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by The Kemalist Republic of The Turkish-State. . 172 reads.

Economy of Turkey

Economy of The Kemalist Republic of The Turkish-State


Levent, business district of Turkey


Currency: Turkish Lira (₺)

Fiscal Year: End of Turkish Year
Trade Organizations: G8,G-20, OECD, WTO, ECO, BSEC and others


Internal Economy:

GDP Nominal: $1.962 trillion

GDP PPP: $3.033 trillion

GDP Rank: 8th

GDP Growth: 6.7%

GDP Per Capita: $22,547.96 (Nominal)
$35,453.58 (PPP)

GDP Per Capita: 38th (nominal)
rank 45th (PPP)

GDP by sector:
Agriculture: 8.6%
Industry: 27.1%
Services: 64.3%

Population: 3%
below
poverty line

Labor force: 39.1 million

Unemployment: 1.7%

Main industries: textiles, food processing, autos,
electronics, tourism, mining,
steel, petroleum, construction,
lumber, paper


External Economy:

Exports: $981.7 billion

Export goods: automobile, auto parts, ships,
wireless communication equipment,
apparel, foodstuffs, textiles, metal manufactures,
transport equipment, electronics

Main export partners:
Germany: 19.1%
Korea 9.6%
Iran 8.9%
Central America 6.3%
Israel 4.2%

Imports: $934.6 billion

Import goods:
machinery, chemicals, semi-finished goods,
fuels, transport equipment

Main import :
Germany 18.1%
Korea 12.5%
USA 5.4%
Iran 5.1%
China 4.2%

The economy of Turkey is defined as an emerging market economy by the IMF. Turkey is among the world's developed countries according to the CIA World Factbook. Turkey is also defined by economists and political scientists as one of the world's newly industrialized countries. Turkey has the world's 8th-largest nominal GDP. The country is among the world's leading producers of agricultural products; textiles; electronic vehicles, smart phones and other technology and transportation equipment; construction materials; consumer electronics and home appliances.


History

At the time of the collapse of the Ottoman Empire (see Economy of the Ottoman Empire) during World War I and the subsequent birth of the Republic, the Turkish economy was underdeveloped: agriculture depended on outmoded techniques and poor-quality livestock, and Turkey's industrial base was weak; the few factories producing basic products such as sugar and flour were under foreign control as a result of the capitulations.

Turkey's economy recovered remarkably once hostilities ceased. From 1923 to 1926, agricultural output rose by eighty-seven percent, as agricultural production returned to pre-war levels. Industry and services grew at more than nine percent per year from 1923 to 1929; however, their share of the economy remained quite low at the end of the decade. The government stepped in during the early 1930s to promote economic recovery, following a doctrine known as etatism. Growth slowed during the worst years of the depression, except between 1935 and 1939 when it reached six percent per year. During the 1940s, the economy stagnated, in large part because maintaining armed neutrality during World War II increased the country's military expenditures while almost entirely curtailing foreign trade.

After 1950 the country suffered economic disruptions about once a decade; the most serious crisis occurred in the late 1970s. In each case, an industry-led period of rapid expansion, marked by a sharp increase in imports, resulted in a balance of payments crisis. Devaluations of the Turkish lira and austerity programs designed to dampen domestic demand for foreign goods were implemented in accordance with International Monetary Fund guidelines. These measures usually led to sufficient improvement in the country's external accounts to make possible the resumption of loans to Turkey by foreign creditors. Although the military interventions of 1960 and 1971 were prompted in part by economic difficulties, after each intervention Turkish politicians boosted government spending, causing the economy to overheat. In the absence of serious structural reforms, Turkey ran chronic current account deficits usually financed by external borrowing that made the country's external debt rise from decade to decade, reaching by 1980 about US$16.2 billion, or more than one-quarter of annual gross domestic product. Debt-servicing costs in that year equaled 33 percent of exports of goods and services.

