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					                MINISTRY of ECONOMY

                    ECONOMIC OUTLOOK

                             April 2012

Economic Outlook is revized in the 1st and the 3rd weeks of the month.
Recent Update:04/12/2012
                                                     OUTLINE
 A- MACROECONOMIC OUTLOOK
 B- FOREIGN TRADE OUTLOOK
             1) MERCHANDISE
             2) SERVICES
 C- INVESTMENTS , FOREIGN CAPITAL and INCENTIVES
 D- FREE ZONES in TURKEY
 E- BILATERAL, REGIONAL, PLURILATERAL and MULTILATERAL TRADE




April 2012                    Ministry of Economy              2
 A- MACROECONOMIC OUTLOOK




April 2012   Ministry of Economy   3
              Growth Forecasts for Selected Countries/Country Groups (%)
                    Growth Forecasts for Selected Countries/Country Groups (%)
                              Turkey Euro Area US Brazil Russia India China
                        2012   2.2       -0.2     1.5   3.8   2.8   6.9   8.5
              IMF       2013   2.5       1.2      2.4   4.1   4.0   7.2   8.4
                        2016   4.3       1.7      3.4   4.2   3.8   8.1   9.5
             OECD       2012   3.0       0.2      2.0   3.2   4.1   7.9   8.5
                        2012   2.9       -0.3     2.2   3.4   3.5   6.5   8.4
               WB
                        2013   4.2       1.1      2.4   4.4   3.9   7.7   8.3
                        2012   3.2       0.4      0.7   2.7   3.9   7.7   8.7
               UN       2013   5.4       1.3      1.7   3.8   4.0   7.9   8.5

  Source: IMF, OECD, UN, WB


  Turkish Economy expanded by 8,5% in 2011.
  According to the IMF, Turkish Economy is expected to grow by 2,2% in
  2012.




April 2012                       Ministry of Economy                             4
                    Forecasts for Merchandise and Services Trade Growth (%)

                     Forecasts for Merchandise and Services Trade Growth (%)
                                   Exports                   Imports         World
                          Advanced Emerging Advanced Emerging Trade
                  Years Economies Markets Economies Markets Volume
                   2012      2,4           6,1           2           7,1      3,8
              IMF 2013       4,7            7           3,9          7,7      5,4

Source: IMF




  According to the IMF estimates, global trade volume of merchandise and
      services is expected to increase by 3.8% in 2012 and 5.4% in 2013.




April 2012                         Ministry of Economy                               5
                   Economic Targets of 2012-2014 Medium Term Programme

                                                             2012* 2013* 2014*
   GDP (Billion $, Current Prices)                                 822           888      952
   GDP Per Capita ($)                                           10.973        11.716   12.412
   Real GDP Growth                                                 4,0           5,0      5,0
   Unemployment Rate (%)                                          10,4          10,2      9,9
   Tourism Income (Billion $)                                       26            29       31
   Current Account Balance (Billion $)                           -65,4           -67    -67,1
   Current Account Balance / GDP (%)                              -8,0          -7,5     -7,0
  *Forecast (Medium Term Programme, Ministry of Development – October 13, 2011)


   Medium Term Programme aims to sustain economic growth, to
    decrease the current account deficit, and to preserve
    macroeconomic and financial stability.



April 2012                           Ministry of Economy                                        6
         Real GDP Growth of Selected Countries/Country Groups (2010)


                           Japan




     Source: TURKSTAT, IMF and countries’ statistics offices
     * Data for India is IMF estimate.

 Turkish Economy expanded by 8.5% in 2011, which was well beyond the
  expectations of the IMF (7.5%).

April 2012                              Ministry of Economy         7
                                      Annual Economic Growth Rates (2002-2011)




       * Forecast, Medium Term Programme Source:TURKSTAT

    Turkey has recovered fast from the global financial crisis and amongst
     those countries affected less from current global economic
     uncertainties.
    Turkey has the fastest economic growth rates in Europe.
    Mean annual growth rate between 2002 and 2011 was 5.4%.
    Real GDP growth for 2011 realized as 8.5%.
April 2012                         Ministry of Economy                        8
                                                                               GDP Per Capita




  Source: Dollar value is from TURKSTAT, PPP Dollar value is from World Bank


   GDP per capita has tripled in the last ten years from 3,492 USD to 10,444
    USD. According to Purchasing Power Parity (PPP),GDP per capita surpassed
    15 thousand USD.
April 2012                            Ministry of Economy                                  9
                              Capacity Utilization Ratio (%)




    Source: TURKSTAT


 Capacity utilization ratio realized as 73.1% in March 2012.



April 2012                 Ministry of Economy                  10
                                Industrial Production Index




     Source: TURKSTAT
 Industrial production index increased by 4.4% year-over-year in February
  2012 up to 118.5


April 2012                Ministry of Economy                            11
                              Inflation (Annual Percent Change)




 Source: TURKSTAT



  In March 2012 compared to the same period of the previous year, CPI has
   increased by %10.4 percent and PPI has increased by %8.2.


