ww w .p w c.

com/tr
Turkey in 2041
Looking to the
future
May 2012
Turkeys economic landscape will
be a very different place in 204.
The country has the opportunity
to capitalise on a growing! skilled
labour force to sustain long"term
economic growth. The range of
options that are open to Turkey
should see it cement itself as the
2
th
largest economy in the
world
by 204! climbing up the global
economic league table in the process.
#ts success will depend upon a
variety of factors$ one of which is
the development of key national
industries.
% number of industries have the
potential to drive this growth. This
report has looked at a number of
potential opportunities for the
Turkish economy by 204! but by
no means aims to cover all sectors
where Turkey displays potential
strength. &ectors such as financial
services! real estate and construction!
for e'ample! have not been covered
in this report! although they could
present interesting opportunities for
many businesses. This report looks
at five industries with the potential
to become regional centres of
e'cellence by 204.
Turkeys plentiful natural resources
create an opportunity for its food
processing industry to grow and
supply to new e'port markets.
(ontinued )oreign *irect #nvestment
+)*#, may also help to foster a
growing agricultural -.* industry.
Turkeys climb up the value"chain
over the ne't thirty years may be
further enhanced by a shift towards
alternative energies! where foreign
investors may look to take advantage
of Turkeys abundant renewable
energy sources.
The tourism sector has the
opportunity to benefit from a larger
e'posure to an emerging"market
demographic which is e'pected
to grow relatively strongly in the
medium"term.
Turkey could also build upon its
e'isting presence in the automobile
manufacturing market! where light
commercial vehicle and new energy"
efficient models offer particular
opportunities for e'pansion.
Map of possible key centres of excellence in Turkey in 2041
Russia/CIS
Processed food
and beverages
Automotives
Europe
Asia
Tourism
Alternative energy
Agriculture R.D
Direction of trade
MEA
Sub Sa!aran
Africa
Strong lin"s
#ea" lin"s
Source$ P%C analysis
Executive
/lobal economic power is shifting
and Turkey has the potential to be
one of the biggest beneficiaries
of this change. To mark the 00
th
anniversary of 1w(s presence in
Turkey! this study looks at what
the ne't three decades could have
in store for the Turkish economy.
The country has the opportunity
to capitalise on a growing skilled
labour force and favourable
climate! as well as geographical
location at the crossroads of a
number of wealthy regions! all of
which could be used to sustain
long"term economic growth and
development.
The success of the Turkish
economy over the ne't 00
years will depend upon a
variety of factors$ one of them
is the development of key
centres of e'cellence centred
on industries where Turkey
can develop an international
competitive advantage and
succeed in attracting foreign
direct investment +)*#, as well as
e'porting goods and e'pertise to
its region and beyond.
This report has looked at a
number of potential opportunities
for the Turkish economy by 204!
but by no means aims to cover
all sectors where Turkey displays
potential strength. &ectors such as
financial services! real estate and
construction! for e'ample! have
not been covered in this report!
although they could present
interesting opportunities for many
businesses. #n this study! we look
at the overall potential for the
Turkish economy to grow vis"a"vis
other ma2or economies over the
ne't 00 years. 3e then look in
more detail at some
of the industries that could
emerge as centres of e'cellence
over the ne't three decades.
A number of industries
have the potential
to become centres of
excellence by 2041
including:
4 )ood and beverage
processing$
4 %gricultural -.* and
services$
4 %lternative energy$
4 %utomobile production and
4 Tourism.
ntroductio
3hat a difference thirty years make. 5y the end of the
670s! Turkeys economy was characterised by soaring
inflation and inward"looking policies aimed at insulating
producers from foreign competition. 3hilst economic
conditions improved over the following two decades
many obstacles remained. #nflation was still rife and
political instability caused uncertainty for potential
foreign investors. %n attempt to bring down inflation
by pegging the e'change rate resulted in a full"blown
banking and financial crisis in 200.
Turning the corner
The response to the 200 crisis signalled the start of a
remarkable turnaround in economic fortunes for
Turkey. &tructural reforms were undertaken to open up
the economy to private businesses and the country
actively courted )oreign *irect #nvestment +)*#,.
The result has been sustained economic growth. 3hereas
a decade ago! the /uinness 5ook of -ecords labelled
the Turkish Lira the worlds 8least valuable currency9!
today investors have sought haven in the currency as
financial crises have engulfed the :& and the euro;one.
%s shown in (hart below! Turkey has recorded
stronger growth than both of these regions over the last
five
years! although it still lags behind e'ceptionally strong
emerging markets performers such as (hina and #ndia.
Chart 1: Average Real !" ro#th 200$%2011
Euro&one
'SA
Russia
Tur"ey
(ra&il
India
C!ina
) * + , - .)
Source$ 'S (ureau of Economic Analysis /(EA01 Central (an" of t!e Republic of Tur"ey1 Eurostat1
)ederal &tate &tatistics &ervice! -ussia! #nstituto 5rasileiro de /eografia e <stat=stica +#5/<,!
(entral Statistical 2rganisation1 India1 ational (ureau of Statistics1 C!ina
Turkey!s economic
Strong economic fundamentals
should provide the backbone for
Turkeys growth in the future. ts
geography ensures easy access to a
number of regions! while the
countrys rising middle class will fuel
consumer spending over the medium"
term.
"oung and educated
labour market
Turkeys labour market has the
potential to support a solid growth
path for the Turkish economy.
5y 2040! Turkeys population is
e'pected to grow by a fifth! to 60
million

