MINISTRY OF FOREIGN AFFAIRS

1
MINISTRY OF FOREIGN AFFAIRS

• TURKISH ECONOMY
• IN THE WORLD

2
THE GEOGRAPHICAL LOCATION OF TURKEY
3
GEOGRAPHICAL ADVANTAGES OF TURKEY

• Area of 785.347 km2.
• 8.485 km of coastline, surrounded by sea on three
  sides by the Black Sea to the north, the
  Mediterranean to the south and the Aegean Sea to
  the west.
• A unique geographical location as a gateway to
  European, Middle Eastern, North African and
  Central Asian markets.
• In four hours of flight from Istanbul, one can
  reach more than 50 countries and a quarter of the
  world population.
• A political and economic attraction center for
  the neighbouring geographies, with its
  strategical location.

4
DEMOGRAPHIC ADVANTAGES OF TURKEY

• A huge and growing market?73,7 million population
  (2010)
• Young, dynamic and well-trained population.
• 61 of the population is under the age of 34.
  (Approximately 45 million)
• Average Age 28,8
• 500 thousand university graduates every
  year.
• 24,7 million of the population is
  actively employed.
• The 5th biggest labor power, if ranked among
  the EU member countries

5
TURKEY IN THE WORLD ECONOMY
(GDP based on purchasing power parity , Trillion
Dollars, 2009)
6
TURKEY IN THE EUROPEAN ECONOMIES

• (GDP based on purchasing power parity ,
  Trillion Dollars, 2009)

7
TURKEY AND G-20

• Turkey is a G-20 member, the Super League of
  world economies, established in 1999.
• This membership gives Turkey the opportunity to
  express its views and suggestions for the
  solution of international economic and financial
  problems and strengthens its profile.
• It is an important platform for sharing views on
  global economy with the other leading actors.
• As a by-product of our pro-active foreign policy,
  we are not solely focusing on our agenda, but
  also trying to reflect the views of other actors
  not represented in G-20.

8
GDP PER CAPITA
9
GDP PER CAPITA (Short Term Targets)
10
DISTRIBUTION OF EMPLOYMENT
Distribution of Employment by Economic Sectors ()
11
FOREIGN TRADEExports
Annual estimate as of February 2011 Source
TURKSTAT
12
FOREIGN TRADEMain Export Destinations of Turkey
Main Export Markets -2010- Billion

Germany 11,4
UK 7,2
Italy 6,5
Iraq 6
France 6
13
FOREIGN TRADEShort Term Targets
14
FOREIGN TRADEImports
Annual estimate as of February 2011 Source
TURKSTAT
15
FOREIGN TRADEMain Import Countries

Main Import Countries -2010- Billion
Russia 21,6 Germany
17,5 China 17,2
USA 12,3
Italy 10,2
16
BILATERAL TRADE WITH THE NEIGHBOURING
COUNTRIES(Global Downturn Period -Billion )

• 2008 2009
  2010
• 
  
• Greece 3,58 2,76 3
• Bulgaria 4 2,5
  3,2
• Georgia 1,52 1,05
  1
• Azerbaijan 2,6 2,15
  2,41
• Iran 10,2 5,43
  10,7
• Iraq 15,2 6
  7,4
• Syria 1,75 1,75
  2,52

17
TURKISH INDUSTRYAutomobile and Household Goods

• Turkey ranks 16th in the world production of
  motor vehicles.
• Turkey is the leading bus manufacturer and 3rd
  largest commercial vehicle manufacturer in
  Europe.
• Around 75 of the automative and auto parts
  industry exports are delivered to the EU
  countries.
• During the last 4 years, ship-building capacity
  of Turkey has grown 3 times. Turkey ranks 7th in
  world ship exports.
• In the production of household goods, Turkey has
  a prominant reputation. It ranks 8th in world
  exports of refrigerators, 6th in washing machines
  and 14th in dishwashing machines.
• Most of the domestic appliances production is
  exported to the EU.

18
TURKISH INDUSTRYDefence Industry
In the year 2011, 1 billion of exports is
expected.
19
TURKISH INDUSTRYTextiles and Clothing

• Turkey ranks 7th in the world cotton production.
  There are more than 35 thousand textile and
  clothing companies in Turkey.
• Turkey ranks 4th in knitted clothing, 8th in
  woven clothing, 3rd in socks and stockings and
  8th in leather wear exports.
• 80 of the textile products are exported to the
  EU countries.
• Turkey is one of the major producers of organic
  ecologic textile products .

