CONTENTS

1. INTRODUCTION: .....................................................................................................................2
2. HISTORICAL GLIMPSE: .............................................................................................................3
3. GEOGRAPHY: ..........................................................................................................................4
3.1 GEOGRAPHICAL STATS: ................................................................................................................. 5
3.2 GEOPOLITICAL IMPORTANCE: ....................................................................................................... 7
4. POLITICAL INFORMATION: ......................................................................................................8
4.1 POLITICAL STRUCTURE: ....................................................................................................................... 8
4.2 POLITICAL STABILITY: .......................................................................................................................... 9
4.3 INTERNATIONAL RELATIONS: .............................................................................................................. 9
4.4 MAJOR DISPUTES: ............................................................................................................................. 10
5. ECONOMIC ANLAYSIS: ........................................................................................................... 11
5.1 MACROECONOMIC PERFORMANCE INDICATORS: ........................................................................... 12
5.2 TRADE PERFORMANCE:..................................................................................................................... 12
5.3 MAIN ECONOMIC SECTOR PERFORMANCE: ..................................................................................... 13
5.4 INVESTMENT: .................................................................................................................................... 18
6. PRODUCTION & RESOURCE STRUCTURE: ............................................................................... 19
6.1 MAJOR RESOURCES:.......................................................................................................................... 19
6.2 MAJOR COMPANIES: ......................................................................................................................... 20
7. HUMAN CAPITAL: ................................................................................................................. 22
8. EMERGING BUSINESSES IN EMERGING TURKEY: ..................................................................... 22
8.1 POTENTIAL BUSINESS OPPORTUNITIES ...................................................................................... 22
8.2 REASONS TO INVEST IN TURKEY: ................................................................................................ 24
9. CONCLUSION: WHY TURKEY IS AN EMERGING MARKET? ........................................................ 26
Resources: ....................................................................................................................................... 28

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COUNTRY ANALYSIS:

REPUBLIC OF TURKEY

1. INTRODUCTION:
Turkey is officially known as REPUBLIC OF TURKEY. It is a transcontinental country with
territory in both EUROPE & ASIA. Turkey has 81 PROVINCES and controls 50% of Cyprus
mainly north Cyprus known as The Turkish Republic of Northern Cyprus. ANKARA is the capital
and second largest city of turkey after ISTANBUL. Turkey celebrate its REPUBLIC DAY on
OCTOBER 29, 1923. Current president of Turkey is RECEP TAYYIP ERDOĞAN and prime
minister is BINALI YILDIRIM. The national currency of Turkey is TURKISH LIRA (TRY)
while official as well as national language is TURKISH. Its Total area is 783,562 km2 of which
1.3% is SEA/WATER and it is the 38th Largest country by total area in the world. Turkey is 18th
largest country in the world in terms of Population. Its current population is 80,845,215.

FOLLOWING ARE THE ETHNIC GROUPS AND RELIGIONS IN TURKEY

ETHNIC GROUPS (est. 2016)

Turkish 75%
Kurdish   18%
Other minorities 12%

RELIGIONS: (est. 2016)

Muslim 99.8% (mostly Sunni)

Other 00.2% (mostly Christians and Jews)

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 2. HISTORICAL GLIMPSE:
In 1453 Sultan Mehmed II the Magnificent captures Constantinople, ending Byzantine Empire and
consolidating Ottoman Empire in Asia Minor and Balkans. During 15th & 16th centuries Ottoman
Empire Expanded into Asia and Africa and in 1683 Ottoman Empire advanced into Europe but
unfortunately halted at Battle of Vienna and then eventually the Long decline of empire started. In
1908 Young Turk Revolution established constitutional rule, but degenerates into military
dictatorship during First World War, where Ottoman Empire fights in alliance with Germany,
Austria & Hungary. In the course of War
(1918-22) Partition of defeated Ottoman Empire started, leading to ensuing triumph of Turkish
National Movement in war of independence against foreign occupation and rule of Sultan.Modern
day Turkey was founded in 1923 and named as Republic of Turkey, from the remnants of the
defeated Ottoman Empire by national hero Mustafa Kemal, who was later honored with the title
Ataturk or "Father of the Turks” Under his leadership, the country adopted radical social, legal,
and political reforms. After a period of one-party rule, an experiment with multi-party politics led
to the 1950 election victory of the opposition Democrat Party and the peaceful transfer of power.
Since then, Turkish political parties have multiplied, but democracy has been fractured by periods
of instability and military coups (1960, 1971, 1980), which in each case eventually resulted in a
return of formal political power to civilians. In 1997, the military again helped engineer the ouster
- popularly dubbed a "post-modern coup" - of the then Islamic-oriented government. A coup
attempt was made in July 2016 by a faction of the Turkish Armed Forces.
Turkey intervened militarily on Cyprus in 1974 to prevent a Greek takeover of the island and has
since acted as patron state to the "Turkish Republic of Northern Cyprus," which only Turkey
recognizes. A separatist insurgency begun in 1984 by the Kurdistan Workers' Party (PKK), a US-
designated terrorist organization, has long dominated the attention of Turkish security forces and
claimed more than 40,000 lives. In 2013, the Turkish Government and the PKK conducted
negotiations aimed at ending the violence, however intense fighting resumed in 2015. Turkey
joined the UN in 1945 and in 1952 it became a member of NATO. In 1963, Turkey became an
associate member of the European Community; it began accession talks with the EU in 2005.
Over the past decade, economic reforms, coupled with some political reforms, have contributed to
a growing economy, although economic growth slowed in recent years.
From 2015 and continuing through 2016, Turkey witnessed an uptick in terrorist violence,
including major attacks in Ankara, Istanbul, and throughout the predominantly Kurdish
southeastern region of Turkey. On 15 July 2016, elements of the Turkish Armed forces attempted
a coup that ultimately failed following widespread popular resistance. More than 240 people were
killed and over 2,000 injured when Turkish citizens took to the streets en masse to confront the
coup forces. In response, Turkish Government authorities arrested, suspended, or dismissed
more than 100,000 security personnel, journalists, judges, academics, and civil servants due to
their alleged connection with the attempted coup. The government accused followers of an
Islamic transnational religious and social movement for allegedly instigating the failed coup
and designates the followers as terrorists. Following the failed coup, the Turkish Government
instituted a State of Emergency in July 2016 that has been extended to July 2017. The Turkish
Government conducted a referendum on 16 April 2017 that will, when implemented, change
Turkey from a parliamentary to a presidential system.