. #n contrast! by 2040
(hinas population is likely to
rise by 2ust
over >. Turkeys population will
also be relatively young and well"
educated. ?ver half of Turkeys
population is e'pected to be below
40 years of age in 2040! compared
to 40> in (hina
2
. % well"
established university system
would e@uip the ne't
generation for increasingly
more highly skilled 2obs in the
future.
Adding more value
The positive developments in the
labour market would be able to
support a gradual move towards
higher value"added industries!
potentially allowing a number of
centres of e'cellence to take shape
in Turkey by 204. /overnment can
play an important part in supporting
these developments. %lready a
number of government reforms aim
to facilitate the transition! with an
-.* incentive programme offering
generous ta' breaks! loans and
grants to support firms competing
higher up the value chain. The
privatisation of energy! utility
and infrastructure sectors would
encourage efficiencies and increase
productivity.
.$ Source$ 'nited ation /'0 #orld Population Prospects *).)
*$ Source$ 'S Census (ureau1*)..
The future path for
5efore we look at the potential makeup
Table 1: Top 20 countries by !" on a """ basis &constant 200' ()*bn+
of the Turkish economy! it is helpful
to understand what si;e the economy
could be by 204. 3e have used our
long"run economic growth model to
pro2ect Turkish /*1 in 204relative to
other larger economies
0
.
*).. *)+.
.3 'S .3 C!ina
*3 C!ina *3 'S
43 India 43 India
+3 5apan +3 (ra&il
Table right! shows the potential for
Turkey to move up the global league
rankings for Total /*1
4
from A
th
in
63 7ermany 63 5apan
,3 Russia ,3 Russia
83 (ra&il 83 Me9ico
20 to 2
th
in 204 based on
our
-3 ':
;3 <rance
-3 Indonesia
;3 7ermany
model pro2ections.
.)3 Italy .)3 ':
..3 Me9ico ..3 <rance
.*3 :orea .*3 Tur"ey
.43 Spain .43 igeria
.+3 Canada .+3 :orea
.63 Indonesia .63 Italy
#$% in
.,3
.83
.-3
.;3
*)3
Source$ International Monetary <und #orld Economic 2utloo" April *).*1 P%C analysis
4$ See Appendi9 for a description of t!e met!odology used in our long=run gro%t! model3
+$ #e use 7DP at PPPs to correct for price level differences bet%een economies1 but t!e relative ran"ing of Tur"ey also moves up from .,
t!
to .4
t!
place by *)+)
based on 7DP at mar"et e9c!ange rates1 so broad trends are similar on eit!er basis3
#$% in
(omparing /*1 per capita across countries gives us a
comparison of income levels across countries. :sing the
same methodological approach as with /*1! Turkeys
/*1 per capita +in terms of 111! constant 2006 :&B, is
e'pected to more than double from its current level to
over :&B0C!000 by 204. Turkey is e'pected to narrow
the income gap with some countries like the :& over the
ne't 00 years. (hart 2 below shows that Turkish income
levels compared to the :& are likely to grow substantially!
from around 2C> of :& levels in 2006 to nearly 4C>
in 204! although countries like (hina are e'pected to
e'perience a sharper rate of catch up over the period.
Chart 2: !" per capita in """ ter,s in 2011 an- 2041 &constant 200' ()*.
/ of () !" per capita+
,)
6)
+)
4)
*)
.)
)
Russia
Me9ico Tur"ey C!ina (ra&il India
*)..
*)+.
Source$ IM< #E21 P%C analysis
&isks to overcome
There are ma2or economic
challenges to overcome if Turkey
is to reach its full potential as
highlighted in the pro2ections
presented above. )or e'ample! the
economy would benefit from a
greater focus on e'ports to reduce
the persistent current account
deficit. The current structure of
the economy remains susceptible
to potential bouts of inflation!
with the re@uired monetary
tightening often leading to
e'change rate appreciation which
hurts e'ports most.
'tructural reforms key
%s Turkey moves towards
higher"value industries! structural
reforms are e'pected to become
increasingly important in order to
improve competitiveness vis"a"vis
other economies. #mproving the
transport infrastructure! the legal
framework! and ta' collection
efficiency could be some of the
%otential centres of excellence
#n addition to a supportive
economic! social and political
environment! the success of
national industries would also play
an important role in supporting
Turkeys growth in the long"term.
% number of industries have the
potential to drive this growth and
it is likely that over the ne't 00
years the map of key industries!
or centres of e'cellence! will
evolve to reflect the changes
taking place in the Turkish and
the world economies. This report
looks at five industries with the
potential to become regional
centres of e'cellence by 204!
building upon Turkeys traditional
strengths in natural resources and
its geographic pro'imity to large
foreign markets! while taking
advantage of an increasingly
skilled and affluent population.
The potential
international centres of
excellence include:
4 )ood and beverage
processing$
4 %gricultural -.* and
services$
4 %lternative energy$
4 %utomobile production and
4 Tourism.
items with higher priority on the
governments agenda in order to
foster sustainable growth over the
longer"term.
The background and key
opportunities in each
industry are outlined in
the follo(ing pages)
Turning challenges into
Turkey currently acts as a regional hub for the
