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  • Kasım – Aralık = 211 x 12 = 132Ocak – Mart = 3Toplam = 137 Ay
  •  
  • State contribution up to 25% of the annual gross minimum wage. 3 years  15%6 years  35%10 years  60%Retirement  100% of the 25% State ContributionParticipants:28.12.2012: 3.119.03330.08.2013: 3.818.622
  •  Turkey ranked 65th out of 102 countries in 2002 whereas it became 53rd among 177 countries in 2013.
  • Turkey ranked 65th out of 102 countries in 2002 whereas it became 53rd among 177 countries in 2013.
  • While Turkey ranked 71st out of 125 countries in the Global Competitiveness Index in 2005, it has become 44thamong 148 countries in the period of 2012-2013.
  • While Turkey wasranked 71st out of 125 countries in the Global Competitiveness Index in 2005, it has become 44thamong 148 countries in 2013.  
  • While Turkey wasranked 84th among 175 countries in 2006, it has become 69thamong 189 countries in 2013.  
  • While Turkey wasranked 84th among 175 countries in 2006, it has become 69thamong 189 countries in 2013-14.  

International Investment Summit International Investment Summit Presentation Transcript

  • Turkey’s Economic & Political Outlook April 10, 2014 Mehmet Şimşek Minister of Finance 1
  • Is political stability at stake? Low growth – the new normal? Is the pick-up in inflation temporary? Turkey’s soft spot - getting fixed? A few Questions of Interest 2
  • Is political stability at stake? 3
  • Importance of Political Stability 4 Political Stability
  • Political Stability 5 15 Months 137 Months 0 20 40 60 80 100 120 140 Average Lifetime of Governements during 1950-2002 AK Party Governments Since 2002 1923-2002 Average Lifetime of Governments: 17 months 2002-14 Political Stability 2023 Vision
  • Key Messages from the Ballot Box Political Stability is here to stay Corruption allegations were politically motivated President is likely to be elected in the first round 6
  • Local Election Results Source: Anadolu Agency AK PARTY: Justice and Development Party CHP: Republican People’s Party MHP: Nationalist Movement Party BDP: Peace and Democracy Party (%) 38.8 23.1 16.1 5.7 16.3 45.5 27.8 15.2 4.2 7.3 0 5 10 15 20 25 30 35 40 45 50 AK PARTY CHP MHP BDP Others 2009 2014
  • 2 More Elections Ahead Presidential • August 2014 Parliamentary • June 2015 8
  • Low growth – the new normal? 9
  • ‹#›
  • ‹#›
  • Upside • Stronger external demand • EU pulling out of recession • Arab Spring becoming less disruptive • TL Depreciation Downside • Tighter financial conditions • Geopolitical tensions Growth Outlook 12
  • Softening Domestic Demand 13 Source: Turkstat, BRSA 0 5 10 15 20 25 30 35 40 45 55 60 65 70 75 80 85 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Consumer Confidence (Left) Total Credit Growth (Right)
  • 14 Source: Bloomberg, Turkstat Index(monthly) (6monthrolling) 20 22 24 26 28 30 32 34 36 30 35 40 45 50 55 60 65 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Eurozone Manufacturing PMI Turkey's Exports to Europe Strengthening External Demand
  • Manufacturing Output Remaining Strong 15 Note: INDEX= 100 : A stable outlook to the economic activity by the real sector agents covered by the Business Tendency Survey. INDEX > 100 : An optimistic outlook to the economic activity by the real sector agents covered by the Business Tendency Survey. INDEX < 100 : A pessimistic outlook to the economic activity by the real sector agents covered by the Business Tendency Survey. Source: Turkstat, CBT 80 85 90 95 100 105 110 115 120 125 130 55 60 65 70 75 80 85 90 95 100 105 110 115 120 Real Sector Confidence Index (Left) (s.a.) Industrial Production (Right) (s.a.)
