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Invest in Balıkesir

Industry in Turkey

Industry in Balıkesir

As globalization tendencies increase in the world, factors like integration of world’s economies, increasing decisiveness of international organizations such as EU and WTO in economy policies, rapid developments in technology, -China and India being the most prominent- rise of developing countries and increase in commodity prices and volume of trade which are tied to economic growth affect Turkey’s economic growth capacity directly. Necessity of increasing competitiveness and sustaining high rates of economic growth due to increasing global competition increases the importance of the industry sector in Turkey even more.

In 2008, whole world faced a global crisis during which not a single country was unharmed. This crisis caused the world economy to enter a pausing phase which was not seen since the days of World War II. In 2009, world’s economic growth was 0.0%, while in 2010 it became 5.4% and demonstrated a tidy up. According to IMF’s World Economic Outlook April 2015 Estimates Report, world’s economy has grown by 3.4% percent in 2013 and 2014. Also, according to the same report, world’s economy expected to grow by 3.5% in 2015.

Some developing countries, starting from 2009, demonstrated higher growth statistics compared to their developed counterparts, thus reduced the negative effects of the global crisis to a minimum domestically. Economic growth in developing countries is supported by dynamic domestic demand and increasing commodity prices. As a result, economic stability measures taken by developed and developing countries prevented a systematical collapse in the world economy and tidied up the confidence curves sooner than expected.

Post-2001 economic reforms and consequent one-digit inflation rates, strong structure of public finance and banking sector enabled Turkey to hold a more advantageous position in 2008 global economic crisis compared to most other countries. Along with these, during post-2009 period when crisis was felt most vividly, thanks to unyielding application of economy policies, Turkish economy demonstrated a great performance and had its place among few economies which dodged the crisis successfully and with least harm.

 

Chosen Country and Country Groups’ GDP Increase Rates (%)

 

2009

2010

2011

2012

2013

2014

2015

Estimation

OECD

-3.5

3.0

2.0

1.5

1.3

1.8

2.3

Eurozone

-4.4

1.9

1.6

-0.6

-0.4

0.9

1.4

France

-3.1

1.6

2.0

0.0

0.4

0.4

1.1

Germany

-5.1

3.9

3.4

0.9

0.2

1.6

1.7

Greece

-3.1

-4.9

-7.1

-7.0

-3.9

0.8

2.2

Italy

-5.5

1.7

0.6

-2.4

-1.8

-0.4

0.6

Japan

-5.5

4.7

-0.5

1.4

1.6

0.0

1.0

Korea

0.7

6.5

3.7

2.3

3.0

3.4

3.7

Spain

-3.8

-0.2

0.1

-1.6

-1.2

1.2

1.7

Turkey

-4.8

9.2

8.8

2.1

4.0

2.9

3.1

England

-5.2

1.7

1.1

0.3

1.8

2.6

2.6

USA

-2.8

2.5

1.8

2.8

2.2

2.4

3.1

Brazil

-0.3

7.5

2.7

1.0

2.5

0.0

-0.5

China

9.2

10.4

9.3

7.7

7.7

7.4

7.0

India

5.2

11.1

7.8

4.9

4.7

7.3

7.7

Russia

-7.8

4.5

4.3

3.4

1.3

0.3

0.0

Source: OECD, Real Gross Domestic Product Forecasts 2015,

OECD, Interim Economic Assessment Report, March 2015

 

Turkey is in a different position compared to new members and other candidate countries when it comes to its relations with the EU as a result of its membership to the Customs Union in 1996, which was three years earlier than receiving candidacy status in 1999. Especially in industry sector, Turkey is in a process which is making it an important part of the European Union. In 2015, 44.5% of Turkey’s total annual exports ($64.008.890.000) were made to EU countries.

Taking a glance at employment statistics according to key activities, sector shares are as follows in 2015 in Turkey: agriculture sector 20.6%, industry sector 20.0%, construction sector 7.2% and services sector 52.2%.

Being in the crossroads of Europe, Asia and Africa, Turkey offers very practical travel routes to European, West and Central Asian, Middle Eastern and African capitals with maximum 4 hours of direct flight durations thanks to its Istanbul and Ankara airports, which are important airline centers in the region. This unique location, enables investors to reach nearby markets which consists of 1.5 billion people, $25 trillion GDP, $8 trillion foreign trade volume (which is almost half of total global trade). As a part of the Customs Union, Turkey is in a different position than other candidates and new members. While Turkish membership to the Customs Union eases movement of industrial products in the EU, it also revokes the customs and quotas between the two parties. Additionally, Turkey signed free trade agreements with 23 different countries or blocs (with 17 of them being in effect), while started the negotiations for more with 14 countries or blocs.

Turkey rapidly tidied up after 2009 and export numbers, thus also import numbers increased.

 

2008-2015 Turkey’s Foreign Trade Numbers

Year

Export

Import

Foreign Trade Balance

Foreign Trade Volume

Rate of Exports Meeting Imports (%)

2008

132.027.196

201.963.574

-69.936.378

333.990.770

65.4

2009

102.142.613

140.928.421

-38.785.809

243.071.034

72.5

2010

113.883.219

185.544.332

-71.661.113

299.427.551

61.4

2011

134.906.869

240.841.676

-105.934.807

375.748.545

56.0

2012

152.461.737

236.545.141

-84.083.404

389.006.877

64.5

2013

151.802.637

251.661.250

-99.858.613

403.463.887

60.3

2014

157.610.158

242.177.117

-84.566.959

399.787.275

65.1

2015

143.861.522

207.206.813

-63.345.290

351.068.335

69.4

Source: Turkish Statistical Institute

 

Thanks to its connections and trade partnerships, a great number of multinational corporations decided to build their production facilities/centres in Turkey or move their regional executive centers to Turkey. Also Turkey offers these corporations a staunch platform which enables these corporations to benefit from Turkey’s common features and local skills and gives them the opportunity of regional economic expansion. Turkey supports global corporations strongly in order to have them move their regional headquarters to Turkey. Thanks to a recent legislation regarding direct foreign investments, foreign corporations no longer subject to taxes like corporate tax, VAT, income tax or revenue stamps when they found their regional headquarters in Turkey as liaison offices.

Half of Turkey’s population is younger than 30, and this young and dynamic structure constitutes one of the most qualified labor pools in the world. While number of graduates from production-related departments in universities was above 32.000 in 2012, during the same period more than 35.000 students were graduated from vocational education schools. Around 600.000 students graduate from universities in Turkey annually. This workforce, which is strictly bound to efficiency, discipline and work ethics; make Turkey one of the most attractive places in the world for investments in knowledge-reliant, high value added, skill intensive sectors.

While 26 million 644 thousand people found employment in Turkey in 2015, 5 million 338 thousand of those has been employed in industry sector. In 2014, while 25 million 904 thousand people were employed, 5 million 310 thousand of those has been employed in industry sector.

Staff Costs (January 2016)

Minimum Wage

1.647,00 TL

Social Security Insurance Premium % 15,5 (Employer Share)

255,29 TL

Employer Unemployment Insurance Fund

32,94 TL

Total Cost

1.935,23 TL