TURKEY - Country Profile

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Information about TURKEY - Country Profile

Published on March 11, 2014

Author: mo-abas

Source: slideshare.net


A country profile on Turkey with a strong outlook on their Economy. History. Geography, Politics and Inequality also mentioned.

By Mohammad Abas

• Turkey is considered to be one of the richest countries in terms of archaeology and is the biggest "open air museum" of the world. • It has been a bridge between the East and West and has been noted by scholars as the "melting pot" of various cultures from the first known urban city settlement of "Çatalhöyük" to the historically famous Troy and from the Ionians (the Anatolian Greeks) to the greatest empires of the world, the Roman, Byzantine, and Ottoman, many cultures were established and indeed flourished in Turkey. • It has been repeatedly settled by colonists and overrun by conquering armies for thousands of years and has experienced the passage of the world’s greatest generals: Alexander the Great, Julius Caesar, and Tamerlane. • Equally it has been home to some of the very greatest artists: architects, philosophers, poets, sculptors, and writers - Sinan, Thales of Miletus, Homer, Praxiteles, and Herodotus, to name but a few.

• Turkey is home to one of the earliest settlements in the world. Built 8,800 years ago, Catal Hoyuk was a labyrinth of 150 mud homes joined together. There were no streets in between, so people had to enter the homes through holes in the roof! • After World War I, the country was invaded by Greece, which led to the Turkish war of Independence in 1920, led by Mustafa Kemal Ataturk • In 1923 the Turkish assembly declared Turkey a republic. • The city formally became Istanbul in 1923. Turkey became a secular country, meaning there is a separation between religion and government. • Women gained the right to vote in 1934.

• Turkey is a large peninsula that bridges the continents of Europe and Asia. Turkey is surrounded on three sides by the Black Sea, the Mediterranean Sea, and the Aegean Sea. • Istanbul, the largest city in Turkey, is built on land in the Bosporus seaway. The city is partly in Europe and partly in Asia. • Turkey is one of the most earthquake prone areas on Earth and has suffered from 13 earthquakes in the past 70 years. • Turkey's highest mountain, Mount Ararat peaks at, 16,945 feet. The mountain is considered sacred by many and is believed to be where Noah beached his ark after the great flood. Climate: temperate; hot, dry summers with mild, wet winters; harsher in inland • Natural resources: coal, iron ore, copper, chromium, antimony, mercury, gold, barite, borate, celestite (strontium), emery, feldspar, limestone, magnetite, marble, perlite, pumice, pyrites (sulfur), clay, arable land, hydropower • Environmental problems: water pollution from dumping of chemicals and detergents; air pollution, particularly in urban areas; deforestation; concern for oil spills from increasing Bosporus ship traffic

• Modern Turkey was founded in 1923 from the Anatolian remnants of the defeated Ottoman Empire by national hero Mustafa KEMAL. • Under his authoritarian leadership, the country adopted wide-ranging 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 Democratic Party and the peaceful transfer of power. • Since then, Turkish political parties have multiplied, but democracy has been fractured by periods of instability and intermittent military coups (1960, 1971, 1980), In 1997, the military again helped engineer the ouster - popularly dubbed a "post-modern coup" - of the then Islamic-oriented government. • Turkey was a founding member of the UN since 1945 and has been an associate member of the European Union since 1963, but it has not been accepted as a full member. • Member of (NATO) which is a defence alliance – 1952. • Turkey is strategic in world affairs due to its location in the Middle East. • Over the past decade, it has undertaken many reforms to strengthen its democracy and economy; it began accession membership talks with the European Union in 2005. • Chief of state: President Abdullah GUL (2007) • Prime Minister: Recep Tayyip Erdagon (2004)

Population: 80,694,485 (July 2013 est.) – 18th in the world HDI: 0.722 (90th in world - 2012) 0.684 (2005) 0.569 (1990) Literacy rate: total: 94.1% male: 97.9% female: 90.3% Children under 5 underweight: 3.5% (2004) – HIV/AIDS: Less than 0.1% - 4,600 in total (120th in the world) Obesity rate: 27.8% Life expectancy: 73.03 years – 126th in the world Ethnic groups: Turkish 70-75%, Kurdish 18%, other 7-12% Religion: Muslim 99.8% (Sunni), other 0.2% (Christians and Jews) Drinking water source: urban: 100% rural: 99.1% Sanitation: urban: 97.2% rural: 75.5% Below Poverty Line: 16.9 % Stage 3: Increasing life expectancy High working population Birth and death rates declining

• GINI INDEX: 40.0 - 2012 • Below poverty line: 16.9 % • Richest 20 percent of Turkey's 74 million people accounted for almost half of national income • The poorest 20 percent had just 6 percent. (2011) • Analysts blame Turkey's inequality, in part, on a lopsided tax system that draws two-thirds of its revenue from indirect taxes such as an 18 percent sales tax on most goods and services, rather than direct levies such as income tax. • The sales tax itself seems distorted; the rate for clothing and caviar is 8 percent, and zero for some precious stones. • Other factors are the limited rights of trade unions, and barriers to women seeking work in a traditional Muslim society.