  • Strong Job Creation Employmentsince2007(mnpeoples.a.) Source:TURKSTAT 25.8 20 21 22 23 24 25 26 27 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 16
  • Unemployment & Labor Participation Rate Source:TURKSTAT 45 46 47 48 49 50 51 52 8 9 10 11 12 13 14 15 16 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Unemploymen Rate (Left Axis) Labor Force Participation Rate (Right Axis) (s.a.,%) (s.a.,%) 17
  • Is the pick up in Inflation Temporary? 18
  • Inflation 0 20 40 60 80 100 120 140 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: TURKSTAT (CPI,Annual,%) 19
  • CBRT’s Inflation Outlook 20 Inflation is to resume downward trend as base effects fade Source: CBRT
  • Upside • TL Depreciation • Unprocessed food prices Downside • Monetary Tightening • Output Gap • Recent Macroprudential Measures Inflation Outlook 21
  • Impact of Currency Depreciation on Inflation 10% currency depreciation 1.5ppt higher inflation Source: Kara, Hakan and Öğünç F. (2011). "Effect of Exchange Rate and Import Prices on Inflation", CBRT, Economic Notes, No. 2011/14. 22
  • Disconnecting from Fundamentals? Source: CBRT (2003=100) 23 80 90 100 110 120 130 140 Jan03 Jun03 Nov03 Apr04 Sept04 Feb05 Jul05 Dec05 May06 Oct06 Mar07 Aug07 Jan08 Jun08 Nov08 Apr09 Sept09 Feb10 Jul10 Dec10 May11 Oct11 Mar12 Aug12 Jan13 Jun13 Nov13 CPI Based REER CPI (Developing Countries) Based REER
  • (%) Tightening Monetary Policy Source: CBRT 8.00 12.00 10.00 3 5 7 9 11 13 15 Oct-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 CBRT Funding Rate O/N Borrowing O/N Lending Policy Rate 24
  • (%) 25 Kaynak: TCMB Interest Rates on Turkish Lira Bank Loans 7 9 11 13 15 17 19 21 23 25 27 29 January-08 April-08 July-08 October-08 January-09 April-09 July-09 October-09 January-10 April-10 July-10 October-10 January-11 April-11 July-11 October-11 January-12 April-12 July-12 October-12 January-13 April-13 July-13 October-13 January-14 Personal Vehicle Housing Commercial
  • Output Gap Source: CBRT, Turkstat (%,GDP) 26
  • Macroprudential Measures • Single limit for all credit cards • Higher minimum payment • Limit on # of installments Credit card loans • Higher risk weighting for consumer loans Consumer loans • Compulsory advance payment • Term limit for vehicle and consumer loans Auto & other consumer loans • Lower risk weighting for SME & export credits Other Loans 27
  • 28 Source: CBRT Credit Growth 13weekmovingavg.,y-on-y% * Credit Growth is adjusted for exchange rate movements 13.1 0 5 10 15 20 25 30 35 40 45 Jan-11 Feb-11 Mar-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Agu-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14
  • Turkey’s Soft Spot 29
  • Current Account Deficit is Large, but...(%ofGDP) Net Gold Exports • 2011: -$4.8 billion • 2012: +$5.7 billion • 2013: -$11.8 billion Source: CBRT 30
  • It’s partially due to Cyclical Factors Euro crisis Energy prices Arab Spring 31 Strong Domestic Demand
  • Outlook for C/A Deficit • Europe pulling out of recession • Tighter monetary policy • Softening domestic demand • Exchange rate weakness • Relatively more stable MENA region • Gold imports likely to fall • Higher tourism revenues Significant adjustment is likely 32
  • FX Short Positions – Should we be worried? 33