production! processing and e'port of foodstuffs to large
<uropean and Diddle <astern markets. #ts agricultural
diversity and amenable climate allow it to produce a
sustainable supply chain of raw inputs for its processing
industry! facilitating its status as a large net e'porter of
food and beverages.
Turkey has already begun its transition up the value"
chain! moving from the e'port of raw foodstuffs to
processed food products. (hart 0 below shows that
Turkeys manufactured food and beverage e'port
industry tripled in si;e over the last ten years and is now
valued at over :&BA.7 billion.
Chart 0: 1alue of Turkey2s ,anufacture- foo- an- beverage export sector
&,illions ()*+
-)))
8)))
,)))
6)))
+)))
4)))
*)))
.)))
)
*))) *))* *))+ *)), *))- *).)
&ourceE Turkish &tatistical ?ffice! 1w( analysis
?ver the ne't thirty years Turkeys food and beverage
market has the potential to continue to e'pand as it is
well positioned to meet rising demand! both domestically
and internationally. /rowing populations! rising
incomes! urbanisation and the increased coverage of
organised retail should present particular opportunities
in the processed! packaged and fro;en food sectors as
consumer tastes shift towards convenience products and
supermarkets proliferate.
Exporting south and (est
Turkey has the opportunity to capitalise from its
geographic pro'imity to <urope! (entral %sia and the
Diddle <ast to satisfy these e'port markets. Turkeys
%egean! 5lack &ea and %natolian regions are well"suited
to the production of organic foods for health"conscious
<uropean consumers! which is currently the destination
for FC> of all organic food e'ports.
There may also be a possible opportunity to focus on the
Galal market to cater for a rising domestic and foreign
#slamic population. (urrently! e'ports to the /((
C
countries! for e'ample! make up only A> of total e'ports
and there is potential for the share of e'ports to the
Diddle <ast to rise! thanks to the si;e of the market and
its potential to grow over the longer"term.
*$ fostering a regional hub
)oreign investors could play an important role in
fostering growth. The number of foreign companies
investing in
the Turkish food and beverage industry has increased
from 2C7 in 200C to 42 in 2006
A
and global brands
have started to e'pand their operations in the
country. HestlI announced in Darch 20 that
it will add to its three ma2or Turkish factories
with a cereal factory in 5ursa.
The company has invested over :&B40 million in the
country over the past four years. There is much potential
for foreign companies to continue to set up factories to
benefit from these favourable growth dynamics! ultimately
encouraging a regional production centre of e'cellence to
develop.
6$ 7ulf Cooperation Council3
,$ Source$ T!e Republic of Tur"ey Prime Ministry Investment Support and Promotion Agency
*ood and beverage
Turkeys development of a competitive food and
beverage industry has been accompanied by its first steps
into establishing an agricultural -.* foothold in the
region. This is an opportunity for -.* to improve the
efficiency of the agriculture sector. (hart 4 below shows
that whilst
Turkeys crop yield in 2006 is higher than some of the
emerging countries such as De'ico! -ussia and #ndia!
it lags behind the developed countries! indicating the
potential scope for improvement.
Chart 4: Crop yiel-3 in 200'
.,)
.+)
.*)
.))
-)
,)
+)
*)
)
'S Italy 7reece
':
C!ina
Tur"ey
Me9ico Syria '"raine Russia India
Source$ <ood and Agriculture 2rganisation3
>Crop yield is calculated as t!e %eig!ted average yield of total pulses1 total vegetables and
melons1 total cereals1 total coarse grain and total fruits e9cluding melon1 %eig!ted e?ually for t!e
year *));
+old ambitions in &,$
Turkey is starting to lay the seeds for its climb up the
agricultural value"chain. #n )ebruary 20! the
government approved the countrys first agriculture
8technopark9
7
. #t aims to become one of the most
competitive regions in global agriculture by
pursuing high"technology -.*! greenhouse
systems and seed and soil improvement. &uch
ambition has already attracted high profile
companies. Donsanto! a multinational
agricultural corporation! has several
well"established facilities in Turkey where it is
conducting trials to improve seed efficiency.
Exporting ne( kno(ledge
?ver the ne't thirty years! there is opportunity for
foreign -.*"intensive companies to enter the Turkish
market and for local companies to emerge! benefiting
from Turkeys increasingly educated population and from
the favourable policy initiatives to foster innovation.
% centre of e'cellence could be strengthened by the
arrival of foreign high"technology firms. The
establishment of a centre of e'cellence in agricultural
-.* will help improve productivity in the local
agricultural sector! providing a potential boost to other
related centres of e'cellence such as food and beverage
processing. ?nce the industry is more established!
regions such as the Diddle <ast and %frica could become
fertile grounds for e'ports of -.* and related services
for the agriculture industry. %frica in particular! with its
vast stock of under"farmed fertile land! could become an
attractive e'port market for this industry.
Agricultural &,$ and
@
g
/
@
a