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 3. GEOGRAPHY:
The lands of Turkey are located at a point where the three continents making up the old world,
Asia, Africa and Europe are closest to each other.
Turkey is situated on an area where Europe meets Asia, creating a link between these two
continents. The European part of the country is called Thrace, while the Asian part is known as
Anatolia (or Asia Minor). It is bordered to the northwest by Greece and Bulgaria, to the east by
the former USSR (Georgia, Armenia, and Azerbaijan Republics) and Iran, and to the south by Iraq
and Syria.
The Turkish peninsula is bathed by four seas: the Mediterranean to the south, the Aegean to the
west, the Sea of Marmara between the European and Asian land masses, and the Black Sea to the
north. The entire coastline spans more than 8,000 kilometers (approximately 5,000 miles) in
length.

Because of its geographical location the mainland of Anatolia has always found favor throughout
history, and is the birthplace of many great civilizations. It has also been prominent as a center of
commerce because of its land connections to three continents and the sea surrounding it on three
sides.

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3.1 GEOGRAPHICAL STATS:
Total area: 783,562 square km
Land area: 769,632 square km
Area:
Thrace (Europe): 23,764 square km.
38th largest in the Anatolia (Asia): 755,688 square km.
world
Max. length: 1,565 km.
Average width: 550km.

Total: 8,372 km.

Aegean: 2,805 km.
Coastline: Mediterranean: 1,577 km.
Black Sea: 1,695 km.
Marmara: 927 km.

Total: 2,753 km.

Syria: 877 km.
Georgia, Armenia,
610 km
Azerbaijan ( Former USSR)
Land Boundaries: Iran: 454 km.
Iraq: 331 km.
Bulgaria: 269 km.
Greece: 212 km.

Arable land: 30%

Permanent crops: 4%
Land Use: Meadows and pastures: 12%
Forest and woodland: 26%
Other: 28%

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 Total: 9,423 square km.
Van, Tuz Golu (Salt Lake),
Lakes: Beysehir, Egridir, Aksehir, Iznik,
In order of size:
Burdur, Manyas, Acigol, Ulubat
(Apolyont).

Mt. Ararat: 5,165 m.

Kackar; 3,923 m.
Erciyes; 3,917 m.
Mountains B Hasan; 3,268 m.

Max. altitude: Nemrut: 2,282 m.

Uludag (Mt. Olympus): 2,543 m.
Average altitude; 1,131 m.
Land above 500 m. altitude 80%

Firat (Euphrates): 1,263 km. (in Turkey)

Kizilirmak: 1,182 km.
Sakarya: 824 km.
Murat: 722 km.
Seyhan: 560 km.
Menderes (Meander): 584 km.
Rivers:
Dicle (Tigris): 523 km. (in Turkey)
Yesilirmak: 519 km.
Ceyhan: 509 km.
Porsuk: 488 km.
Coruh: 442 km.
Gediz: 401 km.

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 Aegean Sea: Gokceada, Bozcaada, Uzunada, Alibey
Marmara Avsa Isles: Eknik, Koyun, Pasalimani
Islands: Buyukada, Heybeliada, Burgaz, Kinali,
Princes' Isles:
Sedef,
Mediterranean: Karaada, Salih, Kekova

Bosphorus Links Black Sea to Marmara Sea

Straits:
Dardanelles Links Marmara Sea to Aegean Sea

Marmara,
Aegean,
Mediterranean,
Seven geographical and
Regions: administrative regions:
Black Sea,
Central Anatolia,
East Anatolia,
Southeastern Anatolia

3.2 GEOPOLITICAL IMPORTANCE:

The world is undergoing rapid and tremendous changes in the post-Cold War era. Turkey’s unique
location, vigorous market economy, well-established tradition of co-operating with the West and
large armed forces, second in size after the US in NATO, makes it a geo-strategic player in world
affairs. The geopolitically important area called the heartland of Eurasia, located on the periphery
of Turkey, has always been a centre of world politics. Turkey’s unique location provides certain
leverages for international influence. Turkey is centrally situated between Europe, where much of
the world’s political and economic power is concentrated, and Asia, which has lately become a
vital centre of economic growth and rising political influence. Turkey fully supports the Middle
East Peace Process by maintaining a balanced position that considers the legal rights and interests
of all parties. Steadily increasing relations between two democratic countries of the region, Turkey
and Israel, are expected to give momentum to the peace and stability efforts in the area. Today,
Turkey’s geopolitical influence is expanding across continents. Turkey exercises a powerful
influence on all the states on its periphery, particularly the Caucasus and this influence continues
into the Central Asian states where a Turkic ethno-linguistic zone extends eastward to the Chinese
border.

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Turkey’s importance derives from the following factors:
o It stabilizes the Black Sea region
o It controls the Turkish Straits
o It serves as the southeastern anchor for NATO
o It balances Russia in the entire southeastern zone, which includes the Caucasus
o It acts as a model for the newly independent countries in the region and helps
them to protect their independence and entrance into the international community
o It plays an important role as an energy bridge between the rich natural resources
of the Caspian basin and Central Asia, and the Western world
o It serves as a springboard for the progressive expansion of Western values deeper
eastward
o It acts as an active geo-strategic player in the region, particularly eastward, with
the ability to affect existing volatile geopolitical states of affairs
o It acts as a pivotal country in Balkan and Middle Eastern affairs
o With its secular regime, it offers a dynamic alternative to fundamentalism.

