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Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
Turkey: Investment Conference
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Turkey: Investment Conference

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  • 1. Turkey: Investment ConferenceOctober 19, 2012Mehmet ŞimşekMinister of Finance
  • 2. OutlineGlobal Economy• Short and Medium Term Outlook and Challenges• Long Term Outlook and ChallengesTURKEY2
  • 3. GLOBAL ECONOMY3
  • 4. Growth Rates in 2012 for AMsSource: IMF3,32,2 2,21,3-0,4-101234World Japan USA Advanced Economies Euro AreaGrowth(%)
  • 5. GDP in Advanced EconomiesSource: Eurostat(2007-Q4=100)91939597991012007-Q42008-Q1Q2Q3Q42009-Q1Q2Q3Q42010-Q1Q2Q3Q42011-Q1Q2Q3Q42012-Q1Q2USA Eurozone Japan5
  • 6. Unemployment in Advanced EconomiesSource: Eurostat, BLSUnemploymentRates(December2007=100,%,s.a.)801001201401601802002202007-122008-122009-122010-122011-12USAEuro AreaJapan6
  • 7. Growth Rates in 2012 for AMsSource: IMF3,32,2 2,21,3-0,4-101234World Japan USA Advanced Economies Euro AreaGrowth(%)
  • 8. Growth Rates in 2012 for EMsSource: IMF, MTPGrowth(%)5,34,13,2 3,22,01,52,02,53,03,54,04,55,05,5Emerging Asia exclChina & IndiaEmerging Economiesexcl China & IndiaLatin America Turkey Emerging Europe
  • 9. Source: IMF, OECDDebtStock/GDP(%)Government Debt Stock67,2 66,474,5107,293,6107,6111,794,9109,360708090100110120USA Eurozone OECD2007 2012 20139
  • 10. Real GDPSource: IMFGreat Depression (1929=100) Current Crisis (2008=100)World vs USA7080901001101202000200120022003200420052006200720082009201020112012WorldUSA7080901001101201301925192619271928192919301931193219331934193519361937193819391940WorldUSA10
  • 11. UnemploymentSource: Karl Aiginger, (2009), Comparing the Current Crisis to the Great Depression, IMF, ILOGreat Depression(1929-32)Current Crisis(2007-11)3 3912243005101520253035World USA Germany1929 19325 5 569805101520253035World USA Advanced Economies2007 201111
  • 12. Budget DeficitSource: Karl Aiginger, (2009), Comparing the Current Crisis to the Great Depression12
  • 13. Eurozone Debt CrisisFiscal Cliff USAHard Landing in Emerging MarketsGeopolitical RisksRisk to the Global Outlook13
  • 14. TURKEY: SHORT AND MEDIUM-TERMOUTLOOK14
  • 15. Managing a Soft Landing15
  • 16. Strong Post-Crisis Recovery, butModerating GrowthSource: TURKSTATRealGDP(s.a,2007Q4=100)96,1101,688,2114,1808590951001051101152007-Q1Q2Q3Q42008-Q1Q2Q3Q42009-Q1Q2Q3Q42010-Q1Q2Q3Q42011-Q1Q2Q3Q42012-Q1Q2 16
  • 17. Turkey: Growth ProjectionsSource: MTP3,24,05,0 5,03,03,54,04,55,05,52012 2013 2014 2015RealGDPGrowth(%)17
  • 18. Rebalancing is well underwayContributiontoGrowth,%Source: TURKSTAT17,313,59,52,21,0-2,0-5,6-5,10,53,24,65,7-6-14914Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12Domestic DemandNet Export18
  • 19. PMI & Capacity UtilizationPurchasingManagersIndexSource: CBT, HSBCCapacityUtilizationRate55606570758085303540455055602007-13579112008-13579112009-13579112010-13579112011-13579112012-13579Purchasing Managers IndexCapacity Utilization Rate19
  • 20. UnemploymentRate(SeasonallyAdjusted,%)89101112131415162008-12009-12010-12011-12012-1Source: TURKSTATUnemployment is Falling20
  • 21. Unemployment Rate ProjectionsSource: MTP9,08,98,88,78,68,78,88,999,12012 2013 2014 2015(%)21
  • 22. Employment Supporting the GrowthSource: TURKSTATAdditionalEmploymentsinceEnd-2007(MnPeople,s.a.)2021222324252008-12009-12010-12011-12012-122