April 2012                 Ministry of Economy                               12
                         Real Effective Foreign Exchange Rate (2003=100)




       Source: CBRT

   As of March 2011, Turkish Lira has depreciated by 1.5% annually in terms of
    the CPI-based real effective exchange rate.
   The level of depreciation is 3.1% in terms of the PPI-based real effective
    exchange rate.

April 2012                     Ministry of Economy                           13
                        Total Credits and Consumer Credits (Billion TL)




  Credits and specifically consumer credits increased in parallel to the
   growing domestic demand.
  Total credits increased slightly on a monthly basis in February 2012.

April 2012                Ministry of Economy                           14
                                                      CDS Premiums (10 April 2012)




        •    Higher CDS premiums indicate higher risk levels.
        •    PIIGS: Portugal, Irland, Italy, Greece, Spain

      CDS premium of Turkey is significantly low compared to most of the
       European countries.

April 2012                       Ministry of Economy                           15
                                                    Financial Markets
 As of September 2011, 194,739 people were employed and 10,501
  branches were operating in Turkish banking sector.
 Total assets of the banking sector increased by 20.6% and reached 1.214
  billion TL in January-September 2011.
 Liquid assets have increased by 62.3% due to the escalation in the
  Required Reserve Ratios (RRR).
 As of September 2011, Turkish banking sector was operating in 31
  countries including banks, other financial corporations and off-shore
  branches.
 As of September 2011, Capital Adequacy Ratio of Turkey is 16.4%. Though
  there is a declining trend in CAR, it is still far above the legal minimum
  level (8%) and even 12%, which is the announced target ratio of Banking
  Regulation and Supervision Agency.
 90.6% of the legal equities are common equities, which are considered as
  the safest type of capital.
April 2012                    Ministry of Economy                        16
                                      Budget Deficit/ GDP (%)




     * 2011

 22 EU countries couldn’t satisfy the Maastricht criteria (3%) in 2010.
 Central government budget deficit/GDP ratio was 1.3% in Turkey in 2011.
 In January-February 2012, central government budget had a 900 million
  dollars deficit.

March 2012                Ministry of Economy                          17
                               Government Debt / GDP (%)




 Debt/GDP ratio of Turkey was 39.4% in 2011, which was below the level in 18
  EU Countries and the Maastricht Criteria (60%).
April 2012            Ministry of Economy                                 18
                                       Unemployment Rates (%)




     Source: TURKSTAT
 Unemployment rates have returned to the pre-crisis level.
 In 2011, the annual rate of unemployment ocurred 2.1 points less than a year
  earlier and recorded as 9.8%.
 Unemployment rate in the Euro Zone and was 10.8% in February 2012.
 Turkey has the 5th largest labor force among the European countries. (2009, World
  Bank)

April 2012                   Ministry of Economy                                  19
                                  Potential of Population (2010)




             Source: World Bank

    Turkey has a population of 74.7 million in which half of the population
     is under the age of 29.2.
    Growth rate of population is 1.36% in Turkey, 0.28% in EU Countries
     and -0.2% in Germany.

April 2012                        Ministry of Economy                          20
              Growing Dynamism in Turkey's Domestic Market

  Cell phone penetration rate in households: 91.9%
  Internet access rate in households: 42.9%
  Internet access rate in enterprises: 90.9%
  PC penetration rate in households: 34.3%
  Laptop penetration rate in households: 22.6%
  Digital camera penetration rate in households: 27.8%
  Printer penetration rate in households: 14.0%
  1 of each 5 people owns a vehicle. (2011)


April 2012           Ministry of Economy                  21
 B- FOREIGN TRADE OUTLOOK




April 2012   Ministry of Economy   22
             I) MERCHANDISE




April 2012   Ministry of Economy   23
                                              Targets in Merchandise Trade

         (Billion $)        2010* 2011* 2012** 2013** 2014**
         Exports               114    135 148,5 165,7 185,1
         Imports             185,5 240,8 248,7 272,5 295,9
         Volume of trade     299,5 375,8 397,2 438,2       481
         Balance of trade    -71,6 -105,8 -100,2 -106,8 -110,8
         Exports/Imports (%) 61,4    56,1   59,7   60,8   62,6


    * Actual (Source: TURKSTAT)
    **Forecast: Medium Term Programme, Ministry of Development- 13/10/2011)




April 2012                           Ministry of Economy                      24
             Turkey's Share in Global Merchandise Exports (%)




   Turkey’s share in global merchandise exports was %0.74 in 2011.



April 2012                 Ministry of Economy                        25
                            Foreign Trade Volume/GDP (%)




 The ratio of foreign trade volume/GDP was 48,7% in 2011.
 Turkey’s integration to the international trade system is eminent.