  • Turkey's FX Position Source: CBRT, BRSA, Treasury * Assets: CBRT FX Deposits of Treasury+ CBRT Foreign Assets; Liabilities= Public gross external debt+CBRT Liabilities to Non Residents. Data from CBT dated 7Apr., 2014; data from gross external debt stock as of Q4-13 ** Data - Feb. 2014 *** Data - Dec. 2013 **** Data - Mar. 2013 *****Data-28.03.2014 Billion $ Assets Liabilities Net Position Public Sector* 132,8 122,9 9,8 Banking Sector** 477,9 477,2 0,7 Real Sector*** 92,2 266,1 -173,9 Short Term 76,9 94,9 -18 Household**** 191,0 0,5 190,5 FX Deposit ***** 82,662 34
  • Fiscally: Room to Manoeuvre 35
  • 10.8 7.9 4.1 0.1 -1.3 0.2 1.6 5.5 3.0 0.4 1.0 1.0 1.1 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Maastricht Criteria: 3% Achieved Maastricht Criteria except 2009 Source: Ministry of Development BudgetDeficit-to-GDP,% Low Deficit 36
  • Budget Deficit (2014)BudgetDeficit-to-GDP,% Source: IMF, OECD, Ministry of Development 4.0 2.9 2.3 1.1 0.5 1 1.5 2 2.5 3 3.5 4 4.5 OECD EU-28 EMs Turkey 37
  • Source: IMF Fiscal Strength in EMsGrossPublicDebt/GDP(%) Fiscal Deficit /GDP (%) Arm Br Bul Col Cro Fr Hun Indo Ire Latv Lith Mex Phil Pol Rom Rus Serb Slvk Slov SoAf Sp Tu 0 20 40 60 80 100 120 140 0 1 2 3 4 5 6 7 8 9
  • 74.0 67.7 59.6 52.7 46.5 39.9 40.0 46.1 42.3 39.1 36.2 36.3 33.0 25 30 35 40 45 50 55 60 65 70 75 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Lower Public Debt Debt-to-GDP,% Satisfying Maastricht Criteria since 2004 Maastricht Criteria: 60% Source: Treasury 39
  • Public Debt (2014) Source: IMF, OECD, Treasury Debt-to-GDP,% 111.8 89.0 33.3 33.0 20 30 40 50 60 70 80 90 100 110 120 OECD EU EMs Turkey 40
  • 41 (%) Real & Nominal Interest Rates on Gov’t Debt Source: Treasury 62.7 7.7 10.9 25.4 0.2 2.8 -5 5 15 25 35 45 55 65 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Feb.14 Interest Rate Real Interest Rate
  • (%) Interest Payments 85.7 14.9 43.2 11.9 0 10 20 30 40 50 60 70 80 90 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Interest Payments/Tax Revenues Interest Payments/Budget Expenditures Source: Ministry of Finance 42
  • Households: Low Leverage Source: CBRT, ECB (HouseholdLiabilities,%ofGDP,June2013) No FX exposure 65 23 20 40 60 80 100 120 140 Denmark Netherlands Ireland United Kingdom Portugal Sweden Spain Finland Euro Area Greece Malta Germany France Luxembourg Belgium Austria Italy Estonia Poland Czech Republic Latvia Slovenia Hungary Slovakia Lithuania Turkey 43
  • 147.9 50 70 90 110 130 150 170 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Foreign Currency Deposits of Residents Source: BRSA (Billion$) 44
  • Foreign Currency Loans (ForeignCurrencyLoans/TotalLoans,%) Source: BRSA 59 29 20 25 30 35 40 45 50 55 60 65 December-02 April-03 August-03 December-03 April-04 August-04 December-04 April-05 August-05 December-05 April-06 August-06 December-06 April-07 August-07 December-07 April-08 August-08 December-08 April-09 August-09 December-09 April-10 August-10 December-10 April-11 August-11 December-11 April-12 August-12 December-12 April-13 August-13 December-13 45
  • Firms Source: CBRT No FX Loans 63% FX Loan w/ export earning 25% FX Loan w/o export earning 12% 9,500 firms Total net sales at 71% of GDP. 46
  • Firms: SMEs and Large Companies Greater amount of FX debt belongs to LARGE COMPANIES 80% out of the 57% of large companies w/ FX debt have export earnings Source: CBRT 47
  • Banks: Safe & Sound CapitalAdequacyRatio,% 2002 Feb-14 17.6 2.8 NPLRatioofLoans(%) 15.5 0 5 10 15 20 25 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 Legal Rate: %8 Target Rate 12% Source: BRSA 48
  • Turkey’s Banks - among the Strongest in EMs 49 Source: World Bank