  • 23. Job Creation hitting Record HighAnnualAverageEmploymentGrowth(%,2007-11)Source: WEO, TURKSTAT3,9-4-3-2-101234IrelandSpainGreeceIcelandDenmarkPortugalEstoniaUSASloveniaJapanItalyFinlandCyprusFranceUnitedKingdomSlovakRepublıcCzechRepublicNetharlandNewZealandHongKongAustriaCanadaGermanyKoreaBelgiumTaiwanNorwaySwitzerlandAustraliaLuxembourgMaltaIsraelSingaporeTurkey23
  • 24. Unemployment at Decade Low,24801001201401601802002202008-12009-12010-12011-12012-1USAEU-27TurkeyUnemploymentRate,s.a.(December2007=100)
  • 25. Inflation RatesSource: TURKSTAT(%)0481216202428322003-1592004-1592005-1592006-1592007-1592008-1592009-1592010-1592011-1592012-15925
  • 26. Inflation ProjectionsSource: MTP(%)7,45,35,0 5,0456782012 2013 2014 201526
  • 27. A Rough Spot: Current Account Deficit27
  • 28. Current Account Deficit is Large, but(12MonthRolling,USDbn)Source: Central Bank of TurkeyNarrowing-80-60-40-20020402002-147102003-147102004-147102005-147102006-147102007-147102008-147102009-147102010-147102011-147102012-147Current AccountCurrent Account without Energy ImportCurrent Account + Net FDI + Net Errors and Omissions28
  • 29. Current Account Deficit: Next Three YearsSource: MTP7.37.16.96.56,46,66,877,27,42012 2013 2014 2015(%,GDP)29
  • 30. Financing Quality is ImprovingSource: CBRT(12MonthRolling,USDbn)-100102030405060708090 2007-13579112008-13579112009-13579112010-13579112011-13579112012-1357FDI Inflows and Long-Term Portfolio and Short-Term Current Account Deficit30
  • 31. REER is still Supportive of AdjustmentSource: Central Bank of TurkeyCPI-DevelopingCountries-BasedREER(2003=100)8590951001051101151201252003-147102004-147102005-147102006-147102007-147102008-147102009-147102010-147102011-147102012-14731
  • 32. Europe56.6%Other43.4%Exports 2002Diversifying away from Europe?Europe38.2%Other61.8%Exports Jan-Aug 2012Source: TURKSTAT32
  • 33. Source: TURKSTATExports to US (% Total Exports)339,33,701234567891020022012Jan-Aug
  • 34. Source: TURKSTATExports to Asia (% Total Exports)14,535,912182430362002 2012Jan-Aug34
  • 35. Source: TURKSTATMENA: a life saver?ExportstoMENA(%ofTotal)12,132,91015202530352002 2012Jan-Aug35
  • 36. Exports by Destination(2007=100)Source: TURKSTAT601201802403003602007-13579112008-13579112009-13579112010-13579112011-13579112012-1357AB-27 MENAEU 2736
  • 37. 832051015202530352000 2011Source: TURKSTATExport Diversification - INumber of Products over $1 billion37
  • 38. 530051015202530352000 2011Source: TURKSTATNumber of Export Markets over $1 billionExport Diversification -II38
  • 39. Share of Largest Five in Total Exports (%)Source: TURKSTAT2002 2011Germany 16.3 Germany 10.3USA 9.3 Iraq 6.2United Kingdom 8.4 United Kingdom 6.0Italy 6.6 Italy 5.8France 5.9 France 5.0Largest five 46.5 Largest five 33.439
  • 40. Current Account Deficitas a Structural Problem40
  • 41. Massive Savings-Investment Gap(%)10121416182022242002 2003 2004 2005 2006 2007 2008 2009 2010 2011Gap Investment/GDP Savings/GDPSource: Ministry of Development41
  • 42. Fall in Private Savings-505101520252002 2003 2004 2005 2006 2007 2008 2009 2010 2011Public Savings/GDP Private Savings/GDP(%)Source: Ministry of Development42
  • 43. High Dependency on Energy Imports72%Total Energy92%Oil98%Natural Gas43
  • 44. Source: Ministry of Development, Bloomberg*2012 May 12 Month RollingEnergy Import Bill(BrentType,Dollar/Barrel)EnergyImports(BillionDollars)9,248,354,158,82397111 111,80204060801001200102030405060702002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012AugustEnergy Import Oil Prices44