By the late 1970s, Turkey's economy had perhaps reached its worst crisis since the fall of the Ottoman Empire. Turkish authorities had failed to take sufficient measures to adjust to the effects of the sharp increase in world oil prices in 1973–74 and had financed the resulting deficits with short-term loans from foreign lenders. By 1979 inflation had reached triple-digit levels, unemployment had risen to about 15 percent, industry was using only half its capacity, and the government was unable to pay even the interest on foreign loans. It seemed that Turkey would be able to sustain crisis-free development only if major changes were made in the government's import-substitution approach to development. Many observers doubted the ability of Turkish politicians to carry out the needed reforms.

In January 1980, the government of Prime Minister Süleyman Demirel (who had served as prime minister 1965–71, 1975–78, and 1979–80) began implementing a far-reaching reform program designed by then Undersecretary of the Prime Ministry Turgut Özal to shift Turkey's economy toward export-led growth.

The Özal strategy called for import-substitution policies to be replaced with policies designed to encourage exports that could finance imports, giving Turkey a chance to break out of the postwar pattern of alternating periods of rapid growth and deflation. With this strategy, planners hoped Turkey could experience export-led growth over the long run. The government pursued these goals by means of a comprehensive package: devaluation of the Turkish lira and institution of flexible exchange rates, maintenance of positive real interest rates and tight control of the money supply and credit, elimination of most subsidies and the freeing of prices charged by state enterprises, reform of the tax system, and encouragement of foreign investment. In July 1982, when Özal left office, many of his reforms were placed on hold. Starting in November 1983, however, when he again became prime minister, he was able to extend the liberalization program.

The liberalization program overcame the balance of payments crisis, reestablished Turkey's ability to borrow in international capital markets, and led to renewed economic growth. Merchandise exports grew from US$2.3 billion in 1979 to US$8.3 billion in 1985. Merchandise import growth in the same period – from US$4.8 billion to US$11.2 billion – did not keep pace with export growth and proportionately narrowed the trade deficit, although the deficit level stabilized at around US$2.5 billion. Özal's policies had a particularly positive impact on the services account of the current account. Despite a jump in interest payments, from US$200 million in 1979 to US$1.4 billion in 1985, the services account accumulated a growing surplus during this period. Expanding tourist receipts and pipeline fees from Iraq were the main reasons for this improvement. Stabilizing the current account helped restore creditworthiness on international capital markets. Foreign investment, which had been negligible in the 1970s, now started to grow, although it remained modest in the mid-1980s. Also, Turkey was able to borrow on the international market, whereas in the late 1970s it could only seek assistance from the IMF and other official creditors.

The reduction in public expenditures, which was at the heart of the stabilization program, slowed the economy sharply in the late 1970s and early 1980s. Real gross national product declined 1.5 percent in 1979 and 1.3 percent in 1980. The manufacturing and services sectors felt much of the impact of this drop in income, with the manufacturing sector operating at close to 50 percent of total capacity. As the external-payments constraint eased, the economy bounced back sharply. Between 1981 and 1985, real GNP grew 3 percent per year, led by growth in the manufacturing sector. With tight controls on workers' earnings and activities, the industrial sector began drawing on unused industrial capacity and raised output by an average rate of 9.1 percent per year between 1981 and 1985. The devaluation of the lira also helped make Turkey more economically competitive. As a result, exports of manufactures increased by an average rate of 45 percent per annum during this period. Since then the Turkish economy has continued to grow.


Energy

Turkey is an oil and natural gas producer, but the level of production by the state-owned TPAO isn't large enough to make the country self-sufficient, which makes Turkey a net importer of both oil and gas. However, the recent discovery of new oil and natural gas fields in the country, particularly off the Black Sea coast of northern Anatolia; as well as in Eastern Thrace, the Gulf of İskenderun and in the provinces of the Southeastern Anatolia Region near the borders with Syria and Iraq; will help Turkey to reach a higher degree of self-sufficiency in energy production.

