in the centre of the enterprise, the concepts of value-producing and
value-transmitting developed and market-directedness became the basis (Varinli, 2006).
The changes could be organized as follows:
 Supply became much greater than demand,
 Very significant developments occured in marketing, particularly during the period after 1990s,
 Determining the customer requirements and necessities in the target market, providing satisfaction
started through manufacturing in a convenient way for it and presenting it to them,
 Every unit of the enterprise started to function coordinately (embedded marketing), marketing became
the task of all employees of the enterprise,
 Profitability, directed at the consumer in the long term, became the target,
 Since the competition was too intense, the search for innovation increased each day,
 Value-based marketing concept developed,
 Market-oriented management and the marketing concept started to dominate.
According to this change, some significant changes in the marketing composite occured, as well, and the
marketing composite, which is known as 4Ps, started to be described as Customer, Cost, Convenience,
Communication –known as 4Cs- instead of Product, Price, Place and Promotion (Kotler, 1998:92).
Marketing concept changed after the conventional marketing and many new marketing techniques were
developed. Modern marketing, social marketing, green marketing, guerilla marketing, post-modern marketing, oneto-one marketing, customer-oriented marketing, value-based marketing, etc. could be given as examples to them.

Developing Human-Oriented Processes
Human-oriented approaches, that place humans at the centre and dignify them, affect all the enterprises
increasingly day by day. Human-oriented approaches have become even stronger together with the development of
globalization and technology, increase of the educational levels of the people, fall of transportation and
communication and the spread of the total quality management processes.
Today, the performances of the people are constantly becoming easy through the sense of ―everything is
for humans‖ in the human-oriented approaches.

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Human-oriented approaches provide a brand new ground, that would gain the advantage of a sustainable
competition in the enterprises. Human-oriented approaches replace the product or process technologies, marketing or
advertisement strategies, which have the authorities of conventional competition, and the advantages, dependent on
the capital power. Comparing with the conventional factors that constitute a competition advantage, it is much harder
to be able to imitate or copy the human-oriented competition elements. For instance, every enterprise imitates the
products or business secrets of a famous enterprise. However, it is very difficult to imitate the culture of an
organization, which is based on human-oriented approaches (Schneider and Benjamin; 1993; p. 42).
While human-oriented approaches in the enterprises primarily aim to constitute an organization culture with
employees, who are considered as internal customers, a customer-oriented approach is adopted for the external
customers. Customer-oriented approaches constituted an alliance of systems, such as customer-oriented marketing,
relation marketing and Customer Relations Management, which gradually develops.

Developing Customer-Oriented Approaches and the New Sense of Marketing: Customer
Relations Management (CRM)
Knowing the requirements and necessities and even the expectations of the customers is very significant in
terms of the path to be followed during the acquirement of the customer satisfaction. Today, the enterprises support
the standards, such as ISO 9000:2000, ISO 9000:2001 and ISO 10002, aimed at developing the quality, in order to
provide customer satisfaction. In this case, good practice of enterprises by concentrating on the issue of customerorientation becomes compulsory (Kağnıcıoğlu, 2002).
The concept of customer relations management is a result of today‘s sense of marketing. The competition
power of enterprises has always required being different. Since differentiations, acquired through technological
innovations are not long standing today, it shall not be possible to go to the customers of the enterprises with a
unique sale proposal in the long term. Therefore, customer relations are depicted as one of the most important ways
of differentiation. The continuing relations, devotions and gradually increasing purchase behaviors of the customers
are the values to protect the enterprises under strong competition conditions (Demir and Kırdar, 2006).
Customer Relations Management could be accepted as an application of one-to-one and relational
marketing, which takes the knowledge about what customers state about their expectations from the product and
knowledge, collected by the enterprises concerning their customers as base and which responds to the customer
personally (Ryals and Pane, 2001: 4).
Although the main reason that requires the materialization of Customer Relations Management applications
is competition, it also is a need of the respect and importance, given to the human, together with the increase it
provides in the service quality of the customer relations management (TaĢpınar, 2005: 19).
Customer is the most important information source in the Customer Relations Management. It is
compulsory for the business process, which includes producing and presenting product or service, to concentrate on
the values, perceived by the customer in today‘s competition environment (Goldman, et al., 1996).
Customer Relations Management (CRM) is the life prescription of enterprises today, where competition
with the elements of marketing composite have become difficult, global competition has increased, technology and
internet have spread, human values have come into prominence and expectations have increased.

Conclusion
Due to mass production, which started with industrial revolution, and the fact that sale became harder than
production and the increase of global competition during the 21st century, marketing started to be forced. While
things to be produced can not be found since everything is already produced now, marketing has started to be forced
although the movements are made in accordance with considering every way as lawful. Why did this happen this
way? What has changed since the 19th century until today?
 ICT, knowledge and communication technologies developed, became cheaper and spread,
 Internet technologies developed, became cheaper and spread,
 Web systems developed and became cheaper, systems like B2B spread,
 Other end of the world became accessible through e-commerce,
 Global enterprises, functioning for 24 hours, were established,
 Total knowledge in the world increased, and access to the knowledge (communication) became
easy,
 Knowledge became strategic,

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�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo






















The importance of knowledge and knowledge-concentrated sectors increased,
Global economy developed,
The number of products became greater than before, supply was much greater than demand,
Competition increased excessively,
Fields of competition decreased,
Competition case of the enterprises was removed together with marketing composite,
Search for competition continues in new fields,
Market segments increased, very attentive Market segments were constituted,
Human-oriented processes started to come into prominence, everything started to be made for
humans,
Transportation and communication increased and became cheaper,
Automatic Recognition and Data Collection (ARDC) systems developed and spread,
Customers became traceable at any moment,
Data mining developed, spread and became cheaper,
Marketing systems developed,
New marketing techniques were developed,
Organizational structures of the enterprises changed,
Marketing became the most significant function in enterprise, through getting ahead of even the
production,
Production systems started to begin with marketing, rather than production,
Customer-oriented production and marketing approaches developed,
Customer Relations Management (CRM) was developed,
Marketing became=CRM

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                    <text>2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

Regulations and Accounting Applications in Insurance Sector of Turkey
Rafet AKTAġ
Dumlupinar University, Turkey
rafetaktas@gmail.com
Süleyman AÇIKALIN
acikalinsuleyman@hotmail.com

Abstract: Insurance is a contract with a premium payment based on the principle of paying claims
when the risk, that is the reason of insurance for an interest, is realized. Trust is the base of
insurance business. This sector especially in developing countries has a potential to raise new
funds for economic development. In Turkey, 61 firms and 16,069 employees work in life, non-life,
life/pension and pension branches of insurance sector in 2008. This sector is one of the developing
areas in Turkey with 73 brokers and 13,250 agencies. Insurance agencies are working according to
the Insurance Law and the regulations of the General Directorate of Insurance and Insurance
Supervisory Board both of which organized under Turkish Treasury. These regulations are about
establishment processes, insurance activities, the way of using funds collected from premiums, and
adequacy of capital and liability compensations. Accounting activities are executed according to
these regulations. In addition, Capital Markets Board (CMB) and Turkish Accounting Standards
Board (TASB) describe standards and accounting applications have to obey these standards too.
The name of this standard is Turkish Financial Reporting Standards (TFRS) 4 – Insurance
Contracts that is arranged parallel to International Financial Reporting Standards (IFRS) 4 –
Insurance Contracts. This study aims to describe the characteristics of insurance sector in Turkey
and also to analyze some specific regulations and accounting applications.

Introduction
Insurance industry performs two important functions in economic life; one is micro and the other one is
macro. Insurance companies create benefits in microeconomic sense by undertaking the risks faced by individuals as
well as companies. Moreover, they contribute to the functioning of the financial markets by supplying the premiums
they collected from their customers as funds to the financial system. Supplying the much needed long term funds for
the real sector is critically important for the countries with limited capital accumulation. Insurance activities in
Turkey are carried out according to Insurance Law No. 5684 and the regulations of the General Directorate of
Insurance and Insurance Supervisory Board, both of which operate under the authority of the Undersecretariat of
Treasury. These arrangements cover the areas of establishing insurance business and insurance processing activities
as well as the use of collected funds, capital and liability coverage adequacy issues.
Accounting practices, on the other hand, are conducted under the above mentioned arrangements as well as
standards prepared by Capital Markets Board (CMB) and Turkish Accounting Standards Board (TASB). Turkish
Financial Reporting Standard 4-Insurance Contracts prepared by TASB is the same as the International Financial
Reporting Standard 4- Insurance Contracts prepared by the IASB. Some special arrangements and their accounting
practices are going to be analyzed after providing a profile picture of the fast developing insurance sector in Turkey.

Definition and Importance of the Insurance Sector
Insurance is an organization which brings people, who is facing the same risk that is determined by a
contract, together in order to pay for the expected damages (Pekiner, 1974, 17). Insurance is the act of guaranteeing
that the payments for damages will be paid in case of the risk under contract is realized (Çaldağ, 1979, 9). The
concept of insurance came to life when people who face the same threat of danger come together to pay for the
damages with the conscious decision that it is not possible to completely eliminating physical dangers.
Insurance companies try to eliminate negative consequences of the risk for the individuals with the help of
other individuals who want to avoid the consequences on the basis of an assurance. Trust is the base of insurance

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�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

business. Insurance sector and its companies are important for the functioning of the financial markets. The
insurance companies play an important role in financial markets by directing the funds they collected as premiums.