• Rural poverty has declined in the Republic of Turkey over the past ten years, but extreme disparities of income and poverty levels persist across the country. • In poor rural areas, family size is nearly twice the national average, adult literacy rates are far lower than the national average, there are fewer doctors, agricultural production per capita is lower, and fewer women are among the employed. • The overall poverty rate in rural households is 35 per cent, compared to 22 per cent in urban households. That margin is diminishing as more and more rural people migrate to urban areas, mainly in the more prosperous western parts of the country. • The poorest rural people are self-employed and unpaid family workers. They include small-scale farmers and their households and people who live in remote and isolated areas. Women and unemployed young people are particularly disadvantaged. WHY? • the large size of families and the small size of landholdings • long-term environmental problems such as overgrazing and soil erosion • lack of infrastructure such as roads and markets in remote areas • lack of an effective welfare safety net for very poor people

• Turkey is home to a sizeable Kurdish minority, which by some estimates constitutes up to a fifth of the population. The Kurds have long complained that the Turkish government was trying to destroy their identity and that they suffer from economic disadvantage and human rights violations. • The Kurdistan Workers Party (PKK), the best known and most radical of the Kurdish movements, launched a guerrilla campaign in 1984 for a homeland in the Kurdish heartland in the southeast. Thousands died and hundreds of thousands became refugees in the ensuing conflict with the PKK, which Turkey, the US and the European Union deem a terrorist organisation. • Kurdish guerrilla attacks briefly subsided after the 1999 capture of PKK leader Abdullah Ocalan, but soon began to increase again. • Partly in a bid to improve its chances of EU membership, the government began to ease restrictions on the use of the Kurdish language from 2003 onwards. As part of a new "Kurdish initiative" launched in 2009, it pledged to extend linguistic and cultural rights and to reduce the military presence in the mainly Kurdish southeast of the country. • Although fighting continued, the PKK signalled its readiness to cease fire in 2010. After months of talks, Abdullah Ocalan ordered his fighters to stop attacking Turkey and withdraw from the country from May 2013, effectively ending the insurgency.

GDP (PPP): $1.109 trillion (2012 est.) – 17th GDP (Nominal): $820.827 billion (2013) GDP growth rate: 2.2% (2012) 8.8% (2011) 9.2% (2010) GDP per capita: $14,800 – (91st) - 2012 Inflation: 6.16 (April 2013) By sector: agriculture: 9%. industry: 27.2%, services: 63.8% Labour force: 27.43 million (23rd) Unemployment: 9.2% (103rd) Industries: textiles, food processing, autos, electronics, mining, steel, petroleum, construction, lumber Occupations: agriculture: 25.5% ,industry: 26.2% services: 48.4% (2010 25.5 26.2 48.4 0 Agriculture Industry Services

Current Account balance: US$ $-47.75 billion 2012) Exports: apparel, foodstuffs, textiles, metal manufactures, transport equipment Partners: Germany 8.6%, Iraq 7.1%, Iran 6.5%, UK 5.7%, UAE 5.4%, Russia 4.4%, Italy 4.2%, France 4.1% (2012) Imports: machinery, chemicals, semi-finished goods, fuels, transport equipment Partners: Russia 11.3%, Germany 9%, China 9%, US 6%, Italy 5.6%, Iran 5.1% (2012) Exchange rate: Turkish liras (TRY)/Pound– 0.27 Turkey very reliant on imported energy. They are trying to become self sufficient by creating new dams (GAP Project) but this has caused controversy as it alters water supply to neighbouring countries. Self sufficient in food production. World's largest producer of hazelnuts, cherries, figs, apricots, quinces and pomegranates;

• Turkey has undergone a deep economic transformation since 2001. It recorded a remarkable GDP growth rate of almost % 6 in average during 2002-2011. Thus, per capita income increased up to 10,500 USD in 2011, from the modest figure of 3,500 thousand dollars recorded in 2002. • Due to the global crisis, majority of the emerging markets suffered a significant slowdown in economic activity. Being an open and free-market economy, integrated with the global economic and financial system, Turkey was no exception. Turkey was also adversely affected by the declining external demand and falling international capital flows. • Global economic conditions and tighter fiscal policy caused GDP to contract in 2009, but Turkey's well- regulated financial markets and banking system helped it weather the global financial crisis. • Overall growth rates in 2008 and 2009 materialized well below the remarkable performance that was achieved between 2002 and 2007. However, Turkish economy bounced back and has achieved a growth rate of % 9.2 and % 8.5 in the years 2010 and 2011 respectively. • In 2012, Istanbul ranked 5th in the world with 30 billionaires, behind Moscow, New York City, London and Hong Kong • Today, Turkey is the 17th largest economy in the world with a nominal GDP of $820.827 billion (2013)(

