PSMEC - Private Sector - S3 Tayfun Bayazit

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The Private Sector Middle East Conference, Riyadh, Saudi Arabia, Dec 3rd, 2013. Hosted by the Saudi Chambers of Commerce -- Session 3 - Tayfun Bayazit, Bayazit Consulting Service

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PSMEC - Private Sector - S3 Tayfun Bayazit

  1. 1. The Private Sector in the Middle East Conference Session 3: International Experiences in Developing the Private Sector Tayfun Bayazıt Vice-President of Board of Directors TÜSİAD Dec 3rd 2013, Riyadh Turkish Economy: Dynamism of Turkish Private Sector
  2. 2. Key Drivers of the Development of Turkish Private Sector in the Last Decade • Macroeconomic stability supported by political stability – Political continuity and effective policy making – Sustained fiscal discipline • Privatization and a more liberal growth model – Successful privatization programme – Elimination of the severe crowding-out effects to unlock the potentials of the private sector – Adoption of Flexible Exchange Rate Regime • Development of economic institutions – Regulatory Reforms and Independent Regulatory and Supervisory Authorities – Strengthening of Independent Central Banking • Efforts for Further Integration with the Global Economy – Turkey’s EU Accession Bid
  3. 3. Macroeconomic Stability Driven by Political Continuity, Effective Policy Making and Sustained Fiscal Discipline
  4. 4. ...Unlocked the Potentials of the Turkish Economy
  5. 5. ... And With the Elimination of the Severe Crowding-out Effects, Especially Fiscal Dominance, Unlocked the Potentials of the Turkish Private Sector 10 Privatization and Budget Balance 3 Budget Balance (as % of GDP) Privatization Revenues (as % of GDP-right) 5 2.5 2 0 10 An Overview of Fiscal Dominance Central Government Buddget Balance (as % of GDP) EU Defined General Government Debt Stock (as % of GDP-Right) 5 1 80 70 0 60 1.5 -5 90 -5 50 8 Employment (YoY % change) 8 Public Private 6 6 4 4 2 2012 2011 2010 2009 0 2008 2012 2011 2010 2009 2008 2007 2006 2005 2 -2 2004 0 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 -15 2012 2011 2010 2009 2008 2007 2006 Asset Structure of Banking Sector (%) Government Bonds/Deposits Loans/Deposits 2003 120 100 80 60 40 20 0 2005 30 2004 0 2003 -15 2001 40 2002 0.5 -10 2000 -10 Contributions to GDP Growth (YoY % Change) Private Sector Fixed Investment Other 2.5 0.6 1.8 3.3 1993-2002 2003-2012
  6. 6. Trade Liberalization, Particularly Customs Union Has Increased the Competitiveness of Turkish Private Sector
  7. 7. Economic Coordination Platforms in Turkey Business Business The Coordination Council for the Improvement of the Investment Environment Business The Investment Advisory Council of Turkey International Investors Labor Government The Economic and Social Council Business Economy Coordination Board Labor
  8. 8. Industrial Strategy 2011-2014, Basic Sectoral Policy Document Objective: “increasing the competitiveness and efficiency of Turkish Industry and expediting the transformation to an industry structure which has more share in world exports, where mainly high-tech products with high added value are produced, which has qualified labor and which at the same time is sensitive to the environment and the society.” Increasing the weight of mid- and high-tech sectors in production and exports, Transition to high added value products in low-tech sectors Increasing the weight of companies that can continuously improve their skills Vision: “Becoming the production base of Eurasia in medium and hightech products.”
  9. 9. Industrial Strategy 2011-2014, Is It Successful • BB+ Fitch • Baa3 Standard & Poor’s Moody’s Turkey’s Rating Map (as of November 25, 2013) • BBB- Global Competitiveness
  10. 10. PPP in Turkey Has Played a Key Role in Private Sector’s Dynamism in the Last Decade PPP in TURKEY: History • Turkey is one of the first countries in the world which developed its own PPP legislation. With the Law numbered 3096 from 1984 the private sector involvement specifically in to power plants projects was allowed. • Turkey has enacted in 1994 a general law for BOT, the Law number 3996, for different infrastructure areas like transportation, energy and water supply and treatment. • On this legal basis, first implementations of PPP projects in Turkey came on agenda and several projects, mainly for electricity production, drinking water facilities have been realized as BOT and later as BO projects. • In the energy sector, between 1995 and 2001, thirty power plants with a total capacity of 8500 MW – equaling nearly one fourth of Turkey’s power production capacity have been completed under the BOT and BO models.

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