Insurance Sector in Turkey
Having enjoyed a spectacular growth consistently after the financial crisis in 2001, the insurance industry in
Turkey experienced a slight decline at the last quarter of the 2008 and concluded the year with a growth rate below
inflation as a result of the global financial crisis (Annual Report 2008, 3). There are total of 61 insurance and pension
companies consisting of 36 non-life, 24 life/pension and 1 reinsuring companies in Turkey in 2008 (Annual Report
2008, 25).
There are 13,250 agencies excluding bank insurance, 73 brokers and 901 loss adjusters (natural entity) in
insurance and private pension sector as of December 31 st, 2008 in Turkey. It is estimated that over 50 thousands of
people are employed in the sector including agencies, brokers and loss adjusters with 16,069 employees in insurance
companies (Annual Report 2008, 26).
When the year 2008 is evaluated by the end of year figures, we could see that insurance companies
concluded 52.4 million contracts and 37.5 million policies during the year. It means that the number of contract and
policies increased by 15% in 2008. The total amount of assets of the industry also rose by 19% to 27.9 billion TL
compared to 2007 (Annual Report 2008, 3).
Turkish insurance sector took 36th place within 88 countries with a share of 0.21% in global premium
production. According to the ratio of premium volume to GDP and premium volume per capita, Turkish insurance
market has been ranked 76th and 65th, respectively. Turkey has a rank of 34 over total of 35 European Countries in
premium volume per capita (Annual Report 2008, 22).

Legal Regulatory Authorities in Insurance Sector in Turkey
The insurance companies must operate under the guidelines of TFRS, Insurance Law, and the Turkish
Commerce Law. At the same time, insurance activities take place inside the framework set by Insurance Supervisory
Board and General Directorate of Insurance both of which operate within the Undersecretariat of Treasury.
Regulations by the Undersecretariat of Treasury
The responsibility of regulating and supervising the insurance sector is given to the Undersecretariat of
Treasury with Insurance Law. There are two units operating within the Treasury about the insurance activities in
Turkey. These are the Insurance Supervisory Board and the General Directorate of Insurance .
Insurance Supervisory Board
The Insurance Supervisory Board was established in 1963 with Law No. 7397 to supervise all activities of
insurance companies.
General Directorate of Insurance
Insurance companies must obey the rules by General Directorate of Insurance . This department is
established by the law establishing the Undersecretariat of Treasury which is dated December 20 th, 1994 and
numbered 4059.
Insurance Law
The purpose of the Insurance Law No. 5684 is to develop the insurance sector in general, to protect rights
and benefits of insured entities and to make sure that the sector could work efficiently in a safe and stable
environment. This law also organizes the start up procedures in the sector and sets the main rules and methods of
operations in the industry.

616

�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

The Turkish Commerce Law Regulations
The fifth chapter of the Turkish Commerce Law is devoted to the topic of insurance. The necessary
definitions such as insurance contracts and insurance policy are given and types of insurance are explained in this
book.
Turkish Accounting Standards Board (TASB) and TFRS 4 Insurance Contracts Standard
Turkish Accounting Standards Board is a public entity established with law in order to perform duties
defined by the Capital Markets Law and has financial and administrative independency. TASB published
International Accounting/Financial Reporting Standards as the Turkish Accounting/Financial Reporting Standards on
the Official Gazette on several dates and Turkish Accounting/Financial Reporting Standards which are going to
guide the Turkish accounting practices became in full harmony with the International Accounting/Financial
Reporting Standards.
One of these standards is the TFRS-4 Insurance Contracts Standard, which is published on March 25 th, 2006
No. 26119 issue of the Official Gazette for the first time and some changes are officially made on July 15 th, 2007
No. 26583 issue of the Official Gazette. Even though these standards set the general framework, they do not include
detailed explanations for insurance accounting practices.
However, it is a known fact that the International Accounting Standards Board (IASB) is still working on
the issues of ―recording‖ and ―valuation‖ about insurance contract. Various arrangements are made regarding
financial reporting activities of insurance companies on the directive about TFRS-4.
The main objective of TFRS-4 is to determine the principles of financial reporting of the insurance
companies. TFRS-4 includes all activities of insurance companies including reinsurance (Berk, 2005, 25).

Accounting Practices by Insurance Companies
Accounting practices of insurance companies are quite different from companies in other sectors. The nonphysical nature of the insurance business differentiates the insurance company from companies in manufacturing and
in commerce. There are other differences for the insurance company in other areas such as capital structure, resource
allocation, and working style. Even though the insurance companies locate inside the financial services sector, the
structure of assets and liabilities are quite different from other financial companies (AktaĢ, 2005, 124).
The differences of insurance companies show themselves also on insurance accounting. These are (Candar,
2001; Uyanık, 2001, 510; BaĢpınar, 2005, 6);
a) The amount of receivables and payables of insurance companies show uncertainties in many aspects. The main
source of this uncertainty arises from the fact it is not known whether the risk under insurance is realized and how
big the compensation is going to be if it is realized.
b) In case of insurance companies, it is not possible to determine periodic profit or loss with certainty. Because the
price of every service provided is based on certain possibility calculations. These calculations generally include an
average value according to the law of big numbers. When the damage is realized above the expected rate, there will
be a loss for the insurance company. Otherwise, there will be a profit.
c) A significant portion of premiums collected by insurance companies is paid back to the clients as compensation
payments. However, it is not possible to determine the amount, the timing or the identity of the client with certainty.
d) The allowances for uncertainties are allocated from the premiums collected from clients rather than the profit as in
the case of other businesses. The financial tables carry some margin or errors since the amount of these allowances
depend on possibility calculations.
e) The differences between life insurance and general insurance create some accounting problems in this sector. The
above mentioned policies provide coverage for different periods with their different premium structures. The
different laws and accounting practices, such as these different policies can not be provided by the same company,
led to developments of these two branches completely separately.
f) The probability of determining the revenues and expenses with certainty is low since financial flows of the
insurance companies goes beyond a single period. However, it is assumed that the revenues collected and
compensations made during the same calendar year are assumed to belong to the same calculation period. Profit and
loss calculations in case of commercial and industrial companies, on the other hand, generally belong to the same
calculation period.
Moreover since the insurance sector functions on the principle of trust and the governments feel the need for
protecting the rights and benefits of clients, the sector faced very important legal restrictions and regulations in many

617

�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

countries. Establishing technical provisions, giving a bigger weight to the liquid assets in total assets, requirement of
establishing funds, extra capital requirements to make sure they have the compensation payment adequacy are some
examples of the regulations faced by the insurance industry.

Technical Provisions
Technical insurance provision is defined as the funds separated by the insurance companies established as
corporations by the Insurance Law to cover the responsibilities of policies not expiring by the last day of the period
and allowed to subtract from the revenues as an expense according to the Corporate Taxation Law (Arslanhan, 1996,
12).
Insurance technical provisions is the amount separated by the insurance companies because of
responsibilities they carry due risks covered by the policies they prepared. The most important function of these
provisions is guaranteeing the compensation payment must be made by the insurance company when the insured risk
is occurred. Moreover, the provisions show the degree of risk the company faces for the financial information users.
Insurance Law lists the technical insurance provisions as:
- unearned premium provisions
- unexpired provisions
- equalization provisions
- mathematical provisions
- outstanding claims provisions
- promotion and discount provisions
Technical provisions are located on the balance sheet as a liability. In order to understand whether the
technical provisions adequately cover the risk they face, liability adequacy test is performed. The liability adequacy
test for life and non-life insurance companies could be summarized as the following table (Sarıaslan, 2008, 20-21).
A. Future Cash Flows
Expected losses
Related expenses of losses
Related management expenses
B. Insurance Liabilities
Unearned premium provisions
Premium production expense
Related non-physical assets

(+)
(+)
(+)
(+)
(-)
(-)

Table 1. Non Life Insurance Company
A. Future Cash Flows
Expected losses
Related
expenses
of
(+)
Related management expenses
Embedded
options
and
(+)
B. Insurance Liabilities
Actuarial mathematical provisions
(+)
Unearned premium provisions
Premium production expense
Related non-physical assets
Table 2. Life Insurance Company

618

(+)
losses
(+)
warranty

(+)
(-)
(-)

�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

TFRS 4 finds such a test outlined above as sufficient for the insurance companies (Sarıaslan, 2008, 21). Liability
adequacy test in Turkey is formulated by the regulations of the Turkish Treasury as the following:
Years
I) Allocated Provisions
A. Accrued
B. Not reported
C. Expense share
II) Realized
D. Accrued
E. Not reported
F. Expense share

2005

2006

2007

2008

2009

Total

2010

150
40
10

130
30
8

120
20
12

200
50
15

220
70
20

820
210
65

210

120
50
15

140
20
13

130
25
10

190
45
10

310
80
20

890
220
68

III) Adequacy ratio
Accrued (A/D) * 100
Not reported (B/E) * 100
Expense share (C/F) * 100

92,1
95,4
95,5

IV) Difference in adequacy Ratio
(The legal adequacy ratio is 95%)
1.Accrued

95-92,1
=
2,9
-

2.Not reported
3.Expense share
*

(210+6,09*)
=
216,09
-

210 x %2,9

Standards allow discounting the general insurance provisions but this practice is not required at this stage.
At the same time, standards do not ban the use of rate of return of insurance assets as the discount rate. Up until the
completion of second stage of establishing insurance standards by IASB, premium production expenses could be
deferred (AktaĢ, 2005, 124-125).

