Turkey Investment Conference

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Turkey Investment Conference

  1. 1. BAML Turkey Investment ConferenceJanuary 2013Mehmet ŞimşekMinister of Finance
  2. 2. Outlook for Turkish Economy2
  3. 3. Strong Post‐Crisis Recovery, butGrowth has ModeratedSource: TURKSTATReal GDP  (s.a, 2007Q4=100)396.1100.088.1114.2808590951001051101152007‐Q1Q2Q3Q42008‐Q1Q2Q3Q42009‐Q1Q2Q3Q42010‐Q1Q2Q3Q42011‐Q1Q2Q3Q42012‐Q1Q2Q3
  4. 4. Soft Landing Growing EconomyNarrowing Current AccountDeficitDeclining InflationLower UnemploymentFalling Public Debt4
  5. 5. Rebalancing is largely doneContribution to Growth, pptSource: TURKSTAT517.614.27.91.9‐1.3‐2.9‐1.8‐5.6‐5.10.53.24.75.93.412.11.6‐6‐226101418Ç1‐11 Ç2‐11 Ç3‐11 Ç4‐11 Ç1‐12 Ç2‐12 Ç3‐12Domestic DemandNet ExportGrowthQ1‐11 Q2‐11 Q3‐11 Q4‐11 Q1‐12 Q2‐12 Q3‐12
  6. 6. Unemployment Rate (%)Source: TURKSTAT9.39.17891011121314151617 2008‐12009‐12010‐12011‐12012‐1Seasonally Adjusted HeadlineLowest level since 20056
  7. 7. Inflation Rate (y/y, %)Source: TURKSTAT6.2481216202428322003‐1592004‐1592005‐1592006‐1592007‐1592008‐1592009‐1592010‐1592011‐1592012‐159Lowest rate for the past 44 years7
  8. 8. Current Account Balance(12 MonthRolling, USD bn)‐528‐34.9‐80‐70‐60‐50‐40‐30‐20‐10010202002‐147102003‐147102004‐147102005‐147102006‐147102007‐147102008‐147102009‐147102010‐147102011‐147102012‐14710Non‐energyOverallExcl FDI, Net E&O8Source: Central Bank of Turkey
  9. 9. Gold Effect?Source: Central Bank of Turkey(12 MonthRolling, USD bn)‐110‐100‐90‐80‐70‐60‐50‐40‐30‐20‐10010202008‐13579112009‐13579112010‐13579112011‐13579112012‐1357911Energy Balance Gold BalanceThe Balance of Services, Revenue and Transfers The Trade Balance excluding Energy and GoldCurrent Account Balance9Net Gold Exports (12‐month Rolling)2011 Nov. 2012Billion $ ‐4.8 5.5Percent of GDP ‐0.6% 0.7%
  10. 10. Financing of the Current Account DeficitSource: Central Bank of Turkey(12 MonthRolling, USD bn)‐100102030405060708090 2007‐13579112008‐13579112009‐13579112010‐13579112011‐13579112012‐1357911FDI Inflows and Long‐Term Portfolio and Short‐Term Current Account Deficit10
  11. 11. Rising Reserves(CBRT Total Reserves, USD bn)556065707580859095100105110115120125 1/4/20074/4/20077/4/200710/4/20071/4/20084/4/20087/4/200810/4/20081/4/20094/4/20097/4/200910/4/20091/4/20104/4/20107/4/201010/4/20101/4/20114/4/20117/4/201110/4/20111/4/20124/4/20127/4/201210/4/20121/4/2013122.111Source: Central Bank of Turkey
  12. 12. Real Effective Exchange RateCPI ‐Developing Countries ‐Based REER (2003=100)859095100105110115120125 2003-147102004-147102005-147102006-147102007-147102008-147102009-147102010-147102011-147102012-1471012Source: Central Bank of Turkey