4. POLITICAL INFORMATION:
4.1 POLITICAL STRUCTURE:

The politics of Turkey takes place in a framework of a secular parliamentary representative

democratic republic, whereby the Prime Minister of Turkey is the head of government, and the
President of Turkey is the head of state who holds a largely ceremonial role with substantial reserve
powers.
Turkey's political system is based on a separation of powers. Executive power is exercised by the
Council of Ministers. Legislative power is vested in the Grand National Assembly of Turkey. The
judiciary is independent of the executive and the legislature. Its current constitution was adopted
on 7 November 1982 after the Turkish constitutional referendum.
EXECUTIVE BRANCH:
CHIEF OF THE STATE: PRESIDENT RECEP TAYYIP ERDOĞAN
HEAD OF THE GOVT.: PRIME MINISTER BINALI YILDIRIM
CABINET: COUNCIL OF MINISTERS

The function of head of state is performed by the President. A President is elected every five years
on the principle of universal suffrage according to the current constitution. The president does not
have to be a member of parliament, but he/she must be over 40 years old and holds a bachelor's
degree. The current president Recep Tayyip Erdoğan was directly elected in 2014. Executive
power rests with the president, the prime minister, and the Council of Ministers.
Most ministers are members of Parliament. (Kemal Derviş's 17 months' tenure in 2001-'02 as
Minister of Economic Affairs was one exception.) The prime minister is appointed by the president
and approved through a vote of confidence (güvenoyu) in the parliament. The Prime Minister of
Turkey (Turkish: Başbakan) is the head of government of Turkey. He is the leader of a political
coalition in the Turkish parliament (Meclis) and the leader of the cabinet.
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The current holder of the position is Binali Yıldırım of the Justice and Development Party (AKP),
who took office on 24 May 2016 and replaced the former Prime Minister Ahmet Davutoğlu (also
from Justice and Development Party - AKP).
4.2 POLITICAL STABILITY:

Turkey since it’s declaration as republic state faced many critical circumstances in terms of
political stability. Turkey faced successful coup attempts in 1960, 1971, 1980 & a soft coup in
1997. The extremism, violence & terror created by Kurdistan Worker’s Party also leads to political
instability, Furthermore the national disputes which will be discussed later are also creating
problems for the country and the recent unsuccessful coup attempt of 2016 and the referendum of
April 2017 of switching to presidential system shows the positive mobility of Turkish nation
towards more stable political situation and makes it more attractive emerging market as the people
of turkey are loyal towards present government and also with the democratic system. It shows
virtuous sign that in upcoming future turkey political condition will become more stable as well
as its markets which leads to stronger economy and it will become attractive market for
International players to invest.
4.3 INTERNATIONAL RELATIONS:

DIPLOMATIC RELATIONS OF TURKEY: At present, the capital city Ankara hosts 127
Embassies and in addition there are 341 consulates. Currently, Turkey maintains 136 embassies
abroad as well as 182 consulates.
ASSOCIATION WITH MAJOR INTERNATIONAL ORGANIZATION:
o Turkey is a founding member of the UNITED NATION (1945)
o The Organisation for Economic Co-operation and Development (1961),
o The Organisation of Islamic Cooperation (1969)
o The Organization for Security and Co-operation in Europe (OSCE) (1973),
o The G20 nations (1999).
o The D-8 Countries (1996)
o Turkey is a member state of the Council of Europe (1949).
o In 1992, Turkey and 10 other regional nations formed the Black Sea Economic
Corporation to expand regional trade and economic cooperation
o Full accession negotiations with the European Union since 2005, having been an
associate member since 1963.
o Signed the E.U. Customs agreement in 1995.
o Turkey entered NATO in 1952 and serves as the organization's vital eastern anchor,
controlling the Turkish Straits which lead from the Black Sea to the Mediterranean
and sharing a border with Syria, Iraq, and Iran. A NATO headquarters is located in
İzmir, and the United States has maintained air forces at the Incirlik Air Base in the
province of Adana.

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 o Turkey is also a member of the World Trade Organization (WTO) since 1995. It has
signed free trade agreements with the European Free Trade Association (EFTA),
Pakistan, Israel, and many other countries.
4.4 MAJOR DISPUTES:

THE KURDISH–TURKISH CONFLICT:

It is an armed conflict between the Republic of Turkey and various Kurdish insurgent groups,
which have demanded separation from Turkey to create an independent Kurdistan, or to have
autonomy and greater political and cultural rights for Kurds inside the Republic of Turkey. The
main rebel group is the Kurdistan Workers' Party or PKK (Kurdish: Partiya Karkerên Kurdistan).
Although insurgents have carried out attacks in many regions of Turkey, the insurgency is mainly
in southeastern Turkey. The PKK's presence in Iraq's Kurdistan Region, from which it has also
launched attacks, has resulted in the Turkish military carrying out frequent ground incursions and
air and artillery strikes in the region. The conflict has cost the economy of Turkey an estimated
300 to 450 billion dollars, mostly military costs. It has also affected tourism in Turkey.

AEGEAN DISPUTE:
The Aegean dispute is a set of interrelated controversial issues for decades between Greece and
Turkey over sovereignty and related rights in the area of the Aegean Sea. This set of conflicts has
had a large effect on Greek-Turkish relations since the 1970s. It has twice led to crises coming
close to the outbreak of military hostilities, in 1987 and in early 1996. The issues in the Aegean
fall into several categories:
 The delimitation of the territorial waters,
 The delimitation of the national airspace,
 The delimitation of exclusive economic zones and the use of the continental shelf,
 The delimitation of Flight Information Regions (FIR), and their significance for the control
of military flight activity,
 The issue of the demilitarized status assigned to some of the Greek islands in the area,
 Turkish claims of "grey zones" of undetermined sovereignty over a number of small islets,
most notably the islets of Imia/Kardak.
Since 1998, the two countries have been coming closer to overcome the tensions through a series
of diplomatic measures, particularly with a view to easing Turkey's accession to the European
Union. However, as of 2010, differences over suitable diplomatic paths to a substantial solution
are still unresolved.
CYPRUS DISPUTE:
The Cyprus dispute or Cyprus issue is the ongoing issue of military invasion and continuing
Turkish occupation (since 1974) of the northern third of the island, a situation described and
deplored in multiple UN reports and resolutions.