  • 45. Fiscal Performance45
  • 46. Lower Fiscal DeficitSource: Ministry of DevelopmentGen.Gov.BudgetDeficit-to-GDP,%Achieved Maastricht Criteria except 200910,87,94,1-0,11,3-0,21,65,53,00,4-20246810122002 2003 2004 2005 2006 2007 2008 2009 2010 2011Maastricht Criteria: 3%46
  • 47. Fiscal Deficit ProjectionsSource: Ministry of FinanceGen.Gov.BudgetDeficit-to-GDP,%1,61,51,20,90,81,01,21,41,61,82012 2013 2014 201547
  • 48. Lower DebtMaastricht Criteria fulfilled since 2004Source: TreasuryDebt/GDP,(%) 74,067,759,652,746,539,9 40,046,142,439,2 36,535,0 33,031,030354045505560657075802002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Maastricht Criteria: 60%48
  • 49. Public Sector Primary BalanceSource: TreasuryPublicSectorPrimaryBalance(ProgramDefined)/GDP(%)0,34,75,54,84,53,21,6-1,00,81,20,50,81,0 1,1-2,0-1,00,01,02,03,04,05,06,01993-20022003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 20152003-10 Avg: 3%49
  • 50. Source: Ministry of FinanceInterest Payments85,716,715,243,213,1 12,202040608010020022003200420052006200720082009201020112012201320142015Interest Payments/Tax Revenues (%)Interest Payments/Budget Expenditures (%)50
  • 51. Public Invesment ExpendituresPublicInvesmentExpenditures(BillionTL)Source: Ministry of Finance,5101520253035404550200220032004200520062007200820092010201120122013201420157,9 8,08,7 11,714,716,521,724,432,837,641,338,642,246,651
  • 52. 88.4-3.5-5515253545556575852002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Q2(BillionTL)Zeroing Net External Debt of the Public SectorSource: Treasury52
  • 53. 2012 August200344%47%9%Fixed Floating CPI Indexed52%30%18%Fixed Floating CPI IndexedLower Interest Rate RiskSource: TreasuryNote: Central Government Domestic Debt Stock53
  • 54. 41.972.858.127.2203040506070802002 2011TL Stock Döviz StockFX SockLower FX RiskCentralGovernmentDebtStock(%)Source: Treasury54
  • 55. Source: TreasuryNote: As of August 2012, the average maturity of domestic cash borrowing is 60.8 months.9.444.751015202530354045502002 2011Lengthening Maturity of Domestic BorrowingMaturityofDebt(Months)55
  • 56. Privatizations56
  • 57. International Recognition of Turkey’s Privatization SuccessTurkey ranked number5 in the top 10 list withits total privatizationimplementation figurefor years 2004-2008among OECD membercountriesWorld Bank: Turkey accords with the best internationalprivatization practices World Bank, CEPDL REPORTTender processes were open,transparent and competitiveand tender pre-conditionsappropriatePA pursued a broadlytransparent process, whichwas consistent withacceptable competitivepracticesPA’s use of financial advisorshas resulted in an open,transparent and competitiveprivatization processPA showed professionalismand good practices in all ofthe 20 transactions57
  • 58. Administrationleadsprivatization ofkey enterprisesin TurkeyMajor Companies in the Privatization Program of PABanking Sugar industriesElectricitydistributionNatural gasdistributionTurkish AirlinesMaritimetransportationImmovables RetailFloor tiles & cementpipes75 100 100100 49 100100 100 56Companies to beprivatized underspecial legislationNational lotteryToll roadsTelecomsElectricitygenerationTCDD Ports31,68% of shares belongingto Privatization Admin.Major Companies & Entities in Privatization Portfolio58
  • 59. Privatization in 2013(Toll Roads and Bridges)About 2,000 km of toll roadsBridges in Istanbul(Bosphorus & FSM)59