T
8$ Source$ @urriyet Daily1 *)..
Agricultural &,$ and
Turkeys hot climate and natural
waterways allows a third of its
installed capacity to be made up
from renewable sources
F
. #t is
particularly strong in
hydroelectric and solar
technologies and is e'pected
to use these renewable sources
to service a large part of the
rising domestic demand for
energy.
There will be plenty of opportunities
for growth$ around half of the
nations potential hydroelectric
capacity has yet to be constructed
6
.
%nd whilst Turkey had the
second highest
0
solar hot
water installed capacity in the
world after (hina in
2006! its high radiation levels make
it more suited than most <uropean
countries for large"scale generation
in the future +see (hart C below,.
The %egean coastline is home to
several ma2or volcanic fields and
potential wind farm locations! yet
these sources currently make up
only percent of electricity
generation

.
Chart 4: 5orl- ra-iation levels
7lobal Irradition
A*.)) "#!/m
*
a
.8))=*.))
.46)=.8))
.)6)=.46)
B.)6)
Source$ 7lobal Energy et%or" Institute
-$ Source$ P%C1 C2n t!e Sunny side of t!e street$ 2pportunities and c!allenges in t!e Tur"is! rene%able energy mar"etD1 *));
;$ Source$ P%C1 C2n t!e Sunny side of t!e street$ 2pportunities and c!allenges in t!e Tur"is! rene%able energy mar"etD1 *));
.)$ Source$ Rene%able Energy Policy et%or" for t!e *.
st
century1 *)..
..$ Source$ T!e Republic of Tur"ey Prime Ministry Investment Support and Promotion Agency
Alternative
-urturing national champions
?ver the ne't thirty years there is the potential for capacity
to e'pand through government and foreign investment in
national champions. *riven by the countrys present reliance
on oil! the government has kick"started investment in energy
technologies! spending over :&BC7 million on environmental
-.* since 200C
2
. )oreign investors have already
in2ected over :&B2.C billion in )*# into the
alternative and renewable energy sectors since
200F
0
. &ome of the largest transactions have seen
foreign investors take large stakes in potential
national champions! as shown in Table 2 below.
.apitalising on natural
advantages
Table 2: 6argest M7A -eals in the
alternative energy sector since 2008
Ac9uirer Target :nergy
Energo=Pro
/C&ec! Republic0
CEE
/C&ec! Republic0
Strat"raft
/or%ay0
Source$ T!e Republic of Tur"ey Prime Ministry
Investment Support and Promotion Agency
.*$ Source$ Tur"is! Statistical Institute
.4$ Source$ <inancial Times1 <DI Intelligence1 *)..
Automobile production
Turkey currently acts as a ma2or
regional centre for the manufacture
and assembly of automobiles!
producing over million vehicles
in 200
4
and forecast to
produce
.4 million vehicles by 207
C
.
1opular <uropean
carmakers such as
-enault! )iat and )ord
have benefited from a
customs union with the
<: that allows Turkey to
e'port non"essential
goods to <urope without customs
restrictions.
%ursuing the /.0 segment
Turkey is particularly specialised
in the manufacture of light"
commercial vehicles +L(Js,.
This has been fuelled by their
advantageous ta' treatment
at home! which has boosted
domestic consumption! and by
the re@uirement for more labour"
intensive techni@ues in the