  • Source: World Bank, IMF, BRSA Banking Sector: Able to Absorb Shocks Arm Br Bul Col Cro Egy Fr Gre Indo Ire Ita Latv Leb Lith Mex Phil Pol Rom Rus Serb SoAf Sp Tu Ukr Venz 8 10 12 14 16 18 20 22 0 50 100 150 200 250 Private Credit/GDP (%) CAR(%) 50
  • Structural Reforms & Priorities 51
  • Chapter- 1 Reducing Energy Import Bill Moving up the Value- Chain Enhancing Human Capital Stock Increasing Labor Market Flexibility 52
  • Reducing Energy Import Bill 53
  • Source: TURKSTAT, Bloomberg Energy Import Bill (Brent,$pbl) EnergyImports(BillionDollars) 54
  • Energy Prices to trend down in the Long-Run BRIC slowing down Renewables Shale gas revolution Energy efficiency gains 55
  • Energy Prices 56 95 100 105 110 115 120 125 75 80 85 90 95 100 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Index,2010=100 Brent$/bbl,2010Prices Crude oil, avg spot (lhs) Energy Prices (rhs) Source: World Bank
  • High Dependence on Energy Imports 72% Total Energy 92% Oil 98% Natural-Gas 57
  • Developing Local & Renewable Resources Source: Ministry of Energy and Natural Resources Electricity Generation Installed Capacity MW % of Total Current Installed Capacity (2013) 64,044 - Renewable Energy 25,596 40.0 Power Plants Under Construction 14,338 - Renewable Energy 10,804 75.4 In 3-to-5 years 78,382 - Renewable Energy 36,401 46.4 58
  • Renewable Energy OutlookOverthenext decadeinTurkey, • 20,000 MW, wind power generation • 3,000 MW, solar power plants • 600 MW, geothermal power plants • An energy stock market to be established 59
  • Building Nuclear Capacity Akkuyu: JW with Russia Sinop JW with a Japanese-French consortium Working on a 3rd plant 60
  • Improving Energy Efficiency Industry 20% Transportation 15% Construction 30% 61
  • Moving up the Value-Chain 62
  • High Added Value in Exports Strengthening the link b/w commerce and R&D Value of export products per kg Turkey $1.58 South Korea $3.0 Turquality $3.28 Japan $3.5 Germany $4.1 63
  • Source: The Scientific and Technological Council of Turkey R&D Spending •3.00%2023 •1.8%2018 • 0.92%2012 • 0.53%2002 64
  • Industrial Design Applications 45,091 applications in 2013 Up by 122% since 2002 Source: TPI 65
  • Trade Mark Applications(2012,Thousand) 108* 86 64 54 44 41 17 16 14 14 0 20 40 60 80 100 120 TURKEY France Germany Italy Spain UK Portugal Switzerlan d Norway Poland Source: TPI *Turkey’s 2013 data 66
  • Patent Applications Source: TPI 1,874 12,053 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 12,000 13,000 2002 2013 67
  • Enhancing Human Capital Stock 68
  • Students (%, Total Population) 39 22 15 20 25 30 35 40 45 Turkey EU Source: TURKSTAT, Eurostat Included Informal Education 69
  • 9.4 18 8 10 12 14 16 18 2002 2014 Source: Ministry of Finance Share of Education in Budget% 70
  • Investment in Education Over the last decade, we have • Built 205,000 classrooms • Hired 410,000 teachers Source: Ministry of Education 71
  • Gross Schooling Rates Source: Ministry of Development 72
  • 12 Years of Mandatory Education Austral. Austria Belg. Canada Chile Czech R. Den. Estonia Finland France Italy Japan Lux Mex New Zeal. Poland Port. Spain Switz. TURKEY UK USA 6 8 10 12 14 16 18 9.5 29.5 49.5 69.5 89.5 109.5 129.5 AverageYearsatSchoolofPop’nover25Years Income per Capita (PPP, log) Source: OECD 73
  • 2002 91,1 girls per 100 boys 2012 101,8 girls per 100 boys Improving Girls’ Education 74
  • Source: OECD 76 74 47 51 38 46 30 35 40 45 50 55 60 65 70 75 80 Science Math 2006 2009 2012 Enhancing Human Capital Stock: PISA Results, Gap b/w Turkey & OECD 75