The pipeline network in Turkey included 1,738 kilometres (1,080 mi) for crude oil, 2,321 kilometres (1,442 mi) for petroleum products, and 708 kilometres (440 mi) for natural gas in 1999. The Baku–Tbilisi–Ceyhan pipeline, the second-longest oil pipeline in the world, was inaugurated on May 10, 2005. The pipeline delivers crude oil from the Caspian Sea basin to the port of Ceyhan on Turkey's Mediterranean coast, from where it is distributed with oil tankers to the world's markets. The planned Nabucco Pipeline will also pass from Turkey and provide the European Union member states with natural gas from the Caspian Sea basin. The Blue Stream, a major trans-Black Sea gas pipeline, is operational since November 17, 2005, and delivers natural gas from Russia to Turkey. The Tabriz–Ankara pipeline is a 2,577-kilometre-long (1,601-mile) natural gas pipeline, which runs from Tabriz in northwestern Iran to Ankara in Turkey. The pipeline was commissioned on July 26, 2001. In Erzurum, the South Caucasus Pipeline, which was commissioned on May 21, 2006, is linked to the Iran-Turkey pipeline. In the future, these two pipelines will be among the main supply routes for the planned Nabucco Pipeline from Turkey to Europe.

To cover the increasing energy needs of its population and ensure the continued raising of its living standards, Turkey plans to build several nuclear power plants. Following the construction of experimental reactors, proposals to build large scale nuclear power plants were presented as early as in the 1950s by Turkish Atomic Energy Authority, but plans were repeatedly canceled even after bids were made by interested manufacturers because of high costs and safety concerns. Turkey has always chosen CANDU reactors because they burn natural uranium which is cheap and available locally and because they can be refueled online. This has caused uneasy feelings among Turkey's neighbours because they are ideal for producing weapons-grade plutonium. Turkey's first nuclear power plants are expected to be built in Mersin's Akkuyu district on the Mediterranean coast; in Sinop's İnceburun district on the Black Sea coast; and in Kırklareli's İğneada district on the Black Sea coast.

Turkey has the fifth-highest direct utilization and capacity of geothermal power in the world.

Turkey is the tenth-ranked producer of minerals in the world in terms of diversity. Around 60 different minerals are currently produced in Turkey. The richest mineral deposits in the country are boron salts, Turkey’s reserves amount to 72% of the world's total. According to the CIA World Factbook, other natural resources include coal, iron ore, copper, chromium, uranium, antimony, mercury, gold, barite, borate, celestine (strontium), emery, feldspar, limestone, magnesite, marble, perlite, pumice, pyrites (sulfur), clay, arable land, hydropower, and geothermal power.


Tourism

Tourism in Turkey has experienced rapid growth in the last twenty years, and constitutes an important part of the economy. The Turkish Ministry of Culture and Tourism currently promotes Turkish tourism under the Turkey Home name. At its height in 2014, Turkey attracted around 42 million foreign tourists, ranking as the 6th most popular tourist destination in the world. Turkey has 17 UNESCO World Heritage Sites, such as the "Historic Areas of Istanbul", the "Rock Sites of Cappadocia", the "Neolithic Site of Çatalhöyük", "Hattusa: the Hittite Capital", the "Archaeological Site of Troy", "Pergamon and its Multi-Layered Cultural Landscape", "Hierapolis – Pamukkale", and "Mount Nemrut"; and 51 World Heritage Sites in tentative list, such as the archaeological sites or historic urban centres of Göbekli Tepe, Gordion, Ephesus, Aphrodisias, Perga, Lycia, Sagalassos, Aizanoi, Zeugma, Ani, Harran, Mardin, Konya and Alanya. Turkey hosts two of the Seven Wonders of the Ancient World: the Mausoleum in Halicarnassus and the Temple of Artemis in Ephesus.


