Turkey: Investment In Turkey

Last Updated: 1 November 2014
Article by KPMG Turkey

Country Profile

1.1 General Information Geography and Climate

Turkey is situated at the junction of Europe and Asia. The European part of the country is called Thrace (Trakya) and the Asian part is named Anatolia (Anadolu).

The location on two continents has been a central feature of the Turkish history, culture and politics. The country shares borders with Greece and Bulgaria to the northwest, with Georgia and Armenia, and Iran to the east, Iraq and Syria to the south. The Black Sea to the north, the Aegean Sea to the west, and the Mediterranean Sea to the south are connected by the Bosphorus, the Sea of Marmara and the Dardanelles, a water way known as the Turkish Straits.

The climate of coastal regions shows features of a transition between a Mediterranean and Black Sea climate. Summers tend to be hot and dry except for the Black Sea coast. While spring and fall are warm and temperate, winters are cold, but the number of snowy days is few.

The inner land is more snowy and colder in winter. The coldest months of the year are January and February, while the hottest are July and August.

History and Government

The Republic of Turkey was established in 1923. The new Republic looked to the West for industrialization and the establishment of a secular political system under the guidance of the new Republic's first President Mustafa Kemal Atatürk, whose reforms constituted the framework for the development of the modern Turkish Republic. Turkey has enjoyed multi-party politics since 1946. Turkey is a unitary parliamentary republic. The Grand National Assembly has 550 members elected for four years term, by secret ballot. The executive branch is the Government, headed by the Prime Minister. The President is elected by citizens for a five-year term and s/he cannot be elected consecutively more than twice. The Prime Minister, who is appointed by the President, nominates the other members of the cabinet, which is approved by the President, and is subject to a parliamentary vote of confidence. The judiciary is independent of both the legislature and the executive. The legal system is largely based on continental European models. A Constitutional Court is also entitled to cancel legislation passed by the Parliament. It can cancel those laws, or parts of them, which it decides to be incompatible with the Constitution.

Foreign Relations of Turkey

Turkey is a founding member of the United Nations (UN), the Organization of Islamic Cooperation (OIC), the Organization for Economic Co-operation and Development (OECD) and the Organization for Security and Co-operation in Europe (OSCE), a member state of the Council of Europe and NATO.

Since 2005, Turkey is in accession negotiations with the European Union. The negotiations have been launched with the adoption of the Negotiation Framework by the Council of the European Union. Turkey and European Union's relations cover 3 elements. These are; the application of Copenhagen Criteria's, the application of EU acquis and the strength of civil society dialogue. According to the basis, negotiations are keeping up with European Union. Turkey is also a member of the G20 industrial nations which brings together the 20 largest economies of the world.

Population and Language

The population of Turkey

According to the Population Services Law No. 5490 acted in 2006, new population registration system, which will be the main data source of population censuses, was established in the country. The results of the census states that the population is approximately 76.667.8642 as of 31.12.2013.

The proportion of population living in cities is 91.3%

The number of people living in Istanbul is 14.160.467. Most populated provinces are Ankara, Izmir, Bursa and Antalya. Bayburt is the least populated province in Turkey, with a population size of 75.620.

The half of the population is below age 30.4 in Turkey

The median age of the population in Turkey is 30,4. While the median age is 29,8 for males, it is 31 for females.

The proportion of the population at ages between 15 and 64 is 67.7%

People between the ages of 15-64 are the working group, which constitute 67,7% of the total population. The age group 0-14 form the 24,6% of the overall population, while the 7,7% of the population is made up by people at 65 and over.

1.2 Economy and Currency Economy

Turkey has marked a remarkable rate of growth after 1980's. This has been attributed to three factors, namely a shift from agriculture towards industry and service activities, the modernization of the existing industry and technology transfer, and the effect of international trade and competition. Significant improvements in such a short period of time have registered Turkey on the world economic scale as an exceptional emerging economy, being the 16th largest economy in the world and the 6th largest economy when compared with the EU countries, according to GDP figures (at PPP) in 2012.

  • 16th largest economy in the world and 6th largest economy compared with EU countries in 2012 (GDP at PPP, IMF-WEO).
  • Robust economic growth over the last decade with an average annual real GDP growth of 5 percent.
  • GDP reached USD 786 billion in 2012, up from USD 231 billion in 2002.
  • Sound economic policies with a prudent fiscal discipline.
  • Strong financial structure resilient to the global financial crisis.

Turkey's GDP current prices and growth rates of GDP are as follows:

Private investments were the driving force in accelerating economic activities over the recent years. The liberalization of capital movements and the willingness of foreign creditors to lend to Turkish investors contributed to the high growth rate of private investment.

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