  13. 13. Europe%56.6Other%43.4Exports 2002Fallout from the EU CrisisEurope%38,8Other%62,2Exports Jan‐Nov 201213Source: TURKSTAT
  14. 14. MENA Region—A SaviorShare of MENA in total exports(%)12.131.851015202530352002 2012Jan‐Nov14Source: TURKSTAT
  15. 15. Export to MENA and EU‐27(2007=100, 3‐Month Moving Average)Source: TURKSTAT601201802403003602007-13579112008-13579112009-13579112010-13579112011-13579112012-1357911EU‐27 MENA15
  16. 16. 832051015202530352000 2011Export Diversification ‐ INumber of Products over $1 billion16Source: TURKSTAT
  17. 17. 530051015202530352000 2011Number of Export Markets over $1 billionExport Diversification ‐II17Source: TURKSTAT
  18. 18. Share of Largest Five in Total Exports (%)Top Export Markets (%, USD bn)2002 2011Germany $5,9 Germany $14,0USA $3,4 USA $8,3United Kingdom $3,0 United Kingdom $8,2Italy $2,4 Italy $7,9France $2,1 France $6,8Largest Five 46,5% Largest Five 33,4%Source: TURKSTAT
  19. 19. Overstating Current Account DeficitReference Price Practice by the CustomsDifficulties in estimating tourism revenues19
  20. 20. Stronger Growth in 201320
  21. 21. Outlook for 2013 Faster GrowthSlight Increase in C/A DeficitDeclining InflationLower UnemploymentFalling Public Debt21
  22. 22. PMI & Manufacturing IndexSource:CBT, HSBC9095100105110115120125130135303540455055602007‐147102008‐147102009‐147102010‐147102011‐147102012‐14710PMI (Left)Manufacturing Index (s.a.) (Right)22
  23. 23. Consumer & Real Sector Confidence IndexSource: CBT, TURKSTAT6570758085909510050607080901001101201302007‐13579112008‐13579112009‐13579112010‐13579112011‐13579112012‐1357911Real Sector Confidence Index (Left) Consumer Confidence Index (Right)23
  24. 24. Looser Monetary Policy( %)Source: CBRT245.009.005.754567891011121314October 11October 11December 11December 11January 12February 12March 12April 12May 12Jun 12July 12August 12September 12October 12November 12CBRT Funding Rate O/N Borrowing O/N Lending Policy Rate
  25. 25. Falling Lending Rates( %)258101214161820222426 1/4/20083/4/20085/4/20087/4/20089/4/200811/4/20081/4/20093/4/20095/4/20097/4/20099/4/200911/4/20091/4/20103/4/20105/4/20107/4/20109/4/201011/4/20101/4/20113/4/20115/4/20117/4/20119/4/201111/4/20111/4/20123/4/20125/4/20127/4/20129/4/201211/4/2012Personal Vehicle Housing CommercialSource: CBRT
  26. 26. Credit Growth26* Credit Growth is adjusted for exchange rate movementsSource: CBRT13 week moving avg., y‐on‐y %19051015202530354045 2011‐Jan.Feb.Mar.MarApr.May.Jun.July.Aug.Sep.Oct.Nov.Dec.2012‐Jan.Feb.Mar.MarApr.May.Jun.July.Aug.Sep.Oct.Nov.Dec.2013‐Jan.
  27. 27. Employment is Supportive of GrowthSource:TURKSTAT2021222324252008‐12009‐12010‐12011‐12012‐127Employment  since end‐2007 (MnPeople, s.a.)
