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Intellectual Capital of Turkey

Kamil Yılmaz Koç U niversit y. Intellectual Capital of Turkey. TEPEK National Event Bilkent University, Ankara October 9, 20 0 9. Turkey’s Participation in the European Knowledge Economy. Value of I ntellectual C apital - 1995. Value of I ntellectual C apital - 200 1.

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Intellectual Capital of Turkey

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  1. Kamil Yılmaz Koç University Intellectual Capital of Turkey TEPEK NationalEvent Bilkent University, Ankara October 9, 2009

  2. Turkey’s Participation in the European Knowledge Economy

  3. Value of Intellectual Capital - 1995

  4. Value of Intellectual Capital - 2001

  5. Value of Intellectual Capital - 2007

  6. Value of Intellectual Capital – 2007 Assets

  7. Value of Intellectual Capital – 2007Investments

  8. Value of Intellectual Capital – 2007Effects

  9. Turkish Economy - 16th in the World(Tril. USD, 2008) Source: IMF, World Economic Outlook

  10. And 6th in Europe..(Tril. USD, 2008) Source: IMF, World Economic Outlook

  11. Turkey’s demographic window of opportunity..

  12. Will more or less be wiped out by 2050… Source: Treasury

  13. Turkish Economy since 2001 • Since 2001 Turkish economy experienced a dramatic recovery • Thanks to institutional and macro reforms (e.g., banking reforms, adopting a flexible exchange rate, sticking to fiscal adjustment) • A very pragmatic government that has sticked to EU membership goal and the IMF program • A very benign international environment for emerging markets (the availability of large sums of international capital flows) • However, the supply-side (micro) structural reforms did not follow through, • The growth rate started to decline since 2006…

  14. Government budget deficit declined substantially since 2001..

  15. Thanks to sustained fiscal discipline public sector debt stock declined substationally since 2001 crisis

  16. Conquest of inflation

  17. Conquest of inflation thanks to fiscal discipline..

  18. Interest rates (%)

  19. R&D Expenditure per capita (USD, PPP)

  20. R&D Human Resources (1000)

  21. Number of Scientific Publications (per million people)

  22. International Patent Applications

  23. But increased difficulty in sustaining high growth rates recently

  24. Share of Agriculture in employment declined dramatically since 2002 …

  25. Unemployment increased to a higher plateau after the 2001 crisis, and yet another one after the global crisis…

  26. Turkish growth is driven by domestic demand… Source: Treasury

  27. Trade deficit continued to rise

  28. Current account deficit financed by capital inflows…

  29. The rapid increase in CA deficit is also due to rapidly increasing energy prices since 2002

  30. Since 2001 composition of Capital Inflows changed for the better… Source: Treasury

  31. Since Dec. 2004 a tremendous increase in FDI inflows

  32. Recent Performance of Sectors (groups based on technology intensity) (Compounded Annual Average Rate of Change)

  33. Crisis and Worldwide Recession

  34. Post-1990 Crises – Impact on Turkish Trade • 1994 (January 1994) • 2001 (January 2001) • 2008 (September 2008)

  35. Economic Crises and Imports

  36. Economic Crises and Exports

  37. Industrial production declined by an average of 16% in the first eight months..

  38. Since the beginning of the crisis a dramatic shift in balance of payments…

  39. The heavy burden of the crisis on Turkish economy • Impact through the trade and finance channels. • Collapse of the EU demand led to 35% decline in exports, • As the EuroArea economy is expected to shrink around 4% in 2009, the demand for Turkish exports will stay weak, • Turkish economy is likely to contract in double digits in the first quarter, and more than 6% in 2009 • Government has recently taken a series of fiscal policy actions • Monetary policy turned into expansionary gear rapidly • Would they be sufficient to bring Turkish economy out of the woods?

  40. After the crisis: Slow recovery for the Turkish economy • The recovery will be slow, thanks to strong headwinds from the trade and finance channels • IIF forecasts sharp decline in private capital flows to EMs in 2009 ($165 bn compared to $920 bn and $465 bn in 2007 and 2008) • Net capital outflows would mean that a strong pick up in domestic demand is unlikely in 2010. • The fiscal deficit is worsening rapidly raising doubts about the sustainability of public sector debt in the long run

  41. Thank You

  42. Indeed Turkey unable to sustain high growth rates since 1940s

  43. Turkey – Demographic Indicators (2008) Land Area (km²) 774,820 Population (Million) 71.5 Rate of Population Growth 1.31% Density (km²) 92.3 Urban Population 62.2% Average Age 28.4 Population Aged 15-64 66.4% Labor Force (Million) 24.6 Unemployment Rate 10.9% Labor Force Participation 49.1% Female Labor Force Participation 26.2%

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