production of these models! where
Turkey can offer lower wages
relative to developed <uropean
economies. L(Js now make up
half of total automobile production
in Turkey! up from a @uarter in
2000. There is the potential for
this segment to grow and become a
key centre of e'cellence for Turkey
over the ne't thirty years! as more
foreign carmakers partner with
Turkish companies to benefit from
e'isting production knowledge
and a more competitive labour
market! as well as establishing their
own independent operations. This
process has already begun with
Gyundai signing a deal recently
that will see Karsan! a Turkish
manufacturer! produce 200!000
new L(Js between 204 and
202
A
.
*uture gro(th prospects
Turkeys automobile sector as a
whole is e'pected to grow strongly
over the ne't thirty years. #ndustry
e'perts
7
predict that Turkey
could record sales per year of
0C cars per
000 people by 204! comparable
to /erman levels today of 40 per
000 people. 5ased on the global
vehicle assembly and production
operations of C ma2or international
players L /eneral Dotors! )ord!
Jolkswagen! Gyundai and
Toyota L Turkey currently already
ranks C
th
globally in terms of
the si;e of operations based
there +see Table 0 below,.
Table 0: Top 20 countries by annual vehicle asse,bly an- pro-uction &;000+
for 4 ,a<or international co,panies3
Country
'nitsF))) Country 'nitsF)))
.3 C!ina ,.-) . .3 C&ec! Republic .)+;
*3 'S +8.- .*3 India --.
43 :orea 4;)+ .43 T!ailand 8)6
+3 7ermany 4,+* .+3 Poland +46
63 Austria 444; .63 T ur"ey +)*
,3 (ra&il .-;6 .,3 Argentina 4--
83 5apan .+,; .83 Slova"ia 44,
-3 Me9ico .+4. .-3 ': 4.6
;3 Spain .448 .;3 Sout! Africa *;;
.)3 Canada .4)- *)3 Indonesia *,6
Source$ Company %ebsites1 P%C Analysis1
>7eneral Motors1 <ord1 Gol"s%agen1 @yundai and Toyota
.+$ Source$ International 2rgani&ation of Motor Ge!icle Manufacturers
.6$ Source$ P%CFs Autofacts
.,$ Source$ T!e Republic of Tur"ey Prime Ministry Investment Support and Promotion Agency
.8$ Source$ P%CFs Autofacts
Turkeys performance in some of the key drivers for this
industry is on par with other current centres of e'cellence for
this industry$ Turkeys global competitiveness ranks broadly
in line with 5ra;il and De'ico and is relatively higher than
large producers such as (hina! according to the 3<) /lobal
(ompetitive #nde' +see (hart A below,. #ts e'ports share of the
economy is higher than 5ra;il but lower than De'ico! (hina
and 1oland! also it lags behind (hina! 5ra;il and De'ico in the
amount of )*# aiming at this sector.
$eveloping energy1efficient
technologies
To be a significant centre of e'cellence in
automobile production in 204! Turkey needs
to keep pace with the global industry
which is moving increasingly towards
energy"efficient models! using hybrid and
electric technologies. %n increasingly skilled
labour force would help! but Turkey must
also maintain a competitive environment for
conducting -.*. The first sign that Turkey
will be able to handle this transition came in
Chart =: >actors -riving Turkey2s auto,obile
sector
&100?si@e of the largest variable in the
sa,ple of 4 countries+
*))
.6)
.))
6)
)
C!ina (ra&il Me9ico
Tur"ey Poland
#
E
<