  28. 28. Strong Job Creation283.9‐5.0‐4.0‐3.0‐2.0‐1.00.01.02.03.04.05.0 IrelandSpainGreeceIcelandDenmarkEstoniaPortugalJapanSloveniaItalyUnited StatesFinlandFranceUnited KingdomSlovak RepublicCzech RepublicNetherlandsNew ZealandAustriaCanadaGermanyKoreaBelgiumNorwaySwitzerlandSwedenAustraliaIsraelSingaporeTurkeyAnnualAverageEmploymentGrowth(%, 2007‐11)Source: WEO, TURKSTAT
  29. 29. 801001201401601802002202008‐12009‐12010‐12011‐12012‐1USAEU‐27TurkeyUnemployment at Decade LowUnemployment Rate, s.a.(December 2007=100)Source: Eurostat, TURKSTAT
  30. 30. Other Factors30Urban Renewal  Sale of 2B LandRemoval of ReciprocityInvestment Grade Rating
  31. 31. Sound Fiscal Position31
  32. 32. Lower Deficit10.87.94.10.1‐1.30.21.65.53.00.41.3 1.5 1.2 0.9‐2.00.02.04.06.08.010.012.02002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Maastricht Criteria: 3% Medium‐Term Program (2013‐15)32Achieved Maastricht Criteria except 2009Source: Ministry of FinanceBudget Deficit‐to‐GDP, %
  33. 33. 74.067.759.652.746.539.9 40.046.142.439.236.035.033.031.030.035.040.045.050.055.060.065.070.075.02002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Medium‐Term Program (2013‐15)33Lower DebtDebt‐to‐GDP, %Satisfying Maastricht Criteria since 2004Maastricht Criteria:  60%Source: Treasury
  34. 34. Net Public Sector DebtNet PublicSectorDet‐to‐GDP (%)61.518.015202530354045505560652002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Q334Source: Treasury
  35. 35. Public Sector is now a Net External Creditor88.4‐31.3‐40‐30‐20‐10010203040506070809020022003200420052006200720082009201020112012 Q3Public Net External Debt (BillionTL)35Source: Treasury
  36. 36. Government Interest Payments85.716.715.214.83.43.002040608010020022003200420052006200720082009201020112012201320142015Interest Payments/Tax Revenues (%)Interes Payments/GDP (%)Medium‐Term Program (2013‐15)36Source: Ministry of Finance
  37. 37. Public Invesment ExpendituresPublicInvesmentExpenditures(BillionTL)7.9 8.08.711.714.716.521.724.432.837.640.2510152025303540452002200320042005200620072008200920102011201237Source: Ministry of Finance
  38. 38. 38Nov, 2012200344%47%9%Fixed Floating CPI IndexedLower Interest Rate RiskSource: Treasury52%29%20%Fixed Floating CPI Indexed
  39. 39. 3941.972.858.127.2203040506070802002 2011TL Stock Döviz StockFX SockLower FX RiskCentral Government Debt Stock (%)Source: Treasury
  40. 40. 9.461.26142230384654622002 2012 Nov40Lengthening Maturity of Domestic BorrowingMaturity of  Debt(Months)Source: Treasury
  41. 41. Solid Banking Sector051015202530352003‐1592004‐1592005‐1592006‐1592007‐1592008‐1592009‐1592010‐1592011‐1592012‐159 Capital adequacy ratio is almost twice the minimum legal limit of 8 %.41Capital Adequacy Ratio, %Target Rate 12% Legal Rate 8% Source: BRSA
  42. 42. Capital Adequacy Ratio*17.48101214161820 BelgiumIrelandTurkeyDenmarkGermanyBosniaand…SwedenBulgariaAustriaEnglandHungaryFinlandRomaniaHollandPolandItalySpainFrancePortugalSloveniaSwedenGreece42( %)* Latest available ratiosSource: Banking Regulation and Supervision Agency , IMF
  43. 43. Strong Households43Source: CBRT, ECB(Household Liabilities, % of GDP, 2012 Q2)65.719.90 20 40 60 80 100 120 140 160DenmarkNetherlandsIrelandUnited KingdomPortugalSwedenSpainEuro areaFinlandMaltaGreeceGermanyFranceBelgiumAustriaLuxembourgEstoniaItalyLatviaPolandHungaryCzech RepublicSloveniaSlovakiaLithuaniaTurkey
