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Turkey's Economy The Republic Of Term Paper

73 billion cu m in 2004; natural gas proved reserves - 8.495 billion cu m in 2005; current account balance - -$25.99 billion in 2006; exports - $85.21 billion f.o.b. In 2006; exports commodities - apparel, foodstuffs, textiles, metal manufactures, transport equipment; imports partners - Germany 11.7%, Russia 11%, Italy 6.5%, China 5.9%, France 5%, USA 4.6%, UK 4% in 2005; reserves of foreign exchange and gold - $53.42 billion in 2006; external debt - $193.6 billion in 2006; exchange rates - Turkish liras per U.S. dollar: 1.4286 in 2006, 1.3436 in 2005, 1.4255 in 2004, 1.5009 in 2003, 1.5072 in 2002 (CIA, 2007). Turkey's agricultural sector

Turkey's agriculture is not one of the modernized sectors of the country's economy. In fact, agriculture is the traditional part of Turkey's economy that combines so well with modern industries. Although Turkey's agricultural sector is a traditional one, it has proven to be quite successful this way, since Turkey is one of the largest producers in the world of several types of fruits. If such great successes have been obtained in the traditional, old-fashioned way, one can only imagine what the results would be if this sector benefited from investments for its development and modernization. Even if the traditional method has worked successfully for Turkey's agriculture, it is time for progress, it is time that things evolve in this sector. This is why specialists consider that agriculture is one of the sectors that would be most profitable for foreign investors, especially from the perspective of Turkey's accession to the European Union. If major investments would be made in turkey's agricultural sector, the potential outputs would definitely excel the outputs obtained so far, which would be of significant importance for both the investors and the country.

As a matter of fact, Turkey's agriculture was ranked seventh worldwide in 2005. Also, it is the most prosperous agriculture of all Muslim countries. This is a good sign for potential investors. With the right investment, there is practically a great chance of success of any of the country's agricultural sub-sectors.

Some current facts about Turkey's agriculture show that any investments in this sector would be more than profitable, helping the country exceed its current possibilities, on the one hand, and repay the investor, on the other hand. These facts are: Turkey is currently the world's producer of hazelnut, fig, apricot, cherry, quince, and pomegranate; the second largest producer of watermelon, cucumber, and chickpea; the third largest producer of tomato, eggplant, green pepper, and lentil; the fourth largest producer of onion and olive; the fifth largest producer of sugar beet; the sixth largest producer of tobacco, tea, and apple; the seventh largest producer of cotton and barley; the eighth largest producer of almond; the ninth largest producer of wheat, rye, and grapefruit; and the tenth largest producer of lemon. These results were achieved in 2007 (Wikipedia, 2007).

Turkey's food production has always allowed the country to be self-sufficient. Even more, agricultural production has been increasing, slowly but in a stable, sufficient manner, covering the country's needs. Even so, compared to the entire economy's situation, Turkey's agricultural sector seems to be situated in a declining period. This situation is partly due to the fact that the agricultural sector is interfering with certain institutions established between 1930 and 1980, and the fact that agricultural loans are issued with negative interest rates.

However, the future looks bright for Turkey's agriculture because of the perspective of Turkey's European Union accession process. This process is expected to change these old agricultural traditions, attitudes, and perspectives. This fact will definitely encourage foreign investments in this field. Foreign investment will also be encouraged by certain planned projects implemented by the Turkish government. One of these projects is the G.A.P. project (Southeastern Anatolia Project). This project is a sign that Turkey's agriculture has taken a new direction, a direction of development, modernization, evolution, and success.

Another aspect related to Turkey's agriculture that the investors might want to take into consideration is agricultural extension and research services, which seem to be under-organized. These issues have determined that lack or shortage, in the best case, of qualified advisors, transportation, and equipment. If invested in these problem areas, things would definitely improve for both Turkey's agricultural sector and for the investor. Foreign investors interested in these aspects might want to start with the investment in human resources, especially into training them, given the lack of specialized Turkish personnel for this field. The next step regarding the subject would be the investment into transportations, which is quite defective in Turkey and is one of the negative factors that have led to Turkey's agricultural...

