Since 1969, “growth based on industry” has been a major motto in five-year development plans. A replacement of imports policy was followed until 1980, but after that year, by starting production for exports, substantial advancement began in the development of the basics and principles of the market economy. The Economic Stability Program of January 24th, 1980 was a crucial milestone for turkish industry. Starting in the mid-1980s, infrastructural investments in the industrial sector gained impetus and in later years the “build-operate-transfer”, ”build-operate” and “transfer of operating rights” models were introduced to meet financial needs on beter terms. The capital markets board was established in 1981 to channel savings to the industrial sector; banking services were modernized and transportation and communications services were improved. The Law for Protection Against Unfair Competition came into force in 1994 and an independent and autonomous Competition Board was established with the objective of effectively taking under control all actions that would prevent, damage or restrict competition in the goods and services market.
New regulations for export and incentives for foreign currency earnings helped the industrial sector improve its competitive power and export increased rapidly. Free trade zones and international fairs were also quite effective in the development of the industrial sector and its integration with world markets.
With is national income, total work force and employment. Turkey has an economy that grows more with its passing day Money and capital market consolidated by reforms enacted in Turkey gradually keep pace with these developments. The state authority carried out privatization in many fields fort he Turkish economy to be one based more on free market in the new century.
Growth, National Income And Employment
The Turkish economy is the world’s 16th biggest economy with 618 billion USD of Gross Domestic Product (GDP) as of 2009. Taverage Income per capita in Turkey is nearly 8.600 USD. The annual growth rate of the Turkish economy in terms of Gross Domestic Product
(GDP) was 5.3% Between 1980-1990 and 4.5% during 1990-1998 periods, a much beter performance than the world average, although the economy receded by 3.1% between 1999-2001 as a result of financial crises of the periot, it successfully recovered and has maintained a steady growth rate since 2002. Average annual growth rate between 2002-2007 was 6.9%. however, the global economic crisis in 2008 and 2009 affected the Turkish economy as well and the growth rate was 0.7% in 2008 and -4.7% in 2009.
The impact of the global crisis reflected in growth figures particulary in the last quarter of 2008 and the first three quarters of 2009. The Turkish economy that receded by 7.0% in the last quarter of 2008, shrank for the first time following a growth period of 27 quarters. The economy that receded by 14.5%, 7.7% and 2.9% in the first three quarters of 2009, grew by 6.0% in the last quarter of 2009 giving the impression that it came out of recession.
The shares of economic sectors in GDP changed during the crisis. In 2008 agriculture, industry and services had a share of 7.6% , 19.7% respectivelty and as of the end of 2009 agriculture, industry and services had a share of 8.3% ,19.2% and 72.5% respectivelty.
According to work force statistic, teh population at employment age that was 50 million 772 thousand in december 2008, has reached 51 million 933 thousand. While the rate of entering the work force was 46.9% in 2008, this rate increased to 48.8% in 2009.
The number of employed was 21 million 194 thousand in 2008. This figıre increased to 22 million 019 thousand in 2009. In 2008, out of the employed, 23, 7% were employed in tyhe agriculture sector, 21% in industry, 5.9% in construction and 49.5% in the services sector and in 2009 25.3% were employed in the agriculture sector, 19.4% in industry and construction sectors and 55.3% in the services sector.
On the other hand, in 2009 the number of unemployed increased by 688 thousand compared to the previous year and reached 3 million 299 thousabd due to the impact of the global crisis and the unemployment rate rose from 11% to 14%. In the same year, the rate of unemployment was 13% in urban areas and 8.2%, in rural areas.
Money And Capital Markets
In Turkey, Capital Markets are regulated and supervised by the Capital Markets Board set up in 1982. Also, capital markets developed with the İstanbul Stock Exchange established in 1985. Stockbrokers and banks are members of the ISE experienced rapid growth as a result of accelerated expansion of investment funds and liberalization of terms for foreign investors to enter Turkish capital markets. At present, there are three markets operating in the ISE, including the Stock Market, Bonds and Bills Market, and Foreign Tangible Assets Market.