  • 60. Privatization in 2013(Electricity Generation & Distribution Assets)13 out of 21 electricity distribution networks already in private handsOffering 8 for sale
  • 61. Privatization in 2013(Gas Distribution Networks)Başkent Natural GasDistribution Company• Turkey’s 2nd largest naturalgas distribution companyIGTASDistribution CompanyTurkey’s largest naturalgas distributioncompany
  • 62. Privatization in 2013(Halkbank and Telecoms)Public Secondary Offerings forHalkbank (20.8% shares)Turkish Telecommunications Company
  • 63. Privatization in 2013National Lottery63
  • 64. Putting Our House in OrderCombattingcorruptionCreating a levelplaying fieldImprovinginternationalcompetitiveness64
  • 65. Corruption Perceptions Index (2002)(65th among 102 countries)3144 4558 59657073 74962030405060708090100 ItalyGreeceBrazilMexicoChinaTURKEYArgentinaIndiaRussiaIndonesiaSource: Transperancy Intenational65
  • 66. Corruption Perceptions Index (2011)6166 66 697375 758095100 100 100143152406080100120140160TURKEYCrotiaSlovakRepublicItalyBrazilChinaRomaniaGreeceIndiaArgentinaIndonesiaMexicoRussiaUkraine(61st among 183 countries)Source: Transperancy Intenational66
  • 67. Within the period of 2005-2012, Turkey has ranked higher than Russia, Argentina and Greece.(71st among 125 countries)384547 48535457 59697130354045505560657075ItalyIndiaGreeceChinaRussiaArgentinaBrazilMexicoIndonesiaTURKEYSource: World Economic ForumGlobal Competitiveness Index (2005)67
  • 68. Within the period of 2005-2012, Turkey has ranked higher than Russia, Argentina and Greece.(43rd among 144 countries)Source: World Economic ForumGlobal Competitiveness Index (2012)294142 434849505359 6067717378942030405060708090100ChinaPolandItalyTURKEYBrazilPortugalIndonesiaMexicoIndiaHungaryRussiaSlovakRepublicUkraineRomaniaArgentineMoved up 16 places in a year2nd fastest rising country68
  • 69. 6269 707184939710811112213113860708090100110120130140MexicoItalyUruguayRomaniaTURKEYArgentinaRussiaChinaGreeceBrazilIndonesiaIndia(84th among 175 countries)Source: World BankEase of Doing Business (2006)69
  • 70. 5371 72808790 91100113120126129132152020406080100120140160MexicoTURKEYRomaniaCrotiaItalyUruguayChinaGreeceArgentinaRussiaBrazilIndonesiaIndiaUkraine(71st among 183 countries)Source: World BankEase of Doing Business (2012)70
  • 71. International Companies Operating in Turkey(1000s)Source: Ministry of Economy5,66,78,811,715,016,119,222,025,329,630,7051015202530352002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012August71
  • 72. Foreign Direct Investment InflowsSource: CBRTBilliondollar14.8118.50204060801001201401980-2002 2003-2012 August72
  • 73. REER AppreciationSource: CBRT(2003=100)55657585951051151251351989-171990-171991-171992-171993-171994-171995-171996-171997-171998-171999-172000-172001-172002-172003-172004-172005-172006-172007-172008-172009-172010-172011-172012-17Linear Trend73
  • 74. Strong Long-Term Prospects74
  • 75. 2011Population: 75 mnGDP: $774 bn2050 (projections)Population: 94-97 mnGDP: $3.9 tn-$5.3 tnTowards 2050…Source: Turkstat, HSBC, PricewaterhouseCoopers 75
  • 76. Ambitious TargetsSource: IMF, PricewaterhouseCoopers1. USA2. China3. India4. Japan5. Germany6. Russia8. UK7. Brazil9. France10. Italy11. Mexico12. South Korea13. Spain14. Canada15. Indonesia16. Turkey17. Iran18. Australia19. Taiwan20. Poland2011 (GDP-PPP) 2050Top 10in the WorldTop 3in Europe6th in Europe16th in the World76