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Although the Republic of Cyprus is recognized as the sole legitimate state, sovereign over all the
island, the north is de facto under the administration of the self-declared Turkish Republic of
Northern Cyprus which is guarded by Turkish Armed Forces. Currently only Turkey recognizes
the Turkish Republic of Northern Cyprus, while there is broad recognition that the ongoing
military presence constitutes occupation of territories that belong to the Republic of Cyprus.
According to the European Court of Human Rights, the Turkish Republic of Northern Cyprus
should be considered as a puppet state under Turkish effective control.

5. ECONOMIC ANLAYSIS:
Turkey has the world's 17th-largest nominal GDP (i.e. $905 billion), and 13th-largest GDP by PPP
(i.e. $25,000). The country is a founding member of the OECD (1961) and the G-20 major
economies (1999). Since December 31, 1995, Turkey is also a part of the EU Customs Union.
Turkey has been meeting the “60 percent EU Maastricht criteria” for public debt stock since 2004.
Similarly, from 2002 to 2011, the budget deficit decreased from more than 10 percent to less than
3 percent, which is one of the EU Maastricht criteria for the budget balance.
The CIA classifies Turkey as a developed country. Turkey is often classified as a newly
industrialized country by economists and political scientists; while Merrill Lynch, the World Bank,
and The Economist describe Turkey as an emerging market economy.
The World Bank classifies Turkey as an upper-middle income country in terms of the country's
per capita GDP in 2007. Mean graduate pay was $10.02 per man-hour in 2010. Turkey's labour
force participation rate of 56.1% is by far the lowest of the OECD states which have a median rate
of 74%.
According to a survey by Forbes magazine, Istanbul, Turkey's financial capital, had a total of 37
billionaires in 2013, ranking 5th in the world behind Moscow (84 billionaires), New York City (62
billionaires), Hong Kong (43 billionaires) and London (43 billionaires).
In 2009 the Turkish government introduced various economic stimulus measures to reduce the
impact of the 2007–2012 global financial crisis such as temporary tax cuts on automobiles, home
appliances, and housing. As a result, the production of durable consumer goods increased by 7.2%,
despite a decrease in automotive production.
The Turkish Stock Market and credit rating agencies have responded positively. According to The
Economist, share prices in Turkey nearly doubled over the course of 2009. On 8 January 2010,
International credit rating agency Moody's upgraded Turkey's rating one notch.
According to the Financial Times Special Report on Turkey, Turkish business executives and
government officials believe the quickest route to achieving export growth lies outside of
traditional western markets. According to Daniel Dombey of the Financial Times, a bit over five
years ago, the "European Union accounted for much more than half of all Turkey’s exports. Now
the figure is heading down toward not much more than a third”. Erdem Başçı, Turkey’s central
bank governor, predicts that Iraq will eventually become Turkey’s largest export market. The
Turkish government is intricately involved in helping to facilitate private sector expansion in
emerging markets. “The government has a strategic vision, saying: “We will open up more
embassies in growth regions and emerging markets such as Africa, Turkish Airlines will fly there,
so Turkish businessmen can go there to do business there” says Hüsnü Özyeğin, one of Turkey’s
most prominent businessmen and bankers. Similarly, Ahmet Davutoğlu, Turkey’s former prime
minister, placed focus on the Middle East and striking a series of visa-free travel deals, while
eyeing to establish free trade zones with the countries in the region.

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The AKP government is also seeking to improve economic and political relations with the
autonomous Kurdish Regional Government (KRG) in northern Iraq.
Turkey’s impressive economic performance over the past 14 years has encouraged experts and
international institutions to make confident projections about Turkey’s economic future. For
example, according to the OECD, Turkey is expected to be one of the fastest growing economies
among OECD members during 2015-2025, with an annual average growth rate of 4.9 percent.
Turkish companies’ foreign direct investment outflow has increased by 10 times over the past 15
years, according to the 2017 Foreign Investment Index.
The Borsa Istanbul (BIST) 100 Index, the benchmark index of Turkey's stock market, set a new
record high at 95,735 points on May 10, 2017.
5.1 MACROECONOMIC PERFORMANCE INDICATORS:

Real GDP: (2016 est.) US$ 863.4 billion

Real GDP Growth Rate: (2016 est.) 2.876%

Real GDP Per Capita: (2016 est.) US$ 10,787.6

Rate of Unemployment: (2016 est.) 10.9%

Rate of Inflation: (2016 est.) 7.8%

Foreign Exchange Reserve: (Dec 2016 est.) US$ 106.1 billion

Debt External: (Dec 2016 est.) US$ 404.9 billion

Population below Poverty Line: (2015 est.) 21.9%

5.2 TRADE PERFORMANCE:

Turkey is the 28th largest export and 22nd largest import economy in the world. In 2016,
Turkey exported $150.2 Billion and imported $191 Billion, resulting in a negative trade
balance of $40.8 Billion in 2016. The top exports of Turkey apparel, foodstuffs, textiles, metal
manufactures and transport equipment. Its top imports are machinery, chemicals, semi-
finished goods, fuels and transport equipment.
The top export destinations Germany 9.8%, UK 8.2%, Iraq 5.4%, Italy 5.3%, US 4.7% and
France 4.2% (2016). The top import origins are China 12.8%, Germany 10.8%, Russia 7.6%,
US 5.5% and Italy 5.2% (2016).

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5.3 MAIN ECONOMIC SECTOR PERFORMANCE:

GDP COMPOSITION BY SECTOR:

Agriculture: 06.1%
Industry: 28.4%
Services: 65.5%
PERCENTAGE OF LABOR FORCE EMPLOYED BY EACH SECTOR:
Agriculture: 18.5%
Industry: 26.6%
Services: 54.9%
AGRICULTURAL SECTOR:
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 tons, and barley 3.44 million tons.
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. 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.
The total installed capacity of power plants is 7476 MW and projected annual energy production
reaches 27 billion kWh. The physical realization of G.A.P. was 72.6% as of 2010.
LIVE STOCK INDUSTRY:
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.

