Turkey: Macro Outlook, Challenges & OpportunitiesJuly 10, 2012Mehmet ŞimşekMinister of Finance1
OutlineREBALANCING ON GOING2Challenges &OpportunitiesMacroOutlookReformAgenda
MACRO OUTLOOK3
Managing a Soft Landing4
Very Strong Recovery, butModeratingSource: TURKSTATRealGDP(s.a,2007Q4=100)596.1101.688.2111.8808590951001051101152007-Q1Q2...
RebalancingContributiontoGrowth,%Source: TURKSTAT616,713,49,42,41,0-5,2 -5,10,53,24,5-6-14914Q1-11 Q2-11 Q3-11 Q4-11 Q1-12...
Composite Leading IndicatorHovering around 100(Index)7075808590951001051101152007-13579112008-13579112009-13579112010-1357...
Real Sector ConfidenceSource: Central Bank of Turkey(Index)5060708090100110120130 2007-1592008-1592009-1592010-1592011-159...
13weekmovingavg.,y-on-y%Credit Growth is RecoveringSource: Central Bank of Turkey.Note: Credit Growth is adjusted for exha...
Employment is Supportive of GrowthSource: TURKSTATAdditionalEmploymentsinceend-2007(MnPeople,s.a.)102021222324252008-12009...
Employment is Supportive of Growth113.9-5-4-3-2-1012345IrelandSpainGreeceIcelandDenmarkEstoniaPortugalJapanSloveniaItalyUn...
UnemploymentRate,s.a.(December2007=100)80901001101201301401502007-122008-122009-122010-122011-12Source: Eurostat, TURKSTAT...
Current Account Deficit13
Current Account Deficit(12MonthRolling,USDbn)Source: Central Bank of TurkeyLarge but Narrowing14-100-80-60-40-200202002-14...
Improving Financing15Source: CBRT(12MonthRolling,USDbn)-100102030405060708090 2007-13579112008-13579112009-13579112010-135...
Tighter Credit Conditions Supportive of Adjustment16Current AccountDeficit /GDP∆ Credit Stock / GDP (Right axis)CreditGrow...
REER still Supportive of AdjustmentSource: Central Bank of TurkeyCPI-DevelopingCountries-BasedREER(2003=100)85909510010511...
Europe56.6%Other43.4%Exports 200218Diversifying away from Europe?Europe40.1%Other59.9%Exports Jan-May 2012Source: TURKSTAT
19Source: TURKSTATExports to AsiaExportstoAsia(%ofTotal)14.532.51015202530352002 2012Jan-May
Source: TURKSTATMENA: life saver?2012.1301015202530352002 2012Jan-MayExportstoMENA(%ofTotal)
Exports by Destination(2007=100)Source: TURKSTAT21801001201401601802002202402007-13579112008-13579112009-13579112010-13579...
832051015202530352000 2011Source: TURKSTATExport Diversification - INumber of Products over $1 billion22
530051015202530352000 2011Source: TURKSTATNumber of Countries over $1 billion23Export Diversification -II
Share of Largest Five in Total Exports (%)Source: TURKSTAT24Largest five in total exports2002 2011Germany 16.3 Germany 10....
Current Account Deficitas a Structural Problem25
Massive Savings-Gap26(%)10121416182022242002 2003 2004 2005 2006 2007 2008 2009 2010 2011Gap Investment/GDP Savings/GDP
Falling Private Savings27-505101520252002 2003 2004 2005 2006 2007 2008 2009 2010 2011Public Savings/GDP Private Savings/G...
Competitiveness28MYR TWDHKDKRWILSCNYCLPTHBPLNCZKZARBRLIDRHUFMXNUYUINRLKRCOPSKKRUBRONPHPTRYy = 8,1785x - 36,575R² = 0,4061-...
Source: Ministry of Development, Bloomberg*2012 May 12 Month RollingEnergy Import Bill(BrentType,Dollar/Barrel)EnergyImpor...
Inflation30
Inflation Rates (1980-2012,%)107.2125.599.18,9020406080100120140 198019811982198319841985198619871988198919901991199219931...