Healthcare

Health care in Turkey consists of a mix of public and private health services. Turkey has universal health care under its Universal Health Insurance (Genel Sağlık Sigortası) system. Under this system, all residents registered with the Social Security Institution (SGK) can receive medical treatment free of charge in hospitals contracted to the SGK. There is also a large private healthcare sector. Private health services often offer shorter waiting lists and higher quality services. Most banks and insurance companies offer health plans, and contract with certain hospitals and doctors. The Turkish healthcare system used to be dominated by a centralized state system run by the Ministry of Health. In 2003 the governing Republican Peoples Party introduced a sweeping health reform program aimed at increasing the ratio of private to state health provision and making health care available to a larger share of the population. Information from the Turkish Statistical Institute states that 76.3 billion Euros are being spent on healthcare annually, with 79.6% of funding coming from the Social Security Institute and most of the remainder (15.4%) coming from out-of-pocket payments. There are 27.954 medical institutions, 4.7 doctor for every 1000 people and 2.54 beds for 1000 people. Private healthcare has increased in Turkey in the last decade due to the long queues and personal service in state-run hospitals. Most private hospitals have contracts with various insurance companies so it is now possible to receive treatment that varies from the state. After rising competition from private hospitals, there has been an increase in the quality of state hospitals. At 7.6% of gross domestic product (GDP) in 2005, Turkey’s public expenditure on national health was below average than that of the developed countries, although the percentage has increased steadily since 2000. In the early 2000s, about 63 percent of health expenditures came from public sources. In 2006 there was one doctor for every 700 people, one nurse for every 580 people, and one hospital bed for every 380 people. The rural population is poorly served by the health care system, which is much more developed in the western half of the country. Between 80 and 90 percent of the population, including self-employed workers, have health care provided by the national pension system, but are often drawn to private health providers in urban areas due to the higher-quality care. Although the private health industry has grown rapidly since the 1990s, only about 2% of the population, mainly in urban areas, has private health insurance. In 2005 about 75 percent of private health expenditures were out-of-pocket rather than being covered by insurance. Turkey had a scheme called green card (Yeşil Kart), which was developed in order to help low-income social group to get medical help. Spending on this system were equal to 40 billion TL in 2010. Due to this fact, the system was reformed in 2011 and the number of people who could benefit from this system was reduced. Following the 2012 Universal Health Insurance Law, the Green Card system was abolished. Due to major health reforms in the 2000s and 2010s, universal health insurance coverage for the population was achieved, and the general quality of health services improved greatly, with patient satisfaction rising from 39.5% in 2003 to 75.9% in 2011.


Agriculture

As of March 2007, Turkey is the world's largest producer of hazelnuts, cherries, figs, apricots, quinces and pomegranates; the second-largest producer of watermelons, cucumbers and chickpeas; the third-largest producer of tomatoes, eggplants, green peppers, lentils and pistachios; the fourth-largest producer of onions and olives; the fifth-largest producer of sugar beet; the sixth-largest producer of tobacco, tea and apples; the seventh-largest producer of cotton and barley; the eighth-largest producer of almonds; the ninth-largest producer of wheat, rye and grapefruit, and the tenth-largest producer of lemons. Turkey has been self-sufficient in food production since the 1980s. In the year 1989, the total production of wheat was 16.2 million tonnes, and barley 3.44 million tonnes. The agricultural output has been growing at a respectable rate. However, since the 1980s, agriculture has been in a state of decline in terms of its share in the total economy.

The country's large agricultural sector accounted for 29.5% of the employment in 2009. Historically, Turkey's farmers have been fairly fragmented. According to the 1990 census, "85% of agricultural holdings were under 10 hectares and 57% of these were fragmented into four or more non-contiguous plots." Many old agricultural attitudes remain widespread, but these traditions are expected to change with the EU accession process. Turkey is dismantling the incentive system. Fertilizer and pesticide subsidies have been curtailed and remaining price supports have been gradually converted to floor prices. The government has also initiated many planned projects, such as the Southeastern Anatolia Project (G.A.P project). The program includes 22 dams, 19 hydraulic power plants, and the irrigation of 1.82 million hectares of land. The total cost of the project is estimated at $32 billion.[63] The total installed capacity of power plants is 7476 MW and projected annual energy production reaches 27 billion kWh.[63] The physical realization of G.A.P. was 72.6% as of 2010. The livestock industry, compared to the initial years of the Republic, showed little improvement in productivity, and the later years of the decade saw stagnation. However, livestock products, including meat, milk, wool, and eggs, contributed to more than ​1⁄3 of the value of agricultural output. Fishing is another important part of the economy; in 2005 Turkish fisheries harvested 545,673 tons of fish and aquaculture.