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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.
INDUSTRIAL SECTOR:
CONSUMER ELECTRONICS AND HOME APPLIANCES:
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. EU market share of Turkish companies in consumer electronics has increased
significantly following the Customs Union agreement signed between the EU and Turkey: in color
TVs from 5% in 1995 to more than 50% in 2005, in digital devices from 3% to 15%, and in white
goods from 3% to 18%.

TEXTILES AND CLOTHING:

Turkish companies made clothing exports worth $13.98 billion in 2006; more than $10.67 billion
of which (76.33%) were made to the EU member states.

AUTOMOTIVE INDUSTRY:
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.
MULTIPLE UNIT TRAINS, LOCOMOTIVES AND WAGONS:
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.

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SHIPBUILDING:
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.
DEFENSE INDUSTRY:
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 main battle tank, attack helicopter, anti-tank missiles, laser-guided rocket,
artillery rocket system, SOM cruise missile and many other products. Turkish made Hand Guns
are also very famous.
STEEL-IRON INDUSTRY:
Turkey ranks 8th in the list of countries by steel production. In 2013, total steel production was 29
million tons. Turkey’s crude steel production reached a record high of 34.1 million tons in 2011.
Notable producers (above 2 million tons) and their ranks among top steel producing companies.
Erdemir (7.1 million tons) (47th)
Habaş (4.4 million tons) (72nd)
İçdaş (3.6 million tons) (76th)
Diler (2.3 million tons) (108th)
Çolakoğlu (2.1 million tons) (110th)

SCIENCE AND TECHNOLOGY:

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. 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.

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CONSTRUCTION AND CONTRACTING SECTOR:
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.
SERVICE SECTOR:

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.
COMMUNICATION:
As of 2008, there were 17,502,000 operational landline telephones in Turkey, which ranked 18th
in the world; while there were 65,824,000 registered mobile phones in the country, which ranked
15th in the world during the same year. The largest landline telephone operator is Türk Telekom,
which also owns TTNET, the largest internet service provider in Turkey. The largest mobile phone
operators in the country are Turkcell, Vodafone Turkey, Avea and TTNET Mobil.
The telecommunications liberalisation process started in 2004 after the creation of the
Telecommunication Authority, and is still ongoing. Private sector companies operate in mobile
telephony, long distance telephony and Internet access. Additional digital exchanges are permitting
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a rapid increase in subscribers; the construction of a network of technologically advanced intercity
trunk lines, using both fiber-optic cable and digital microwave radio relay, is facilitating
communication between urban centers. The remote areas of the country are reached by a domestic
satellite system, while the number of subscribers to mobile-cellular telephone service is growing
rapidly.
The main line international telephone service is provided by the SEA-ME-WE 3 submarine
communications cable and by submarine fiber-optic cables in the Mediterranean Sea and Black
Sea that link Turkey with Italy, Greece, Israel, Bulgaria, Romania, and Russia. In 2002, there were
12 Intelsat satellite earth stations; and 328 mobile satellite terminals in the Inmarsat and Eutelsat
systems.
Türksat A.Ş. is the primary communications satellite operator of Turkey, controlling the Turksat
series of satellites. TÜBİTAK and Turkish Aerospace Industries have developed scientific
observation satellites and reconnaissance satellites like the RASAT, Göktürk-1 and Göktürk-2.
As of 2015, there were 42,275,017 internet users in Turkey, which ranked 15th in the world; while
as of 2012, there were 7,093,000 internet hosts in the country, which ranked 16th in the world.
TOURISM SECTOR:
Tourism is one of the most dynamic and fastest developing sectors in Turkey. According to travel
agencies TUI AG and Thomas Cook, 11 of the 100 best hotels of the world are located in Turkey.
In 2005, there were 24,124,501 visitors to the country, who contributed $18.2 billion to Turkey's
revenues, with an average expenditure of $679 per tourist. In 2008, the number of visitors rose to
30,929,192, who contributed $21.9 billion to Turkey's revenues. For 2011, the World Tourism
Organisation (UNWTO) reported 34,654,000 arrivals and US$25 billion in receipts for Turkey.
According to the World Travel & Tourism Council, in 2012 travel and tourism made a total
contribution of 10.9% to Turkish GDP and supported 8.3% of all jobs in the country. Over the
years, Turkey has emerged as a popular tourist destination for many Europeans, competing with
Greece, Italy and Spain. Resorts in provinces such as Antalya and Muğla (which are located on
the Turkish Riviera) have become very popular among tourists.
FINANCIAL SECTOR:
At present, the Turkish banking sector is among the strongest and most expansive in East Europe,
the Middle East and Central Asia. During the past decade since 2001, the Turkish lira has also
gained a considerable amount of value and maintained its stability, becoming an internationally
exchangeable currency once again (in line with the inflation that dropped to single-digit figures
since 2003.) The economy grew at an average rate of 7.8% between 2002 and 2005. The five big
state-owned banks were restructured in 2001. Political involvement was minimized and loaning
policies were changed.
There are also numerous international banks, which have branches in Turkey. A number of Arabian
trading banks, which practice an Islamic banking, are also present in the country.
Government regulations passed in 1929 required all insurance companies to reinsure 30% of each
policy with the Millî Reasürans T.A.Ş. (National Reinsurance Corporation) which was founded on
February 26, 1929. In 1954, life insurance was exempted from this requirement. The insurance
market is officially regulated through the Ministry of Commerce.