Inflation is on the Decline32Moderate Domestic DemandSofter Commodity PricesStable Exchange RateTight Monetary Policy
Fiscal Outlook33
Lower DeficitSource: Ministry Of Finance and MTPBudgetDeficit-to-GDP,%1,41,51,41,00,50,8 0,80,40,20,40,60,81,01,21,41,6201...
Lower DebtSource: TreasuryGeneralGovernmentDebt-to-GDP,%39,437353230323436384042442011 2012 2013 2014
Lower Deficit0123456789101994-2002 2003-20117.73.3Source: Ministry of FinanceBudgetDeficit-to-GDP,%Achieved Maastricht Cri...
Lower DebtSource: TreasurySatisfying Maastricht Criteria since 200477.939.432.02030405060708020012002200320042005200620072...
Zeroing Net Public Sector External DebtSource: Treasury88.401020304050607080902002200320042005200620072008200920102011(Bil...
Lower Interest Rate Risk39Source: Treasury2012 May200344%47%9%Fixed Floating CPI Indexed52%30%18%Fixed Floating CPI Indexed
4041.972.458.127.6203040506070802002 2011TL Stock FX StockLower FX RiskSource: TreasuryCentralGovernmentDebtStock(%)
Lengthening Maturity of Domestic Borrowing*41MaturityofDebt(Months)* CashSource: Treasury9.444.7813182328333843482002 2011
42Reform Agenda
Reform Agenda43Deepening financial marketsEnhancing investment climateLabor market reformsR&D and innovationEnhancing phys...
Deepening Financial Markets44
Strengthening the legal frameworkImproving physical infrastructureProviding financial educationNew Incentives forIstanbul ...
Strengthening the Legal FrameworkEnhancing regulatory and supervisory frameworkAdopting the best global practices & the EU...
Revising Capital Markets Law47A new law with amarketperspectiveRestructuring ofISE•Regional Leadership•Raising MarketCap/G...
Improving Physical InfrastructureIstanbul is a 24-7 living city• An exciting place to live & work• Largest city in Europe•...
Improving Financial LiteracyState run programs in countrieslike Australia, Japan, USA & UK49It is all about perception• St...
Increasing Private Pensions25% State ContributionPenalty for Early Withdrawals50
Incentives for Global Fund ManagersA tax free environment for Global Funds51Making it easier to manage assets in Turkey
Incentives for Venture Capital• 10% of VC Revenues• 20% of VC CapitalAllowing Venture Capital to be deducted fromCorporate...
Incentives for Business Angels5375% income tax relief onAngel Capital100% tax relief forR&D and InnovationIncome & Withhol...
SukukGlobal issuance: $170 bnTreasury plans to issue SukukSimilar to euro bonds, international holders ofSukuk will not be...
Enhancing Investment Climate55
New Investment Incentive SchemeObjectives:- Reduce regional development gaps- Reduce current account deficit- Promote effi...
YENİ TEŞVİK SİSTEMİRegional Customs DutyExemption VAT Exemption Lower CIT rate Support for theemployer’s share ofinsur...
Supporting Strategic InvestmentsStrategic Investments will be supported regardless of locationCustoms Duty ExemptionVAT Ex...
Simplifying Tax SystemBuilding a Simple and Effective Tax system• Boosting competitiveness• Widening tax base• Increasing ...
New Turkish Commercial CodeTransparencyAccountabilityInstitutionalizationImprovement in investmentand business environment...
61Improving Business ClimateStarting a business is less costly byeliminating notarization feesTax burden is lower after lo...
Labor Market Reforms62
National Employment Strategy4 Main ObjectivesReducing labor market rigiditiesIncreasing employment of women, youth and the...
Average Weekly Hours Worked on the Main JobSource: OECD6449,33032343638404244464850TurkeyKoreaMexicoGreeceCzechRepublicSlo...
Share of Part-time Employment (%, 2010)Source: OECD6511,70510152025303540NetharlandsSwitzerlandIrelandAustraliaUnitedKingd...