APRIL 2012                      Ministry of Economy                    26
                                              Foreign Trade Developments
                               2009 - 2011 / 2011-2012 January-February
                                      Annual (Billion $)               January- February (Billiob $)
                                                                                                         Change (%)
                              2009         2010            2011     2011 (Jan-Feb)      2012 (Jan-Feb)
                                                                                                          2011/2012
Export                        102,1        113,9            135,0       19,6                 22,1            12,9
         Energy Export         3,9          4,5              6,5          0,9                1,3             37,9
          Gold Export          4,6          2,1              1,5          0,1                0,7            486,7
Import                        140,9        185,5            240,8       34,4                 35,1             1,9
       Energy Import          29,9          38,5            54,1          7,5                9,3             23,8
        Gold Import            1,6          2,5              6,2          0,9                0,4            -55,6
Foreign Trade Volume          243,1        299,4            375,8       54,0                 57,2             5,9
Foreign Trade Balance         -38,8        -71,7           -105,9       -14,8               -13,0           -12,2
Balance excl. Energy          -12,8        -37,6            -58,3        -8,2                -4,9           -40,0
Export/Import(%)              72,5         61,38            56,04       56,97               63,09              *
* Energy corresponds to Chapter 27.
 Source:Ministry of Economy

 In January- February 2012 compared to the same period of the previous
  year, exports and imports increased by 12,9 % and 1,9% respectively.


March 2012                                         Ministry of Economy                                                27
                                                       Monthly Exports




 In February 2012 compared to February 2011 exports and imports have
  increased by 17,1% and 1,1% and reached to the level of 11,8 and 17,7
  billion dollar respectively.

   April 2012                    Ministry of Economy                      28
          Distribution of Foreign Trade in Broad Economic Categories

EXPORT
                           Annual     2010/2011 January-February 2011/2012
      (Million $)
                       2010     2011   Change%   2011      2012   Change%
 Investment Goods     11.771   14.167    20,4    1.953     2.193    12,3
 Intermediate Goods   56.381   67.981    20,6    9.826    11.509    17,1
 Consumption Goods    45.321   52.252    15,3    7.787     8.385    7,7
 Others                 411      555     35,0      44        50     12,5
 TOTAL                113.883 134.954    18,5   19.611    22.137    12,9

IMPORT
                           Annual     2010/2011   January-February 2011/2012
      (Million $)
                       2010     2011   Change%     2011      2012   Change%
 Investment Goods     28.818   37.268    29,3      4.699     4.949     5,3
 Intermediate Goods   131.445 173.135    31,7     25.249    26.502     5,0
 Consumption Goods    24.735   29.692    20,0      4.294     3.499    -18,5
 Others                 546      739     35,3       183       136     -25,4
 TOTAL                185.544 240.833    29,8     34.425    35.086     1,9


  April 2012                Ministry of Economy                                29
                                                                                                Main Export Items

                                     Million Dolar                                 EXPORT            IMPORT            BALANCE   CHANGE %
                                Dönemsel (Ocak-Şubat)                         2011       2012    2011     2012      2011 2012 2011/2012
 1 Vehicles other than railway or tramway                                    2.337      2.519   2.284     1.751       53     767     7,8
 2 Iron and Steel                                                            1.634      1.882   3.104     3.213    -1.470 -1.331   15,2
 3 Boilers, machinery and mechanical appliances; parts thereof               1.590      1.762   3.334     3.739    -1.743 -1.977   10,8
 4 Electrical machinery and equipment; parts thereof                         1.227      1.443   2.422     2.564    -1.196 -1.121   17,6
 5 Pearls, precious stones, precious metals and articles thereof               419      1.122     989      558      -570     563   167,7
 6 Knitted and crocheted goods and articles thereof                          1.358      1.303     170      123      1.188 1.180     -4,0
 7 Mineral fuels, mineral oils and product of their distillation               933      1.286   7.507     9.292    -6.575 -8.006   37,9
 8 Articles of iron and steel                                                  810        939     350      337       460     602   15,9
 9 Non-knitted and crocheted goods and articles thereof                        836        878     283      251       553     627     5,1
10 Plastic and articles thereof                                                631        687   1.898     1.967    -1.267 -1.281     8,8
                                    LIST TOTAL                               13.785 13.821      22.342 23.796      -8.557 -9.975     0,3
                                      TOTAL                                  19.611 22.137      34.425 35.086     -14.814 -12.949 12,9
 * Percent change is related to the annual change in exports in 2012.
   Source: TURKSTAT



    April 2012                                                     Ministry of Economy                                                30
                                                                                           Main Import Items