The EU imported fruit and vegetables from Turkey worth €738.4 million up to September 2016, an increase of 21% compared to the same period in 2015, according to Eurostat data processed by FEPEX. Turkey is the EU's fourth largest non-EU vegetable supplier and the seventh largest fruit supplier, and the European Commission has already started the formal process for the modernization of the Customs Union Agreement.


Industry

Turkey's Vestel is the largest TV producer in Europe, accounting for a quarter of all TV sets manufactured and sold on the continent in 2006. By January 2005, Vestel and its rival Turkish electronics and white goods brand Beko accounted for more than half of all TV sets manufactured in Europe. Another Turkish electronics brand, Profilo Telra, was Europe's third-largest TV producer in 2005. Turkish companies made clothing exports worth $13.98 billion in 2006. In 2008 Turkey produced 1,225,400 motor vehicles, ranking as the fifth-largest producer in Europe (behind the United Kingdom and above Italy) and the twelfth-largest producer in the world. The automotive industry is an important part of the economy since the late 1960s. The companies that operate in the sector are mainly located in the Marmara Region. With a cluster of car-makers and parts suppliers, the Turkish automotive sector has become an integral part of the global network of production bases, exporting over $22.94 billion worth of motor vehicles and components in 2008. Turkey's annual auto exports, including trucks and buses, surpassed 1 million units for the first time in 2016 as foreign automakers' investment in new models and a recovery in its mainstay European market lifted shipments. According to industry group the Automotive Manufacturers Association, or OSD, Turkey exported 1.14 million units in 2016, up 15% from the year before. Auto exports hit a record high for the fourth straight year. Production grew 9% year on year in 2016 to 1.48 million units, setting a new record for the second consecutive year. Nearly 80% of vehicles produced in Turkey were exported. TÜLOMSAŞ (1894), TÜVASAŞ (1951) and EUROTEM (2006) are among the major producers of multiple unit trains, locomotives and wagons in Turkey, including high-speed EMU and DMU models. Turkey is one of the world's leading shipbuilding nations; in 2007 Turkish shipyards ranked 4th in the world (behind China, South Korea and Japan) in terms of the number of ordered ships, and also 4th in the world (behind Italy, USA and Canada) in terms of the number of ordered mega yachts. Turkey has many modern armament manufacturers. Annual exports reached $1.6 billion in 2014. MKEK, TAI, Aselsan, Roketsan, FNSS, Nurol Makina, Otokar, and Havelsan are major manufacturers. On July 11, 2002, Turkey became a Level 3 partner of the F-35 Joint Strike Fighter (JSF) development program. TAI builds various aircraft types and models, such as the F-16 Fighting Falcon for the Turkish Air Force. Turkey has recently launched domestically built new military/intelligence satellites including a 0.8m resolution reconnaissance satellite (Project Göktürk-1) for use by the Turkish Armed Forces and a 2m resolution reconnaissance satellite (Project Göktürk-2) for use by the Turkish National Intelligence Organization. Other important products include the Altay main battle tank, A400M, TAI TFX, TF-2000 class AAW frigate, Milgem class corvette, TAI Anka UAV, Aselsan İzci UGV, T-155 Fırtına self-propelled howitzer, J-600T missile, T-129 attack helicopter, Roketsan UMTAS anti-tank missile, Roketsan Cirit laser-guided rocket, Panter Howitzer, ACV-300, Otokar Cobra and Akrep, BMC - Kirpi, FNSS Pars 6x6 and 8x8 APC, Nurol Ejder 6x6 APC, TOROS artillery rocket system, Bayraktar Mini UAV, ASELPOD, and SOM cruise missile. Turkey ranks 8th in the list of countries by steel production. In 2013, total steel production was 29 million tonnes. Turkey’s crude steel production reached a record high of 34.1 million tons in 2011. Notable producers (above 2 million tonnes) and their ranks among top steel producing companies. TÜBİTAK is the leading agency for developing science, technology and innovation policies in Turkey. TÜBA is an autonomous scholarly society acting to promote scientific activities in Turkey.[85] TAEK is the official nuclear energy institution of Turkey. Its objectives include academic research in nuclear energy, and the development and implementation of peaceful nuclear tools. Turkish government companies for research and development in military technologies include Turkish Aerospace Industries, Aselsan, Havelsan, Roketsan, MKE, among others. Turkish Satellite Assembly, Integration and Test Center is a spacecraft production and testing facility owned by the Ministry of National Defence and operated by the Turkish Aerospace Industries. The Turkish Space Launch System is a project to develop the satellite launch capability of Turkey. It consists of the construction of a spaceport, the development of satellite launch vehicles as well as the establishment of remote earth stations. The Turkish construction and contracting industry is one of the leading, most competitive and dynamic construction/contracting industries in the world. In 2009 a total of 33 Turkish construction/contracting companies were selected for the Top International Contractors List prepared by the Engineering News-Record, which made the Turkish construction/contracting industry the world's second-largest, ranking behind those of China.