Severence Pay Burden*Source: Doing Business* For a worker with 20 years of tenure, salary in weeks6686,7050100150200250Zim...
R&D and Innovation67
Brand Turkey, moving up the LaddersSource: Brand - Finance68With a brand value of$487bn, Turkey ranks inthe top 20.
Boosting R&D InnovationCreatingBrand NamesMoving up the Value Chain69
Why is R&D so significant for us?The share of high and medium-hightechnology sectors in production and inexport is lowBoos...
•0.842010•0.532002R&D spending to GDP rose by 58 %Source: The Scientific and Technological Council of Turkey71R&D Spending
Industrial Design Applications36,578 applications in 2011Up by 80 % since 2002Ranking 3rd in EuropeSource: TPI72
Trademark Applications• 36,4292002• 117,7232011Source: Turkish Patent Instıtute73
74Rising Patent Applications in Turkey10,010,511,011,512,012,513,0Turkey World12.710.72011RiseinPatentApplications(%)Sourc...
Enhancing Physical Infrastructure75
1,714 KmTotal of Motorways4,387 KmTotal of State andProvincial DualCarriagewaysTotal: 6,101 KmDual CarriagewayNetwork(Janu...
Investing in Railways AgainPRE-REPUBLIC RAILWAY NETWORK 4,136 km MAINLINEEARLY YEARS OF THE REPUBLIC (1923-1950) 3,764 km ...
High Speed Railway Projects78İSTANBULESKİŞEHİR POLATLIANKARAKONYASİVAS212km533km405kmYOZGATHST Lines under Construction: E...
Passenger Traffic at the AirportsNumber of FlightsSource: General Directorate of State Airports Authority79020040060080010...
Improving Quality of Education80
Source: OECD, PISA 2009PISA Results - Overall Reading Scale41st (among 65 countries)35037540042545047550052555081
Source: OECD, PISA 2009PISA Results - Mathematics Scale43rd (among 65 countries)82350375400425450475500525550
Source: OECD, PISA 2009PISA Results - Science Scale43rd (among 65 countries)83350375400425450475500525550
Improving Quality of EducationWith Fatih Project, we are providing our children withBroadband Internet AccessSmart BoardsT...
Reforming Judicial System85
Judicial Reforms86A judicial system that complies with internationalstandardsA package aimed at reducing major failures of...
2010 Constitutional Amendment87Reflecting the will of the peopleTowards a performance basedsystem
3rd Justice Package88For a faster, more effective and efficient judicialsystem, arrangements were made in thefollowing are...
A New ConstitutionOur goal is to have a;civilparticipatory anda democraticconstitution.89The most comprehensive constit...
Putting Our House in OrderCombattingcorruptionCreating a levelplaying fieldImprovinginternationalcompetitiveness90
Combatting CorruptionCorruption Perceptions Index2002(among 102 countries)0102030405060708090100ITALYGREECEBRAZILMEXICOCHI...
Combatting CorruptionCorruption Perceptions Index020406080100120140160TURKEYCROATIASLOVAKIAITALYBRAZILCHINAROMANIAGREECEIN...
Within the period of 2005-2012, Turkey has ranked higher than Russia, Argentina and Greece.2005(among 125 countries)010203...
0102030405060708090CHINAITALYINDONESIABRASILINDIAMEXICOTURKEYLATVIARUSSIASLOVAKREPUBLICCROTIAROMANIAUKRAINEARGENTINAGREECE...
020406080100120ITALYMEXICOARGENTINARUSSIAGREECECHINATURKEYINDONESIAINDIABRAZIL707377 79 8091 93115 116 1192006(among 155 c...
020406080100120140160MEXICOTURKEYROMANIACROATIAITALYCHINAGREECEARGENTINARUSSIABRASILINDONESIAINDIAUKRAINE5371 728087911001...
We are making progressSource: TreasuryNumberofCompanieswithInternationalCapital(Cumulative,inThousands)5.66.78.811.715.016...