                              Million Dolar                             IMPORT              EXPORT             BALANCE     CHANGE %
                           January-February                         2011      2012     2011       2012     2011      2012 2011/2012
 1 Mineral fuels, mineral oils and product of their distillation   7.507     9.292      933      1.286    -6.575 -8.006       23,8
 2 Boilers, machinery and mechanical appliances; parts thereof     3.334     3.739    1.590 1.762         -1.743 -1.977       12,2
 3 Iron and Steel                                                  3.104     3.213    1.634 1.882         -1.470 -1.331       3,5
 4 Electrical machinery and equipment; parts thereof               2.422     2.564    1.227 1.443         -1.196 -1.121       5,9
 5 Plastic and articles thereof                                    1.898     1.967      631        687    -1.267 -1.281       3,7
 6 Vehicles other than railway or tramway                          2.284     1.751    2.337 2.519           53        767    -23,3
 7 Organic chemicals                                                 815       758      90         86      -725       -672    -7,0
 8 Pharmaceutical Products                                           711       610      88         83      -623       -527   -14,2
 9 Optical Equipments                                                575       602      60         80      -515       -522    4,7
10 Pearls, precious stones, precious metals and articles thereof     989       558      419      1.122     -570       563    -43,6
                             LIST TOTAL                            23.640    25.056   9.009 10.950       -14.631 -14.106      6,0
                               TOTAL                               34.425    35.086   19.611 22.137      -14.814 -12.949      1,9
* Percent change is related to the annual chamge in imports in 2012.
Source: TURKSTAT



    April 2012                                                Ministry of Economy                                                     31
                   Main Trade Partners (January-February 2012)

Main Export Partners (Share,%)




                                        Main Import Partners (Share,%)


Source: TURKSTAT




April 2012               Ministry of Economy                         32
                                                                           Exports by Regions

                                                         February                        January-February
                   (Million $)
                                              2011         2012     Change(%)     2011         2012     Change(%)
    A- EU (27)                                   4.918        4.930         0,3      9.470        9.438        -0,3
    B- FREE ZONES IN TURKEY                        183          213        16,0        363          404       11,3
    C- OTHER COUNTRIES                           4.958        6.633        33,8      9.778       12.295       25,7
       1- OTHER EUROPE                             964        1.335        38,5      1.812        2.271       25,4
       2- AFRICA                                   607        1.195        97,0      1.381        2.090       51,3
          North Africa                             411          903       119,7        957        1.517       58,5
          Other Africa                             196          292        49,3        424          572       35,1
       3- AMERICA                                  526          865        64,5      1.039        1.577       51,8
          North America                            392          627        60,1        740        1.145       54,6
          Central America And Caraips               26           80       211,7         92          144       55,8
          South America                            109          159        45,8        206          289       40,1
       4- ASIA                                   2.821        3.142        11,4      5.452        6.220       14,1
          Near And Middle Eastern                2.134        2.387        11,8      4.157        4.713       13,4
          Other Asia                               687          755         9,9      1.296        1.507       16,3
       5- AUSTRALIA AND NEW ZEALAND                 37           39         7,1         69           76       10,3
       6- OTHER COUNTRIES AND REGIONS                3           57     1.588,4         25           60      143,2
                       TOTAL                    10.060       11.777        17,1     19.611       22.137       12,9
    Source: TURKSTAT




April 2012                              Ministry of Economy                                                       33
                                                                            Imports by Regions

                                                          February                        January-February
                   (Million $)
                                               2011         2012     Change(%)     2011         2012     Change(%)
    A- EU (27)                                    6.823        6.718        -1,5     12.540       12.749         1,7
    B- FREE ZONES IN TURKEY                          85           80        -5,8        153          160         4,2
    C- OTHER COUNTRIES                           10.612       10.914         2,8     21.731       22.178         2,1
       1- OTHER EUROPE                            2.857        2.469      -13,6       5.990        5.492        -8,3
       2- AFRICA                                    432          369      -14,5         940          763      -18,9
          North Africa                              240          197      -17,7         467          421        -9,7
          Other Africa                              192          172      -10,5         474          341      -27,9
       3- AMERICA                                 1.728        1.533      -11,2       3.375        3.137        -7,0
          North America                           1.347        1.210      -10,2       2.666        2.374      -11,0
          Central America And Caraips                62           79       27,4         149          162         8,5
          South America                             318          244      -23,3         560          602         7,5
       4- ASIA                                    4.826        5.367       11,2       9.948       10.840         9,0
          Near And Middle Eastern                 1.194        1.374       15,1       2.529        3.162       25,1
          Other Asia                              3.632        3.993         9,9      7.420        7.678         3,5
       5- AUSTRALIA AND NEW ZEALAND                  90           97         8,2        123          122        -0,7
       6- OTHER COUNTRIES AND REGIONS               680        1.079       58,6       1.355        1.823       34,5
                       TOTAL                     17.520       17.713         1,1     34.425       35.086         1,9
    Source: TURKSTAT




April 2012                              Ministry of Economy                                                        34
                                                              Tariff Rates