Conclusion
Insurance industry performs two important functions, one micro and the other one is macro, in economic
life. The insurance sector in Turkey operating in the branches of non-life, life, life/pension, and pension with 61
companies and 16,069 employees by 2008 is fast growing sector. Insurance activities in Turkey are carried out
according to Insurance Law and the regulations of the General Directorate of Insurance Business and Insurance
Supervisory Board, both of which operate under the authority of the Undersecretariat of Treasury.
Turkish Financial Reporting Standard 4-Insurance Contracts prepared by TASB is the same as the
International Financial Reporting Standard 4- Insurance Contracts by the IASB. Regulations prepared by the legal
authorities in Turkey satisfy the minimum requirements set by the TFRS-4. There are going to be serious changes in
insurance accounting practices in Turkey when the second stage of Insurance Contracts Standards is completed.

References
AktaĢ, R. (2005). Sigorta ĠĢletmelerinde Gerçeğe Uygun Değer YaklaĢımının Kullanılması ve Değerlendirilmesi, Gazi University
Unpublished Phd Thesis, Ankara.
Annual Report about Insurance and Private Pension Activities in Turkey, 2008
Arslanhan, N. (1996). Sigorta Teknik Ġhtiyatları, Vergi Sorunları Dergisi, Eylül.
BaĢpınar, A. (2005) Finansal Analiz Tekniklerinin Sigorta ġirketi Mali Tablolarına Uygulanması, Maliye Dergisi, Sayı:149,
Mayıs-Aralık.

619

�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

Berk, N. (2005). AB Sigortacılığı'nda Solvency II Düzenlemeleri ve Türk Sigortacılığı'nın Harmonizasyonu, Türkiye Sigorta ve
Reasürans ġirketler Birliği Yayını, Bilim ve DanıĢma Kurulu Onaylı Eserler.
Candar, S. (2001). Sigorta Muhasebesi ve Mali Tablolarının Diğer Sektörlerden FarklılaĢması ve Analizi, Ankara.
Çaldağ, Y. (1979). Sigorta ĠĢletmeleri ve Muhasebesinin Ġncelenmesi, AĠTĠA Yayınları, Ankara.
International Financial Reporting Standard 4- Insurance Contract
Pekiner, K. (1974). Sigorta ĠĢletmeciliği Prensipleri-Hesap Bünyesi, Ġstanbul.
Sarıaslan, M. (2008). Devam Eden Riskler KarĢılığının TFRS 4‘deki Düzenlemelerle KarĢılaĢtırılması, Sigorta AraĢtırmaları
Dergisi, Sayı:4.
Turkish Financial Reporting Standard 4- Insurance Contract
Uyanık, A. (2001). Denetim, Muhasebe ve Vergilendirme -Sigorta Sektörü Uygulamalı-, Beta Basım Yayım Dağıtım, Ġstanbul.

620

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AÇIKALIN, Süleyman</text>
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                    <text>2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

Regulations and Accounting Applications in Insurance Sector of Turkey
Rafet AKTAġ
Dumlupinar University, Turkey
rafetaktas@gmail.com
Süleyman AÇIKALIN
acikalinsuleyman@hotmail.com

Abstract: Insurance is a contract with a premium payment based on the principle of paying claims
when the risk, that is the reason of insurance for an interest, is realized. Trust is the base of
insurance business. This sector especially in developing countries has a potential to raise new
funds for economic development. In Turkey, 61 firms and 16,069 employees work in life, non-life,
life/pension and pension branches of insurance sector in 2008. This sector is one of the developing
areas in Turkey with 73 brokers and 13,250 agencies. Insurance agencies are working according to
the Insurance Law and the regulations of the General Directorate of Insurance and Insurance
Supervisory Board both of which organized under Turkish Treasury. These regulations are about
establishment processes, insurance activities, the way of using funds collected from premiums, and
adequacy of capital and liability compensations. Accounting activities are executed according to
these regulations. In addition, Capital Markets Board (CMB) and Turkish Accounting Standards
Board (TASB) describe standards and accounting applications have to obey these standards too.
The name of this standard is Turkish Financial Reporting Standards (TFRS) 4 – Insurance
Contracts that is arranged parallel to International Financial Reporting Standards (IFRS) 4 –
Insurance Contracts. This study aims to describe the characteristics of insurance sector in Turkey
and also to analyze some specific regulations and accounting applications.

Introduction
Insurance industry performs two important functions in economic life; one is micro and the other one is
macro. Insurance companies create benefits in microeconomic sense by undertaking the risks faced by individuals as
well as companies. Moreover, they contribute to the functioning of the financial markets by supplying the premiums
they collected from their customers as funds to the financial system. Supplying the much needed long term funds for
the real sector is critically important for the countries with limited capital accumulation. Insurance activities in
Turkey are carried out according to Insurance Law No. 5684 and the regulations of the General Directorate of
Insurance and Insurance Supervisory Board, both of which operate under the authority of the Undersecretariat of
Treasury. These arrangements cover the areas of establishing insurance business and insurance processing activities
as well as the use of collected funds, capital and liability coverage adequacy issues.
Accounting practices, on the other hand, are conducted under the above mentioned arrangements as well as
standards prepared by Capital Markets Board (CMB) and Turkish Accounting Standards Board (TASB). Turkish
Financial Reporting Standard 4-Insurance Contracts prepared by TASB is the same as the International Financial
Reporting Standard 4- Insurance Contracts prepared by the IASB. Some special arrangements and their accounting
practices are going to be analyzed after providing a profile picture of the fast developing insurance sector in Turkey.

Definition and Importance of the Insurance Sector
Insurance is an organization which brings people, who is facing the same risk that is determined by a
contract, together in order to pay for the expected damages (Pekiner, 1974, 17). Insurance is the act of guaranteeing
that the payments for damages will be paid in case of the risk under contract is realized (Çaldağ, 1979, 9). The
concept of insurance came to life when people who face the same threat of danger come together to pay for the
damages with the conscious decision that it is not possible to completely eliminating physical dangers.
Insurance companies try to eliminate negative consequences of the risk for the individuals with the help of
other individuals who want to avoid the consequences on the basis of an assurance. Trust is the base of insurance

615

�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

business. Insurance sector and its companies are important for the functioning of the financial markets. The
insurance companies play an important role in financial markets by directing the funds they collected as premiums.

Insurance Sector in Turkey
Having enjoyed a spectacular growth consistently after the financial crisis in 2001, the insurance industry in
Turkey experienced a slight decline at the last quarter of the 2008 and concluded the year with a growth rate below
inflation as a result of the global financial crisis (Annual Report 2008, 3). There are total of 61 insurance and pension
companies consisting of 36 non-life, 24 life/pension and 1 reinsuring companies in Turkey in 2008 (Annual Report
2008, 25).
There are 13,250 agencies excluding bank insurance, 73 brokers and 901 loss adjusters (natural entity) in
insurance and private pension sector as of December 31 st, 2008 in Turkey. It is estimated that over 50 thousands of
people are employed in the sector including agencies, brokers and loss adjusters with 16,069 employees in insurance
companies (Annual Report 2008, 26).
When the year 2008 is evaluated by the end of year figures, we could see that insurance companies
concluded 52.4 million contracts and 37.5 million policies during the year. It means that the number of contract and
policies increased by 15% in 2008. The total amount of assets of the industry also rose by 19% to 27.9 billion TL
compared to 2007 (Annual Report 2008, 3).
Turkish insurance sector took 36th place within 88 countries with a share of 0.21% in global premium
production. According to the ratio of premium volume to GDP and premium volume per capita, Turkish insurance
market has been ranked 76th and 65th, respectively. Turkey has a rank of 34 over total of 35 European Countries in
premium volume per capita (Annual Report 2008, 22).

Legal Regulatory Authorities in Insurance Sector in Turkey
The insurance companies must operate under the guidelines of TFRS, Insurance Law, and the Turkish
Commerce Law. At the same time, insurance activities take place inside the framework set by Insurance Supervisory
Board and General Directorate of Insurance both of which operate within the Undersecretariat of Treasury.
Regulations by the Undersecretariat of Treasury
The responsibility of regulating and supervising the insurance sector is given to the Undersecretariat of
Treasury with Insurance Law. There are two units operating within the Treasury about the insurance activities in
Turkey. These are the Insurance Supervisory Board and the General Directorate of Insurance .
Insurance Supervisory Board
The Insurance Supervisory Board was established in 1963 with Law No. 7397 to supervise all activities of
insurance companies.
General Directorate of Insurance
Insurance companies must obey the rules by General Directorate of Insurance . This department is
established by the law establishing the Undersecretariat of Treasury which is dated December 20 th, 1994 and
numbered 4059.
Insurance Law
The purpose of the Insurance Law No. 5684 is to develop the insurance sector in general, to protect rights
and benefits of insured entities and to make sure that the sector could work efficiently in a safe and stable
environment. This law also organizes the start up procedures in the sector and sets the main rules and methods of
operations in the industry.