  • Increasing Labor Market Flexibility 76
  • 77 Labor Market Improving labor market flexibility Increasing female labor-force participation Improving the relation b/w education & employment Improving the relation b/w employment & social protection
  • Average Retirement Age 41.0 44.9 61.9 63.3 30 35 40 45 50 55 60 65 Female Male Turkey OECD Source: OECD 78
  • Average Usual Weekly Hours Worked on the Main Job 48.9 30 32 34 36 38 40 42 44 46 48 50 Turkey Korea Mexico Greece CzechRepublic Israel SlovakRepublic Poland Iceland Slovenia Hungary Portugal Chile Canada Estonia Spain France Austria Italy NewZealand Finland Luxembourg Belgium Sweden United… Australia Germany Switzerland Ireland Norway Denmark Netherlands (2011,hour) OECD Average: 38.5 Source: OECD 79
  • Labor Participation Rate, Female Source: Fraker, A. and D. Ozdemir, 2011, “Female Labor Force Participation How Does Turkey Compare?”, TEPAV FemaleLaborParticipationRate(%) Income per Capita (log) 80
  • Source: TURKSTAT, Eurostat, WB (2004=100) 75 80 85 90 95 100 105 110 115 120 125 130 2004 2005 2006 2007 2008 2009 2010 2011 2012 TURKEY South Africa Croatia Hungary Poland Brazil Russian Federation Indonesia China Mexico India TURKEY Female Labor Participation Rates 81
  • Chapter- 2 Deepening Capital Markets Combatting Shadow Economy Improving Infrastructure Reducing Regional Development Gaps 82
  • Deepening Capital Markets 83
  • Capital Markets Source: CMB, Borsa Istanbul Data as of October 2013. *30.03.2014 **21.03.2014 ***2013 84 More than 1 million equity investors More than 3 million mutual fund investors More than 4.3 million private pension accounts** Nearly 172 thousand corporate bond holders 141 investment banks & brokerages Over $220bn market cap* 424 listed companies***
  • A New Capital Markets Law •Increasing financial deepening & innovation •Strengthening investor rights •Improving corporate governance New legal framework in line with the best global practices 85
  • Restructuring of Borsa Istanbul Regional Leadership Raising Market Cap/GDP to 80% 1,000 new companies to be listed 86
  • 2009 72nd 2014 47th 2018 25th Global Financial Centres Index Source: Global Financial Centres Index 15 45 47 60 63 70 75 77 20 30 40 50 60 70 80 Rio de Jeneiro ISTANBUL Warsaw Mauritius Mexico Prague Budapest 87
  • Increasing Savings: Private Pensions 25% State Contribution 1.2 million new participants and TL5.6bn funds since end-2012 88
  • Incentives for Global Fund Managers A tax free environment for global funds Making it easier to manage assets in Turkey 89
  • Incentives for Venture Capital Allowing contributions to Venture Capital to be deducted from Corporate & Personal Income Tax Base, up to • 10% of VC Revenues • 20% of VC Capital Tax Relief on Dividends 90
  • Incentives for Business Angels 91
  • Combatting Shadow Economy 92
  • 52.1 51.7 50.1 48.2 47.0 45.4 43.5 43.8 43.3 42.1 39.0 36.7 30 35 40 45 50 55 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 InformalEmployment(%ofTotalEmployment) Informal Employment Source:TURKSTAT 93
  • Size of Shadow Economy (%, GDP) 32.2 31.5 30.7 30.4 29.1 28.4 28.9 28.3 27.7 27.2 26.5 26 27 28 29 30 31 32 33 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: Schneider, 2013 Down 6 percentage points 94
