REPUBLIC OF TURKEY UNDERSECRETARIAT FOR FOREIGN TRADE ECONOMIC OUTLOOK OF TURKISH ECONOMY AND TRADE & INVESTMENT RELATIONS BETWEEN TURKEY AND EGYPT Alexandria, 14 October 2008 EGYPT WWW.COUNSELLORS.GOV.TR
TURKEY ON THE CROSSROADS OF CONTINENTS • Geographical Area :774,576 km2 • Population : 72 Million • GDP (2007) : 659 Billion US $ • GDP per capita (PPP) (2007) : 9,333 US $ • Trade Volume (2007) : 277 Billion US $
GROSS DOMESTIC PRODUCT (GDP) (Billion US$) GDP Growth 5,3% 9,4% 8,4% 6,9% 4,5% Economic growth has been robust and registered around 6,6% on average during the last three years. GDP per capita (PPP) reached to 9,333 US $ Turkey has become 6th biggest economy in Europe and 17th biggest economy in the world. According to OECD, Turkey is the 13th most industrialized country in the world.
SECTORAL BREAKDOWN OF GDP in 2007 In 2007, services constitutes the main part with approximately 70% and followed by Industry and Agriculture.
SECTORAL BREAKDOWN OF EMPLOYMENT (2007) in 2007, majority of the workforce was employed in the services sector by 55% 1
INTEREST RATES ARE DIMINISHING Since 2002 interest rates in Turkey have been decreasing despite the minor increasesin 2007 and 2008
INFLATION IS IN A DECREASING TREND In 2007 CPI (Consumer Price Index) was 8,4.
CURRENT ACCOUNT BALANCE OF TURKEY (million US $) current account deficit of38 billion US$ in 2007 The current account deficit stems mainly from the one in foreign trade deficit. The current account deficit is covered by tight fiscal policy and foreign investment in Turkey.
FOREIGN DIRECT INVESTMENT IN TURKEY (Billion US $) While the FDI inflows to Turkey on a yearly average basis were about 1.1 billion dollars between the 1993-2002 period, this figure increased to 9.7 billion in 2005, 20 billion in 2006, and 22 billions in 2007. 1
FOREIGN DIRECT INVESTMENT IN TURKEY 18.308 68.286 1
FDI TO TURKEY BY COUNTRY GROUPS IN 2007 FDI in Turkey in 2007: 22 billion US$ EU countries are by far the largest investor in Turkey. 1
ADVANTAGES OF INVESTING IN TURKEY • Liberalized Market • Domestic Market of over 70 Million People • Proximity to the Huge Markets • High-skilled, Competitive Labor • Low Labor Cost • Strong Ties With Caucasia and Central Asia • The Gateway of Energy Resources • Guarantee of Transfers • National Treatment • Reliable Investment Environment 1
TURKEY’S FOREIGN DIRECT INVESTMENT ABROAD (Million $) Total (Cumulative) : 10,3 Billion $ 1
PRIVATIZATION IN TURKEY • Sugar Companies • Turkish Airlines • Some major Ports - İzmir Port - İskenderun Port • Turkish Institution of Electric Distribution (TEDAŞ) • Halkbank 1
PRIVATIZATION REVENUES (Billion Dollars) In 2006 privatizations revenues reached a historical level of 9,5 billion US$. 1
Visitors 2004 : 17,5 million 2007 : 23,3 million 2010 Target: 30 million Bed Capacity 1984 : 65.000 2006 : 800.000 2010 Target : Above 1 million TOURISM IN TURKEY 1
TOURISM REVENUES IN TURKEY (Billion US$) Turkey aims to reach 30 billion US $ tourism revenue in 2010 1
TURKEY’S STRATEGIC POSITION IN ENERGY SECTOR TURKEY IS AN ENERGY CORRIDOR BETWEEN SUPPLIERS AND CONSUMERS 1
TURKEY:A Major Energy Transport Hub NATURAL GAS A. Existing • Russia –Turkey (2 pipelines) • Iran-Turkey B. Under Construction • South Caucasus • Turkey-Greece-Italy C. Projected • Trans-Caspian • Nabucco • Samsun-Ceyhan-Haifa • Iraq-Turkey OIL A. Existing Baku-Tbilisi-Ceyhan (BTC) Kirkuk (Iraq)-Ceyhan C. Projected Kazakh Oil (BTC) Samsun-Ceyhan 1
TURKISH FREE ZONES 20 free zones operational 3.754 Companies 642 with foreign participation Trade Volume: 24,5 billion US$ İst.Thrace (1998) Europe (1999) Trabzon (1992) Rize (1998) TUBITAK-MAM TECHNOLOGY (2002) İst. Ataturk Airport (1990) Samsun (1998) İst. Leather and Industry (1995) Eastern Anatolia (1995) Kocaeli (2001) Aegean (1990) Bursa (2001) İzmir Menemen (1998) Kayseri (1998) Mardin (1995) Denizli (2001) Mersin (1987) Gaziantep (1999) Adana –Yum. (1998) Antalya (1987) Bulk of the export: to the EU 1
TURKISH FREE ZONES OFFER • Incentives • Modern infrastructure • Minimum bureaucracy • Facilitated customs procedures • Access to important trade routes • Effective management 1
TURKEY’S ROLE AS A TRANSIT AND HUB COUNTRY Turkey is not only an energy corridor but also an important energy terminal. Future projects will enhance Turkey’s role in energy. 1
DEVELOPMENT OF TURKEY’S FOREIGN TRADE Today, Turkey is the 22nd biggest exporter and the 15th largest importer of the world.