Foreign Direct Investment InflowsSource: Central Bank of TurkeyBilliondollar14.8109.60204060801001201980-2002 2003-1198
99Attracting FDI23rd53rd10152025303540455055602002 2011(among 193 countries)Source: UNCTAD(among 211 countries)
REER AppreciationSource: Central Bank of Turkey10055657585951051151251351989-951991-1951993-1951995-1951997-1951999-195200...
THANK YOU…101
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Turkey: Macro Outlook, Challenges & Opportunities

  1. 1. Turkey: Macro Outlook, Challenges & OpportunitiesJuly 10, 2012Mehmet ŞimşekMinister of Finance1
  2. 2. OutlineREBALANCING ON GOING2Challenges &OpportunitiesMacroOutlookReformAgenda
  3. 3. MACRO OUTLOOK3
  4. 4. Managing a Soft Landing4
  5. 5. Very Strong Recovery, butModeratingSource: TURKSTATRealGDP(s.a,2007Q4=100)596.1101.688.2111.8808590951001051101152007-Q1Q2Q3Q42008-Q1Q2Q3Q42009-Q1Q2Q3Q42010-Q1Q2Q3Q42011-Q1Q2Q3Q42012-Q1
  6. 6. RebalancingContributiontoGrowth,%Source: TURKSTAT616,713,49,42,41,0-5,2 -5,10,53,24,5-6-14914Q1-11 Q2-11 Q3-11 Q4-11 Q1-12Domestic Demand Net Exports
  7. 7. Composite Leading IndicatorHovering around 100(Index)7075808590951001051101152007-13579112008-13579112009-13579112010-13579112011-13579112012-135Source: CBRT7
  8. 8. Real Sector ConfidenceSource: Central Bank of Turkey(Index)5060708090100110120130 2007-1592008-1592009-1592010-1592011-1592012-15Remains in the optimistic zone8
  9. 9. 13weekmovingavg.,y-on-y%Credit Growth is RecoveringSource: Central Bank of Turkey.Note: Credit Growth is adjusted for exhange movements. 923,901020304050602012 2011 2007-2011 AverageJan.Feb.Mar.Apr.May.Jun.Jul.Aug.Sep.Oct.Nov.Dec.
  10. 10. Employment is Supportive of GrowthSource: TURKSTATAdditionalEmploymentsinceend-2007(MnPeople,s.a.)102021222324252008-12009-12010-12011-12012-1
  11. 11. Employment is Supportive of Growth113.9-5-4-3-2-1012345IrelandSpainGreeceIcelandDenmarkEstoniaPortugalJapanSloveniaItalyUnitedStatesFinlandFranceUnitedKingdomSlovakRepublicCzechRepublicNetherlandsNewZealandAustriaCanadaGermanyKoreaBelgiumNorwaySwitzerlandSwedenAustraliaIsraelSingaporeTurkeyAnnualAverageEmploymentGrowth(%,2007-2011)Source: WEO, TURKSTAT
  12. 12. UnemploymentRate,s.a.(December2007=100)80901001101201301401502007-122008-122009-122010-122011-12Source: Eurostat, TURKSTATEuro AreaTurkeyEU 27Unemployment at Decade Low,12
  13. 13. Current Account Deficit13
  14. 14. Current Account Deficit(12MonthRolling,USDbn)Source: Central Bank of TurkeyLarge but Narrowing14-100-80-60-40-200202002-147102003-147102004-147102005-147102006-147102007-147102008-147102009-147102010-147102011-147102012-14Current AccountNon Energy Current AccountCurrent Account + Net FDI + Net Errors and Omissions
  15. 15. Improving Financing15Source: CBRT(12MonthRolling,USDbn)-100102030405060708090 2007-13579112008-13579112009-13579112010-13579112011-13579112012-13FDI and Long-Term Portfolio and Short-Term Current Account Deficit
  16. 16. Tighter Credit Conditions Supportive of Adjustment16Current AccountDeficit /GDP∆ Credit Stock / GDP (Right axis)CreditGrowthandCurrentAccountDeficit(%,12monthcumulative)Source: Central Bank of Turkey
  17. 17. REER still Supportive of AdjustmentSource: Central Bank of TurkeyCPI-DevelopingCountries-BasedREER(2003=100)8590951001051101151201252003-147102004-147102005-147102006-147102007-147102008-147102009-147102010-147102011-147102012-1417