  • Size of Shadow Economy (%, GDP) Source: Schneider, 2013 But still higher than EU average 31.2 28.4 28.4 28.0 27.6 26.5 25.5 25.2 24.3 23.8 23.6 23.1 22.1 21.1 19.0 18.6 18.4 16.4 15.5 15.0 13.9 13.6 13.0 13.0 13.0 12.2 9.9 9.7 9.1 8.0 7.5 5 10 15 20 25 30 35 Bulgaria Romania Crotia Latvia Estonia TURKEY Lithuania S.Cyprus Malta Poland Greece Slovenia Hungary Italy Portugal Spain EUAverage Belgium CzechRep. Slovakia Sweeden Norway Denmark Finland Germany Ireland France UnitedKingdom Netherlands Luxemburg Austria SizeofInformalEconomy(2013,%,GDP) 95
  • Improving Infrastructure 96
  • 1,714 Km Total of Motorways 4,387 Km Total of State and Provincial Dual Carriageways Total: 6,101 Km January 2003 2,244 Km Total of Motorways 20,807 Km Total of State and Provincial Dual Carriageways Total: 23,051 Km January 2014 97
  • İSTANBUL EDİRNE ESKİŞEHİR Polatlı ANKARA KONYA İZMİR SİVAS AFYONKARHİSAR KAYSERİ BURSA ERZİNCAN ERZURUM KARS MERSİN ADANA DİYARBAKIR ELAZIĞ MALATYA ZONGULDAK SAMSUN Bandırma VAN MUŞ BİLECİK ÇANKIRI KIRIKKALE TEKİRDAĞ İZMİT BALIKESİR AYDIN DENİZLİ BURDUR ISPARTA UŞAK MANİSA KARAMAN NİĞDE OSMANİYE K.MARAŞ AMASYA BATMAN MARDİN Yerköy KARABÜK Yenişehir Constructed (1.724 km) Under Construction (2.500 km) Bidding Phase (1.600 km) GAZİANTEP Çobanbey 1,724 km of railroad constructed since 2003 o.w. 1,366 km High Speed Train Lines High Speed Railway Projects 98
  • • The number of airports serving scheduled flights = 262003 • The number of airports serving scheduled flights = 522013 Active Airports in Turkey Airports serving Scheduled Flights (52) Airports under Construction (3) Airports Planned (1) 99
  • İstanbul Antalya İzmir Gaziantep Trabzon Kayseri Samsun Erzurum Kars Van Diyarbakır Malatya Dalaman Bodrum Sivas Elazığ Bursa Ankara Ağrı Erzincan Muş Batman Mardin Şanlıurfa Adana Konya Denizli KKTC THY THY PegasusOnur Air SUN Express ATLAS JET Tokat Zonguldak BoraJet Edremit Siirt Gazipaşa Çorlu KKTC Iğdır Gökçeada Hata y Adana Antalya İzmir Gaziantep Trabzon Kayseri Ankara Bursa Samsun Erzurum Kars Van Mardin Malatya Dalaman Bodrum Konya Sivas Elazığ Sinop Nevşehir Adıyaman Batman Çanakkale Denizli Eskişehir Isparta Kahramanmaraş Merzifon Muş Uşak Ağrı Tekirda ğ Erzincan Diyarbakır Şanlıurf a İstanbul Kastamonu Bingöl Şırnak 2013 6 Airline Comps 7 Hubs 52 Points 2003 2 Hubs 26 Points Turkey has the most rapid domestic flight expansion Domestic Flights 100
  • 2003 60 Points SunExpressPegasus ATLAS JET Onur Air 2013 236 Points THY THY SunExpress International Flights 294% Expansion 101
  • Improving Social Equity 102
  • Southeast Anatolian Project ₺36.1 bn invested in Southeast Anatolian Project during 2003-13 22 dams, almost completed 416 thousand, new jobs since 2009 $6.6bn contribution to the economy 103
  • East Anatolian Project (DAP) Source: Ministry of Development Division of GAP Administration 1.2 mn jobs created A $1.4bn contribution to the economy 104
  • Konya Plain Project (KOP) 14 irrigation 3 drinking water 1 energy 18 GREAT PROJECTS 105
  • Strong Long-Term Prospects 106
  • GDP Per Capita Source: TURKSTAT, Ministry of Development 1 099 1 609 600 800 1 000 1 200 1 400 1 600 1 800 2002 2013 GDP Per Capita (₺, Real) 3 492 10 782 1 000 3 000 5 000 7 000 9 000 11 000 2002 2013 GDP Per Capita ($) 8 667 19 038 5 000 7 000 9 000 11 000 13 000 15 000 17 000 19 000 21 000 2002 2013 GDP Per Capita ($,PPP) 107
  • Real Convergence with AMs Source: IMF,OECD, Turkstat 22.7 36.0 37.0 59.6 10 20 30 40 50 60 2002 2013 Turkey /USA Turkey /European Union (%) 108