616

�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

The Turkish Commerce Law Regulations
The fifth chapter of the Turkish Commerce Law is devoted to the topic of insurance. The necessary
definitions such as insurance contracts and insurance policy are given and types of insurance are explained in this
book.
Turkish Accounting Standards Board (TASB) and TFRS 4 Insurance Contracts Standard
Turkish Accounting Standards Board is a public entity established with law in order to perform duties
defined by the Capital Markets Law and has financial and administrative independency. TASB published
International Accounting/Financial Reporting Standards as the Turkish Accounting/Financial Reporting Standards on
the Official Gazette on several dates and Turkish Accounting/Financial Reporting Standards which are going to
guide the Turkish accounting practices became in full harmony with the International Accounting/Financial
Reporting Standards.
One of these standards is the TFRS-4 Insurance Contracts Standard, which is published on March 25 th, 2006
No. 26119 issue of the Official Gazette for the first time and some changes are officially made on July 15 th, 2007
No. 26583 issue of the Official Gazette. Even though these standards set the general framework, they do not include
detailed explanations for insurance accounting practices.
However, it is a known fact that the International Accounting Standards Board (IASB) is still working on
the issues of ―recording‖ and ―valuation‖ about insurance contract. Various arrangements are made regarding
financial reporting activities of insurance companies on the directive about TFRS-4.
The main objective of TFRS-4 is to determine the principles of financial reporting of the insurance
companies. TFRS-4 includes all activities of insurance companies including reinsurance (Berk, 2005, 25).

Accounting Practices by Insurance Companies
Accounting practices of insurance companies are quite different from companies in other sectors. The nonphysical nature of the insurance business differentiates the insurance company from companies in manufacturing and
in commerce. There are other differences for the insurance company in other areas such as capital structure, resource
allocation, and working style. Even though the insurance companies locate inside the financial services sector, the
structure of assets and liabilities are quite different from other financial companies (AktaĢ, 2005, 124).
The differences of insurance companies show themselves also on insurance accounting. These are (Candar,
2001; Uyanık, 2001, 510; BaĢpınar, 2005, 6);
a) The amount of receivables and payables of insurance companies show uncertainties in many aspects. The main
source of this uncertainty arises from the fact it is not known whether the risk under insurance is realized and how
big the compensation is going to be if it is realized.
b) In case of insurance companies, it is not possible to determine periodic profit or loss with certainty. Because the
price of every service provided is based on certain possibility calculations. These calculations generally include an
average value according to the law of big numbers. When the damage is realized above the expected rate, there will
be a loss for the insurance company. Otherwise, there will be a profit.
c) A significant portion of premiums collected by insurance companies is paid back to the clients as compensation
payments. However, it is not possible to determine the amount, the timing or the identity of the client with certainty.
d) The allowances for uncertainties are allocated from the premiums collected from clients rather than the profit as in
the case of other businesses. The financial tables carry some margin or errors since the amount of these allowances
depend on possibility calculations.
e) The differences between life insurance and general insurance create some accounting problems in this sector. The
above mentioned policies provide coverage for different periods with their different premium structures. The
different laws and accounting practices, such as these different policies can not be provided by the same company,
led to developments of these two branches completely separately.
f) The probability of determining the revenues and expenses with certainty is low since financial flows of the
insurance companies goes beyond a single period. However, it is assumed that the revenues collected and
compensations made during the same calendar year are assumed to belong to the same calculation period. Profit and
loss calculations in case of commercial and industrial companies, on the other hand, generally belong to the same
calculation period.
Moreover since the insurance sector functions on the principle of trust and the governments feel the need for
protecting the rights and benefits of clients, the sector faced very important legal restrictions and regulations in many

617

�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

countries. Establishing technical provisions, giving a bigger weight to the liquid assets in total assets, requirement of
establishing funds, extra capital requirements to make sure they have the compensation payment adequacy are some
examples of the regulations faced by the insurance industry.

Technical Provisions
Technical insurance provision is defined as the funds separated by the insurance companies established as
corporations by the Insurance Law to cover the responsibilities of policies not expiring by the last day of the period
and allowed to subtract from the revenues as an expense according to the Corporate Taxation Law (Arslanhan, 1996,
12).
Insurance technical provisions is the amount separated by the insurance companies because of
responsibilities they carry due risks covered by the policies they prepared. The most important function of these
provisions is guaranteeing the compensation payment must be made by the insurance company when the insured risk
is occurred. Moreover, the provisions show the degree of risk the company faces for the financial information users.
Insurance Law lists the technical insurance provisions as:
- unearned premium provisions
- unexpired provisions
- equalization provisions
- mathematical provisions
- outstanding claims provisions
- promotion and discount provisions
Technical provisions are located on the balance sheet as a liability. In order to understand whether the
technical provisions adequately cover the risk they face, liability adequacy test is performed. The liability adequacy
test for life and non-life insurance companies could be summarized as the following table (Sarıaslan, 2008, 20-21).
A. Future Cash Flows
Expected losses
Related expenses of losses
Related management expenses
B. Insurance Liabilities
Unearned premium provisions
Premium production expense
Related non-physical assets

(+)
(+)
(+)
(+)
(-)
(-)

Table 1. Non Life Insurance Company
A. Future Cash Flows
Expected losses
Related
expenses
of
(+)
Related management expenses
Embedded
options
and
(+)
B. Insurance Liabilities
Actuarial mathematical provisions
(+)
Unearned premium provisions
Premium production expense
Related non-physical assets
Table 2. Life Insurance Company

618

(+)
losses
(+)
warranty

(+)
(-)
(-)

�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

TFRS 4 finds such a test outlined above as sufficient for the insurance companies (Sarıaslan, 2008, 21). Liability
adequacy test in Turkey is formulated by the regulations of the Turkish Treasury as the following:
Years
I) Allocated Provisions
A. Accrued
B. Not reported
C. Expense share
II) Realized
D. Accrued
E. Not reported
F. Expense share

2005

2006

2007

2008

2009

Total

2010

150
40
10

130
30
8

120
20
12

200
50
15

220
70
20

820
210
65

210

120
50
15

140
20
13

130
25
10

190
45
10

310
80
20

890
220
68

III) Adequacy ratio
Accrued (A/D) * 100
Not reported (B/E) * 100
Expense share (C/F) * 100

92,1
95,4
95,5

IV) Difference in adequacy Ratio
(The legal adequacy ratio is 95%)
1.Accrued

95-92,1
=
2,9
-

2.Not reported
3.Expense share
*

(210+6,09*)
=
216,09
-

210 x %2,9

Standards allow discounting the general insurance provisions but this practice is not required at this stage.
At the same time, standards do not ban the use of rate of return of insurance assets as the discount rate. Up until the
completion of second stage of establishing insurance standards by IASB, premium production expenses could be
deferred (AktaĢ, 2005, 124-125).

Conclusion
Insurance industry performs two important functions, one micro and the other one is macro, in economic
life. The insurance sector in Turkey operating in the branches of non-life, life, life/pension, and pension with 61
companies and 16,069 employees by 2008 is fast growing sector. Insurance activities in Turkey are carried out
according to Insurance Law and the regulations of the General Directorate of Insurance Business and Insurance
Supervisory Board, both of which operate under the authority of the Undersecretariat of Treasury.
Turkish Financial Reporting Standard 4-Insurance Contracts prepared by TASB is the same as the
International Financial Reporting Standard 4- Insurance Contracts by the IASB. Regulations prepared by the legal
authorities in Turkey satisfy the minimum requirements set by the TFRS-4. There are going to be serious changes in
insurance accounting practices in Turkey when the second stage of Insurance Contracts Standards is completed.

References
AktaĢ, R. (2005). Sigorta ĠĢletmelerinde Gerçeğe Uygun Değer YaklaĢımının Kullanılması ve Değerlendirilmesi, Gazi University
Unpublished Phd Thesis, Ankara.
Annual Report about Insurance and Private Pension Activities in Turkey, 2008
Arslanhan, N. (1996). Sigorta Teknik Ġhtiyatları, Vergi Sorunları Dergisi, Eylül.
BaĢpınar, A. (2005) Finansal Analiz Tekniklerinin Sigorta ġirketi Mali Tablolarına Uygulanması, Maliye Dergisi, Sayı:149,
Mayıs-Aralık.

619

�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

Berk, N. (2005). AB Sigortacılığı'nda Solvency II Düzenlemeleri ve Türk Sigortacılığı'nın Harmonizasyonu, Türkiye Sigorta ve
Reasürans ġirketler Birliği Yayını, Bilim ve DanıĢma Kurulu Onaylı Eserler.
Candar, S. (2001). Sigorta Muhasebesi ve Mali Tablolarının Diğer Sektörlerden FarklılaĢması ve Analizi, Ankara.
Çaldağ, Y. (1979). Sigorta ĠĢletmeleri ve Muhasebesinin Ġncelenmesi, AĠTĠA Yayınları, Ankara.
International Financial Reporting Standard 4- Insurance Contract
Pekiner, K. (1974). Sigorta ĠĢletmeciliği Prensipleri-Hesap Bünyesi, Ġstanbul.
Sarıaslan, M. (2008). Devam Eden Riskler KarĢılığının TFRS 4‘deki Düzenlemelerle KarĢılaĢtırılması, Sigorta AraĢtırmaları
Dergisi, Sayı:4.
Turkish Financial Reporting Standard 4- Insurance Contract
Uyanık, A. (2001). Denetim, Muhasebe ve Vergilendirme -Sigorta Sektörü Uygulamalı-, Beta Basım Yayım Dağıtım, Ġstanbul.