  18. 18. Europe56.6%Other43.4%Exports 200218Diversifying away from Europe?Europe40.1%Other59.9%Exports Jan-May 2012Source: TURKSTAT
  19. 19. 19Source: TURKSTATExports to AsiaExportstoAsia(%ofTotal)14.532.51015202530352002 2012Jan-May
  20. 20. Source: TURKSTATMENA: life saver?2012.1301015202530352002 2012Jan-MayExportstoMENA(%ofTotal)
  21. 21. Exports by Destination(2007=100)Source: TURKSTAT21801001201401601802002202402007-13579112008-13579112009-13579112010-13579112011-13579112012-13Export to EU Export to MENA
  22. 22. 832051015202530352000 2011Source: TURKSTATExport Diversification - INumber of Products over $1 billion22
  23. 23. 530051015202530352000 2011Source: TURKSTATNumber of Countries over $1 billion23Export Diversification -II
  24. 24. Share of Largest Five in Total Exports (%)Source: TURKSTAT24Largest five in total exports2002 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 33.4
  25. 25. Current Account Deficitas a Structural Problem25
  26. 26. Massive Savings-Gap26(%)10121416182022242002 2003 2004 2005 2006 2007 2008 2009 2010 2011Gap Investment/GDP Savings/GDP
  27. 27. Falling Private Savings27-505101520252002 2003 2004 2005 2006 2007 2008 2009 2010 2011Public Savings/GDP Private Savings/GDP(%)
  28. 28. Competitiveness28MYR TWDHKDKRWILSCNYCLPTHBPLNCZKZARBRLIDRHUFMXNUYUINRLKRCOPSKKRUBRONPHPTRYy = 8,1785x - 36,575R² = 0,4061-12-8-4048124 4,2 4,4 4,6 4,8 5 5,2 5,4 5,6Source: IMF, WEFCAD/GDP(%)WEF Competitiveness Score (2011-12)
  29. 29. Source: Ministry of Development, Bloomberg*2012 May 12 Month RollingEnergy Import Bill(BrentType,Dollar/Barrel)EnergyImports(BillionDollars)948545823971111140204060801001200102030405060702002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012MayEnergy Import Oil Prices29
  30. 30. Inflation30
  31. 31. Inflation Rates (1980-2012,%)107.2125.599.18,9020406080100120140 198019811982198319841985198619871988198919901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012From double digit tosingle digit ratesSource: Central Bank of Turkey 31
  32. 32. Inflation is on the Decline32Moderate Domestic DemandSofter Commodity PricesStable Exchange RateTight Monetary Policy
  33. 33. Fiscal Outlook33
  34. 34. Lower DeficitSource: Ministry Of Finance and MTPBudgetDeficit-to-GDP,%1,41,51,41,00,50,8 0,80,40,20,40,60,81,01,21,41,62011 2012 2013 2014Central Government General Government
  35. 35. Lower DebtSource: TreasuryGeneralGovernmentDebt-to-GDP,%39,437353230323436384042442011 2012 2013 2014
  36. 36. Lower Deficit0123456789101994-2002 2003-20117.73.3Source: Ministry of FinanceBudgetDeficit-to-GDP,%Achieved Maastricht Criteria except 200936
  37. 37. Lower DebtSource: TreasurySatisfying Maastricht Criteria since 200477.939.432.020304050607080200120022003200420052006200720082009201020112012*2013*2014*Debt-to-GDP,%37
  38. 38. Zeroing Net Public Sector External DebtSource: Treasury88.401020304050607080902002200320042005200620072008200920102011(BillionTL)38
  39. 39. Lower Interest Rate Risk39Source: Treasury2012 May200344%47%9%Fixed Floating CPI Indexed52%30%18%Fixed Floating CPI Indexed
  40. 40. 4041.972.458.127.6203040506070802002 2011TL Stock FX StockLower FX RiskSource: TreasuryCentralGovernmentDebtStock(%)
  41. 41. Lengthening Maturity of Domestic Borrowing*41MaturityofDebt(Months)* CashSource: Treasury9.444.7813182328333843482002 2011
  42. 42. 42Reform Agenda
  43. 43. Reform Agenda43Deepening financial marketsEnhancing investment climateLabor market reformsR&D and innovationEnhancing physical infrastructureImproving quality of educationReforming judicial system
