Turkey s economic transformation and its role in the region; full side and empty side of the glass

Transcription

1 Heart of the WORLD Turkey s economic transformation and its role in the region; full side and empty side of the glass Zuhal Mansfield Chairperson of Turkish-Egyptian Business Council ITC WEDF 2012,JAKARTA

2 Extraordinary crisis performance A stress test for our institutional infrastructure Fastest Contracting Economies in 2009 Fastest Growing Economies in 2010 Finland -8.3% Singapore 14.5% Russia -7.9% Taiwan 10.8% Hungary -6.7% China 10.3% Mexico -6.5% Argentina 9.1% Japan -6.3% Turkey 8.9% Denmark -5.2% India 8.6% Sweeden -5.1% Thailand 7.8% Italy -5.1% Brazil 7.5% England -5.0% Malasia 7.2% Turkey -4.7% Hong Kong 6.9% Slide 2

3 An overview of the recent progress of Turkish economy GDP (billion $) Per capita GDP (USD) 1,500 2,906 9,977 Number of enterprises 90, ,503 1,325,749 Exports (USD billion) Exports per worker (USD) 65 1,456 5,040 Industry share in exports 10% 92% 92% Number of exporters 1,000 25,000 50,350 Tourism revenue (billion $) 0, Ranking in the world (in terms of GDP) 25th 21st 17th Slide 3 Source: WDI, EIU, TÜİK, SSK, TİM

4 Very rapid convergence to the EU in terms of urbanization: social transformation Urban population as a percentage of the total population in Turkey and EU countries, (%), Slide 4 Source: World Bank, World Development Indicators

5 Turkey s top-5 export items (1980, share %) Turkey s top-5 export items (2010, share %) Slide 5 Source: UN COMTRADE

6 Turkey in the region: Rapid growth in manufacturing after mid-90 s Share in exports of the region and level of industrialization (1996) Country s share in total manufacturing exports of the region Share of manufacturing in Country s total exports (%) Source: UN COMTRADE, TEPAV Calculations Slide 6

7 Today Turkey is the largest manufacturer in the region Share in exports of the region and level of industrialization (2010) Country s share in total manufacturing exports of the region Share of manufacturing in Country s total exports (%) Source: UN COMTRADE, TEPAV Calculations Slide 7

8 Regional economic integration is the current trend Geographical distribution of Turkey s exports: Slide 8

9 Diversification of manufacturing throughout Turkey Change in the number of companies in Istanbul Chamber of industry Top-500 List ( , provinces with a number of companies above 5 only) Tekirdağ + 6 İstanbul Kocaeli + 40 Sakarya + 4 Samsun + 8 Ordu + 1 Trabzon + 3 İzmir - 37 Denizli 0 Bursa + 28 Balıkesir + 2 Manisa + 7 Antalya + 2 Bolu + 2 Eskişehir + 1 Karaman - 1 Ankara + 18 Konya + 12 Adana + 7 Mersin - 3 Kayseri + 10 K.Maraş + 11 Gaziantep + 15 Source: Istanbul Chmaber of Industry Slide 9 Hatay + 8

10 Export volume & integration of different Turkish cities: İstanbul USD 51 billion Kocaeli USD 10 billion Bursa USD 11.2 billion İzmir USD 6.6 billion Konya USD 1 billion Kayseri USD 1.1 billion Gaziantep USD 3.6 billion Source: TURKSTAT Slide 10

11 Star companies are in a wide range of sectors Services Manufacturing Airport Services Entertainment Mobile Marketing Arts &Ent. & Recreation Eyewear Motion Picture Automotive Factoring Services MultiplexOperator Biotech Fairs and Exhabitions Paper & Packaging Broadcasting Fleet Rental Payment Systems Brokerage House Food & Beverage Pharmaceuticals Cargo Carrier Furniture & Carpets Plastics Ceramic Tiles Health Care Real Estate Construction Household Appliances FMCG Retailing Cosmetics Retail Information and IT Security Services Dental Hospital Leasing Ship Building Edible Oil Production Logistics System Integrator Electrical Accessories Media Textile Electronics Retail Medical Equipment Travel Accessories Electronics Mineral Products Vehicle Inspection Slide 11

12 Emergence of a new middle class? Automobile Sales (in thousands) White Good Sales (in millions) Airline Passengers (in millions Mobile Phone Network Subscribers (in millions) # of People Getting House Loans (thousands) Consumer Credit + Credit Cards (billion TL) Turkey s economic transformation Source: ODD, TURKBESD, DHYMI, TBB

13 Top-10 Today s challenge in Turkey: Can we become a top-10 economy by 2023? Nominal GDP (billion USD) 1 USA 14, China 5, Japan 5, Germany 3, France 2, UK 2, Brazil 2, Italy 2, India 1, Canada 1, Russia 1, Spain 1, Mexico 1, S. Korea 1, Australia Netherlands Turkey Indonesia Turkish Economy: A Long 19 Term Switzerland Poland Output per worker (thousand USD) Source: The World Bank World Development Indicators and TEPAV calculations Slide 13

14 Next big challenge: move towards high tech? Technological composition of Turkey s exports Source: UN COMTRADE database, TEPAV calculations (Based on UNIDO classification of products by level of technology) Slide 14

15 What has Turkey done in terms of policy reform so far? 1980 policy reforms o Price reforms o Financial liberalization o Trade liberalization o Convertibility of the Turkish lira 2001 policy reforms o Banking reform prudence etc. o Privatization o Independent authorities o Fiscal and monetary discipline Slide 15

16 Missing links Public administration reform Tax reform Operational problems of the legal system Education reform-curriculum Labor market rigidities Health reform Slide 16

17 Turkey-Egypt Cooperation Opportunities: Transportation Ro-ro trips between Mersin Port Said began on 26 April Ro-Ro Trips from Istanbul and Izmir to Alexandria should also be initiated (which can also enlarged as to cover Algeria, Tunisia or Morocco) Slide 16

18 Turkey-Egypt Cooperation Opportunities: Agro industry Surging demand in Africa for food Cooperation between Turkey and Egypt in food and livestock production Especially in poultry production in Turkey: Turkey has significant advantages in poultry products production for Egyptian investors. Slide 16

19 Turkey-Egypt Cooperation Opportunities: Construction Turkey is a major global contractor: Turkey ranks 2nd after China with 33 companies according to ENR Int l 225 list US$ B Turkey generates substantial revenues from construction projects abroad # of countries Egypt, as an African Development Bank Member, and with a relatively quickly resumed construction activity following the revolution, may be a strong partner of Turkish construction sector in Sub- Saharan Africa. * * * * * * * * * * * Slide 16

20 Turkey-Egypt Cooperation Opportunities: Vocational Training Egypt is a strong investment destination for Turkey (USD 2 billion Turkish investments) Egypt needs to overcome the shortage of qualified labour to increas inward investments Vocational training is an important field of cooperation between Turkey and Egypt Slide 16

21 Turkey-Egypt Cooperation Opportunities: High Technology Investments The geographical importance and the regulatory circumstances certainly push Turkey to become the next base for high-tech products. Turkey is focused on making a leap forward in technological innovations and therefore adopted a new R&D and Innovation Support Law in 2008 (Law no.5746). R&D allowances and enhanced tax allowances Income witholding tax deduction Cash support for entrepreneurial scientists

22 :::: THANKS :::: Zuhal Mansfield President of Turkish Egyptian Business Council Economic Policy Research Foundation of Turkey Esen CAGLAR Slide 17