  • 77. Favourable DemographicsSource: EurostatShareof15-24yearsinTotalPopn(%)16,879111315171921 AndorraItalyGreeceSpainPortugalGermanySloveniaIrelandBulgariaLuxembourgSwitzerlandCroatiaCzechRepublicAustriaLiechtensteinSerbiaHungaryNetherlandsFinlandFranceDenmarkUnitedKingdomNorwaySwedenEstoniaUkraineMaltaPolandLatviaSlovakiaMontenegroLithuaniaIcelandFormerYugoslavRepublic…GeorgiaTurkeyMoldovaAzerbaijan77
  • 78. 71,930,383,468,82030405060708090Male FemaleOverall Higher EducationLabor Participation Rate2012July(%)Source: TURKSTATRoom for improvement with further education78
  • 79. Priorities & Reform Agenda79
  • 80. Priorities & Reform AgendaEducationTransportation and InfrastructureEnergyDeepening financial marketsEnhancing investment climateLabor market reformsR&D and innovation80
  • 81. Education81
  • 82. 11.368.10102030405060702002 2013Source: Ministry of FinanceResources Allocated to EducationBillionTL82
  • 83. Source: Ministry of DevelopmentSchooling ratio is Improving (Gross Rate)11.296.580.835.845.3107.693.372.51030507090110pre-primary education primary education secondary education higher education2002-2003 2010-201183
  • 84. Transportation and Infrastructure84
  • 85. 1,714 KmTotal of Motorways4,387 KmTotal of State andProvincial DualCarriagewaysTotal: 6,101 KmDual CarriagewayNetwork(January 1, 2003)2,236 KmTotal of Motorways19,565 KmTotal of State andProvincial DualCarriagewaysTotal: 21,801 KmDual CarriagewayNetwork(October 4, 2012)Motorway Network: 63,143Motorway Network: 65,35485
  • 86. Our RailwaysPRE-REPUBLIC RAILWAY NETWORK 4,136 km MAINLINEEARLY YEARS OF THE REPUBLIC (1923-1950) 3,764 km MAINLINE (134 km on annual average)1951-2003 945 km MAINLINE (18 km on annual average)2003 DEN GÜNÜMÜZE KADAR (2010 dahil) 1.076 km ANAHAT (Yılda Ortalama 135 km)UNDER CONSTRUCTION 2,047 km MAINLINE2003-2011 1,076 km MAINLINE (135 km on annual average)İSTANBULEDİRNEESKİŞEHİRPOLATLIANKARAKONYAİZMİRSİVASAFYONKAYSERİBURSA ERZİNCANERZURUMKARSMERSİNADANA GAZİANTEPDİYARBAKIRELAZIĞMALATYAZONGULDAKSAMSUNBANDIRMAVANTATVAN2010 : 11.940 km ( Konvansiyonel + Yüksek Hızlı )AdapazarıSource: Ministry of Transport2010:12,000 km (Conventional+High Speed)86
  • 87. High Speed Railway ProjectsİSTANBULESKİŞEHİR POLATLIANKARAKONYASİVAS212km533km405kmYOZGATHST lines to be completed until 2015Completed High Speed Train (HST) Lines: ANK-Eskişehir and ANK-KonyaYerköyHST lines being under-construction in 2015AFYONİZMİRMANİSA 624kmBURSABİLECİK124 km235km ERZİNCANSource: Ministry of Transport 87
  • 88. AIRPORTS AVAILABLE FORCIVIL AVIATION TRAFFIC IN TURKEY20032012Airports serving ScheduledFlight (48)Airports under Construction (6)Airports being Planned(2)The number ofairports servingscheduledflights=48The number ofairports servingscheduledflights=48The number ofairports servingscheduledflights=26The number ofairports servingscheduledflights=26Airports serving ScheduledFlight (26)88
  • 89. Energy89
  • 90. When all construction process is completed, the share of the renewableenergy resources within the total energy capacity will rise to 47%.Energy ResourcesEnergy MWInstalled Energy Capacity until 2011 52,911Renewable Energy Capacity until 2011 19,095Power plants under construction 26,118Renewable Energy Capacity under construction 17,747
  • 91. Electricity Generation from Renewable Energy33,68448 105 17434,01152,0784,726668 45057,922-200080001800028000380004800058000Hydroelectric Wind Geothermal Other Total2002 20112023 Target: Raising the share of the renewableenergy in the electricity generation by 30%Source: Ministry of Energy and Natural Resources(GW/H)