620

�</text>
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AÇIKALIN, Süleyman</text>
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                <text>Insurance is a contract with a premium payment based on the principle of paying claims  when the risk, that is the reason of insurance for an interest, is realized. Trust is the base of  insurance business. This sector especially in developing countries has a potential to raise new  funds for economic development. In Turkey, 61 firms and 16,069 employees work in life, non-life,  life/pension and pension branches of insurance sector in 2008. This sector is one of the developing  areas in Turkey with 73 brokers and 13,250 agencies. Insurance agencies are working according to  the Insurance Law and the regulations of the General Directorate of Insurance and Insurance  Supervisory Board both of which organized under Turkish Treasury. These regulations are about  establishment processes, insurance activities, the way of using funds collected from premiums, and  adequacy of capital and liability compensations. Accounting activities are executed according to  these regulations. In addition, Capital Markets Board (CMB) and Turkish Accounting Standards  Board (TASB) describe standards and accounting applications have to obey these standards too.  The name of this standard is Turkish Financial Reporting Standards (TFRS) 4 – Insurance  Contracts that is arranged parallel to International Financial Reporting Standards (IFRS) 4 –  Insurance Contracts. This study aims to describe the characteristics of insurance sector in Turkey  and also to analyze some specific regulations and accounting applications.</text>
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                    <text>Boronizing: Radiation Shielding of Stainless Steel
Iskender Akkurt
Süleyman Demirel University Fen-Edebiyat Fak. Fizik Böl. Isparta-Turkey
skender@fef.sdu.edu.tr
Adnan Çalık
Süleyman Demirel University Teknik Eğt. Fak. Makina Egt. Böl. Isparta-Turkey
Hakan Akyıldırım
Süleyman Demirel University Teknik Eğt. Fak. Yapı Egt. Böl. Isparta-Turkey
Nazım Uçar
Süleyman Demirel University Fen-Edebiyat Fak. Fizik Böl. Isparta-Turkey

Abstract: Boron is an important element and about 75% of the world reserve is in Turkey
and it can be used in a variety of 400 different fields. Moreover it can be used in strategic
fields such as defense or nuclear technologies directly or by boronizing of materials for some
different applications. In the radiation shielding besides some materials such as lead, the
boronizing of the material can be used to increase radiation shielding capability. In this study
the importance of the boron and its application will be detailed and application of the
boronizing on the radiation shielding properties of some types of steel will be presented.
Keywords: Boron, radiation shielding, stainless steel

Introduction
Boron is a black, lustrous material and conducts electricity like a metal at high temperatures and is almost an
insulator at low temperatures. It was first isolated in 1808 by heating boron oxide (B2O3) with potassium metal.
The elemental boron is widely used to increase hardness in steel and also used in the nonferrous-metals industry,
generally as a deoxidizer, in copper-base alloys and in aluminum castings to refine the grain. It is estimated that
about 75% of the known boron reserves of the World are in Turkey. On the other hand the only 22% of the boron
based production are produced in Turkey. The boron can be used in a variety of 400 different fields such as
kitchen staff, defense sector and also agriculture. Radiation always exists in our environment due to the natural
and man-made sources and this is called background radiation. Especially after development of the technology
man-made radiation has significantly increased. Thus the radiation protection became an important subject in
nuclear science. The basic rule for the radiation protections is time, distances and shielding and the latest one is a
most commonly used methods. Although heavy metals such as lead have been used for this purpose, an
alternative method would be investigated. Boron can be an alternative for radiation shielding and boronizing of
the materials used in radiation shielding can be used to improve radiation shielding properties. In this study
radiation shielding properties of the boronized steel has been investigated.

Materials and Methods
Besides utilization of boron itself, boronizing is the most commonly used technology in different fields.
Boronizing processes is an important technology and different types of samples have being boronized in
Suleyman Demirel University Technical Faculty laboratory for different purposes (Calık et al. 2007). This is
achieved in a solid medium using the powder pack method where a commercial Ekabor-II boron source and
activator (ferro-silicon) were mixed. The packed samples are heated in an electrical furnace for required period
(usually several hours) at about 1000 oK under atmospheric pressure. After the bonding process the samples is
cooled at a rate of 15 °C/min to room temperature before removal from the chamber. The samples are sectioned
from one side and prepared metallographically up to 1200-grid emery paper and then polished, using 0.3-Am
alumina pastes.

292

�For the radiation shielding properties, the linear attenuation coefficients have been measured using gamma
spectrometer system (Akkurt et al. 2004, Akkurt et al. 2006, Akkurt et al. 2008). In the system NaI(Tl) detector
connected to Multi-Channel-Analyzer (MCA). Gamma rays have been obtained from the 137Cs and 60Co sources.
Those produce 0.662 and 1.17, 1.332 MeV energy.

Results and Discussions
The linear attenuation coefficients (µ) of steel were measured at the photon energies of 0.66, 1.17 and 1.332
MeV obtained from 137Cs and 60Co γ-ray sources respectively. This measurement has been performed before and
after boronizing. This is displayed in Figure 1 where it can clearly be seen that the boronizing processes
increased linear attenuation coefficients.

Figure 1. Linear attenuation coefficients for boronized and unboronized steel

References
Akkurt I. et al. 2004 "The photon attenuation coefficients of barite, marble and limra" Annals of Nuclear Energy 31,577-582
Akkurt I. et al. 2006 "Radiation shielding of concretes containing different aggregates" Cement and Concrete Composites,
28-2,153-157
Akkurt I. et al. 2008 "The effect of boronizing on the radiation shielding properties of steel" Z.Naturfors. A 63a, 445-447
Çalık A. et al. 2007 "Mechanical Properties of Boronized Fe-0.94%Mn Binary Alloy" Z.Naturfors. A 62a, 545-548
Çalık A. et al. 2008 "Specimen geometry effect on the mechanical properties of AISI 1040 steeel" Z.Naturfors. A 63a, 448452

293

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Çalık, Adnan
Akyıldırım, Hakan
Uçar, Nazım</text>
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                <text>Boron is an important element and about 75% of the world reserve is in Turkey  and it can be used in a variety of 400 different fields. Moreover it can be used in strategic  fields such as defense or nuclear technologies directly or by boronizing of materials for some  different applications. In the radiation shielding besides some materials such as lead, the  boronizing of the material can be used to increase radiation shielding capability. In this study  the importance of the boron and its application will be detailed and application of the  boronizing on the radiation shielding properties of some types of steel will be presented.</text>
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                    <text>Nuclear Energy: An Alternative Energy Source For Turkey
Đskender Akkurt
Süleyman Demirel Üniversity
Science and Arts Faculty Physics Department Isparta-Turkey
iskender@fef.sdu.edu.tr
Hakan Akyıldırım
Süleyman Demirel Üniversity
Science and Arts Faculty Physics Department Isparta-Turkey
Betül Mavi
Süleyman Demirel Üniversity
Science and Arts Faculty Physics Department Isparta-Turkey
Murat Öztürk
Suleyman Demirel University,
Hydrogen Technology Res. and Application Center, Isparta, Turkey
Nuri Özek
Süleyman Demirel Üniversity
Science and Arts Faculty Physics Department Isparta-Turkey

Abstract: Energy consumption is an important parameter to show the development level of a
country. Thus the total energy consumption per capita (in 2005) is 1778 (unit is kilograms of
oil equivalent (kgoe) per person) for world average, 4720 for developed countries and 975.9
for developing countries. On the other hand it is 1185.9 for Turkey. Although there are many
different energy sources for many different countries depending on the geological and
geographical conditions, Nuclear energy is one of the most commonly used alternative energy
source in especially developed countries. The first large-scale nuclear power plant opened in
England, in 1956 and nowadays about 16% of the world's energy needs has been produced
from Nuclear power plants where huge amounts of energy from small amounts of fuel can be
obtained without any pollution by burning fossil fuels. This rate is about 24% for developed
countries. In conventional nuclear power plant the energy is generated using Uranium (235U)
fuel. In a typical sample of natural uranium, most of the weight (99.27%) consists of atoms of
238
U and about 0.72% of the weight consists of atoms of 235U. This requires enrichment of the
235
U in the sample which is expensive and high technology. On the other hand recently new
generation nuclear power plant based on the proton accelerator so-called Accelerator Driven
System (ADS) has been proposed. Establishing nuclear power plant will lead to be transferred
nuclear technology to Turkey and it will be possible to be used it in other fields.
Keywords: Energy, nuclear power plant, Turkey, nuclear technology.

Introduction
As a scientific term, energy describes the amount of work performed by a force, an attribute of objects and
systems that is subject to a conservation law (Kittel vd., 1973:134). Different forms of energy such as kinetic,
potential, thermal, gravitational, sound, light, elastic, and electromagnetic energy are available. All living
organism needs energy to continue their life. Especially radiation from the Sun in the case of green plants is
necessary to be fed. For this purposes from the beginning of life people have always been searching new types of
energy sources as the population has increased sharply. Energy consumption of a country is an important
parameter to show the development level. Thus the total energy consumption per capita (in 2005) is 1778 (unit is
kilograms of oil equivalent (kgoe) per person) for world average, 4720 for developed countries and 975.9 for
developing countries. On the other hand it is 1185.9 for Turkey. The world population and related electricity
demand as a function of year is shown in Fig.1. It can be seen from this figure that the world population
448

�increases fast according to world average of 2%. It seems that at the end of this century population and related
energy demand will almost be equal (Omer, 2008).

Energy Sources
Energy sources are not used directly in daily life and also in industry. Those of energies are used in electricity
generation and most of the electricity power plants use turbines to generate electricity and here it is important to
turn turbines. Although some types of turbines can be driven by wind or falling water, most of them are driven
by a steam which can be obtained by boiling water using different types of energy. This is scheduled in Fig.2.
For this purposes it is important to find new energy source. Before construction power plant where different
types of energies are used to generate steam, there are some parameters to be considered. Because energy power
station have to be considered plays an increasingly vital role in national security of any country. Those
parameters
• Economical efficient
• Foreign dependence
• Environmental effect
• Resources potential
• Efficiency
With those of parameters any country should decide which types of energy sources, will be detailed below,
suitable to be used to generate electricity.