Monetary Policy Monetary policies of the Turkish Central Bank played a crucial role in securing macroeconomic balances, and most importantly reining in inflation over the last decade. Having been one of the major concerns of the Government for more than 3 decades, inflation has finally been brought down to single digits by mid-2000s. • CPI inflation was % 6.16 last year. It is forecasted to settle down around % 5 in 2014 Fiscal Discipline Turkey has been extremely careful with its budget for the last decade. Once peaked at almost % 17 in 2001, EU-defined general government budget deficit/GDP ratio was % 2.6 in 2011 and Turkey met the Maastricht criteria of % 3 while outperforming 18 EU Countries (Central government budget deficit/GDP ratio was % 1.3 in Turkey in 2011 and Turkey outperformed 23 EU Countries). • While net public debt to GDP ratio was % 90.5 in 2001, it decreased to % 39.4 in 2011, which was below the level in 21 EU Countries and the Maastricht Criterion of % 60. The composition of the debt stock has also been improved and become more resilient to fluctuations in interest and exchange rates as well as capital flows. Public Debt (% of GDP)

Foreign Trade Turkey has been pursuing an export-led growth since 1980. By virtue of economic reforms, restrictions on imports have been lifted, safeguard practices were reduced, and foreign exchange transactions were liberalized. As a result of the economic reforms carried out during the last decade, both the volume and composition of the Turkish trade have radically changed. The volume of Turkish exports increased to 152,6 billion USD in 2012 from 36 billion USD in 2002. • The total trade volume accounted for 389.1 billion USD in 2012. Exports increased by % 13.9 on an annual basis up to 152,6 billion USD. Imports shrank by % 1.6 decreasing to 236.5 billion USD. Foreign Direct Investment Turkey’s successful economic performance, young population, qualified and competitive labour force, liberal and reformist investment climate, highly developed infrastructure, advantageous geographic position, low tax rates and incentives and large domestic market, as well as customs union with the EU since 1996 provide ample opportunities for foreign investors. • As of 31 December 2012, the number of foreign firms active in Turkey is 32,146. 881 foreign firms have liaison offices in Turkey. • The total amount of foreign direct investments exceeded 130 billion USD by the end of 2012

Privatization • Privatization has been among the top priorities of the Government’s agenda.. Privatization revenues reached 8 billion Dollars in the period of 1986-2003 and 36.2 billion Dollars between 2003-2012 • The main idea of privatization is to confine the role of the state in areas such as health, basic education, social security, national defence, and large scale infrastructure investments. This is in line with Turkey’s target of creating a truly competitive market economy driven by the private sector. Turkish Business Abroad Turkish businessmen have been increasingly active in neighbouring countries as well as other regional countries. This is most visible in construction business. Turkish contractors have successfully completed 7000 projects in 100 countries across the globe by the end of 2012. • Total turnover of the Turkish construction and engineering sector has reached 242 billion USD. 33 Turkish firms were listed among the top 225 international contractors in 2012 coming second after Chinese companies. Tourism with its natural beauties, unique historical and archaeological sites, ever- developing hotel and touristic infrastructure and a tradition of hospitality, Turkey has so much to offer to its visitors. Turkey has recently become one of the world's most popular tourism destinations. • In 2012 31.8 million foreign visitors entered Turkey and tourism revenues exceeded 23.4 billion USD.

• Until sharia-compliant banking was introduced to Turkey in the 1980s, many individuals kept their money "under the mattress," because of mistrust of traditional banking, and a desire to avoid breaking religious beliefs regarding interest. • Turkey at present has four Islamic banks -- three that are partially owned by companies based in the Persian Gulf -- which accounted for 5 percent of Turkey's 1-trillion-lira ($559 billion) banking sector in late 2010. • Islamic banks do not charge interest, and share the profit and loss risks of their customers • Turkey's booming real estate sector accounts for the bulk of Islamic banking activity, but the banks also provide working capital and equipment to companies involved in construction, trade and industry, three of the country's strongest economic sectors. • To encourage the development of Islamic banks, Turkey's governing Islamist-rooted Justice and Development Party (AKP) has granted them tax-neutral status.

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