Turkey is an upper-middle income countrywith a population of 73 million. It has a diversifiedeconomy with a strategic geographical position, located onthe southeastern side of Europe and southwestern side ofAsia. Continued economic growth, combined with increases inthe urban population, will place increasing demands onTurkey's transport infrastructure. High middle incomecountries such as Turkey typically see very rapid increasesin demand for transport services for several decades.Consequently public expenditures on transport sector haveincreased substantially in Turkey in recent years. Publicexpenditures on transport have almost doubled from 1.06percent of Gross Domestic Product (GDP) in 2004 to 1.92percent in 2010, and the transport sector accounted for thebulk of the increase in total public investments over thisperiod. Turkey's transport sector has been growing bothin terms of its size and the quality of the network, andcurrently compares well with similar middle incomecountries. However, Turkey's infrastructure qualitylags behind the levels of EU countries, particularly in therailroads and ports sector. The need for transportinfrastructure improvements is also reinforced by theresults of business surveys.