  44. 44. Current Account Deficitas a Structural Problem44
  45. 45. (%)1012141618202224262002 2003 2004 2005 2006 2007 2008 2009 2010 2011 201245Savings‐Investment GapSource: Ministry of Development
  46. 46. ‐505101520252002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Public Savings/GDP Private Savings/GDP(%)46Source: Ministry of DevelopmentFalling Private Savings
  47. 47. Foreign Dependence on Energy Imports% 72 Total Energy% 92 Oil% 98 Natural‐gas47
  48. 48. Electricity Generation Installed CapacityKaynak: Ministry of Energy and Natural Resources48MW % of TotalCurrent Installed Capacity (Sept, 2012) 55,663‐ Renewable Energy 20,963 37.7Power Plants Under Construction 23,396‐ Renewable Energy 15,879 67.9TOTAL 79,029‐ Renewable Energy 36,843 46.6
  49. 49. Source: TURKSTAT, Bloomberg*2012 November 12 Month RollingEnergy Import Bill(Brent Type, Dollar/Barrel)Energy Imports (Billion Dollars)948546023971111140204060801001200102030405060702002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012NovEnergy Import Oil Prices49
  50. 50. Energy‐saving PotentialIndustrial sector 20%Transportation sector15%Construction sector 30%There is a considerable potential to save energy.50
  51. 51. New Steps towards better Energy EfficiencyGrants to enterprises that reduce energy intensity by 10%Occupancy permits is not provided for buildings thatare noncomplying with the minimum energy efficiencycriteria.Obsolete vehicles used by public institutions willgradually be taken off the traffic. Tax relief to remove cars older than 22 years to salvage51
  52. 52. R&D and Innovation52
  53. 53. Brand Turkey, moving up the LaddersSource: Brand ‐ FinanceWith a brand value of $373 bn, Turkey ranks 19thglobally53
  54. 54. Boosting R&D Innovation Creating Brand NamesMoving up the Value Chain54
  55. 55. 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 Export55
  56. 56. •0.862011•0.532002Source: The Scientific and Technological Council of TurkeyR&D Spending56
  57. 57. Industrial Design Applications36,578 applications in 2011Up by 80 % since 2002Ranking 3rd in EuropeSource: TPI57
  58. 58. Trademark Applications• 117,7232011• 36,4292002Source: Turkish Patent Instıtute58
  59. 59. Patent  ApplicationsKaynak: TPE591,87410,2411,0002,0003,0004,0005,0006,0007,0008,0009,00010,00011,0002002 2011
  60. 60. Reform Agenda60
  61. 61. Tax Reform61
  62. 62. Our Tax PolicySustaining Fiscal DisciplineIncreasing Employment & InvestmentsReducing Regional Development GapsEnhancing Competitiveness62
  63. 63. Simplifying Tax SystemBuilding a Simple and Effective Tax system• Boosting competitiveness• Widening tax base• Increasing tax predictability• Supporting Investments & Employment
  64. 64. Legislative Tax Reforms: CompletedCorporate Income TaxTransfer PricingCommercial Code64
  65. 65. Legislative Tax Reforms: Under ProgressPersonal Income Tax Tax Procedure Law65
  66. 66. Focusing on the tax‐payer & voluntary compliance• Improving the technological infrastructure• Risk‐based Assessments• E‐archive implementation• E‐invoicing, e‐book‐keeping• Declaration of Tax Payers’ RightsMicro‐Level Tax Reforms
  67. 67. Combatting Shadow Economy67