Figure 1. World population and electricity demand as a function of year (Omer, 2008).

Nuclear Energy
Nuclear energy is obtained from the fission of heavy nuclei such as uranium, plutonium or thorium and also
from the fusion of hydrogen into helium. When an heavy nuclei is splitted an energy is released due to the
loosing of some part of nuclear mass. The conversion of nuclear mass to energy is described by Einstein as

∆E = ∆ m ⋅ c 2
449

�where ∆E is the energy release, ∆m is mass defect and c is the speed of light (Kaplan, 1965:178-180). The first
large-scale nuclear power plant opened in England, in 1956 and nowadays about 16% of the world's energy
needs has been produced from Nuclear power plants where huge amounts of energy from small amounts of fuel
can be obtained without any pollution by burning fossil fuels. This rate is about 24% for developed countries. In
conventional nuclear power plant the energy is generated using Uranium (235U) fuel. In a typical sample of
natural uranium, most of the weight (99.27%) consists of atoms of 238U and about 0.72% of the weight consists
of atoms of 235U. This requires enrichment of the 235U in the sample which is expensive and also heart of this
high technology.
The Nuclear energy is used to generate steam is used to drive turbines as described previous section. For this
purposes an extra section called “reactor” should be built. Nuclear reactor basically controls chain reactions
(fission) to release heat desired rate. Although there are many different types of nuclear reactor types, most
commonly used types are namely Advanced Gas-Cooloed Reactor (AGR), boiling-water reactors (BWRs), and
pressurized-water reactors (PWRs) and liquid metal fast breeder reactors (LMFBR), high temperature gas cooled
reactors (HTGR). On the other hand recently new generation nuclear power plant based on the proton accelerator
so-called Accelerator Driven System (ADS) has been proposed.
As the energy is an important for developing country such as Turkey, it is vital to spread out energy sources to
generate electricity. It can be concluded that the nuclear energy is an important energy sources for any country
not just for generating electricity also to transfer nuclear technology which can be used a variety of different
fields.

Figure 2. Schematic view of electricity generation.

References
Kaplan, I., (1965), Nuclear Physics, Çev. Nusret Kürkçüoğlu, Berksoy Matbaası, Đstanbul.
Kittel, C., Knight, W.D., Ruderman, M.A., (1973), Mechanics Vol 1, New York.
Omer, A.M. “Energy, Environment And Sustainable Development” Renewable and sustainable energy reviews
12(2008)2265

450

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Akyıldırım, Hakan
Mavi, Betül
ÖZTÜRK, Murat
ÖZEK, Nuri</text>
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                <text>Energy consumption is an important parameter to show the development level of a  country. Thus the total energy consumption per capita (in 2005) is 1778 (unit is kilograms of  oil equivalent (kgoe) per person) for world average, 4720 for developed countries and 975.9  for developing countries. On the other hand it is 1185.9 for Turkey. Although there are many  different energy sources for many different countries depending on the geological and  geographical conditions, Nuclear energy is one of the most commonly used alternative energy  source in especially developed countries. The first large-scale nuclear power plant opened in  England, in 1956 and nowadays about 16% of the world's energy needs has been produced  from Nuclear power plants where huge amounts of energy from small amounts of fuel can be  obtained without any pollution by burning fossil fuels. This rate is about 24% for developed  countries. In conventional nuclear power plant the energy is generated using Uranium (235U)  fuel. In a typical sample of natural uranium, most of the weight (99.27%) consists of atoms of  238U and about 0.72% of the weight consists of atoms of 235U. This requires enrichment of the  235U in the sample which is expensive and high technology. On the other hand recently new  generation nuclear power plant based on the proton accelerator so-called Accelerator Driven  System (ADS) has been proposed. Establishing nuclear power plant will lead to be transferred  nuclear technology to Turkey and it will be possible to be used it in other fields.</text>
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                    <text>2nd International Symposium on Sustainable Development, June 8-9, 2010 Sarajevo

The Level of Using Technology for Pre-Graduate Students While Preparing
Assignments
Ahmet Ocak AKDEMĐR
Doctoral Student at Ataturk University
Institute of Natural and Applied Sciences
Instructor at Ağrı Đbrahim Çeçen University
ahmetakdemir@agri.edu.tr
M. Emin ÖZDEMĐR
Professor at Ağrı Đbrahim Çeçen University
emos@atauni.edu.tr
Abstract:The aim of this study is to determine the level of using
technology of Pre-Graduate students likewise internet and other basic
technology resources while they are preparing their assignments. The
centre of the research is Pre-Graduate students of AICUNI (Ağrı Ibrahim
Çeçen University), Vocational Training School of Ağrı.
Students have opportunities of accessing some other resources different
from books and papers with the help of developing informative
technologies finding their way through educational settings. Contrary to
traditional teaching/learning methods, developing technologies, especially
educational technologies, make it unavoidable for students to use them
while preparing assignments. While evaluated as information resources,
technologies such as internet and TV undoubtedly provide great
convenience to students for their individual studying. However there exist
some obstacles in the technology use for students such as access to
technology, know-how of tools, anxiety level etc.
With the questionnaires that are applied to our students of Pre-Graduate
students of AICUNI (Ağrı Ibrahim Çeçen University), Vocational Training
School of Ağrı we tried to determine the level of using technologies while
they are preparing assignments.
Determining their level of using technology will be useful for teachers and
lecturers to understand students’ tendencies about internet and other
technological resources as educational materials.
Key Words: Pre-Graduate, technology, assignment, internet, educational
technologies.

Introduction
Technology, which literary means “applying knowledge to process in industry systematically”, broadly
is a collection of knowledge and abilities to actualize effective and productive process that covers research,
development, production, marketing, selling, service during post-selling period. Technological innovation is
defined as “innovation in production processes, mew productions and news types of institutional organizations”.
On the other hand, there are industry branches that are “science and technology oriented” sectors such as
particularly electronic, energy, informatics, space, bio-engineering, organic chemistry and defence industry that
is intersection of these sectors and brings the highest amount value added tax consequently contributes to social
welfare at the highest level. Using technology has become compulsory to get success in many fields now.
Technological opportunities and devices have been started to be used, in recent years, especially in education
fields densely and new teaching approaches have been started to be built considering education outputs.
As a result of common technical infrastructure in classes and buildings of schools using technology has
become one of the standards in all levels from primary to higher education. Access to mass media, on-line
libraries, internet and computer, digital databases and other technology based information sources has caused a
decrease regarding access to written and published sources. Accessibility, broadness and richness in terms of
content, time and financial savings are seen as positive aspects that support using technology.
Due to the high rate of unemployment, problems in the field of employment, increased numbers of
qualified staffs because of the high standard in education consequently there is a competition atmosphere that

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�2nd International Symposium on Sustainable Development, June 8-9, 2010 Sarajevo
always aims better standards. In order to be different from others under such an atmosphere, receive good
education has gained importance. In parallel with these facts, big steps taken in education field educational
statistics have reached a level that has potential to be raised fast. Especially, everyone has accepted that a higher
education, which focuses on technical and vocational education, has become compulsory.
Increased numbers of universities, increased students placements and new departments and programmes
established in the light of the needs analysis have made higher education a centre of attraction for young people.
There is a focus on technology based education to meet such a demand in the best way. To meet needs in terms
of intermediate staff, numbers of vocational high-school have been increased.
A transition process from traditional education mentality to mentality based on world facts has been
started as a result of schools which are equipped with technical infrastructure and technology opportunities in all
levels e.g. primary to higher education (Özdaş, 1997). There is more research and application based activities in
new education models and student-centred education mentality is practised. Students graduate from schools after
they gain qualities, which are requirements of their departments and potential professions, via fulfilling their
tasks such as research activities, performance projects and they become successful.
Homework, which is important for education, can be defined as out-of-school activities assigned by
teachers. These assignments are given to students as it is aimed that students should improve their knowledge
and abilities they gain inside of schools. While students do their homework, they gain new experiences with new
materials and knowledge. Students realize and improve their ability, interest and knowledge, make up their
deficiencies, gain habit to study lesson regularly, drift away from memorization and establish a studying method
based on research, increase their creativity via these experiences. Therefore, homework has short-term benefits
such as getting high mark and long-term benefits such as supporting aspects to become a successful, responsible,
creative, researcher person.
In this regard, homework can be classified under three topics:
• Application homework, it aims that students shall apply their new knowledge, abilities, repeat and revise
them. It is like practice homework that is about subjects of the concerned day.
• Preparatory homework, it aims to prepare students for next subjects in a better way and provide basic
knowledge about required subjects. It is like preparation for next day.
• Homework to improve, it is generally long time projects that are implemented in parallel with class
activities. It aims to improve students’ personal knowledge and abilities. It is like a research about a
particular subject or writing summary of a book (Aksüt,2005).
One of the most used sources in preparing projects and doing homework is access to internet. Internet,
which is preferred by students at the highest level as it contains more information that a student want and is easy
to use, is a unique education material but it may cause negative effects because of its risks.
Today when we think technology in terms of information source, we remember internet first and then
TV and other mass media tools such as digital databases and other technology based materials (Gentry,1995).
According to a research; information source and benefiting from internet during preparing project and doing
homework period is high among students of faculty of education. 70 % of student state that they benefit from
internet while they do their homework because it saves time. In addition students want to benefit also from
academicians’ personal webpage and universities’ e-libraries. (Aksüt,2005)

Method
Aim of this research is to determine associate degree students’ level of using technology while they
prepare their project and do their homework and their attitudes towards technology. This study is important
regarding the following aspects; associate degree students should be able to question education system that they
attend and verify outputs of education under existing conditions. Screening method has been used in the
research. There are 20 questions in the questionnaire. Subject of the questionnaire is students’ level of using
technology, their opinions and preferences about technology.
Results have been evaluated with five point likert scale. First the questionnaire had been applied to a
small group, which was determined coincidentally among main group and questions were discussed with these
students. In addition to that there were meetings with administrators and academicians of the Ağrı Đbrahim Çeçen
University, where research has been conducted. Sample of the research is composed of 153 students that chosen
randomly from four programmes of Ağrı Vocational High-school.