20
FOREIGN INVESTMENTS

• With its population of more than 73 million, its
  dynamic and open-market economy, competitive
  industry and the Customs Union with the EU for
  more than 15 years, Turkey is an attractive
  country for foreign investors.
• With its high performance, Turkey is steadily
  heading for an annual GDP of 1 trillion dollars.
  During the last 8 years, the total inflow of
  foreign direct investments has reached to 93,6
  billion dollars.
• According to IMF and OECD reports/projections,
  Turkey is among the most rapidly growing
  economies in 2010 and 2011.

21
FOREIGN INVESTMENTS-II
22
INTERNATIONAL COMPANIES IN TURKEY

• As of February 2011, the number of international
  companies operating in Turkey was 26.609.
• Top 3 countries according to the country of
  origin of international companies Germany
  (4411), UK (2272) and the Netherlands (1894).
• International companies operating in Turkey are
  mostly focused on wholesale and retail,
  manufacturing, real estate, chemical industry,
  textile and food production.
• Top 4 cities hosting international companies in
  Turkey
• -Istanbul (14810)
• -Antalya (3258)
• -Ankara (1748)
• -Izmir (1560)

23
PRIVATIZATION

• Privatization has been among the top priorities
  on the agenda in line with Turkeys target of
  creating a truly competitive market economy.
• The involvement and participation of
  international investors is highly encouraged in
  the massive privatization program.
• The main philosophy of privatization is to
  confine the role of the state to areas such as
  health, basic education, social security,
  national defense and large scale infrastructure
  investments.
• Turkey is listed among the top 25 OECD countries
  that has gained the most out of its privatization
  program.

24
PRIVATIZATION-IIPrivatization Implementations
(Billion USD)

• () 1985-2010 figures include privatizations done
  by Privatization Administration, Savings Deposit
  Insurance Fund of Turkey and Ministry of
  Transportation.

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GROWTH PERFORMANCE OF TURKEY
26
GROWTH PERFORMANCE OF TURKEY II

• Growth Rates of Turkey in the last decade (GDP)
• 2000                 6,8     2001              
    -5,7     2002                 6,2   
   2003                 5,3     2004             
      9,4     2005                 8,4   
   2006                 6,9     2007             
      4,7     2008                 0,7   
   2009                -4,7
• 2010 8,9

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GROWTH PERFORMANCE OF TURKEY-III (Comparison with
OECD Countries)
2011-2017 Dönemi OECD Ülkeleri Yillik Ortalama
Reel GSYIH Büyüme Tahminleri ()
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                      
Annual Average Real GDP Growth () Forecast in
OECD Countries 2011-2017                        
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                 
According to OECD, Turkey is expected to be the
fastest growing economy among OECD members during
2011-2017, with an annual average growth rate of
6.7 percent.
28
INFLATION RATES (1983-2011)

29
TURKEYS IMPORTANCE IN THE CONSTRUCTION SECTOR

• Turkey is the leading country in its region in
  the construction sector.
• It is the main manufacturer of cement in Europe.
  Among cement manufacturers in the world, Turkey
  ranks 4th. Turkey also ranks 10th in steel
  production.
• As of the end of 2010, Turkish construction
  sector has attained 188 billion dollars worth of
  contracts in 89 countries, from Balkans to
  Central Asia, from Russia to the Middle East and
  Africa.
• On an annual basis it has an average business
  capacity of 20 billion (The target for 2011 is
  30 billion, for 2015 50 billion ).
• According to the Top 225 International
  Contractors" list of Engineering News Record
  magazine, Turkey is the second country in the
  world with 33 outstanding firms (2010).

30
TURKISH BANKING SECTOR-I

• Turkey has already completed deep-rooted reforms
  in the banking sector as of 2006. Thanks to these
  reforms, the banks in Turkey have not suffered
  from the global crisis on the contrary they have
  increased their profits.
• Turkish banks have branches and offices in 14
  countries (USA, Germany, Bahrain, Bulgaria,
  China, Georgia, Iraq, UK, TRNC, Luxemburg, Malta,
  Pakistan, Russia, Greece).
• There are 41 representations of foreign banks in
  Turkey (Switzerland 8, Germany 6, the Netherlands
  6, USA 4, France 3, UK 4, Spain 2, Italy 2,
  Qatar, UAE, Belgium, India, Canada, Japan 1).