  • Priorities for Sustainable Growth Improving Competitiveness Innovation-based Growth Attracting FDI Financial deepening R&D Corporate Governance Building a more Equitable Society Inclusive Growth Education & Skills Childcare & Family Support Flexible Labor Market Improving Quality of Institutions Open-access Growth Rule of Law Independent and Arms- length Regulation Improving Business Climate Public Finance Management 109
  • Achieving Sustainable Development 10th Development Plan (2014-18) Qualified Individiuals, Str onger Society Innovative Production, Sust ainable Growth Liveable Spaces, Sustain able Environment International Cooperation for Development 25 Transformation Programs of High Priority Implemention, Monitoring, and Evaluation 110
  • Determinants of Long-Term Growth Quality of Institutions Demographics Productivity 111
  • Improving Quality of Institutions Corruption Perceptions: 2013: 53rd in 177 2002: 65th in 102 Ease of Doing Business: 2013-14: 69th in 185 2006: 84th in 175 Global Competitiveness: 2013: 44th in 148 2005: 71st in 117 Source: WB, WEF, Transparency International 112
  • Corruption Perceptions Index (2002) (65th among 102 countries) 31 44 45 58 59 65 70 73 74 96 20 30 40 50 60 70 80 90 100 Italy Greece Brazil Mexico China TURKEY Argentina India Russia Indonesia Source: Transparency International 113
  • Corruption Perceptions Index (2013) (53rd among 177 countries) Source: Transparency International 53 69 72 80 80 94 106 106 114 127 40 50 60 70 80 90 100 110 120 130 140 TURKEY Italy Brazil China Greece India Argentina Mexico Indonesia Russia 114
  • Within the period of 2005-2012, Turkey has ranked higher than Russia, Argentina and Greece.(71st among 117 countries) 31 35 36 38 43 45 47 48 53 54 57 59 67 68 69 71 30 35 40 45 50 55 60 65 70 75 Portekiz Hungary SlovakRep. Italy Poland India Greece China Russia Argentina Brazil Mexico Romania Ukraine Indonesia TURKEY Source: World Economic Forum Global Competitiveness Index (2005) 115
  • (44th among 148 countries) Source: World Economic Forum Global Competitiveness Index (2013) 29 38 42 44 49 51 55 56 60 63 64 76 78 84 91 104 25 35 45 55 65 75 85 95 105 China Indonesia Poland TURKEY Italy Portugal Mexico Brazil India Hungary Russia Romania SlovakRep. Ukraine Greece Argentina 116
  • (84th among 175 countries) Source: World Bank Ease of Doing Business (2006) 62 69 70 71 84 93 97 108 111 122 131 132 134 138 60 70 80 90 100 110 120 130 140 Mexico Italy Uruguay Romania TURKEY Argentina Russia China Greece Brazil Indonesia Ukraine Croatia India 117
  • (69th among 189 countries) Source: World Bank Ease of Doing Business (2013) 53 65 69 72 73 88 89 92 96 112 116 120 126 134 20 40 60 80 100 120 140 Mexico Italy TURKEY Greece Romania Uruguay Crotia Russia China Ukraine Brazil Indonesia Argentina India 118
  • Favorable Demographics Source: Eurostat Shareof15-24yearsoldinTotalPop.(%) 16.6 7 9 11 13 15 17 19 21 Spain Italy Andorra Slovenia Greece Portugal Bulgaria Germany Czech Republic Serbia Switzerland Ireland Croatia Estonia Latvia France Austria Hungary Luxembourg Finland Netherlands Ukraine Poland Denmark Sweden United Kingdom Slovakia Norway Malta Lithuania Montenegro Iceland Macedonia Georgia Moldova Turkey Azerbaijan 119
  • 2.0 0.7 0.3 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 TURKEY OECD EU-27 AnnualAverageGrowthRate(%,2001-11) Working Age Population Growth Source: OECD, Eurostat, Turkstat 120
  • Have Investors Noticed the Transformation? 121
  • International Companies Operating in Turkey Source: Ministry of Economy 122
  • Foreign Direct Investment Inflows Source: CBRT (Billiondollar) 123
  • REER Appreciation Source: CBRT (2003=100) 124
  • Thank You… 125