  68. 68. Combatting Shadow EconomyA level playing fieldImproved Business EnvironmentHealthy EconomySound Fiscal PerformanceBetter Social Safety Net68
  69. 69. Size of Shadow Economy (2012, % GDP)32.329.629.52928.627.226.52625.82524.322.821.619.419.219.217.116.4161614.814.713.813.713.512.81110.598.27.97.85101520253035BulgariaRomaniaCroatiaLithuaniaEstoniaTurkeylatviaCyprusMaltaPolandGreeceHungaryItalyPortugalAverageSpainBelgiumCzech RepSloveniaSlovakiaNorwaySweedenDenmarkFinlandGermanyirelandFranceUKNetherlandsLuxembourgAustriaSwitzerland69
  70. 70. Turkey: Size of Shadow Economy (% GDP)32.231.530.730.429.128.428.928.327.727.22627282930313233200320042005200620072008200920102011201270
  71. 71. Size of Pure Tax Evasion (% GDP)7.87.37.47.57.57.16.86.35.75.35.35.73.63.43.43.43.53.43.33.12.92.62.52.823456789199920002001200220032004200520062007200820092010Turkey Average of 38 CountriesTax evasion is on average 3 ppt higher in Turkey71
  72. 72. Privatizations72
  73. 73. 19 %$8.2 bn $35.4 bn81%Source: PA29 131 486 244 423 568 412 515 292 4661,020382,717120 536 1871,2838,222 8,0964,2596,2962,2743,0851,3583.01801.0002.0003.0004.0005.0006.0007.0008.0009.0001985–1988198919901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012(US$m)PRIVATIZATION  REVENUESTotal privatization revenue  $43.6 bnAmount of due recievables : $12 bn
  74. 74. AT THE APPROVAL STAGE DATE OF TENDER $ [Million]DOĞUSAN  22.11.2012 5.2SMALL HYDRO PP’s 27.11.2012 0.7AKDENİZ ELECTRICITY DISTRUBITION COMPANY 12.11.2012 546.0PORT AREA OF KEMERKÖY / MUĞLA 13.12.2012 31.1BOĞAZİÇİ ELECTRICITY DISTRUBITION COMPANY 14.12.2012 1,960.0MOTORWAYS & BOPHORUS BRIDGES 17.12.2012 5,720.0GEDİZ ELECTRICITY DISTRUBITION COMPANY 19.12.2012 1,231.0SEYİTÖMER THERMAL POWER PLANT 28.12.2012 2,248.0VARIOUS IMMOVABLES _ 44.3TOTAL VALUE OF THE TENDERS AT THE APPROVAL STAGE 11,786.3AT THE CLOSING STAGEVARIOUS IMMOVABLES _ 207.0SMALL HYDRO PP’s in 13 GROUPS _ 231.7TOTAL VALUE OF THE TENDERS AT THE CONTRACTING  STAGE 439.0TOTAL VALUE OF TENDERS TO BE CONTRACTED 12,225.3FINALIZED PRIVATIZATION TENDERS AT THE APPROVAL & CLOSING STAGEPRIVATIZATION  IMPLEMENTATIONS AT APPROVAL and CLOSING STAGEREAL ESTATEREAL ESTATE
  75. 75. 75% of sharesbelonging to Privatization AdministrationAdministration leads privatization of key enterprises in TurkeyMajor Companies in the  Privatization PortfolioBanking  Sugar industries Electricity distribution Natural gas distribution Turkish Airlines Maritime transportation Immovables RetailFloor tiles & cement pipes 50 100 100100 49 100100 100 56Companies to be privatized under special legislationNational lottery gamesToll motorwaysTelecomElectricity generationTCDD Ports31,68%MAJOR COMPANIES AND ENTITIES IN THE PRIVATIZATION PORTFOLIO
  76. 76. PRIVATIZATION  IMPLEMENTATIONS AT TENDER STAGECOMPANIES Bidding Deadlineİstanbul Anadolu Yakası Electricity DisCo 19.02.2013Toroslar Electricity DisCo 19.02.2013Dicle Electricity DisCo 19.02.2013Vangölü Electricity DisCo 19.02.2013Hamitabat Electricity Generation And Trade Inc. Co 28.02.2013Yeditepe Beynelminel Otelcilik Turizm ve Ticaret A.Ş. 03.04.2013Taksim Otelcilik A.Ş. 03.04.2013Kangal Electricity Generation Plant7 bids recieved17.01.2013Başkent Natural Gas Distribution6 bids recieved18.01.2013