  • 92. Source: European Wind Energy Association (EWEA)Wind Energy Capacity2002 2011Rising from # 35 to # 10 in Europe.35.10.92
  • 93. Energy DemandWorld energy demand is projected to grow by 40 % until 2030.Turkey’s energy demand is projected to grow by 146 % until 2030.Source: Ministry of Energy and Natural ResourcesTurkey ranks second following the China in terms of the World energy demand.93
  • 94. Investment in Energy SectorWe invested $ 25 billion in energy over the last 9 years.We need to invest $120 billion by 2023.94
  • 95. Deepening Financial Markets95
  • 96. Strengthening the legal frameworkImproving physical infrastructureProviding financial educationNew Incentives forIstanbul as a Finance CenterMain Objective: Deepening Financial Markets96
  • 97. Strengthening the Legal FrameworkEnhancing regulatory and supervisory frameworkAdopting the best global practices & the EU acquisBuilding institutionsNo need to re-invent the wheel97
  • 98. Revising Capital Markets LawA new law with amarketperspectiveRestructuring ofISE•Regional Leadership•Raising MarketCap/GDP to 80%•1,000 newcompanies98
  • 99. Improving Physical InfrastructureIstanbul is a 24-7 living city• An exciting place to live & work• Largest city in Europe• History of 8000 years• Work in progress to tackle the trafficPurpose-built financial center• 2.5 million m2 area in Atasehir99
  • 100. Improving Financial LiteracyState run programs in countrieslike Australia, Japan, USA & UKIt is all about perception• Stock market – not a casino?• Financial education is key to making informed andeffective decision100
  • 101. Increasing Private Pensions25% State ContributionPenalty for Early Withdrawals101
  • 102. Incentives for Global Fund ManagersA tax free environment for Global FundsMaking it easier to manage assets in Turkey102
  • 103. Incentives for Venture Capital• 10% of VC Revenues• 20% of VC CapitalAllowing Venture Capital to be deducted fromCorporate & Personal Income Tax Base, up toTax Relief from Dividends103
  • 104. Incentives for Business Angels75% income tax relief onAngel Capital100% tax relief forR&D and InnovationIncome & Withholding TaxRelief on divestment of stocks104
  • 105. SukukGlobal issuance: $170 bnSimilar to euro bonds, international holders of Sukukwill not be subject to withholding taxSep-12: First Sukuk issued for $1.5bnOct-12: Sukuk denominated in TL issued for TL1.6bn105
  • 106. Enhancing Investment Climate106
  • 107. Public and private sectorrepresentatives107
  • 108. New Investment Incentive SchemeObjectives:- Reduce regional development gaps- Reduce current account deficit- Promote efficient allocation of resources to high value-added investmentsGeneralIncentivesRegionalIncentivesIncentives forLarge-ScaleProjectsIncentives forStrategicInvestments108
  • 109. YENİ TEŞVİK SİSTEMİRegional Customs DutyExemption VAT Exemption Lower CIT rate Support for theemployer’s share ofinsurance premium Allocation of Land Customs DutyExemption VAT Exemption Lower CIT rate Support for theemployer’s shareof insurancepremium Allocation ofLand Interest Support Customs DutyExemption VAT Exemption Customs DutyExemption VAT Exemption Lower CIT rate Support for theemployer’s shareof insurancepremium Allocation ofLand Interest Support VAT RebateGeneralIn the 6th Region, additional support for The employee’s share of insurance premium Income tax stoppageIncentivesLarge-Scale Strategic109