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After years of low levels of foreign direct investment (FDI), in 2007 Turkey succeeded in attracting
$21.9 billion in FDI and is expected to attract a higher figure in following years. A series of large
privatizations, the stability fostered by the start of Turkey’s EU accession negotiations, strong and
stable growth, and structural changes in the banking, retail, and telecommunications sectors have
all contributed to the rise in foreign investment.
5.4 INVESTMENT:

Turkey has invested 29.8% of total GDP in fixed capital. Fixed capital consists of total business
spending on fixed assets, such as factories, machinery, equipment, dwellings, and inventories of
raw materials, which provide the basis for future production. It is measured gross of the
depreciation of the assets, i.e., it includes investment that merely replaces worn-out or scrapped
capital. Turkey invested major part of its GDP in fixed capital which is seemed as a long run
benefit for country.
Turkey’s investment in inventories -1.1%. Investment in inventories consists of net changes to the
stock of outputs that are still held by the units that produce them, awaiting further sale to an end
user, such as automobiles sitting on a dealer’s lot or groceries on the store shelves. This figure may
be positive or negative. If the stock of unsold output increases during the relevant time period,
investment in inventories is positive, but, if the stock of unsold goods declines, it will be negative.
Investment in inventories normally is an early indicator of the state of the economy. If the stock
of unsold items increases unexpectedly – because people stop buying - the economy may be
entering a recession; but if the stock of unsold items falls - and goods "go flying off the shelves" -
businesses normally try to replace those stocks, and the economy is likely to accelerate. In case of
Turkey this is investment is in negative which shows economy is going well.
FOREIGN INVESTMENT:
According to the UNCTAD 2017 World Investment Report, Turkey was the second largest
recipient of FDI in West Asia, behind Israel and according to CIA World Fact Book it was 40 th
largest recipient in the world. In 2016 the total foreign direct investment in turkey was $133.2
billion (Dec 2016 est.). During the last five years, the intermediation and manufacturing sectors
have attracted the highest amount of FDI.
Till December 2016, around 53,200 companies with foreign capital operate in Turkey. The
majority of FDI inflows to Turkey come from Europe, North America, and the Gulf countries.
As of December, 2016 Turkey has invested $38.31 Billion abroad and was declared by CIA World
Fact Book as 47th largest country in terms of stock of direct foreign investment in abroad.

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 6. PRODUCTION & RESOURCE STRUCTURE:
6.1 MAJOR RESOURCES:

PETROLEUM AND NATURAL GAS:

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

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MINERALS:
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
Fact book, 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
6.2 MAJOR COMPANIES:

Top 5 companies from Turkey’s Fortune 500:

1. TURKISH PETROLEUM REFINERY INC.

Tupras was founded in 1983 by the Turkish government in order to gather all refineries companies
under one roof, and it has many refineries in many places like Kirrikale, Batman, Aliaga, and
Kocali. The company Tupras is on the top of the list of the richest in Turkey with total sales that
reached 34.8 billion TL.

2. ENERGY EXCHANGE ISTANBUL (EXIST).

Energy Exchange Istanbul (EXIST) was officially established on March 12, 2015, by the Turkish
government the Main objective and principal business activity of the company is to “Plan,
establish, develop and manage energy market The company is on the second number of the list of
the richest in Turkey with total sales that reached 33 billion TL.

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 3. OMV PETROL OFISI

Petrol Ofisi company was founded in 1941 as a shareholding company in business activities in
the petroleum and petroleum products sector and the company is headquartered in the Austrian
capital Vienna. The company owns 2,500 petrol stations, 10 gas stations, and two liquefied
natural gas, and 31 packaging units for jet fuel. The company got a third place in the “Fortune
500” list with total of 30 billion and 790 million TL sales. It sponsors sports such as car racing
(GP2), rallying, offshore speedboat racing, karting and mountaineering of Mount Everest for
Turkish sportspeople.

4. BOTAŞ PETROLEUM PIPELINE CORPORATION

BOTAŞ Petroleum Pipeline Corporation (BOTAS) is the state-owned crude oil and natural gas
pipelines and trading company in Turkey. The company was established in 1974 as a subsidiary
of Türkiye Petrolleri Anonim Ortaklığı (TPAO). Since 1995, BOTAS is a wholly state-owned
company. BOTAŞ was able to get the fourth place in the “Fortune 500” list by total of sales,
which amounted to 29.68 Billion TL.

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 5. TURKISH AIRLINE COMPANY

Turkish Airlines is the national airline of Turkey. The company‘s headquarters is located in
Istanbul, and it takes Ataturk International Airport as hub for its operations and flights. Turkish
Airlines offers and serves more than 280 destinations in Europe, Asia, Africa, and North
America. The company got the fifth rank in the “Fortune 500” list with a total sales of 29.46
billion TL.

7. HUMAN CAPITAL:
In Turkey still Top-level education was not accessible to broader segments. Today in Turkey, not
even half of the young population aged between 25 and 34 are high school graduates, as
compulsory 12-year education is a relatively new thing. What’s more, in Turkey less than 30
percent of this same segment has a university degree. Only about 20 percent of Turkey’s working
population between the ages of 25 and 64 are high school graduates. Out of the working population,
between the ages 25 and 64, 5 percent are illiterate, 46 percent are primary school graduates, 13
percent are middle school graduates, 19 percent are high school graduates, 5 percent have a two-
year degree, 10 percent have an undergraduate degree, and 1 percent have a postgraduate
degree. Half of the working population between the ages of 25 and 34 are not high school
graduates. Turkey’s major population falls between the age group 15% – 64% that is the suitable
portion available for deploying in the work field but unfortunately large piece of this segment lack
theoretical and technical education and will stay in the labor force for at least 30 more years.

8. EMERGING BUSINESSES IN EMERGING TURKEY:

8.1 POTENTIAL BUSINESS OPPORTUNITIES

Turkey is rapidly emerging as a high-growth market for many investments and businesses.
Actually, the country is already Europe’s sixth and the world’s eighteenth largest economy. Its
recent economic growth record, its talented, young workforce and its geographical location
between Europe, Middle East and Central Asia make Turkey a hugely attractive destination for
trade and investment.
Following are the potential business opportunities in turkey:
1. Construction in Turkey: Construction is one of the key sectors in Turkey, as one of the
main drivers of public and private investment. There are large construction companies but
in general we can appreciate gaps in the environmental and energy infrastructures, because
this type of construction has been doing only since the last 10 years without any prior
experience.