         Source: WTO Tariff Profiles, 2010




April 2012                              Ministry of Economy            35
             2) SERVICES




April 2012             Ministry of Economy   36
                                                   Targets in Services
  Tourism: Besides increasing the number of tourist arrivals, creating a
   structure that improves service quality, targets high-income groups
   by diversifying marketing channels, preserves natural capital and
   sustainability, and stimulates those types of tourism where Turkey
   has comparative advantages
  Construction, Engineering-Architecture, Technical Consultancy and
   Contracting Services: Establishing a structure that fits Turkey’s
   economic and social needs, that is compatible with high technology
   and international rules, that is sensitive to environment, that creates
   high value added, high foreign exchange inflow and high
   employment, that grants high service quality, and that relies on
   qualified human and physical capital.
  Commercial Services: Increasing productivity and commercial trade
   volume in a competitive way, and to encourage technology and
   innovation.



April 2012                Ministry of Economy                            37
                           Turkey's Share in Global Services Exports (%)




       Source: WTO, CBRT

    Turkey’s share in global exports of services was 0.92% in 2011.

April 2012                      Ministry of Economy                  38
                                         Balance of Payments - Services
                    Million $              2008        2009        2010        2011        2011*       2012*
        BALANCE ON SERVICES                   17.748      17.316      15.493      18.241         875       1.191
        Total Services Exports                35.564      33.922      34.743      38.982       3.830       4.037
        Total Services Imports               -17.816     -16.606     -19.250     -20.741      -2.955      -2.846
             1.Transportation                    208       1.840       1.482       2.502          62         262
                  Credit                       8.246       8.262       9.586      11.064       1.350       1.523
                  Debit                       -8.038      -6.422      -8.104      -8.562      -1.288      -1.261
             2.Travel                         18.445      17.103      15.981      18.044       1.104       1.309
                  Credit                      21.951      21.250      20.807      23.020       1.842       1.856
                  Debit                       -3.506      -4.147      -4.826      -4.976        -738        -547
             3.Construction Services             974       1.090         859         838          58         151
                  Credit                         974       1.090         859         838          58         151
                  Debit                            0           0           0           0           0           0
             4.Insurance Services               -684        -527        -469        -407         -79        -121
                  Credit                         752         676         719         869         142         109
                  Debit                       -1.436      -1.203      -1.188      -1.276        -221        -230
             5.Financial Services               -133        -355        -234        -690         -40         -80
                  Credit                         845         471         490         531          82          68
                  Debit                         -978        -826        -724      -1.221        -122        -148
             6.Other Business Services        -1.040      -1.286      -1.340      -1.440        -173        -206
                  Credit                         338         282         333         300          34          53
                  Debit                       -1.378      -1.568      -1.673      -1.740        -207        -259
             7.Government Services              -778        -846        -869      -1.059        -107        -115
                  Credit                         460         460         483         505          44          48
                  Debit                       -1.238      -1.306      -1.352      -1.564        -151        -163
             8.Other Services                    756         297          83         458          50          -9
                  Credit                       1.998       1.431       1.466       1.811         278         229
                  Debit                       -1.242      -1.134      -1.383      -1.353        -228        -238
    *January-February
    Source: CBRT

April 2012                               Ministry of Economy                                                       39
                                             Tourism Statistics (Quarterly)




             Tourists visited, Source: TURKSTAT


   Turkey’s income per tourist increased by 18% in 2010 and 1% in 2011.



April 2012                               Ministry of Economy               40
                              Constructing Services Abroad
                                                 Contributions to the overall
                                                 economic performance: Creating
                                                 foreign exchange inflow, exports,
                                                 employment, technology transfer;
                                                 adding to the machinery stock,
                                                 facilitating internationalization




 31 out of the world’s top 225
  constructing companies are Turkish.
 Turkey ranks as the 2nd country
  (following China) in terms of the
  number of top constructing
  companies.
April 2012                 Ministry of Economy                                 41
                                                   Logistics


 Europe’s biggest truck fleet
 (45 thousands trucks and 1,420 companies)
 Almost 1 million flights in 2011
 (2.3 million tonnes freight and 117 million passengers)
 25. biggest fleet in the world
 45 airports and 51 ports
 Total length of divided highways will reach 15 thousand
  kilometers.
 High-speed railway projects are carried out rapidly.