In order to maintain adequate supplies for both industry and exports, agricultural production needs to be expanded. Turkey's agriculture must evolve and develop in accordance with the rest of the country's economy. Foreign investors should take this aspect into consideration when deciding what region of the world they could direct their financial forces to. Turkey's agriculture seems to be just the right solution right now, given the fact that its entire potential is not even close to being exploited in its totality. As mentioned above, foreign investments into Turkey's agricultural sector would be beneficial for both the country and the investors. First of all, the country could use some investment in this field, which would lead to agriculture's development, it would increase outputs, it would expand current markets and create new ones. As a consequence, the investor would have a lot to profit from this, so things would be positive for everyone involved.
Turkey's industrial sector

Turkey's industrial sector is in much more advanced conditions than the agricultural one is. The country's industry is acknowledged as the twenty-first worldwide and the third within the Muslim countries, given the country's industrial production output in 2005. Turkey's industrial sector is characterized by several indexes, like:

It had a 19% share in employment

29% share in national production

94% share in total exports

These facts prove Turkey's industrial's sector improvements that were made over the past decades due to several reforms programs implemented by the Turkish government.

The industrial sector in Turkey presents low risks for investors. One of the fields of Turkey's industry that investors should take into consideration is the textiles and clothing, which is the largest industry in Turkey, mostly because of cheap labor and outsourcing. This industry covers about 16.3% of Turkey's total industrial capacity. Textiles and clothing produced in Turkey are exported all over the world. Along with China, Turkey covers most of the textiles and clothing production in the world. The negative part of this sector is represented by the poor quality of Turkish textiles and clothing. This is another reason for which this sector would need certain investments. Given Turkey's potential EU accession, the textiles and clothing sector will have stricter rules regarding quality. This will require serious investments. Although prices in this sector will rise in accordance with these investments and profits might not be as significant as before, this sector still represents an important one that foreign investors might benefit from.

The textiles and clothing industry is followed by: oil refinery 14.5%, food 10.6%, chemicals 10.3%, iron and steel 8.9%, automotive 6.3%, and machinery 5.8%. The exports structure is the following: textiles and clothing 19%, automotive 18%, iron and steel 13%, white goods 10%, chemicals and pharmaceuticals 9%, and machinery 7% (Wikipedia, 2007).

Regarding Turkey's automotive industry, it is worth to mention that this sector is currently in a development process, as the Turkish automotive industry and market are significantly increasing. This is another industrial aspect that investors should take into consideration. Turkey's cheap labor force encourages investments in production related fields, like automotive industry. In 2006 this industry was ranked 6th largest in Europe, after Germany, France, Spain, UK, and Italy. In 2006, the Turkish automotive industry produced approximately 1,024,987 motor vehicles. All the developments made over the past decades in this sector have led to this industry's present evolution. However, there is still room for improvements and for outputs, as this industry is not yet working at its potential. With the help of foreign investors and combined with the country's cheap labor force and strategic positioning, Turkey's automotive industry might become a very serious competitor for Germany, which is Europe's largest automotive producer. The size of Turkish motor vehicles and components exports reached over $14 billion in 2002.

Turkey's service sector

Other sectors that require investments are transportations and communications. Although these sectors went through significant development process over the past periods of time, there is still room for improvements. Also, developments in Turkey's industrial sectors and development of Turkey's tourism sector are in a continuous need of modernization of the transportations and communications systems. Actually, the transportation system is closely related to the country's agriculture, which has had a lot to suffer from defective transportations. Therefore, investments in both agriculture and transportations will have significant…

Sources used in this document:
Reference List

Chapin Metz, Helen (1995). Turkey: A Country Study. Washington: GPO for the Library of Congress. Retrieved July 4, 2007 at http://countrystudies.us/turkey/53.htm.

Economy of Turkey (2007). Wikipedia, the free encyclopedia. Retrieved July 5, 2007 at http://en.wikipedia.org/wiki/Economy_of_Turkey.

The World Factbook: Turkey (2007). Central Intelligence Agency. Retrieved July 5, 2007 from https://www.cia.gov/library/publications/the-world-factbook/geos/tu.html.

Krueger, Anne O. (2005). Turkey's Economy: A Future Full of Promise. International Monetary Fund. Retrieved July 5, 2007 at http://www.imf.org/external/np/speeches/2005/050505.htm.
P, JP Morgan reports say Turkey's market prospects high (2005). Turkish Daily News. Retrieved July 5, 2007 at http://www.investinturkey.gov.tr/cms/news.show.php?id=4.
Cirik, Elcin (2007). Turkey's Tasty Real Estate Market. BusinessWeek online. Retrieved July 5, 2007 at http://www.businessweek.com/globalbiz/content/apr2007/gb20070425_341562.htm.
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