  77. 77. Private and confidential 77Upcoming Projects • Fenerbahçe – Kalamış Marina• Mersin Taşucu Marina• Salıpazarı Cruise Port‐Galataport• Derince Container Port• İzmir Container Port• İzmir Cruise Port• Haydarpaşa Port &Train Station Transformation Project• Türk Telekom• Sugar Factories• National Lottery Games
  78. 78. Judicial Reform78
  79. 79. New Iniatives4th Judicial Reform PackageA New ConstitutionA New Patent Law79
  80. 80. Deepening Capital Markets80
  81. 81. A New Capital Markets Law81New legal framework in line with the best global practices•Increasing financial deepening & innovation•Strengthening investor rights•Improving corporate governance
  82. 82. Restructuring of ISE82Regional LeadershipRaising Market Cap/GDP to 80%1,000 new companies
  83. 83. Increasing Private Pensions25% State ContributionPenalty for Early Withdrawals83
  84. 84. Extending Maturity Period of SavingsMaturity Withholding Tax Rate (TL, %)0‐6 Months 15% 6‐12 Months 12% 1 year and over 10% Maturity Withholding Tax Rate (FX, %)0‐6 Months 18%6‐12 Months 15% 1 year and over 13% 84
  85. 85. Incentives for Global Fund ManagersA tax free environment for Global Funds85Making it easier to manage assets in Turkey
  86. 86. Incentives for Venture Capital• 10% of VC Revenues• 20% of VC CapitalAllowing contributions to Venture Capital to be deducted from Corporate & Personal Income Tax Base, up to86Tax Relief on Dividends
  87. 87. Incentives for Business Angels8775% income tax relief onAngel Capital100% tax relief forR&D and InnovationIncome & Withholding Tax Relief on divestment of stocks
  88. 88. SukukGlobal issuance:  $170 bnSimilar to euro bonds, international holders of Sukukwill not be subject to withholding taxSep‐12: Sukuk issued for $1.5bnOct‐12: Sukuk denominated in TL issued for TL1.6bn88
  89. 89. Enhancing Investment Climate89
  90. 90. New Investment Incentive SchemeObjectives:‐ Reduce regional development gaps‐ Reduce current account deficit‐ Promote efficient allocation of resources to high value‐added investmentsGeneral IncentivesRegional IncentivesIncentives for Large‐Scale ProjectsIncentives for Strategic Investments90
  91. 91. YENİ TEŞVİK SİSTEMİRegional Customs Duty Exemption VAT Exemption  Lower CIT rate Support for the employer’s share of insurance premium Allocation of Land Customs Duty Exemption VAT Exemption Lower CIT rate Support for the employer’s share of insurance premium Allocation of Land Interest Support Customs Duty Exemption VAT Exemption Customs Duty Exemption VAT Exemption  Lower CIT rate Support for the employer’s share of insurance premium Allocation of Land Interest Support VAT RebateGeneralIn the 6th Region, additional support for The employee’s share of insurance premium Income tax stoppageIncentivesLarge‐Scale Strategic91
  92. 92. Supporting Strategic InvestmentsStrategic Investments are supported regardless of locationCustoms Duty ExemptionVAT ExceptionSupport for the employer’s share of insurance premium for 7 years (10 years 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 not exceed 5% of the fixed investment) Allocation of Investment LocationVAT Retubate for the building construction costs (For the investments amounting to 500 Million TL and above)Income Tax Stoppage Support (Only for the investments in the 6th region for 10 years)92