  • 110. Supporting Strategic InvestmentsStrategic Investments will be supported regardless of locationCustoms Duty ExemptionVAT ExceptionSupport for the employer’s share of insurance premium for 7 years (10years in the 6th region)90% tax reduction, of which contribution rate to investment is 50%Interest Support (Minimum 50 million TL, on condition that it does notexceed 5% of the fixed investment)Allocation of Investment LocationVAT Retubate for the building construction costs (For the investmentsamounting to 500 Million TL and above)Income Tax Stoppage Support (Only for the investments in the 6th regionfor 10 years)110
  • 111. Simplifying Tax SystemBuilding a Simple and Effective Tax system• Boosting competitiveness• Widening tax base• Increasing tax predictability• Reducing tax rates on financial transactions &intermediation• Unifying tax burden on similar financial transactions111
  • 112. New Turkish Commercial CodeTransparencyAccountabilityInstitutionalizationImprovement in investmentand business environmentAdoption of institutionalmanagement principlesOpportunity to perform legalprocesses electronically112
  • 113. Improving Business ClimateStarting a business is less costly byeliminating notarization feesTax burden is lower after lowering CITand social security contribution ratesIt is easier to pay taxes by allowing forself-assessmentIt is easier to trade across borders byusing electronic data interchange113
  • 114. Labor Market Reforms114
  • 115. National Employment Strategy4 Main ObjectivesReducing labor market rigiditiesIncreasing employment of women, youth and the disadvantageousStrengthening the link between education and employmentStrengthening the link between employment and social protection115
  • 116. Average Weekly Hours Worked on the Main JobSource: OECD50,2303234363840424446485052TurkeyKoreaMexicoGreeceCzechRepublicSlovakRepublicPolandIcelandHungarySloveniaPortugalChileEstoniaSpainFranceAustriaItalyNewZealandFinlandLuxembourgBelgiumSwedenUnitedKingdomAustraliaGermanySwitzerlandIrelandNorwayDenmarkNetherlandsHighest among the OECD countries!116
  • 117. Share of Part-time Employment (%, 2011)Source: OECD11,30510152025303540NetharlandsSwitzerlandIrelandAustraliaUnitedKingdomGermanyNewZelandJapanNorwayCanadaDenmarkAustriaBelgiumMexicoChileIcelandItalyLuxembourgSweedenIsraelFranceKoreaSpainFinlandUnitedStatesPortugalTurkeyGreeceEstoniaSloveniaPolandHungarySlovakRepublicCzechRepublıc8th lowest among the OECD countries.117
  • 118. R&D and Innovation118
  • 119. Brand Turkey, moving up the LaddersSource: Brand - FinanceWith a brand value of$487bn, Turkey ranks inthe top 20.119
  • 120. Boosting R&D InnovationCreatingBrand NamesMoving up the Value Chain120
  • 121. Why is R&D so significant for us?The share of high and medium-hightechnology sectors in production and inexport is lowBoosting R&DSource: Ministry of Development27.672.435.664.401020304050607080High and Medium-High Low and Medium-LowProduction Export121
  • 122. •0.842010•0.532002Source: The Scientific and Technological Council of TurkeyR&D Spending122
  • 123. Industrial Design Applications36,578 applications in 2011Up by 80 % since 2002Ranking 3rd in EuropeSource: TPI123
  • 124. Trademark Applications• 117,7232011• 36,4292002Source: Turkish Patent Instıtute124
  • 125. THANK YOU…125

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