7
l
o
b
a
l

C
o
m
p
e
t
i
t
i
v
e

i
n
I
n
d
e
9

/
r
e
c
e
n
t

a
v
e
r
a
g
e
0

E
9
p
o
r
t
s

a
s

a

s
!
a
r
e

o
f

7
D
P

/
r
e
c
e
n
t

a
v
e
r
a
g
e
0
7ross <DI in Automotives /*)),=5uly
*)..0
Source$ P%C Analysis1 #orld Economic <orum1 <DI
Intelligence1#orld (an"
.-$ Source$ P%CFs Autofacts
Tourism
Turkeys aesthetically pleasing
coastline! hot climate! historical!
cultural and natural attractions
make it a popular holiday hotspot.
Last year it was the 7
th
most
popular destination in the
world! attracting
27 million visitors to its shores and
cities
6
. The fact that Turkeys
tourism sector is well
diversified allows it to appeal
to a broad range of travellers
and goes some way to
shielding the country against
the sectors volatility. #n 2006
the global tourism industry
contracted by
0.C>
20
yet arrivals in Turkey
grew by
nearly 0>
2
.
Attracting the
emerging middle1class
Turkey is already popular with
5ritish! /erman and -ussian
tourists L who together make up
over a third of all foreign visitors.
?ver the ne't thirty years! Turkey
is also well positioned to tap into a
growing travel"hungry middle class
in emerging markets. (urrently!
a larger proportion of visitors to
Turkey come from emerging markets
than can be found in established
destinations in some developed
countries. %ppro'imately 40> of
Turkeys overseas visitors come from
emerging economies whilst this
segment accounts for less than 22>
of visitors in the :& and less than
0> in #taly
22
.
% recent lifting of visa re@uirements
has also encouraged more visitors
from its eastern neighbours of #ran!
/eorgia and &yria. These countries
now make up 4> of all foreign
visitors! up from 6> in 200F. %nd
long"term climate change patterns
as pro2ected by #ntergovernmental
1anel on (limate (hange +#1((,
could also result in Turkey moving
closer to the 8ideal9 holiday
temperature of 27Mc
20
! appealing
to the sun"seeking <uropean
travellers. :sing a simple
model to factor
in these future trends shows that
Turkey could have the potential to
overtake the :K and nearly catch up
with #taly in terms of annual arrivals
by 204 +see (hart 7 ne't page,.
.;$ Source$ #orld Tourism 2rganisation
*)$ Source$ T!e Republic of Tur"ey Prime Ministry Investment Support and Promotion Agency
*.$ Source$ Ministry of Culture and Tourism1 Tur"ey
22E &ourceE Dinistry of (ulture and Tourism! Turkey$ ?ffice for Travel and Tourism #ndustries! :&$ <urostat
*4$ Source$ Survey of *))) respondents by (eat t!e (roc!ure1 *)..
Turkeys tourism infrastructure is likely
to be characterised by a mi' of mass"
tourism seaside resorts! many of which
populate the %gean and Dediterranean
coastlines of #;mir and %ntalya today!
and premium"end conurbations. ?ver
the ne't thirty years! Turkey will look
to promote itself more as a cultural
and historical destination in an effort
to increase revenues in this area.
#stanbul! in particular! is increasingly
becoming the destination of choice for
well"off weekend travellers and the
200 <uropean (apital of (ulture is
responding by improving the tourist
facilities! including a new museum
Chart $: Annual tourist
arrivals in-ex &100?si@e of
country #ith ,axi,u,
international tourist arrivals
in 2010+
*
6
*
)
<
r
a
n
c
e

