Disparities across regions and provinces are on the agenda of both developed and developing countries. Differences in terms of development and income between regions are becoming more important policy challenge particularly in developing countries. As a developing country, inter-regional disparities are seen intensively at east-west direction in Turkey. In recent years with the process of harmonization with the European Union policies, inter-regional disparities problem and regional development policy issues came to the fore in Turkey. In this paper, Diyarbakir-Sanliurfa region, located in Southeast Anatolia, the largest region with respect to population identified as regional growth poles by Ministry of Development, is discussed in the framework of regional economic development and competitiveness. Diyarbakir-Sanliurfa Region is the seventh largest region in Turkey according to population, but socio-economic development rank of the region is 23 between 26 NUTS 2 regions in Turkey. According to economic base model, local economy shapes regions' size and welfare level. "Information about an area's future population is incomplete without a parallel understanding of the local economy that largely shapes its future.' (Klosterman, 1990) In this context, the aim of this paper is two-fold. First is to analyze the regional economy of Diyarbakir-Sanliurfa using the economic base approach to identify main sources of regional economic growth and the driving forces of the local economy. Second is to identify competitiveness of the region by comparing the regional economy with the national economic growth. As method of the study; in order to determine the basic and leading sectors of regional economy, location quotient technique was used. Then shift-share analysis was used to examine competitiveness of the region and to see economic projection of region. Finally findings and results of the two analyses were compared. The findings showed that the region has a rapidly growing economy depend on "agriculture", "construction", "mining", "transportation and storage" and "human health" sectors and also for manufacturing industry "food products", "textiles", "non-metallic products" and "wood products" are basic sub-manufacturing sectors. But results of shift-share analysis showed that regional economy offers competitive advantages especially in "agriculture", "transportation and storage", "trade and wholesale" and sub-service sectors related to "urbanization economies" and "tourism" sector. Although the region has some basic/exporter manufacturing sectors increasing their concentration, the regional economy have low competitiveness for attracting investment in manufacturing. Therefore, in this period many of the manufacturing industry investments have shifted to other more competitive regions.