April 2012          Ministry of Economy                     42
                                                       Energy




   Turkey is an energy hub between energy producer and consumer
    regions
April 2012            Ministry of Economy                    43
     C- INVESTMENTS, FOREIGN CAPITAL and
                 INCENTIVES




April 2012      Ministry of Economy        44
                        Investment Climate in Turkey

                 10 REASONS TO INVEST IN TURKEY
    1- SOUND ECONOMIC
    PERFORMANCE                  6- CENTRAL LOCATION
    2- YOUNG and DYNAMIC         7- ENERGY CORRIDOR and
    POPULATION                   TERMINAL of EUROPE
    3- QUALIFIED and COMPETITIVE 8- LOW TAX RATES and
    LABOR FORCE                  INCENTIVE FACILITIES
    4- LIBERAL and INNOVATIVE    9- CUSTOMS UNION with EU
    INVESTMENT CLIMATE           and OPEN ECONOMY
    5- INFRASTRUCTURE            10- DOMESTIC MARKET



April 2012           Ministry of Economy                    45
                               Time Required to Start a Business




    Source: Invest In Turkey


       The required time to start a business is 6 days in Turkey.

April 2012                       Ministry of Economy                 46
                                                      Skilled Labour Availability




     Source: Invest In Turkey



         Scoring is between 0 and 10.

April 2012                      Ministry of Economy                          47
                                    Transparency in Finance Sector




         Source: Invest In Turkey

        Scoring is between 0 and 10.

April 2012                          Ministry of Economy        48
                  The Sectoral Breakdown of Foreign Investments
                                 (Million $)                      2010 2011 2011* 2012*
             AGRICULTURE                                             82     31     2   9
             INDUSTRIAL SECTORS                                   2,861 7,770 450 446
               Mining and Quarrying                                 139    148     5 22
               Manifacturing                                        905 3,363 178 352
               Production and Distribution of Electricity, Gas,   1,817 4,259 267 72
             SERVICES SECTOR                                      3,295 8,085 664 825
                                 TOTAL                            6,238 15,886 1,116 1,280

     * January - February

             Source: CBRT




April 2012                         Ministry of Economy                                       49
                   Breakdown of Foreign Investments by Country
                      Million $          2010           2011    2011*   2012*
              1   Netherlands             486          1.623     392     385
              2   Malasia                  6             15       0      230
              3   Azerbaijan              12           1.265      0      151
              4   Luxembourg              292            481      70     144
              5   Geermany                597            605     120     72
              6   USA                     323          1.403      48     67
              7   United Kingdom          245            917      14     37
              8   Norway                  19             76       0      27
              9   Italy                   25             98       10     24
             10   Austria                1.584         2.235      50     22
             11   Switzerland             122            233      51     18
             12   Hong Kong               21             163      0      17
             13   Greece                  436            123      10     10
             14   China                    0              0       0       9
             15   France                  623            985     193      8
             16   Bahrain                  0              5       0       7
             17   Kuwait                  193            38       6       6
             18   Spain                   205          2.230      17      5
             19   Albania                  0              0       0       5
             20   Cayman Island            0             54       54      5
                     LIST TOTAL          5.294         11.334    378     654
                        TOTAL            6.238         15.887    462     667
             *January-February



                                                                                Source: CBRT

April 2012                       Ministry of Economy                                       50
                     New Investment Incentive System

       The New Investment Incentive Regime of Turkey
       is structured under four schemes:

              General Investment Incentive Regime
              Regional Investment Incentive Regime
              Incentives for Large-scale Investments
              Incentives for Strategic Investments



April 2012              Ministry of Economy             51
                             New Investment Incentive System




* Only for the investments located in the 6th region
** For the regional investment incentive regime, investments located in the 3rd, 4th, 5th and 6th region are
eligible for the interest support.



   Nisan 2012                                     Ekonomi Bakanlığı                                            52
                   Current Investment Incentives (January-February)

                                                Amount of Fixed     Potential
                     Certificates
                                                 Investments       Employment
                       Issued
                                                  (Million TL)      (People)
      2010                           581                     5,059       18,422
      2011                           765                    12,952       22,976
      2012                           584                     8,406       16,252
                           CERTIFICATES ISSUED
                   Region I Region II Region III Region IV TOTAL
     2010            170       86       185        140      581
     2011            248      121       231        165      765
     2012            211       72       198        103      584
  Source: General Directorate of Incentive Implementation and Foreign Investment

April 2012                            Ministry of Economy                          53
         D - FREE ZONES IN TURKEY




April 2012        Ministry of Economy   54
                 The Advantages of Free Zones for Users
   Tax advantages for manufacturers
   Medium-and long-term investment view
   Availability to transfer profits
   Commercial facilities
   Exemptiın from customs duties
   Acquisition of the documents relating to the free movement of goods under the
    scope of Customs Union with the EU
   Principle of equality
   No time restrictions
   Flexibility to adjust to the market needs and conditions
   Reliable inflation accounting
   Market access to domestic and foreign markets
   Reduced bureaucratic procedures and dynamic business management
   Strategic advantages.
   Affordable and compatible infrastructure
   Supply chain opportunities




April 2012                   Ministry of Economy                                    55
                                              Free Zones in Turkey




   54,022 people have been employed in Free Zones of Turkey in 2011.