  93. 93. Transportation and Infrastructure93
  94. 94. 1,714 KmTotal of Motorways4,387 KmTotal of State and Provincial Dual Carriageways Total: 6,101 KmDual Carriageway Network(January 1, 2003)2,236 KmTotal of Motorways19,968 KmTotal of State and Provincial Dual CarriagewaysTotal: 22,204 KmDual Carriageway Network(December 1, 2012)94
  95. 95. İSTANBULESKİŞEHİR POLATLIANKARAKONYASİVAS212 km533 km405 kmYOZGATYerköyAFYONİZMİRMANİSA624 kmBURSABİLECİK110 kmUnder constructionCompletedAt tender phase95High Speed Railway ProjectsSource: Ministry of Transport  95
  96. 96. Our Railway TargetsBy 2023$45 billion ‐ investment10 thousand km network of newhigh‐speed rail4 thousand km of newconventional railwaysBetween 2023 and 20351.480 km of high‐speed train lines956 km of conventional lines96
  97. 97. 2003 2012 2011 20129,147,43964,548,93258.258.32464,548,93225,296,21665,408,92959.362.14565,408,929672,293671,531672,29334,443,655130,630,154118,292,000130,630,154DOMESTIC INTERNATIONAL OVERFLIGHT TOTAL2003 2012 2011 2012156,582599,670579,488599,670218,405490,962462,881490,962154,218283,008292,816283,008529,2051,373,6401,335,1851,373,640DOMESTIC INTERNATIONAL OVERFLIGHT TOTALHAVALİMANLARI UÇAK – YOLCU TRAFİKLERİ97Plane Traffic at the AirportsPassenger Traffic at the Airports
  98. 98. AIRPORTS AVAILABLE FOR CIVIL AVIATION TRAFFIC IN TURKEY20032012Airports serving Scheduled Flight (49)Airports under Construction (5)Airports being Planned(2)The number of airports servingscheduled flights=49The number of airports servingscheduled flights=26Airports serving Scheduled Flight (26)98
  99. 99. Education99
  100. 100. 11.368.1102030405060702002 2013Source: Ministry of FinanceResources Allocated to Education Billion TL
  101. 101. 9.417810121416182002 2013Source: Ministry of FinanceShare of Education Budget%101
  102. 102. Gross Schooling RatesSource: Ministry of Development of Republic of Turkey11.296.580.835.846.4108.492.681.61030507090110130Preschool(age of 4‐5 )Primary School Secondary School Higher Education2002‐2003 2011‐2012102
  103. 103. Improving Quality of EducationWith Fatih Project, we are providing our children withBroadband Internet AccessSmart BoardsTablet PCsOther Information Technology Tools103
  104. 104. Labor Market104
  105. 105. Low Employment RateEarly retirementLow rate of female labor force participationRigidities in labor force market 105
  106. 106. Average Retirement Age41.044.961.963.33035404550556065Women MenTurkey OECDSource: OECD106
  107. 107. Labor Force Participation Rate, Female30.717.426.831.837.772.61020304050607080Total Illeterate Less than highschoolHigh school Vocational highschoolHigher schoolLaborForce PaticipationRate byEducation(%, October2012)OECD Average:62.3Source: TURKSTAT, OECD107
  108. 108. Improving Girls’ Education2002 201291 girlsper 100boys100.4 girlsper 100boys108
  109. 109. Average Weekly Hours Worked on the Main Job(2011) Source: OECD10948,93032343638404244464850TurkeyKoreaMexicoGreeceCzechRepublicSlovakRepublicPolandIcelandHungarySloveniaPortugalChileEstoniaSpainFranceAustriaItalyNewZealandFinlandLuxembourgBelgiumSwedenUnitedKingdomAustraliaGermanySwitzerlandIrelandNorwayDenmarkNetherlandsHighest among the OECD countries!