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Programmes

Female

Male

Total

Accounting and Tax Applications

29

27

56

Machinery

1

31

32

Electricity

2

36

38

Furniture and Decoration

1

26

27

TOPTAL

33

120

153

Table 1. Gender of participants

Findings
As student activities are important in modern education mentality, associate degree students are given to
performance projects and this mentality contributes to intensify their knowledge via leading them to project
based studies and keep their high readiness level active during term. Therefore, students think that using
technology is compulsory in order to meet these requirements.
According to research findings; students use technological tools such as internet, TV and etc… at a high
level while they prepare their project and do their homework (4, 45). Most of the students think that preparing
project or doing homework in an internet house saves time (4,02). Students state that using technology makes
them successful (3,97), they are able to use computer programmes that are necessary to prepare their projects and
do their homework (3,86). Students group which took part in the research state that they want to benefit from
schools and academicians’ website as it is important for their success (3,83). Majority of the students defends
that information, which they get from internet is enough for their projects and homework (3,41).
Similarly majority of the students states that they use memory stick (3,35), access to e-book while they
prepare their projects and do their homework (3,03). Associate degree students, which think that homework
should be assigned in the form of performance projects (2,82), do not have clear opinions whether physical
environment is suitable or not to do homework in internet houses (2,69).
According to the research there are students that use town library (1,68) and school’s library (1,19) and
a significant amount of students ask help from staff in internet house (1,86) or pay money to staff for their
homework, projects (1,98).
Some students state that they use on-line libraries (1,45) and some other students defend books and
sources, which they currently have are enough (1,83). A small group of students (1,26) state that they benefit
from academicians’ books.

291

�I use technological facilities such as internet and TV while I prepare project or do
homework
Preparing project or doing homework in internet house saves time
Using technology to prepare projects or do homework contribute to my success
I am able to use computer programmes while I prepare projects or do homework
School’s website and academicians’ webpage provides easiness to us
Content of projects or homework based on internet, TV and other communication tools is
satisfactory
I know and use memory stick
I access to e-book rather than buy books that might be necessary for homework and
projects
Homework and projects should be assigned in the form of performance project
Physical environment in internet house is suitable to prepare projects or do homework
Laboratory and other technological sources in the school are satisfactory to prepare
projects or do homework
Technological facilities are used in a satisfactory level in the classes
I pay money to staff in internet house for my projects or homework
I ask help from staff in internet house for my projects or homework
Books and other sources that I have are enough to prepare projects or do homework
I often go to town library to do homework
I think academicians use computer in a satisfactory level
I can use database, on-line libraries
I benefit from academicians’ books while I prepare projects or do homework
I benefit from school’s library to prepare project or do homework

Average

OPTIONS

Order

2nd International Symposium on Sustainable Development, June 8-9, 2010 Sarajevo

2

4,45

1

4,02

12

3,97

7

3,86

3

3,83

4

3,41

10

3,35

6

3,03

17

2,82

5

2,69

18

2,60

8

2,43

16

1,98

9

1,86

15

1,83

14

1,68

19

1,52

11

1,45

20

1,26

13

1,19

Table 2.Research Questionnaire’s List According to Order of Average
In conclusion, it is understood that associate degree students’ inclination to use technology is on
increase gradually; they are open to using technology and want regulations that shall support using technology in
the school. It is also understood that they complain about lack of sources such as library, database that they need
to prepare project or do homework.

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References
Aksüt M. Nihat Çakın,Đbrahim Battal,Özgür Tuğyan. "Eğitim Fakültesi Öğrencilerinin Ödev Hazırlamada Đnternet
Kullanımına Đlişkin Tutumları" 10.Türkiye Đnternet Konferansı. 9.10.11 Aralık 2005. Bahçeşehir Üniversitesi Đstanbul. inettr.org.tr/inetconf10/bildiri/77.docĐ.
Driscoll M. &amp; Dick W. (1999). New Research Paradigms in Instructional Technology: An Inquiry. ETR&amp;D, 47(2), pp. 7-18.
Gentry, C.G. (1995). “Educational Technology: A question of Meaning. Part 1 in Instructional Technology: Past, Present,
and Future, G. J. Anglin (Ed.), (2nd ed.), Englewood, CO, Libraries Unlimited.
Özdaş, A. (1997). Öğretim Đlke ve Yöntemleri, http://www.dersimiz.com/eyazim/yazi.asp?id=64
Özdaş, Ali, Öğretim Đlke ve Yöntemleri, Đstanbul 1997

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                    <text>2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

Instrument for Pre-accession Assistance (IPA) to Turkey: Expectations and
Results
Hasan AKCA
Çankırı Karatekin University
Faculty of Economics and Administrative Sciences
Department of Economics
18100 Çankırı – Turkey
akcahasan@yahoo.com
Abstract: Turkey has benefited from the pre-accession financial aids of the EU to meet the
criteria for EU membership. As from 2007, all the EU assistance to candidate and potential
candidate countries has been brought under a single heading IPA. All components of the IPA
are open to Turkey as a candidate country. According to database of the Central Finance and
Contracts Unit (CFCU), totally 2 312 projects were carried out by various bodies in Turkey.
About €286 million were distributed to governmental and non-governmental organizations,
SMEs via projects. Literature review shows that information about EU funded projects in
Turkey is limited. Therefore, this study aims at analyzing EU funds towards Turkey in terms
of programme, organizations, performance ranks, expectations from projects and their results.

Introduction
In September 1959, as the European integration project gathered pace following the signing of the
Treaty of Rome, Turkey applied for Associate Membership of the European Economic Community (EEC). Four
years later, in 1963, the Ankara Agreement put Turkey on the road towards a customs union with the EEC, with
a view to eventual membership (Akcakoca 2006). At the same time, the EEC provided financial assistance to
Turkey under the First Financial Protocol (1963-1970) (ABGS 2007). Turkey was accepted as a ―candidate
country‖ by the EU at Helsinki Summit held in December 1999. Therefore, a new strategy was formulated for
supporting EU membership bid of Turkey (Anonymous 2007). The EU is committed to supporting Turkey in its
path for membership. The initial objective of EU financial support towards Turkey was the extension of an area
of peace, stability and prosperity within and beyond Europe. Once the EU accepted Turkey as a candidate,
financial assistance began to focus on supporting Turkey in its preparation for EU membership. Between 2001
and 2006 EU funds for Turkey were programmed on an annual basis under National Programmes for each year.
From 2007 onwards, this pre-accession financial instrument for Turkey has been replaced by the Instrument for
Pre-Accession Assistance (IPA) (Dimireva 2009).
Literature review shows that information about financial assistance of the EU to Turkey is very limited.
Therefore, aim of this study is to analyze EU funds for Turkey point of view of programme, organizations,
performance ranks, expectations from projects carried out by governmental and non-governmental organizations
and their results.

Brief Information about IPA
As from January 2007, the Instrument for Pre-Accession Assistance (IPA) replaces a series of EU
programmes and financial instruments for candidate and/or potential candidate countries, namely PHARE,
PHARE CBC, ISPA, SAPARD, CARDS and the financial instrument for Turkey (Anonymous 2006).
The IPA consists of five components (Table 1) (EU 2009):
 Component I: Assistance for transition and institution building
 Component II: Cross-border cooperation (with EU Member States and other countries eligible for IPA)
 Component III: Regional development (transport, environment, regional and economic development)
 Component IV: Human resources development (strengthening human capital and combating exclusion)
 Component V: Rural development.

The IPA beneficiary countries are divided into two categories (EU 2009):

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�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo



EU candidate countries (Croatia, Turkey and the Former Yugoslav Republic of Macedonia) are eligible
for all five components of IPA,
Potential candidate countries in the Western Balkans (Albania, Bosnia-Herzegovina, Montenegro,
Serbia, and Kosovo under UN Security Council Resolution 1244/99) are eligible only for the first two
components.