Mining

Turkey is the tenth-ranked producer of minerals in the world in terms of diversity. Around 60 different minerals are currently produced in Turkey. The richest mineral deposits in the country are boron salts, Turkey’s reserves amount to 72% of the world's total. According to the CIA World Factbook, other natural resources include coal, iron ore, copper, chromium, uranium, antimony, mercury, gold, barite, borate, celestine (strontium), emery, feldspar, limestone, magnesite, marble, perlite, pumice, pyrites (sulfur), clay, arable land, hydropower, and geothermal power.


Transport

In 2013 there were ninety-eight airports in Turkey, including 22 international airports. As of 2015, Istanbul Atatürk Airport is the 11th busiest airport in the world, serving 31,833,324 passengers between January and July 2014, according to Airports Council International. The new (third) international airport of Istanbul is planned to be the largest airport in the world, with a capacity to serve 150 million passengers per annum. Turkish Airlines, flag carrier of Turkey since 1933, was selected by Skytrax as Europe's best airline for five consecutive years from 2011 and 2015. With 435 destinations (51 domestic and 384 international) in 126 countries worldwide, Turkish Airlines is the largest carrier in the world by number of countries served as of 2016.

The total length of the rail network was 10,991 km in 2008, ranking 22nd in the world, including 2,133 km of electrified track. The Turkish State Railways started building high-speed rail lines in 2003. The first line, which has a length of 533 km from Istanbul (Turkey's largest metropolis) via Eskişehir to Ankara (the capital) is under construction and will reduce the travelling time from 6–7 hours to 3 hours and 10 minutes. The Ankara-Eskişehir section of the line, which has a length of 245 km and a projected travel time of 65 minutes, is completed. Trials began on April 23, 2007, and revenue earning service began on March 13, 2009. The Eskişehir-Istanbul section of the line is scheduled to be completed by 2012, and includes the Marmaray tunnel which will enter service in 2012 and establish the first direct railway connection between Europe and Anatolia.Second high-speed rail line, which has length of 212 km between Ankara and Konya become operational in 2011. As of 2010, the country had a roadway network of 426,951 km, including 2,080 km of expressways and 16,784 km of divided highways. As of 2010, the Turkish merchant marine included 1,199 ships (604 registered at home), ranking 7th in the world. Turkey's coastline has 1,200 km of navigable waterways. In 2008, 7,555 kilometres (4,694 mi) of natural gas pipelines and 3,636 kilometres (2,259 mi) of petroleum pipelines spanned the country's territory.


List of Economic Projects and Investments

Photo

Name

Location(s)

Nationwide bullet train network

2020 Olympics

Istanbul Stock Exchange (Market Cap=1,539)

TOGG Launch

Muhateş 5 launch

Turkish Space Agency

Enver Organization

RawReport