April 2012              Ministry of Economy                             56
                                                         Trade Flows of Free Zones

             Million $              2008                           2008        2010     2011 2011* 2012*
From Domestic Market to Free Zones 3,195                           2,177       2,295    2,668 204    249
From Free Zones to Abroad           5,874                          4,914       4,361    6,924 358    554
From Abroad to Free Zones           8,248                          5,493       6,626    7,253 555    543
From Free Zones to Domestic Market 7,262                           5,174       5,291    5,801 410    575
       TOTAL TRADE VOLUME          24,578                         17,757      18,572   22,646 1,527 1,921
*January

Source: General Directorate of Free Zones, Foreign Investments and Services



 Total trade volume of the Free Zones in January 2011 reached to
  1.5 billion USD.
 In January 2012 total trade volume of the Free Zones reached to
  1.9 billion dollars, increasing 25.8 % annually.

April 2012                              Ministry of Economy                                            57
                   Concentration in Free Zones by Industries


 Istanbul Ataturk Airport FZ                        Services and Software
 Antalya FZ                                         Yacht-building, Medical Equipment
 Kocaeli FZ                                         Ship-building
 Avrupa FZ                                          Ready-Wear
 Mersin FZ                                          Ready-Wear
 Bursa FZ                                           Automotive sub-industries
 Izmir FZ                                           Leather
 TUBITAK-MAM FZ                                     R&D Activities
 Adana-Yumurtalik FZ                                Ship Repair and Maintenance
Source: General Directorate of Free Zones, Foreign Investments and Services




 April 2012                              Ministry of Economy                            58
      E - BILATERAL, REGIONAL,
   PLURILATERAL and MULTILATERAL
                TRADE




April 2012   Ministry of Economy   59
                   Trade Relationships of Turkey with Others

      Bilateral Trade Relationships of Turkey
 Europe, Asia-Pacific, Eurasia, Middle East and North Africa,
 Sub-Saharan Africa, Americas

      Regional and Multiple Trade Relationships of
       Turkey
 EU, ECO, D8, BSEC, OIC, COMCEC

      Multilateral Trade Relationships of Turkey
 WTO, OECD, ACTA


April 2012            Ministry of Economy                       60
                                        Regional Breakdown of Exports

                                                                    Share %                                Share %
              (Million $)             2010      2011     Change %             2011*    2012*    Change %
                                                                     (2011)                                (2012*)
CIS                                  10,288    13,383      30.1        7.9     1,798    2,015     12.1        7.1
EFTA                                  2,416     1,892      -21.7       1.1      263      673      155.8       2.4
Economic Cooperation Organisation     7,617     9,295      22.0        5.5     1,321    1,336      1.2        4.7
Organization of Islamic Conference   32,470    37,338      15.0       22.0     5,415    6,681     23.4       23.7
Black Sea Economic Cooperation       14,456    17,774      23.0       10.5     2,459    2,580      4.9        9.2
OECD                                 61,491    71,655      16.5       42.2    10,748   11,626      8.2       41.2
FTA Countries**                      12,702    13,619       7.2        8.0     1,767    2,526     42.9        9.0
Turkic Republics                      3,921     5,043      28.6        3.0      595      758      27.3        2.7
               LIST TOTAL            145,361   170,000     16.9       100.0   24,366   28,195     15.7      100.0


  Source: TURKSTAT * January-February ** Except Lebanon and Mauritius

   In January-February period of 2012, our exports to OECD countries increased
   8.2 % and our exports to FTA countries increased 42.9 % annually. The annual
   increase of our exports to EFTA countries in the same period was 155.8 % and
   EFTA countries became the fastest growing export destination of the regions
   above.


  April 2012                             Ministry of Economy                                                61
             Chronological Evolution of the Relationship between Turkey and the EU


    12 September 1963: Ankara Agreement
    13 November 1970: The signing of the Additional Protocol
    1 January 1973: Additional Protocol to come into force
    14 April 1987: Turkey’s Application for Membership
    5 March 1995: The Association Council Decision Establishing the
     Customs Union
    10-11 December 1999: Recognition of the Candidate Status of
     Turkey at the Helsinki Summit
    8 March 2001: The first Accession Partnership Document issued
    17 December 2004: European Council decision to start
     Negotiations with Turkey in Brussels Summit
    3 October 2005: Start of the Negotiations between Turkey and the
     EU
    20 October 2005: Start of the Screening Process
    13 October 2006: End of the Screening Process

April 2012                  Ministry of Economy                              62
                      The process of Accession Negotiations between Turkey and the EU

Negotiations for 1 chapter were temporarily opened and closed afterwards.
     – Science and Research

Negotiations for 12 chapter were opened but closure criteria to all those negotiations were
imposed bt the EU.
     –   Business and Industry Policy,
     –   Statistics,
     –   Financial Control,
     –   Consumer and Health Protection,
     –   Trans-European Networks,
     –   Intellectual Property Law,
     –   Company Law,
     –   Free Movement of Capital,
     –   Information Society and Media,
     –   Taxation,
     –   Environment,
     –   Food Safety, Veterinary and Plant Health

Position papers of Turkey for 2 negotiations were forwarded to the EU. EU Common Position
Paper is expected to be announced.
     – Education and Culture,
     – Economic and Monetary Policy
For the opening of 8 chapters opening criterias of the EU have to be met by Turkey.
In all other chapters, Screening Reports are expected to be announced by the EU.