  44. 44. Deepening Financial Markets44
  45. 45. Strengthening the legal frameworkImproving physical infrastructureProviding financial educationNew Incentives forIstanbul as a Finance Center45Main Objective: Deepening Financial Markets
  46. 46. Strengthening the Legal FrameworkEnhancing regulatory and supervisory frameworkAdopting the best global practices & the EU acquisBuilding institutions46No need to re-invent the wheel
  47. 47. Revising Capital Markets Law47A new law with amarketperspectiveRestructuring ofISE•Regional Leadership•Raising MarketCap/GDP to 80%•1,000 newcompanies
  48. 48. 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 Atasehir48
  49. 49. Improving Financial LiteracyState run programs in countrieslike Australia, Japan, USA & UK49It is all about perception• Stock market – not a casino?• Financial education is key to making informed andeffective decision
  50. 50. Increasing Private Pensions25% State ContributionPenalty for Early Withdrawals50
  51. 51. Incentives for Global Fund ManagersA tax free environment for Global Funds51Making it easier to manage assets in Turkey
  52. 52. Incentives for Venture Capital• 10% of VC Revenues• 20% of VC CapitalAllowing Venture Capital to be deducted fromCorporate & Personal Income Tax Base, up to52Tax Relief from Dividends
  53. 53. Incentives for Business Angels5375% income tax relief onAngel Capital100% tax relief forR&D and InnovationIncome & Withholding TaxRelief on divestment of stocks
  54. 54. SukukGlobal issuance: $170 bnTreasury plans to issue SukukSimilar to euro bonds, international holders ofSukuk will not be subject to withholding tax54
  55. 55. Enhancing Investment Climate55
  56. 56. New Investment Incentive SchemeObjectives:- Reduce regional development gaps- Reduce current account deficit- Promote efficient allocation of resources to high value-added investmentsGeneralIncentivesRegionalIncentivesIncentives forLarge-ScaleProjectsIncentives forStrategicInvestments56
  57. 57. 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 Strategic
  58. 58. 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)58
  59. 59. 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 transactions59
  60. 60. New Turkish Commercial CodeTransparencyAccountabilityInstitutionalizationImprovement in investmentand business environmentAdoption of institutionalmanagement principlesOpportunity to perform legalprocesses electronically60
  61. 61. 61Improving 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 interchange
  62. 62. Labor Market Reforms62
  63. 63. 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 protection63
  64. 64. Average Weekly Hours Worked on the Main JobSource: OECD6449,33032343638404244464850TurkeyKoreaMexicoGreeceCzechRepublicSlovakRepublicPolandHungarySloveniaPortugalIcelandChileEstoniaSpainFranceAustriaItalyNewZealandFinlandLuxembourgBelgiumSwedenUnitedKingdomAustraliaGermanySwitzerlandIrelandNorwayDenmarkNetherlandsHighest among the OECD countries!
  65. 65. Share of Part-time Employment (%, 2010)Source: OECD6511,70510152025303540NetharlandsSwitzerlandIrelandAustraliaUnitedKingdomGermanyNewZelandJapanNorwayCanadaDenmarkAustriaBelgiumMexicoChileIcelandItalyLuxembourgSweedenIsraelFranceKoreaSpainFinlandUnitedStatesTurkeyPortugalGreeceEstoniaSloveniaPolandHungarySlovakRepublicCzechRepublıc9th lowest among the OECD countries.