Today Turkey has one of the most liberal foreign Exchange regimes in the world. Since 1984, the foreign Exchange regime has been liberalized to a great extent and extensive freedom was brought into the foreign currency regime. Decree No. 32, accepted in August 1989 related to Protecting the value required for free convertibility of the Turkish Lira. Limitations on indi viduals and corporations, who wish to trade securities quoted in the ISE were lifted and Turkish stocks and bonds became open to foreign investors, to transfer abroad both their capital an their profits without any restrictions.
In 2008, in addition to the shares of 316 companies, 10 “stock Exchange investment funds’” were traded daily in the ISE. In 2009, the number of shares traded dropped by 2 and the number of investment funds rose by 1. In 2009, the daily average transaction volume in the ISE was 1,3 billion, the daily transaction volume in the Bonds And Bills Market averaged 1,1 million and the same figure for the Repo/Reverse Repo Market averaged 7,7 billion USD. In 2009, the total transaction volume was 316 billion in the equity market, 270 billion in the Bonds And Bills Market Outright Purchases And Sales Market and 1,929 billion USD in the Repo/Reverse Repo Market.
In 2009, teh ISE was placed 7th among the developing stock exchanges and markets in terms of transaction volume of and 10th in terms of market value. The ISE Bonds and Bills Market Outright Purchases and Sales Market were placed 6th among all stock exchanges dealing with bonds and bills, in terms of the annual total volume of transactions.
The ISE is a founder member of the Federation of Euro –Asian stock Exchanges (FEAS), and a full member of the World Federation of Exchanges (WFE), the International Capital Markets institute (ECMI). It has also joined International Organization of Securities Commissions (IOSCO) as an affiliate member.
In Turkey, transactions in modern Money and foreign currency markets started with Decisions taken on January 24th, 1980 Today, a flexible and daily Exchange rate system is implemented and prices are determined in the free markets. Transactions in the free market are effective . ın the Central Bank market the Central Bank directs foreign currency movements. Foreign currency transactions are conducted in interbank markets the most., credit and deposit interests act freely. Foreign currency can be brought into the country freely. There is also nan effective gold market in the country.
As is in many other countries, privatization efforts in Turkey started in the 1980s tol essen the weight of the public sector in the economy and increase the weight of the public sector in the economy and increase effectiveness. However, unlike other countries the privatization process lasted very long in Turkey. Many legal arrangements were made to surmount the related practical difficulties. Law No.4046, enacted in 1994, established a comprehensive legal and a socially negotiable inf rastructure for privatization practices. Over years, various alterations and arrangements have been made to law No.4046, in order to overcome the problems faced in privatization applications; thus regulations were continuously renewed.
Since privatization applications started and until the end of 2009, public shares in 270 institutions, 22 unfinished facilities, 524 immovable property, 8 motorways, 2 Bosphorus bridges, 103 facilities, 6 ports, chance games license right and vehicle inspection stations were included in privatization.
In the privatization process, the state has state has completely pulled out of the forestry, animal feed and cement sectors, and partially from tourism, textiles, sea transportation, husbandry and the petroleum sector. Within the frame of the program implemented since 1986, so far nearly 199 establishments, either shares or entity sales/transfers have been made and no public shares are left in 188 of these establishments. In this period, a part of the shares of big companies like Netaş, Teletaş, USAŞ, Petrol Ofisi, Erdemir, Tüpraş, Petkim and Turkish Telekom have been either offered to the public or the remaining shares have been sold in blocks. There are no public contributions left in these establishments, except for Petlim (10%).
In Turkey, 53% of privatization realised up the present day was block sale, 24% sale of facilities and property and 21% public offering. The total volume of the privatizations realized from 1985 until the end of 2009 has amounted to almost 38,8 billion USD. The significant implementations in 2009 were the transfer of Başkent, Sakarya and Meral Electricity Distribution companies.
Some of the institutions within the context of privatization and the tender/sale/transfer procedures of which are in progress, are Turkish State Railways (TCDD), Finance-State Supply Office (SSO) İmmovables, Sümer Holding Company, Akarsu Power Plants, some factories of Turkish Sugar Factories Inc.Co., some elecricity distribution power plants of TEDAŞ ( Turkish Electricity Distribution Inc.Co.), Monopoly Inc.Co. and TCDD ports.