31
TURKISH BANKING SECTOR-II
Source. BDDK (Banking Regulation and Supervision
Agency)
32
TOURISM

• One of the top 10 tourism destinations across the
  globe.
• Ranked 7th in terms of visiting tourists and 8th
  in terms of tourism revenues in the world. The
  main visitors are German, Russian and British
  tourists.
• Achieved 2,8 increase in both 2009 and 2010 in
  the number of foreign visitors, despite the
  adverse effects of the global crisis.
• It possesses not only the infrastructure for
  seaside tourism, but also for health, culture,
  faith, congress, sports, hunting and
  archaeological tourism.

33
TOURISM (2010)

• In 2010, 28,6 million foreign tourists visited
  Turkey.
• 2,8 increase as compared to 2009.
• Percentage of tourists in 2010
• German 15.3
• Russian 10.85
• British 9.3
• (Other most visiting tourists Iranian,
  Bulgarian, Georgian, Dutch, French, Syrian and
  Italian).

34
HEALTH TOURISM

• Receiving nearly 60 thousand visitors for health
  tourism, generating an approximate annual income
  of 1 billion .
• Turkey is the 1st in Europe and 7th in the world
  in terms of thermal sources.
• Modern and very competitive private health
  centers.
• Low costs in health services.
• Qualified and experienced staff in the health
  sector.

35
TOURISM FIGURES (Past 10 Years)

• Tourist arrivals and revenues (last 10 years)
• International Revenues Visitors
  (millions) (billion )
• 2001 11.3 7,4
• 2002 13.0 9,0
• 2003 13.7 9,7
• 2004 17.2 12,0
• 2005 20.5 14,0
• 2006 19.3 12,6
• 2007 23.0 14,0
• 2008 26.4 16,8
• 2009 27.3 15,8
• 2010 28.6 15,6

36
TRANSPORTATION

• Turkey has a unique and strategic location as
  part of both Europe and Asia.
• 18.500 km of two-lane highways. The target is to
  increase it to 22,500 km by the end of 2011.
• 12 new motorway projects to be built by the year
  2023, the total length of which will be 4,773
  kilometers.
• Marmaray Project will connect Europe and Asia by
  railway under the Bosphorus.

37
TURKISH AIRLINES

• Fastest growing airline company in Europe.
• In terms of destination diversity 8th airline
  company in the world, 3rd in Europe.
• In terms of profits, 6th biggest airline company
  in the world.
• 131 international 41 domestic destinations (in
  total 172).
• In 2010 8 new international destinations were
  inaugurated (Accra, Bologna, Dar-es Salaam,
  Entebbe, Nakhcivan, Podgorica, Sochi, Washington
  D.C.)
• In 2011 11 additional international destinations
  will be established (Malaga, Thessaloniki,
  Valencia, Toulouse, Manila, Naples, Turin,
  Genova)
• Sponsorship to world-famous trademarks
  (F.C.Barcelona, Manchester United, Euroleague)

38
TECHNOLOGY, RESEARCH DEVELOPMENT

• Turkeys RD expenditures rose to 0.85 of GDP in
  2010. The target is 2.
• The number of technoparks reached 39 in 2010.
  1.451 firms are active in these parks, the added
  value of which amounts to 540 million in
  Turkish exports.
• Between 2003 and 2009, domestic intellectual
  property right applications and licensing
  increased five-fold.

39
TECHNOLOGY, RESEARCH DEVELOPMENT

• Utmost importance attached to investments in
  information and communication technologies.
• A growing market of 30 billion US Dollars,
  constituting 4 of GDP
• Turkish software market recorded a growth rate
  of 100 in recent years and reached the level of
  2 billion US Dollars as of 2009.
• Over 68 million mobile phone subscriptions, 37
  million wideband Internet users.
• Well educated engineers and specialised personnel
  in technology and IT fields.