C
!
i
n
a

'
S
.
6
S
p
a
i
n
I
t
a
l
y
.
)
T
u
r
"
e
y
'
:
7ermany
6)
)
*).)
*)*4
*)+.
Source$ #orld Tourism 2rganisation1 IPCC1 P%C Analysis
Turkey in 2022 3 marking the 100
th
year anniversary of The &epublic of
Turkey!s establishment
/aying the seeds for gro(th
?ur long"run growth pro2ection model shows that
Turkey has the potential to grow strongly in the
medium"term and with economies such as &pain and
(anada slowing down in terms of /*1 in 111 terms!
Turkey is well positioned to catch up.
?ver the ne't 0 years! it is e'pected to become
wealthier with /*1 per capita forecasted at around
:&B20!000 compared to :&B4!000 in 200.
.limbing up the value1chain
&everal industries have the potential to make large
strides towards establishing a centre of e'cellence
by 2020. The critical mass the country has already
developed in food processing! automobile manufacture
and tourism should see these industries grow relatively
@uickly.
5y 2020! potential centres of e'cellence in the
-.*"intensive sectors of agricultural technology
and alternative energy are likely to be in the earlier
stages of development! as it is likely to take longer
to establish significant operations in these areas.
?ver a longer"term hori;on! there is the potential
for these sectors to develop centres of e'cellence as
This section outlines the
methodology to forecast
the long"term #$%
pro&ections outlined in this
report.
#$% pro4ections
The essence of the model is that long"
term trend growth is driven by the
following key factorsE
4 /rowth in the labour force of working
age +based on the latest :H population
pro2ections,.
4 #ncreases in human capital! pro'ied
here by average education levels across
the adult population.
4 /rowth in the physical capital stock!
which is driven by capital investment
net of depreciation.
4 Total factor productivity growth!
which is driven by technological
progress
and catching up factor of lower income
countries with richer ones
by making use of higher"income
countries technologies and processes.
The emerging economies have stronger
potential growth than the established
?<(* economies on most of these
measures! although it should be stressed
that this assumes they continue to follow
broadly growth friendly policies. #n this
sense! the pro2ections are of potential
future /*1 if such policies are followed!
rather than predictions of what will
actually happen! bearing in mind that
some countries may not be able to sustain
such policies in practice. There are! of
course! also many other uncertainties
surrounding these long"term growth
pro2ections! so more attention should be
paid to the broad trends indicated rather
than the precise numbers @uoted in the
rest of this report. The broad conclusions
reached on the shift in global economic
power from the /7 to the <7 emerging
economies should! however! be robust to
these uncertainties! provided that there
are no catastrophic shocks that derail
the overall global economic development
process.
5ethodolog
'conomic (iews reports are
produced by %w)s Macro
)onsulting team.
The team maintains in"house
models of over *0 economies which
together account for +0, of global
#$%.
This provides us with the
essential understanding of the
economic outlook around the
world. To this we add systematic
and in"depth
e-ploration and analysis of
prevailing and emerging trends .
economic and otherwise.
The team works with businesses and
governments to identify and assess
strategic opportunities and e'ternal
risks. The teams consulting services