Component

1.Transition
Assistance &amp;
Institution
Building
2.
CrossBorder
Cooperation
3. Regional
Development
4.
Human
Resources
Development

5.
Rural
Development

Content
Addressing priorities as fully meeting the Copenhagen political
criteria, ability to assume the obligations of membership; as well as
the promotion of an EU-Turkey Civil Society Dialogue. Institution
building includes supporting programmes aimed at strengthening
the institutional capacity for the management of EU funds as well
as covering Turkey‘s participation in Community Programmes
Promoting good neighbourly relations, fostering stability, security
and prosperity in the mutual interest of all countries concerned, and
of encouraging their harmonious, balanced and sustainable
development
Preparing candidate countries in the development of policies,
investment planning and implementation, with a view to their
participation in Community Cohesion policy
Assisting Turkey in policy development as well as preparations for
the future implementation of the European Social Fund (ESF). It
will support a single operational programme addressing three major
areas of intervention: employment, education and training as well
as social inclusion
Preparing the candidate countries to implement the EU Common
Agricultural Policy (CAP) upon accession by helping them to align
their agricultural sectors to the Community standards that will be
applicable to them after accession and assisting them to develop a
policy for the agricultural sector and rural areas

Candidate
Countries

Potential
Candidate
Countries

√

√

√

√

√

---

√

---

√

---

Table 1: Components of the Instrument for Pre-Accession Assistance (IPA)
Annual or multi-annual programmes (depending on the component) are designed in accordance with the
strategic Multi-annual Indicative Planning Documents and adopted by the Commission following consultation
with the beneficiary countries and other stakeholders. They are implemented in one of three ways: by centralized
(assistance is managed by the Commission Headquarters in Brussels), decentralized (assistance is managed by
the authorities of the beneficiary country as a result of an accreditation process carried out by the Commission)
or shared (assistance is managed by the authorities of one of the Member States participating in the cross-border
programme) management (Anonymous 2010).
Types of assistance under IPA include finance investments, procurement contracts, grants, including
interest rate subsidies, special loans, loan guarantees and financial assistance, budgetary support, and other
specific forms of budgetary aid, and the contribution to the capital of international financial institutions or the
regional development banks (Anonymous 2006).

IPA and Turkey
In the past, the EU has provided support to Turkey under a variety of financial instruments, including
CARDS (2001-2004), PHARE and ISPA (2005-2006) as well as SAPARD (2006) (Anonymous 2010). IPA
provides countries seeking EU membership with a total amount of € 11.5 billion in the seven-year term from
2007 onwards (Anonymous 2009).
Pre-accession funding is directed mainly at state or civil institutions. Individuals are not eligible, except
for specific community programmes. In addition to state institutions, there are also programs open to
universities, civil society groups, media organizations and business interest groups. Projects benefit both the
administration and Turkish citizens directly: i) Ministries &amp; other governmental organizations, ii) Municipalities,
iii) Civil society, iv) SMEs, v) Unemployed and vulnerable groups especially youth and women, vi) School
children, vii) Farmers in poor areas (Anonymous 2008).

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�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

For 2007-2010, allocations of EU financial assistances to Turkey are shown in Table 2 (Anonymous
2010).

Transition Assistance &amp; Institution Building
Cross-border Co-operation
Regional Development
Human Resources Development
Rural Development
Total

2007
256.7
2.1
167.5
50.2
20.7
497.2

2008
256.1
2.9
173.8
52.9
53.0
538.7

2009
233.2
9.4
182.7
55.6
85.5
566.4

2010
211.3
9.6
238.1
63.4
131.3
653.7

2011
230.6
9.8
291.4
77.6
172.5
781.9

2012
250.9
10.0
350.8
89.9
197.9
899.5

Table 2: Financial Assistance of the EU to Turkey under IPA (2007-2012) (€ million)
As of December 31, 2009 number of projects implemented in Turkey was totally 2 312 (Table 3)
(CFCU 2010).
Bodies
SMEs
Associations
Municipalities
Chambers
Foundations
Unions
Villages Service Unions
Universities
Others
Cooperatives
Farmer Groups
Special Provincial Administration
Colleges
Villages
Trade Unions
Vocational High Schools
Public Bodies
Primary Schools
Total

Number of Contracts
654
341
291
245
145
95
76
73
68
66
65
50
38
35
33
21
12
4
2 312

%
28.29
12.75
12.59
10.60
6.27
4.11
3.29
3.16
2.94
2.85
2.81
2.16
1.64
1.51
1.43
0.91
0.52
0.17
100.00

Grant (€ million)
47.77
22.86
88.95
21.62
13.19
8.92
21.21
11.79
7.18
5.13
5.31
15.55
3.78
5.00
3.72
1.45
2.62
0.13
286.18

%
16.70
8.00
31.10
7.50
4.60
3.12
7.41
4.12
2.50
1.80
1.86
5.44
1.32
1.75
1.30
0.51
0.92
0.05
100.00

Table 3: Performance Ranks by Bodies (As of 31 December 2009)
The EU provides financial assistance to Turkey and helps it reform and adapt its institutions and
legislations. Financial assistance takes the form of projects on the ground following phases of programming and
contracting. Hundreds of projects are being carried out across all sectors throughout Turkey. Some of the
successful projects are summarized in Table 4.
In recent years, tendency of SMEs, governmental and non-governmental organizations to prepare EU
funded projects have increased day by day. For example, in 2009, nearly 5 000 projects were submitted to CFCU
during the call for projects proposals in the following fields: Strengthening Pre-School Education Grant Scheme,
Civil Society Dialogue: Istanbul 2010 European Capital of Culture, Increasing School Enrolment Rates
Especially for Girls Grant Scheme, Promoting Youth Employment Grant Scheme, Promotion of Life Long
Learning (LLL) Grant Scheme, Promoting Women‘s Employment Grant Scheme, Promoting Registered
Employment through Innovative Measures Grant Scheme.

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�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

Subjects
Culture and tourism
Health and food safety
Infrastructure
and
environment
Reform of police and judiciary
Social inclusion and education
Socio-economic development

Examples
Cultural Heritage in South-eastern Anatolia; The power of information
Minimizing the Bird Flu Threat
EU project took Turkish ships off the black list; EU support fot modern
railways
EU supports the fight against child labor
EU Support to Basic Education in Turkey; Call… Don‘t be silent!;
Bizimköy (our village) integrates disabled people into society
Project that breaks new ground in vocational education and training: SVET;
EU loan for small businesses; Quality: key to successful partnership in trade;
Regional Development Programmes reduce economic and social disparities
Table 4: Some Successful Projects in Turkey

Call for
Projects
in 2009

Call for
Projects
in 2010

Strengthening Pre-School Education Grant Scheme
Civil Society Dialogue: Istanbul 2010 European Capital of Culture
Black Sea Basin Joint Operational Programme 2007-2013
Increasing School Enrolment Rates Especially for Girls Grant Scheme
Promoting Youth Employment Grant Scheme
Promotion of Life Long Learning (LLL) Grant Scheme
Promoting Women‘s Employment Grant Scheme
Promoting Registered Employment through Innovative Measures Grant Scheme
Civil Society Dialogue II: Fisheries and Agriculture Grant Scheme
Developing Civil Dialogue among NGO's
The Civil Society Facility: EU-Turkey Intercultural Dialogue - Culture and Arts
Grant Scheme (ICD-CA)
Empowering Civil Participation at Local Level
Voc-Test Centres Grant Scheme
Civil Society Dialogue-II: Micro Grant Scheme
Empowerment of Women and Women NGOs in the Least Developed Regions
of Turkey (Southeastern Anatolia, Eastern Black Sea, Eastern Anatolia)
Civil Society Dialogue-II: Culture and Arts

Total Budget (€)
5 270 000
1 578 900
1 339 401
10 000 000
21 000 000
5 000 000
13 700 000
11 850 000
2 200 000
800 000
1 447 368
200 000
6 000 000
200 000
3 000 000
1 800 000

Table 5: Call for Projects in 2009 – 2010
In the first half of the year 2010, CFCU announced call for proposals: Civil Society Dialogue II:
Fisheries and Agriculture Grant Scheme, Developing Civil Dialogue among NGO's, The Civil Society Facility:
EU-Turkey Intercultural Dialogue - Culture and Arts Grant Scheme (ICD-CA), Empowering Civil Participation
at Local Level, Voc-Test Centers Grant Scheme, Civil Society Dialogue-II: Micro Grant Scheme, Empowerment
of Women and Women NGOs in the Least Developed Regions of Turkey (Southeastern Anatolia, Eastern Black
Sea, Eastern Anatolia), and Civil Society Dialogue-II: Culture and Arts (CFCU 2010).

Conclusion
For a long time, Turkey has benefited from EU financial assistance under different titles or applications.
As from 2007, EU funds are used by candidate and potential countries according to IPA.
Expectations of the EU from Turkey in the context of IPA assistance and results of the implementation
of the EU funded projects in Turkey are given in Table 6.

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�2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo

Expectations of the EU from Turkey
Results of the EU funded projects
 Support economic, political and EU projects were an opportunity for various bodies that did not have
social reforms in Turkey
enough finance
 Prepare
Turkey
for
the Number of EU funded projects have been increased in Turkey day by
management and implementation day
of Structural Funds.
 Number of projects carried out interdisciplinary were increased
 Knowledge transfer among organizations in both EU member
countries and Turkey was achieved
Table 6: EU Financial Assistance, Expectations, Results of the EU Funded Projects
The interim evaluations of EU pre-accession assistance (Phare 1999-2002) and EU pre-accession
support to Turkey (2003-2006) have highlighted a number of lessons that may be drawn for future assistance.
The evaluations of assistance to Turkey lead to similar conclusions (STB, 2007):
 Absence of adequate planning documents and sectoral strategies (particularly as concerns economic and
social cohesion) resulting in weaknesses in needs analysis;
 Insufficient attention to horizontal public administration reforms in the support for the development of
administrative and judicial capacity; and
 Weaknesses in programme management resulting from understaffing and instability of the DIS
institutions.

References
ABGS (2007). History of Turkey-EU Relations. Republic of Turkey-Prime Ministry Secretariat General for EU Affairs
(www.abgs.gov.tr/index.php?p=111&amp;l=2).
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