We left behind a very particular year which was the scene to numerous developments both on a global and national scale; a year which saw shifts in economic, social and political balance. It was a year whose significance will probably be better perceived in the years to come.

The substructure of global change has been cast by the parliamentary elections and post-election government changes in various countries of the world, the incessant clashes and terrorism in Iraq and the Middle East, the so-called “mortgage” crisis which leapt from real estate to financial markets in the US, and oil prices that increased throughout the year.

While these constituted the highlights of worldwide developments, Turkey focused on current political events particularly in the first eight months of the past year. The 2007 performance of the Turkish economy has been affected to a great extent by an exercise to handle political uncertainties. Additional important contributors to this performance were the slow pace in the global economy and the course of Turkey’s EU accession.

Overall in 2007, the EU process decelerated significantly and even came to a halt in certain departments. The national agenda has been dogged by terrorism and security issues at our borders in the last quarter. Having closed the past year with presidential and general elections behind us, we are stepping into 2008, at least the first quarter of the new year, with heated debates on the constitution.

As the fiscal discipline program slackened due to an agenda concentrated on internal issues, it resulted in the failure to capture our targets in growth, inflation, interest rates and budget. In fact, coupled with the slowing-down of the economy, inflation maintained its downward trend from the beginning of 2007, keeping with the targets, driven also by the revaluation of TRY against USD. Yet, it re-adopted a rising trend in the last few months owing to the increase in food prices, leading to an inflation figure that stands well above the year-end target.

In employment, on the other hand, consequences of the slowing growth were manifested. Inclined to go down since April 2006, the rate of unemployment once again started to climb up in the past four months, even if slightly.

Surely, the developments are not totally negative. Despite the occurrences mentioned above, the continued foreign capital inflow and increased export rates deserve to be noted.

Although the Turkish economy significantly eliminated its fragility, in view of the changing balances across the world, it is evident that the national economy must acquire a stronger structure that is less disposed to lose equilibrium by the decelerated global growth and its outcomes.

All in all, the world economy is starting the year 2008 exposed to much higher risks as opposed to the past several years. The major worry is an economic recession in the USA in 2008, which is an election year.

The world is bracing itself for 2008 as a year of uncertainties. The key elements of this environment of uncertainty are made up by extremely important topics including the results of the abolition of quotas against China, whether the oil prices will rise, and the course the anxieties in the financial markets will take…

An assessment of 2007 from the standpoint of Doğan Holding reveals that it has been a year in which we continued with our declared initiatives geared towards becoming a regional actor. We backed this target by a strong will and rock-solid resolve, and we will take major steps in this direction. We exported our cumulative experience in media across borders, and will continue in that direction.

Capitalizing on the advantage of being one of Turkey’s strong and large corporations, we took important steps in international alliances and strategic partnerships. We will start reaping the benefits of these actions in 2008.

We undertook important initiatives and achieved growth in media, energy, industry, trade, tourism and financial services, our fields of operation. We made plans to enter new fields that are expected to create synergy with the entire portfolio of our activities also in 2008. This will be the year in which we expand our existing investments and underwrite new ones.

Considering contribution to society in education, culture and arts, Doğan Holding continued its work through Aydın Doğan Foundation in these areas in 2007. Social responsibility at our Group is built upon sharing our earnings with the public and raising social awareness across several social issues. In this regard, we will strictly adhere to our well-established stance.

Aydın Doğan
Chairman