EXPORTS OF TURKEY BY COUNTRY GROUPS IN 2007 The EU is the biggest trade partner of Turkey.In 2007, EU-27 accounted for 56 % of total exports of Turkey. The share of EuroMed in Turkey’s export is around 6 %.
IMPORTS OF TURKEY BY COUNTRY GROUPS IN 2007 The EU is the biggest trade partner of Turkey, in terms of imports. EuroMed has % 3 share in Turkey’s imports.
EXPORTS OF TURKEY BY COUNTRIES (2007) Billion $ In Turkey’s Exports Egypt ranks at the 25th place while Turkey is the 9th country in Egypt’s overall Exports
IMPORTS OF TURKEY BY COUNTRIES (2007) Billion $ In Turkey’s Imports Egypt ranks at the 38 th place while Turkey is the 14 th country in Egypt’s overall Imports
SECTORAL BREAKDOWN OF TURKEY’S EXPORTS (2007) Most of Turkish exports are composed of manufactured products, which have accounted for 82 % of the total.
SECTORAL BREAKDOWN OF TURKEY’S IMPORTS (2007) Manufactured products again has the biggest share in Turkey’s imports with 62%.
TURKEY’S ALIGNMENT WITH THE EU’S PREFERENTIAL REGIMES Agreements in Force Agreement Signed Negotiation Process 1- EFTA (1992) 2- Israel (1997) 3- Macedonia (2000) 4- Croatia (2003) 5- Bosnia (2003) 6- Tunisia (2005) 7- Palestine (2005) 8- Morocco (2006) 9- Syria (2007) 10- Egypt (2007) 11- Albania (2008) -Georgia (2007) • Montenegro (initialled) • Chile • Faroe Islands • - Jordan • - Lebanon • - Gulf Cooperation Council Preparatory/ExploratoryStage EU’s New Strategy: Global Europe • - India • - S.Korea • ASEAN • ANDEAN • - Central America • - Russia - Ukraine - Mexico - S. Africa - Algeria - Mercosur 3 1
Trade & Investmet Relations between Turkey and Egypt 1
FTA entered into Force on 1 March 2007 FREE TRADE AGREEMENTBETWEEN TURKEY & EGYPT Turkey abolished all custom duties on imports applicable to industrial goods originating in Egypt upon the entry into force of this Agreement. Egypt will gradually abolish custom duties applicable on industrial goods originating in Turkey over a transitional period of up to 15 years . 1
Since the signing up of the FTA in 2005, Turkish investments in Egypt have boosted. Recently, Egypt appears as foremost the leading country to attract the Turkish investments. In early days of 2006, 23 Turkish companies had around 40 Million US Dollars of investment in Egypt. In the last 3 years, we witnessed 190 new companies being established in various cities of Egypt. Today, more than 190 companies and around 1 billion US Dollars of investment. Turkey has become a major donor of investments in Egypt. EFFECTS OF FTA ON TURKISH INVESTMENTS IN EGYPT 1
Turkish investors has created 50 thousand new jobs in Egypt since 2005. 150 companies are also carrying out feasibility researches in Egypt and start of their investments in the short term is expected to bring another 1 Billion $ of Turkish invesment. Activities of Turkish Industrial Zone in 6 October City, 5 Contracting Companies and 28 Retail Shops are not included in these figures. It should also be mentioned that 80% of the Russian and Ukranian tourists visiting Egypt are transfered through Turkish Operators. EFFECTS OF FTA ON TURKISH INVESTMENTS IN EGYPT 1
TURKISH CEMENT INDUSTRY Million US$ • 3rd Producer in Europe • 2nd Exporter in the World
TURKEY’S NATURAL STONES Turkey is among the leadng countries in the field of exporting high quality marbles, deposits where the total exports reached to 1.2 billion $ in 2007 Million US$
TURKISH CERAMIC PRODUCTS Million US$ • 5thProducer in the World and 3rdExporter inEurope in Ceramic Building Materials
TURKISH TEXTILES INDUSTRY Billion US$ • 2ndTextiles Supplier in the EU • 1st Home Textiles Exporter in the World • 6th largest synthetics capacity in the world
TURKISH CLOTHING INDUSTRY Billion US$ • 1st in Exports of Clothing Industry in the EUand 4th in the World • 1st in Sock Production and Exports in the World • Use High Technology in Clothing
TURKISH FURNITURE INDUSTRY Million US$ Although highly fragmanted among a large number of small workshops, wooden furniture and metal office furniture exports reached to 1.5 billion $
TURKISH LEATHER ARTICLES INDUSTRY Million US$ 4th in Exports of Leather Garments in the World and 2nd in Europe