Turkey on the way to high
income
Martin Raiser
Country Director
World Bank
Key Messages
• Turkey has done well in the past decade
• Due to demographics, past reform efforts and
relatively strong financial buffers Turkey is
likely to do well in the next decade
• To avoid a growth slow-down at high income,
Turkey needs to deepen structural reforms
Turkey has done well because of
economic integration
Turkey has become part of the
European Convergence Machine
The Customs Union with the EU has
made Turkish trade brainier
(b) Intra-industry trade (% of exports to EU-27)
0
10
20
30
40
(a) Product composition (% of exports to EU-27)
2000
2001
2002
2003
2004
2005
Year
2006
2007
2008
2009
Vehicles
Machinery
Textiles
Metals
Foodstuffs
Vegetables
2010
Turkey has done well because of social
inclusion
The shift of economic activity to the
East has played a big role in inclusion
Spatial distribution of newly created firms between 2007-2011
Supported by public investments
And improved public services
Turkey’s prospects are favorable
because of demographics
But sustaining growth into high
income is difficult
And growth in Turkey has been volatile
given dependence on foreign financing
The middle income trap
35,000
GDP per capita in 2011 constant PPP USD
30,000
25,000
Turkey
20,000
Brazil
South Korea
Malaysia
15,000
Mexico
South Africa
10,000
5,000
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
1976
1974
1972
1970
1968
1966
1964
1962
1960
1958
1956
1954
1952
1950
-
What Turkey needs to do to sustain
growth: deepen integration
What Turkey needs to do to sustain
growth: boost productivity
What Turkey needs to do to sustain
growth: boost energy efficiency
Denmark
0.11
UK
0.12
Germany
0.16
France
0.18
OECD
0.18
Turkey
0.26
World
0.3
0
0.05
0.1
Energy Intensity (toe/000 2000 USD)
0.15
0.2
0.25
0.3
0.35
What Turkey needs to do to sustain growth:
boost savings and contain growth in transfers
What Turkey needs to do to sustain
growth: boost female employment
What Turkey needs to do to sustain growth:
make institutions fit for high income
Turkey: an emerging regional and
global power
Turkey: an emerging regional and
global power
70
Total GDP in 2011 USD, 2011 and 2060)
60
50
40
30
20
10
0
The 20 largest economies in the world in 2011 and 2060 - OECD