40
TECHNOLOGY, RESEARCH DEVELOPMENT
41
AGRICULTURE

• Turkey is the 8th biggest power in terms of
  agricultural production (Annual produce value of
  up to 50-60 billion ).
• One of the most important producer and exporter
  countries of the region.
• Produces more than 150 agricultural products. The
  total amount of fruits and vegetables produced is
  42 million tonnes. Exports to 177 countries.
• Thanks to her diverse geography climate Turkey
  is
• - ?1 in terms of hazelnut, fig, quince, cherry,
  fresh and dried apricot production,
• - ?3 in terms of pistachio production,
• - ?5 in terms of tea and olive oil production in
  the world.

42
TURKEYS DEVELOPMENT ASSISTANCE

• Official development assisstance has exceeded
  3,4 billion US Dollars in the last 5 years (79,7
  TIKA, 8,7 National Ministry of Education).
  The total development assistance has reached 7,1
  billion dollars (officalNGOs).
• Year Official Assistance NGOs
  assistance Total
• (million ) (million )
  (million )
• 2005 ? 601 450 1,051
• 2006 ? 714 995 1,709
• 2007 ? 602 734 1,336
• 2008 ? 780 796 1,576
• 2009 ? 707 812 1,519
• 2010 ? 997
  na
  ---
• Source TIKA

43
TURKEYS OFFICIAL DEVELOPMENT ASSISTANCE(2010)

• Official development assistance (2010)? 966,82
  million
• Distribution 53,51? The Caucasus and Central
  Asia
• 24,17 ? The Middle East
• 15,18 ? Europe
• 4,04 ? Africa
• 2,48 ? Other
• Top three countries with biggest share (2010)
• 134,49
  million ? Pakistan
• 107,32 million ?
  Afghanistan
• 83,81 million ?
  Kazakhstan
• Source TIKA

44
NEW ECONOMIC EVOLUTIONS

• Mutual elimination of visa requirements (Libya,
  Lebanon, Syria, Jordan, Albania, Tajikistan,
  Serbia, Russia, Yemen)
• High Level Strategic Cooperation mechanisms with
  Syria and Iraq, signing of numerous agreements in
  various fields, Quadruple Cooperation Mechanism
  among Turkey, Syria, Lebanon and Jordan.
• Development Assistance and TIKA Offices (26
  coordination offices in 23 countries).
• Developing transportation network with regional
  countries (new railroad connections, enlargement
  of road transport network, advances in maritime
  cooperation, increased airline connections, THY
  as the 3rd biggest airline company),
• New embassies in Africa

45
CHALLENGES IN THE ECONOMY-I

• Trade imbalance 69,9
  billion (2008)
• 38,8 billion (2009)
• 71,6 billion (2010)
• Unemployment 11
  (2008)
• 14 (2009)
• 
  11,9 (2010)
• Current Account Deficit 42 billion
  (2008) (5,7of GDP)
• 14 billion (2009) (2,3 of
  GDP
• 48,6 billion (2010) (6,5 of
  GDP)

46
CHALLENGES IN THE ECONOMY-II

• Gross External Debt 290,4 billion
  in 2010
• Public Sector
  88,9 billion
• Private Sector 189,6 billion
• Central Bank 11,8 billion
  
• Long Term 211,7 billion
• Short Term 78,6
  billion
• Gross External Debt/GDP 37,8 (2008)
• 43,6 (2009)
• 39,5 (2010)

47
2023 TARGETS

• Targets for the century-old Republic in 2023
• - to be among the top ten economies of the
  world,
• - to reach a trade volume of 1 trillion Dollars,
  
• - to surpass 500 million US dollars in exports ,
• - to attain 2 trillion dollars GDP,
• - to increase GDP per capita to 25,000 ,
• - to create 10 brands of global fame,
• - to meet one thirds of its power generation
  from renewable energy sources,
• - to reach a capacity to host 50 million foreign
  tourists annually.

48
2023 TARGETS

• Further macroeconomic targets for 2023
• - to employ 30 million of the population
  actively,
• - to decrease unemployment rate to 5 ,
• - to include every citizen in the social
  security system,
• - to decrease infant mortality rates to
  one-digit numbers,
• - to complete all regional development projects
  in order to make Turkey one of the foremost
  global grain producers,
• - to double the overall length of railroad
  network up to 22,000 km with new high-speed
  railroad lines,
• - to add 15,000 km double-lane motorways to the
  road network,
• - to construct at least three nuclear power
  plants,
• - the total energy consumption per capita to
  exceed 4.000 kWh,
• - to further advance in aeronautics, satellite
  and defence technologies.