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Turkey's Strong Recovery and Structural Reforms for Competitiveness

This review analyzes Turkey's strong recovery after the global crisis and outlines the structural reform agenda to increase competitiveness and reduce external imbalances. It includes evaluations of labor market flexibility, product market competition, education quality, domestic content of production, infrastructure investments, quality of financing, R&D, innovation, and entrepreneurship.

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Turkey's Strong Recovery and Structural Reforms for Competitiveness

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  1. OECD-EDRC2012 ECONOMIC REVIEW OF TURKEY OPENING STATEMENT OF THE TURKISH DELEGATION Erhan USTA Deputy Undersecretary Republic of Turkey Ministry of Development June 14th, 2012

  2. Turkey: StrongRecoveryafter Global Crisis(GDP Growth, %) Source: IMF

  3. StrongEmploymentGrowth

  4. Current Account Deficit/GDP (%) Source: CBRT

  5. Saving-InvestmentGap Source: Ministry of Development

  6. Implementation of MonetaryPolicy CBRT Policy Rates (Percent) TL Required Reserve Ratios (Percent) Source: CBRT Source: CBRT

  7. AnnualGrowth in DomesticCredit (%) FX adjusted

  8. Developments in the Domestic Demand Source: CBRT, Turkstat, Ministry of Development

  9. Developments in ForeignTrade Seasonallyandcalendareffectadjusted, 2007 -Q1=100. Source: Turkstat

  10. Current Account Balance (Seasonally Adjusted, Million Dollars)

  11. Rebalancing (Contributionsto GDP Growth) Source: Turkstat, Ministry of Development

  12. ManagingInflation Expectations Source: CBRT, Turkstat

  13. Fiscal Stance Source: Ministry of Development, Undersecretariat of Treasury

  14. FiscalRuleTargetvs Realization, 2011 Source: Ministry of Development

  15. Fiscal Performance (General GovernmentDeficit*) *ExcludingPrivatizationRevenues Source: Ministry of Development

  16. Redistributive Role of Direct Taxes Source: Ministry of Development

  17. Redistributive Role of Indirect Taxes Source: Ministry of Development

  18. General Government Balance GGB: General GovernmentBalance (Public Receivables Restructuring, Privatization and One-Off Revenues Excluded) Source: Ministry of Development

  19. General Government PrimaryBalance GGPB: General GovernmentPrimaryBalance (Public Receivables Restructuring, Privatization and One-Off Revenues Excluded) Source: Ministry of Development

  20. TheSlowdown in Europe willaffectTurkeyvia… ►diversification of tradepartnerstoward other regions ►low direct exposure to financially weak countries of EU ►strong Turkish banking sector ►wide set of CBRT instruments to manage liquidity ►the new investment scheme and other structural reformsto attract FDI and boost investment ►stable and strong macroeconomic fundamentals and growth potantial ►relatively low risk perception about Turkey

  21. OECD-EDRC2012 ECONOMIC REVIEW OF TURKEY AFTERNOON SESSION STATEMENT Erhan USTA Deputy Undersecretary Republic of Turkey Ministry of Development June 14th, 2012

  22. Evaluation of Baseline Long TermScenario

  23. Structural Reform Agenda to Increase Competitiveness and Reduce External Imbalances (1) • Labor Market • Increasing flexibility of labor market • Introducing severance pay fund • Increasing female labor participation rate • Linking social assistance with employment • Product Market • Increasing competition and efficiency in energy sector • Boosting agricultural productivity • Further improving investment climate • Education • Improving quality of education • Increasing average years of schooling • Strengthening the linkage between employment and education

  24. Structural Reform Agenda to Increase Competitiveness and Reduce External Imbalances (2) • Increasing Domestic Content of Production • New incentive scheme • Input supply strategy • Infrastructure Investments • Public -private partnership • Transportation investment • Improving Quality of Financing • Promoting non-bank financing • Mobilizing savings under the mattress • Extending private pension scheme incentives • Issuing rental certificate • R&D, Innovation and Entrepreneurship • Development of human resources for science , technology and innovation • Stimulating transformation of research results into products and services

  25. Climate Change Indicators (2005) Source: OECD (2008) Differentiating Countries in terms of Mitigation Commitments, Actions and Support

  26. CO2 Emission Intensity (kg / 2005 PPP$ GDP) • Source: World Development Indicators, World Bank, 2009

  27. Emission Reduction (According to BusinessAs Usual) Source: Ministry of Development

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