Working on the economy presentation of the Turkish Republic was a knowledge-broadening experience. We relied greatly on the CIA’s library and the WorldBank website. We worked our way down the list of guidelines and the first topic we researched was the free-market aspect of its economy.
The Republic of Turkey is a bridge between two continents: Europe and Asia. Along these lines, it has made a good use of its geographical location and became very influential on its trade system. Genuinely, Turkey has a free market economy which is driven by service sectors and agriculture, where the agriculture contains 25% of the whole market. The agricultural sector is controlled by quotas implemented by the Turkish Council of ministers. Therefore, the quotas help to control the stabilization of the prices on agricultural products, due to High and rising red meat prices in Turkey. It caused enormous economic and political problems in Turkish political and economic systems. Moreover, the economy of Turkey tends to have domestic monopolies which cause the dominancy of one or several companies on the national market.
Modern Turkey is a free market economy oriented to Western markets. The private sector of its economy still remains the most powerful aspect of Turkish economy growth. It can be noted that the imports in Turkey exceed the exports which cause the phenomenon of trade deficit. Therefore, the Turkish economic institutions attempt to increase the exports by attracting foreign investments and companies. Turkey major exports are: textiles and clothing, automotive, iron and steel, white goods and chemicals, pharmaceuticals and ships. Turkey imports mainly machinery, chemicals, semi-finished goods, fuels and transport equipment. When it comes to its main trading partners, the European Union (57% exports, 40% imports), Russia and The United States top the list of its international trade.
Compared to the U.S, Turkey has $242.9 billion and ranked 22nd, while the U.S has second largest imports with $2.273 trillion. However, by the number of exports Turkey is ranked at 30th with $167.6 billion, while the U.S still remains on the top position with $1.575 trillion. Regarding the currency of the U.S and Turkey, 1 Turkish Lira is equivalent to $0.38.
Making sure we compared the economies of Turkey and the U.S on every step of the presentation, we could have easily noticed the distribution of the labor force within these countries. In point of fact, American population is mainly employed in managerial and professional fields with 37.3%. Main labor force industries of the U.S include sales and office, faming and forestry as well as transportation and crafts. However, Turkey is a more agrarian oriented country. It has 25.5% labor force in the agriculture filed. Nonetheless, the majority of the labor force is still concentrated in the services and industry sector. As a result, the industrial production growth of Turkey is 3.5% as a comparison to the U.S growth with 2.5%. In this matter, Turkey wins over the U.S in the industrial production growth.
Turkey’s rapidly growing economy was the next focus. The income level per capita GDP is 10,971 US dollars by the February 2013. The inflation rate in Turkey was recorded at 7.55 percent in February of 2015. Despite the low percentage of GDP and relatively high percentage of the inflation, Turkey still remains attractive to the foreign investors. Even though inflation is still prevalent and the rate of unemployment is still high and corruption is still present, Turkey has a great economic potential for further development. In a nutshell, we found that Turkey was a great example of the dynamic economy with the mix of traditional agriculture and modern industries.
Afterwards, we have tackled the Turkish financial system. On the monetary plan, Turkey has a free floating currency system were the Turkish Lira abides to the rules of supply and demand on currency to fix its rate accordingly with the USD. Currently, the Turkish Lira is being exchanged as the 16th most traded currency. As far as it concerns the financial markets, companies’ capital shares are traded on the Istanbul Stock Exchange, a market place to meet the demand on capital.
Concerning trade, we found out that Turkey has a free trade system where tariffs are low at the rate of 2.7% and the use of quotas is limited. Nevertheless, the Turkish trade keeps on recording deficit with its imports exceeding its exports despite the thorough effort to increase exports.
After much research, our group found that Turkey’s economy is a free market capitalistic economy that attracts and encourage the foreign investment and has much potential in regards to the future. The service and agriculture sectors seemed to be the primary focus with much of the trade out of the country being through the waterways. Turkey consistently ranked in the top 20 by country on the CIA’s website in all but a few categories, proving that Turkey is a country that has great potential for appealing and setting a global business.