  110. 110. Share of Part‐time Employment (%, 2011)Source: OECD11011,70510152025303540NetharlandsSwitzerlandIrelandAustraliaUnitedKingdomGermanyNewZelandJapanNorwayCanadaDenmarkAustriaBelgiumMexicoChileIcelandItalyLuxembourgSweedenIsraelFranceKoreaSpainFinlandUnitedStatesTurkeyPortugalGreeceEstoniaSloveniaPolandHungarySlovakRepublicCzechRepublıc9th lowest among the OECD countries
  111. 111. 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 protection111
  112. 112. Long-Term Growth112
  113. 113. Determinants of Long‐Term GrowthQuality of InstitutionsDemographicsProductivity113
  114. 114. Quality of InstitutionsCombattingcorruptionCreating a levelplaying fieldImprovinginternationalcompetitiveness114
  115. 115. Corruption Perceptions Index (2002)(65th among 102 countries)3144 4558 59657073 74962030405060708090100ItalyGreeceBrazilMexicoChinaTURKEYArgentinaIndiaRussiaIndonesiaSource: Transperancy Intenational115
  116. 116. Corruption Perceptions Index (2012)(54th among 176 countries)Source: Transperancy Intenational1165469728094 94102105118133405060708090100110120130140TURKEYBrazilItalyChinaGreeceIndiaArgentineMexicoIndonesiaRussia
  117. 117. 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)117
  118. 118. (43rd among 144 countries)Source: World Economic ForumGlobal Competitiveness Index (2012)118294142 434849505359 6067717378942030405060708090100ChinaPolandItalyTURKEYBrazilPortugalIndonesiaMexicoIndiaHungaryRussiaSlovak RepublicUkraineRomaniaArgentinaMoved up 16 places in a year2nd fastest rising country
  119. 119. (84th among 175 countries)Source: World BankEase of Doing Business (2006)1196269 707184939710811112213113860708090100110120130140MexicoItalyUruguayRomaniaTURKEYArgentinaRussiaChinaGreeceBrazilIndonesiaIndia
  120. 120. (71st among 185 countries)Source: World BankEase of Doing Business (2012)1204871 727378848991112124128130 13213720406080100120140MexicoTURKEYRomaniaItalyGreeceCrotiaUruguayChinaRussiaArgentinaIndonesiaBrazilIndiaUkraine
  121. 121. EU Accession121Despite unfavorable politics of enlargement,EU accession process is relevantDespite the general perception of noprogress, the underlying trend is positive
  122. 122. Favorable Demographics122Source: EurostatShareof15-24yearsoldinTotalPopn(%)16.879111315171921AndorraItalyGreeceSpainPortugalGermanySloveniaIrelandBulgariaLuxembourgSwitzerlandCroatiaCzech RepublicAustriaLiechtensteinSerbiaHungaryNetherlandsFinlandFranceDenmarkUnited KingdomNorwaySwedenEstoniaUkraineMaltaPolandLatviaSlovakiaMontenegroLithuaniaIcelandFormer Yugoslav…GeorgiaTurkeyMoldovaAzerbaijan
  123. 123. 2.01.00.30.70.20.40.60.81.01.21.41.61.82.0Turkey USA EU‐27 OECDAnnualAveragePopulationGrowthRate(%,2001-11)Growth Rate of Working‐Age PopulationSource: OECD, Eurostat, TURKSTAT 123
  124. 124. Have Investors noticed theTransformation?124
  125. 125. Int’l Companies Operating in Turkey(1000s)Source: Ministry of Economy1255.66.78.811.715.016.119.222.025.229.631.90510152025303520022003200420052006200720082009201020112012November
  126. 126. Foreign Direct Investment InflowsSource: CBRTBilliondollar14.8121.10204060801001201401980‐2002 2003‐2012 November126
  127. 127. REER AppreciationSource: CBRT(2003=100)12755657585951051151251351989-171990-171991-171992-171993-171994-171995-171996-171997-171998-171999-172000-172001-172002-172003-172004-172005-172006-172007-172008-172009-172010-172011-172012-17Linear Trend
  128. 128. THANK YOU!Questions?128

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