Economy
From The Report: Turkey 2013
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Turkey has had an impressive decade of expansion that saw GDP rise from $196bn in 2001 to $787bn in 2012, or about $10,400 per capita. Since 2001, real growth has averaged more than 5% per year, an extraordinary rate for a middle-income country that imports most of its raw materials. A young and mobile population provides a natural tailwind to growth, while a high level of diversification in terms of products and markets has helped the Turkish economy bounce back strongly from recent global and regional crises. Despite a decline in growth in 2012, Turkey’s performance was regarded as impressive, given that much of emerging Europe fell into recession. However, it needs to be wary of falling into the “middle-income trap”, although there is no good evidence that countries in its income bracket are especially prone to severe slowdowns. Turkey’s open economic model might miss some short-term gains by eschewing such tactics as export subsidies and import restrictions, but that restraint has also made it into one of the more competitive emerging markets, demonstrated by its high average growth rates and relatively high incomes.

This chapter contains interviews with Nicole Bricq, French Minister for Foreign Trade; Ahmet Aksu, President, Turkish Privatisation Administration; Ali Sabancı, Chairman, Pegasus Airlines; and Mark Lewis, Senior Resident Representative in Turkey, IMF.

Articles from this Chapter

Overview

Soft landing: Growth continues at a slower pace, although more needs to be done to improve industrial competitiveness
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With an impressive record of rapid and resilient economic expansion, Turkey looks to the future with confidence in uncertain times. Since 2001 real growth has averaged more than 5% a year, an extraordinary rate for a middle-income country that imports most of its raw materials. A young and mobile population provides a natural tailwind to growth, while a high level of diversification in terms of products and markets has helped the Turkish economy bounce back strongly from recent global and regional…

Interview

OBG talks to Nicole Bricq, French Minister for Foreign Trade
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Interview: Nicole Bricq The market share of French companies in Turkey has decreased in recent years. What can be done to counter this trend and increase involvement? NICOLE BRICQ: That is not entirely accurate. Admittedly, our market share has eroded slightly, but it actually saw an upswing in 2012 when Turkey was our fourth-biggest non-EU trading partner behind the US, China and Russia. Sales of French goods and services in Turkey exceeded €7bn in 2012, considerably higher than for any of…

Analysis

An unorthodox approach: Understanding the central bank’s corridor interest rate policy
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Monetary policy is not as simple or predictable as it used to be anywhere, but Turkey’s central bank governor, Erdem Başç›, is breaking new ground in making things more complicated and keeping people guessing. Since being promoted from deputy governor in 2011, Başç› has been alternately criticised and applauded for the innovative and often unexpected moves he has taken in trying to steer the economy through uncharted waters. New Challenges Like all emerging market central banks, Turkey’s…

Analysis

A new era: Resolving the conflict in the south-east may bring economic benefits
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For decades, when Turks spoke of their relationship with Kurds in the south-east of Turkey, the topic was usually terrorist bombings, or youthful years spent manning a military outpost on a remote mountainside in sub-zero temperatures. In 2013, the topics are the potential for resolution talks to bring about an investment upgrade, the big oil deals in Iraq’s Kurdish region that are being linked to those talks, and how many percentage points a deal could add to the long-term potential growth rate. The…

Interview

OBG talks to Ahmet Aksu, President, Turkish Privatisation Administration
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Interview: Ahmet Aksu How would you evaluate Turkey’s experience with privatisation over the last three decades? What key lessons has the government learned? AHMET AKSU: Turkey was among the first countries in the world to attempt a large-scale privatisation programme. Yet, the process, which began in 1984, was held back by an unsophisticated domestic legal environment that created uncertainty for investors and weak coalition governments that bred political instability. It was not until 1994…

Interview

Making a start-up nation: OBG talks to Ali Sabanc›, Chairman, Pegasus Airlines
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Interview: Ali Sabanci How can Turkey develop a culture and a legal system that encourages entrepreneurship while reducing the cost of business failure? ALI SABANCI: Entrepreneurs require a healthy ecosystem which includes the proper market conditions and regulatory framework, as well access to low-interest finance and a supportive culture. Regulations that pertain to taxation, auditing standards and bankruptcy procedures are of particular importance. In Turkey, the legal system is somewhat…

Analysis

Reality check: Analysing the government’s targets for 2023
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Looking forward to the 100th anniversary in 2023 of the founding of the Republic of Turkey, Prime Minister Recep Tayyip Erdoğan and his government have set a number of goals for the country, some of them highly ambitious. These targets are to some extent an effort by Erdoğan to promote his bid to become president with executive powers, but they are also seen as positive catalysts to promote reforms. Tough, But Plausible The government aims to achieve a GDP of $2trn and a per capita income of…

Viewpoint

Mark Lewis, Senior Resident Representative in Turkey, IMF, on the challenges and opportunities confronting the economy
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The year 2013 is an important one for the Turkish economy, with many challenges and opportunities on the horizon. First, the sluggish global economy will likely remain a drag on Turkey’s growth this year, notably because of weak activity in the EU, a result of fiscal tightening in some countries and the uncertain outlook. Furthermore, several emerging markets have come down from the very high growth rates of earlier years, for example China and India, which will have repercussions for all countries,…