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 2. Automotive and metal in Turkey: Turkey is a market of 74 million people, with three in
four without an own car but with a very consumerist middle class and growing steadily
since early 2000, which represents a huge potential in terms of domestic consumption.
Moreover, the important automotive industry still has needs in few areas of qualified
suppliers for all kind of parts. The largest automotive companies have factories here, such
as Ford, Fiat, Renault, Toyota, Hyundai, Mercedes, Citroen, etc.

3. IT in Turkey: In the market there are few telecom operators because of the huge entry
barriers (state regulation, mainly), However, there are interesting opportunities in the
provision of services, especially for the integrators which subcontract directly these
operators. TIC is one of the fastest growing sectors in the country.

4. Environment in Turkey: The environment sector has gained in importance in recent years
as one of the priority sectors for the Turkish government. Turkey’s rapid industrialization
and high population growth (one of the highest in the OECD) along with the expansion of
cities, have created complex environmental problems related to public services (solid waste
management, supply potable water, water treatment and waste water, sewage and power
distribution). In accordance with the government previsions, Turkey will need 60.000
millions of Euros in investment in this sector during the next 10 years.

5. Energy in Turkey: The clear intention of deregulation and privatization of the Turkish
government in the last decade coupled with a solid legal framework and increasing
domestic demand, make Turkey a key country for energy investment. Government sources
said the sector needs an investment of approximately 130,000 million by 2020, and urged
foreign investors and the Turkish private sector to carry out projects in this field.

6. Agriculture in Turkey: The Turkish food industry has grown steadily in the recent years.
The growth of the disposable income and the changes in consumer trends, along with the
increasing number of women employed full-time (in a still conservative society in general),
have caused the increasing in the interest in packaged foods and processed meals and frozen
foods.

7. Natural Stone in Turkey: Turkey is the fourth largest producer of natural stone in the
world with over one hundred varieties of marble, travertine, limestone, slate, basalt, tuff,
andesite, diabase, granite and onyx. It owns the 40% of the world reserves of marble.
However, the country has serious shortcomings in terms of know-how and R & D.

8. Textile in Turkey: The textile industry is one of the most important sectors of the Turkish
economy. Representing approximately 10,8% of GDP, one of the leading sectors in
manufacturing, employment, investment and macroeconomic indicators. The European
brands are very interesting for Turkish consumers.

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 9. Finance in Turkey: The Turkish financial sector is undertaking a major development
process, with the financial services expanding solidly on the basis of the current economic
growth, low inflation and a decrease interest rate. Despite the global financial crisis the
Turkish banking sector has maintained a stable position.

10. Chemical in Turkey: The Turkish chemical sector has been developing continuously in
recent years. Today the industry provides not only raw-materials but also intermediate
products to other actors in the economy, especially automation, leather products, glass,
textiles and paper.

11. Restaurant in Turkey: this sector registers a low positive constant value growth, which
is expected to continue during the following years. Factors such as improvements in the
income, the youth of the Turkish population and the Mediterranean culture push the
consumption of this services.
Deserves special mention the sector of fast food in turkey, with a great growth and the entry
of new companies, especially multinational chains, will serve to fuel the growth.

12. Industrial subcontracting in Turkey: The Turkish subcontracting sector has developed
widely over the last few years. The multinational companies have valued very positively
the proposal of Turkey in terms of costs, logistics and technical capacities in order to
subcontract to Turkish industry rather than producing in their own countries.

13. Tourism in Turkey: Tourism is a key sector of the Turkish economy, with huge growth
potential thanks to the country’s natural beauty and cultural assets. According to data from
2011 Turkey was 6th in the ranking of most visited countries and 9th in income from
tourism.
8.2 REASONS TO INVEST IN TURKEY:

1. SUCCESSFUL ECONOMY
 Booming economy; more than tripling its GDP, reaching USD 857 billion in 2016, up
from USD 231 billion in 2002 (TurkStat)
 Stable economic growth with an average annual real GDP growth rate of 5.6 percent
between 2002 and 2016 (TurkStat)
 Promising economy with a bright future as it is expected to become one of the fastest
growing economies among the OECD members during 2017-2020 with an average
annual real GDP growth rate of 5.4 percent (OECD)
 13th largest economy in the world and 5th largest economy compared with the EU in
2016 (GDP at PPP, IMF WEO)
 Institutionalized economy fueled by USD 145 billion of FDI in the last decade (CBRT)
 A dynamic and mature private sector with USD 143 billion worth of exports and an
increase of 300 percent between 2002 and 2016 (TurkStat)

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 2. POPULATION
 A population of 79.8 million (2016, TurkStat)
 Largest youth population compared with the EU (Eurostat)
 Half the population under the age of 31 (2016, TurkStat)
 Young, dynamic, well-educated and multi-cultural population

3. QUALIFIED AND COMPETITIVE LABOR FORCE

 Over 30.5 million young, well-educated and motivated professionals (2016,
TurkStat)
 Increasing labor productivity
 Approximately 800,000 students graduate annually from over 183 universities
(2016, CoHE)
 More than 950,000 high school graduates with around half from vocational and
technical high schools (2016, Ministry of National Education
 INFRASTRUCTURE

4. LIBERAL AND REFORMIST INVESTMENT CLIMATE

 The 2nd biggest reformer among OECD countries in terms of its restrictions on FDI
since 1997 (OECD FDI Regulatory Restrictiveness Index 1997-2016)
 Business-friendly environment with an average of 6.5 days to set up a company
(World Bank Doing Business Report 2017)
 Highly competitive investment conditions
 Strong industrial and service culture
 Equal treatment for all investors
 Around 52,700 companies with international capital in 2016 (Ministry of Economy)
 International arbitration
 Guarantee of transfers