  66. 66. Severence Pay Burden*Source: Doing Business* For a worker with 20 years of tenure, salary in weeks6686,7050100150200250ZimbabweSierraLeoneGhanaZambiaSriLankaLaoPDRMozambiqueEquatorialGuineaEgypt,ArabRep.SudanEcuadorIndonesiaGuatemalaBangladeshTurkeySpainGermanyGreeceBrazilFranceHungaryCanadaCzechRepublicUnitedKingdomIrelandRussiaRomaniaPolandUSA15th highest among 181 countries.
  67. 67. R&D and Innovation67
  68. 68. Brand Turkey, moving up the LaddersSource: Brand - Finance68With a brand value of$487bn, Turkey ranks inthe top 20.
  69. 69. Boosting R&D InnovationCreatingBrand NamesMoving up the Value Chain69
  70. 70. 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 Export70
  71. 71. •0.842010•0.532002R&D spending to GDP rose by 58 %Source: The Scientific and Technological Council of Turkey71R&D Spending
  72. 72. Industrial Design Applications36,578 applications in 2011Up by 80 % since 2002Ranking 3rd in EuropeSource: TPI72
  73. 73. Trademark Applications• 36,4292002• 117,7232011Source: Turkish Patent Instıtute73
  74. 74. 74Rising Patent Applications in Turkey10,010,511,011,512,012,513,0Turkey World12.710.72011RiseinPatentApplications(%)Source: World Intellectual Property Organization
  75. 75. Enhancing Physical Infrastructure75
  76. 76. 1,714 KmTotal of Motorways4,387 KmTotal of State andProvincial DualCarriagewaysTotal: 6,101 KmDual CarriagewayNetwork(January 1, 2003)2,236 KmTotal of Motorways18,991 KmTotal of State andProvincial DualCarriagewaysTotal: 21,227 KmDual CarriagewayNetwork(March 15, 2012)Before 2003, only 6 cities were connected to each other via dual carriageway. Now, we have 74 cities21,227 Km3,125 Km3,061 Km27,413 KmDual carriageways put into serviceDual carriageways under constructionDual-carriageways to be put out to tenderTotal76
  77. 77. Investing in Railways AgainPRE-REPUBLIC RAILWAY NETWORK 4,136 km MAINLINEEARLY YEARS OF THE REPUBLIC (1923-1950) 3,764 km MAINLINE (134 km on annual average)1951-2002 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 MAINLINE2003-2010 1,076 km MAINLINE (135 km on annual average)İSTANBULEDİRNEESKİŞEHİRPOLATLIANKARAKONYAİZMİRSİVASAFYONKAYSERİBURSA ERZİNCANERZURUMKARSMERSİNADANA GAZİANTEPDİYARBAKIRELAZIĞMALATYAZONGULDAKSAMSUNBANDIRMAVANTATVAN2010 : 11.940 km ( Konvansiyonel + Yüksek Hızlı )AdapazarıSource: Ministry of Transport2010:11.940 km (Conventional+High Speed)77
  78. 78. High Speed Railway Projects78İSTANBULESKİŞEHİR POLATLIANKARAKONYASİVAS212km533km405kmYOZGATHST Lines under Construction: ESK-İST and ANK-SİVASCompleted High Speed Train (HST) Lines: ANK-Eskişehir and ANK-KonyaYerköyHST at tender phase : Ankara-İzmir and Ankara-BursaAFYONİZMİRMANİSA 624kmBURSABİLECİK110 km
  79. 79. Passenger Traffic at the AirportsNumber of FlightsSource: General Directorate of State Airports Authority7902004006008001000120014002003 2011154.2290.3218.4460.2156.6581.3529.21,335.2Overflıght International Domestic Total(Thousand)020406080100120Domestic International9.158.325.359.034.4117.3Domestic International Total(Million)
  80. 80. Improving Quality of Education80
  81. 81. Source: OECD, PISA 2009PISA Results - Overall Reading Scale41st (among 65 countries)35037540042545047550052555081
  82. 82. Source: OECD, PISA 2009PISA Results - Mathematics Scale43rd (among 65 countries)82350375400425450475500525550
  83. 83. Source: OECD, PISA 2009PISA Results - Science Scale43rd (among 65 countries)83350375400425450475500525550
  84. 84. Improving Quality of EducationWith Fatih Project, we are providing our children withBroadband Internet AccessSmart BoardsTablet PCsOther Information Technology Tools84
  85. 85. Reforming Judicial System85
  86. 86. Judicial Reforms86A judicial system that complies with internationalstandardsA package aimed at reducing major failures of theTurkish judicial systemEnhancing civil liberties
  87. 87. 2010 Constitutional Amendment87Reflecting the will of the peopleTowards a performance basedsystem
  88. 88. 3rd Justice Package88For a faster, more effective and efficient judicialsystem, arrangements were made in thefollowing areas:Penal code,Execution and bankruptcy,Administrative justice andFreedom of press and expression.