April 2012                           Ministry of Economy                                      63
                                                 Trade between Turkey and the EU




Source: Data Source of the Ministry of Economy

April 2012                            Ministry of Economy                    64
                                                               FTA Countries
       1. EFTA (Norway,                          10. Egypt
          Switzerland, Iceland,                  11. Albania
          Liechtenstein)                         12. Georgia
       2.    Israel                              13. Montenegro
       3.    Macedonia                           14. Serbia
       4.    Croatia                             15. Chile
       5.    Bosnia and Herzegovina              16. Jordan
       6.    Palestine                           17. Lebanon*
       7.    Tunisia                             18. Mauritius*
       8.    Morocco
       9.    Syria                               (*) Agreements that are in the
                                                 approval process


April 2012                 Ministry of Economy                                    65
                                 Trade with FTA Countries

  Our exports to FTA Countries increased %7,2 in 2011.
  The share of FTA Countries in total exports reached 10%.
  Turkey recorded a trade surplus of 1,4 billion USD in
   2011 with FTA Countries, while there was a trade deficit
   of 1.5 billion USD in 2002.




April 2012           Ministry of Economy                      66
                              Trade Representatives Abroad




             195 trade representatives from the
             Ministry are serving in 130 locations
             and 6 offices abroad.




April 2012             Ministry of Economy              67
                                                 Locations of Trade Representatives

     AMERİKA
Buenos Aires New York
Karakas      Sao Paulo
Mexico City Şikago
Ottava       Toronto
Santiago     Miami
Vaşington    San Francisco
Houston      Seattle
Los Angeles




      AFRİKA
 Abuja           Kahire
 Addis Ababa     Nairobi
 Akra            Pretoria
 Cezayir         Rabat
 Dakar           Trablus
 Darüsselam      Tunus
 Hartum          Kazablanka
 İskenderiye

             ASYA
                                                                                                                 GEORGETOWN




   Astana            Taşkent
   Aşkabat           Tokyo
   Bangkok           Ulan Bator
   Bişkek            Yeni Delhi
   Cakarta           Almatı
   Duşanbe           Guangzhou
   Hanoi             Hong Kong
   İslamabad         Karaçi
   Kabil             Mumbai
   Kuala Lumpur      Şangay
   Manila            Georgetown
   Pekin
   Seul
   Singapur
          AVRUPA/KAFKASYA
    AB            Londra       Barselona
    DTÖ           Lubliyana    Batum
    OECD          Madrid       Düsseldorf
    Atina         Minsk        Hamburg
    Bakü          Moskova      Hannover
    Belgrad       Oslo         Kazan
    Berlin        Paris        Marsilya
    Bern          Podgorica    Milano
    Bratislava    Prag         Münih
    Brüksel       Priştine     Novorossisk
    Budapeşte     Roma         Odessa               ORTA DOĞU
    Bükreş        Saraybosna   Rotterdam
    Dublin        Sofya        Selanik        Abu Dhabi   Muskat     Cidde                                                    Daimi Temsilci Yardımcılığı
    Helsinki      Stokholm     St.            Amman       Riyad      Dubai
                                              Bağdat      Sana       Erbil    AVUSTRALYA                                      Ticaret Müşavirliği
    Kiev          Tiflis       Petersburg
    Kişinev       Tiran        Stutgart       Beyrut      Şam        Halep                                                    Ticaret Ataşeliği
                                                                               Sidney
    Kopenhag      Üsküp        Birmingham     Doha        Tahran     Kudüs
                                                                               Melbourne
    Lahey         Varşova      Krasnodar      Kuveyt      Tel Aviv   Musul                                                    İrtibat Büroları
    Lizbon        Viyana       Novosibirsk    Manama      Basra      Tebriz
    Lefkoşa       Zagreb       Yekaterinbur
                               g               April 2012                                  Ministry of Economy                                              68
                   Projects with Future Prospects
 • Export Oriented Production Strategy and Input Supply
   Strategy
 • Market Access Strategy
 • Supporting Exports
 • Trade Remedies
 • Restructuring the Incentive System
 • Improving the Investment Climate
 • Trade Agreements
 • Next-Generation Free Zones
 • Trade in Services and Turkish Investments Abroad
 • Market Surveillance and Inspection
 • Strengthening the Organization Abroad

April 2012         Ministry of Economy                    69

				
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