combine strategic analysis of macro
trends with strong @uantitative
techni@ues across four broad
categories outlined belowE
Economy 0ision $esign
3e work with cities! regions and
countries to create or update their
economic vision blueprints and
strategies.
#eographical market selection
3e assist growing multinational
companies to assess opportunities in
new geographical markets.
+usiness scenario analysis 3e
use our knowledge of macro trends
and our econometric toolkit to
help companies understand the
risks and opportunities in their
business.
Economic impact analysis
3e assist clients in demonstrating
the value they bring to their host
economies in the conte't of wider
economic trends.
*or more information about our services please contact one of the members of the 5acro .onsulting
team belo(:
/ohn 0awksworth
(hief :K <conomist
TelE N44 +0, 20 720 AC0
<"mailE 2ohn.h a w k s w o r t hOu k .p w c.com
1illiam 2immern
&enior (onsultant
Tel +*irect,E N44+0, 207 22 27C0
Tel +Dobile,E N44+0, 7700 4A 0C
<"mailE william.;imme r nOu k .p w c.com
0imani #upta
&enior %ssociate
TelE N44 +0,20 7F04 C47C
<"mailE himani.;.gu p t aOu k .p w c.com
3obert (aughan
%ssociate
TelE N44 +0,20 722 2C2
<"mailE robert.p.vaughanOu k .p w c.com
%(. 5acro
<very day! in every corner of the world! clients rely on 1w( to help them e'plore opportunities and deal with
comple' business challenges. These clients range from the largest! global organisations! to governments and other
not"for"profit organisations! to family businesses and to start"ups. 3e take the time to listen! @uestion and understand
their goals and their competitive and regulatory environment. %nd then we tap into our global network! deep
industry e'pertise! and strong 2udgement and e'perience to help each client create the kind of value they are looking
for.
The cornerstone of our approach is the belief that developing strong relationships with clients unlocks value and
meaningful results"and further strengthens the capabilities of our network. This is how we do business.
1w( firms provide industry"focused assurance! ta' and advisory services to enhance value for their clients. Dore
than A6!000 people in CF countries in firms across the 1w( network share their thinking! e'perience and solutions
to develop fresh perspectives and practical advice.
1w( has been operating in Turkey since 6F with 00 partners and 2C0 professional staff enhancing value for our
clients and with C offices$ in #stanbul +2,! in %nkara! in 5ursa and in #;mir.
*or more information visit us at (( ( )p ( c)com6tr or contact the members of %(. Turkey belo(:
)ansen 4a5aran Symes
1w( Turkey Territory &enior 1artner
TelE N60 +22, 02A A02
<"mailE cansen.basar an"symesOt r.p w c.com
6rhan )em
%dvisory &ervices Leader
TelE N60 +22, 07A C00
<"mailE orhan.cemOt r.p w c.com
2eki #7nd78
Ta' and Legal &ervices Leader
TelE N60 +22, 02A A40
<"mailE ;eki.gundu;Ot r.p w c.com
2eynep 9ras
%ssurance &ervices Leader
TelE N60 +22, 02A A4
<"mailE ;eynep.ur asOt r.p w c.com
P Q202R 1w( Turkey. %ll rights reserved. #n this document! 81w(9 refers to 1w( Turkey! which is a member firm of 1ricewaterhouse(oopers #nternational Limited!
each member firm of which is a separate legal entity. 81w( Turkey9 refers to 5aSaran Has 5aTUmsU; *enetim ve &erbest Duhasebeci Dali DVSavirlik %.W.! 5aSaran Has
Xeminli Dali DVSavirlik %.W. and 1ricewaterhouse(oopers *anUSmanlUk Gi;metleri Ltd Wti. which are separate legal entities incorporated in Turkey within the 1w( Turkey
organisation.
%(.