  89. 89. A New ConstitutionOur goal is to have a;civilparticipatory anda democraticconstitution.89The most comprehensive constitutional amendmentof the Republican Era…
  90. 90. Putting Our House in OrderCombattingcorruptionCreating a levelplaying fieldImprovinginternationalcompetitiveness90
  91. 91. Combatting CorruptionCorruption Perceptions Index2002(among 102 countries)0102030405060708090100ITALYGREECEBRAZILMEXICOCHINATURKEYARGENTINAIDNIARUSSIAINDONESIA3144 455859 657073 7496Source: Transperancy Intenational91
  92. 92. Combatting CorruptionCorruption Perceptions Index020406080100120140160TURKEYCROATIASLOVAKIAITALYBRAZILCHINAROMANIAGREECEINDIAARGENTINAINDONESIAMEXICORUSSIAUKRAINE6166 66 697375 758095100 1001001431522011(among 183 countries)Source: Transperancy Intenational92
  93. 93. Within the period of 2005-2012, Turkey has ranked higher than Russia, Argentina and Greece.2005(among 125 countries)01020304050607080ITALYINDIAGREECECHINARUSSIAARGENTINABRAZILMEXICOINDONESIATURKEY384547485354 57596971Source: World Economic ForumImproving International CompetitivenessGlobal Competitiveness Index93
  94. 94. 0102030405060708090CHINAITALYINDONESIABRASILINDIAMEXICOTURKEYLATVIARUSSIASLOVAKREPUBLICCROTIAROMANIAUKRAINEARGENTINAGREECE2643465356 585964 6669767782 8590Within the period of 2005-2012, Turkey has ranked higher than Russia, Argentina and Greece.2012(among 142 countries)Source: World Economic ForumImproving International CompetitivenessGlobal Competitiveness Index94
  95. 95. 020406080100120ITALYMEXICOARGENTINARUSSIAGREECECHINATURKEYINDONESIAINDIABRAZIL707377 79 8091 93115 116 1192006(among 155 countries)Source: World BankCreating A Level Playing FieldEase of Doing Business95
  96. 96. 020406080100120140160MEXICOTURKEYROMANIACROATIAITALYCHINAGREECEARGENTINARUSSIABRASILINDONESIAINDIAUKRAINE5371 728087911001131201261291321522012(among 183 countries)Source: World BankCreating A Level Playing FieldEase of Doing Business96
  97. 97. We are making progressSource: TreasuryNumberofCompanieswithInternationalCapital(Cumulative,inThousands)5.66.78.811.715.016.219.322.125.429.4 29.9051015202530352002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Apr97
  98. 98. Foreign Direct Investment InflowsSource: Central Bank of TurkeyBilliondollar14.8109.60204060801001201980-2002 2003-1198
  99. 99. 99Attracting FDI23rd53rd10152025303540455055602002 2011(among 193 countries)Source: UNCTAD(among 211 countries)
  100. 100. REER AppreciationSource: Central Bank of Turkey10055657585951051151251351989-951991-1951993-1951995-1951997-1951999-1952001-1952003-1952005-1952007-1952009-1952011-195Linear Trend
  101. 101. THANK YOU…101

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