5. INFRASTRUCTURE
 New and highly-developed technological infrastructure in transportation,
telecommunications and energy
 Well-developed and low-cost sea transport facilities
 Railway transport advantage to Central and Eastern Europe
 Well-established transportation routes and direct delivery mechanism to most of the
EU countries

6. CENTRALLY LOCATED
 A natural bridge between both East-West and North-South axes, thus creating an
efficient and cost-effective outlet to major markets
 Easy access to 1.6 billion customers in Europe, Eurasia, the Middle East and North
Africa
 Access to multiple markets worth USD 24 trillion of GDP

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 7. ENERGY CORRIDOR AND TERMINAL OF EUROPE
 An important energy terminal & corridor in Europe connecting the East & the West
 Located at a close proximity of more than 70 percent of the world’s proven primary
energy reserves, while the largest energy consumer, which is Europe, is located right
to the west of Turkey, thus making the country a linchpin in energy transit and an
energy terminal in the region

8. LOW TAXES & INCENTIVES

 Corporate Income Tax reduced from 33 percent to 20 percent
 Tax benefits and incentives in Technology Development Zones, Industrial Zones
and Free Zones, including total or partial exemption from Corporate Income Tax, a
grant on employer’s social security share, as well as land allocation
 R&D and Innovation Support Law
 Incentives for strategic investments, large-scale investments and regional
investments

9. CUSTOMS UNION WITH THE EU SINCE 1996

 Customs Union with the EU since 1996 and Free Trade Agreements (FTA) with 27
countries (Ministry of Economy)
 More FTAs underway
 Accession negotiations with the EU

10. LARGE DOMESTIC MARKET

 62.2 million Broadband internet subscribers in 2016, up from 0.1 million in 2002
(ICTA, TurkStat)
 75.1 million Mobile phone subscribers in 2016, up from 23 million in 2002
(TurkStat)
 58.8 million Credit card users in 2016, up from 16 million in 2002 (The Interbank
Card Center of Turkey)
 181 million airline passengers in 2015, up from 33 million in 2002 (TurkStat)
 25.3 million International tourist arrivals in 2016, up from 13 million in 2002
(TurkStat)

9. CONCLUSION: WHY TURKEY IS AN EMERGING MARKET?

Turkey is a country in transition. The country has experienced solid economic growth for decades,
two of the three main sectors of turkey’s economy i.e. manufacturing and service sector are
performing very well. The Industrialization base, Infrastructure, health, and education sectors of
country are transforming to modernization very rapidly. At more than $10,000, per-capita income
today is more than double what it was at the turn of the millennium and Turkey is now on the cusp
of emerging as a high-income country, poised to become the 12th largest economy in the world by
2060.

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Thanks to improved public services, but also thanks to the process of urbanization and job creation
in industry and services sector, which has opened up new opportunities for Turkey’s traditionally
poorer rural population. Poverty has fallen by half since 2002 and the share of the middle class has
more than doubled from 18% in 1993 to 41% in 2010. Incomes among the bottom 40% in the
country have increased at the same rate as those for the population as a whole – in other words
prosperity has been shared.
Turkey’s achievements are a source of inspiration for policy makers from many emerging markets.
In the past two years alone, with assistance from the World Bank Group, nearly 20 delegations
from countries as far flung as India, Uzbekistan, Kosovo, Kenya, and Ukraine have come to Turkey
to learn about health care reform, secondary education, banking restructuring, public finance
management, and a range of other areas where Turkey has improved in recent years.
Despite the many challenges Turkey still faces, the interest of the many visitors confirms the value
of capturing emerging lessons of development in real time, from countries which like Turkey are
still in the middle of their own transition.
A shift in employment away from agriculture and into industry and services has resulted in
increased productivity and helped reduce regional income inequality. A combination of trade
liberalization, a Customs Union agreement with the European Union, reforms to the banking sector
and other business regulations, and rapid urbanization helped create the conditions necessary to
drive productivity growth around the country. Between 1990 and 2009, the share of employment
in agriculture declined by 24 percentage points, while the share of industry increased by 4.6
percentage points.
Gaps in access to health, education and municipal services have been reduced and outcomes have
significantly improved. For instance, life expectancy in Turkey has increased by 10.6 years since
the 1990s and infant mortality rates have fallen six fold. Secondary education enrolment rates also
nearly doubled between 1998 and 2012 - from 38% to 67%, respectively. These improvements
have made economic growth more socially inclusive.
All of these conditions have helped Turkey achieve economic and social success in a broad range
of areas. However, these advances provide no guarantee of enduring success. Indeed, Turkey’s
economy faces a number of challenges that should be addressed if the country wants to complete
the transition to high income status. The sources of productivity growth need to shift from the
reallocation of labor to greater innovation and the adoption of new technologies. This will require
better skills and a competitive business environment to encourage Turkey’s entrepreneurs to try
new things. But most importantly, it requires the government to build the institutional foundations
of a high income country, including the rule of law, arms’ length and independent regulation, and
prudent, transparent and accountable public sector management. Turkey does not make it into the
top 40 on any of the indicators measuring the quality of a country’s economic institutions. For a
country that aspires to join the top 10 economies in the world, this is clearly not good enough.
Turkey’s Transitions have attracted the attention of many policy makers in emerging markets. By
addressing the remaining challenges and completing the transition to high income, Turkey’s
authorities would ensure that their country remains a valuable case study of successful
development for years to come.
THE END

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Resources:

http://www.worldbank.org
https://www.cia.gov/library/publications/the-world-factbook/geos/tu.html
https://www.wikipedia.org/
http://www.oecd.org/turkey/
https://www.imf.org/
http://www.invest.gov.tr/en-
US/turkey/factsandfigures/Pages/TRSnapshot.aspx
http://www.emergingmarketsmonitor.com/analysis/emerging-markets-
monitor/turkey
http://www.tcmb.gov.tr/wps/wcm/connect/tcmb+en/tcmb+en
http://www.google.com.pk
https://www.ifitweremyhome.com/compare/PK/TR

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