Turkey

                                               Turkey

          The Republic of Turkey is located in the South-Eastern Europe and South-Western Asia on a total surface area of 783,562 km². It is the only country situated in both Europe and Asia, bordering Bulgaria, Greece, Iran, Iraq, Syria, Azerbaijan, Georgia and Armenia (see Exhibit 1). Turkey has a total population exceeding 80 million with 43.15% of people between the ages of 25-54 and a median age of 317. The country’s population has increased beyond expectations during the 2015 and 20168 due to migrations from Syria and other neighboring countries. As of 2017, the urban population represents 72.3% of the total population9 and Istanbul is the most crowded city with 14.80 million inhabitants10.

Turkey is home to various cultures as well as religious and ethnic groups like Muslims, Christians, Jews, Kurds, Tatars, Zazas and more. The country is a candidate for the European Union (EU) membership since 1999, and currently a member of NATO and G2011. Following two elections in 2015 as well as a referendum in 2017, Turkey is ruled by Recep Tayyip Erdogan’s Islamic party AKP (Justice and Development Party). In past years, Turkey has had some serious political problems due to both internal as well as external unrest at its southeastern borders. For instance, there has been a conflict with Russia in November 2015 due to the shooting down of a military jet, a coup attempt on 15th July 2016, and several terrorist attacks by Kurdish worker’s party (PKK) and Islamic State in Iraq and Syria (ISIS) coupled with intensified violence between the security forces and militants, leading to unstable political circumstances12, as well as the rapid deterioration of the tourism sector among others13.

On the other hand, Statistic Times (2016) ranked Turkey as the 17th largest economy in the world with a gross domestic product (GDP) of 857 billion USD5, a GDP per capita of 10,807 USD5 and an annual growth of 4.0%14, with the majority of the population belonging to middle-income class15. The country’s GDP consists of services (64.3%,), industry (27.1%) and agriculture (8.6%)16. Tourism is of major importance in the economy generating 5% of the GDP17 as the total number of foreign visitors exceeded 25 million in 2016 and close to 9 million tourists arrived until the end of May 201718.

However, in the first half of 2016, GDP growth declined to 3.7% and the country experienced a serious depreciation of its currency leading to economic instability19. For instance, the exchange rate of Turkish Lira (TRY) against USD was around 2.95 in June 2016, and 3.54 in December 2016, and 3.78 in February 201720. Turkey has a relatively high unemployment rate, which increased from 10.4 % in 2015 to 12.7 % in December 201621. This rate is even higher for young people, as the unemployment rate of those between the ages of 15-24 is approaching 24% as of December 201622.
Turkey ranks 55th among 140 countries in the Global Competitiveness Index 2016-2017 by The World Economic Forum, showing a drop from its earlier rank of 45th (out of 144 countries) in 201415. On the other hand, within the recent years a lot of investment went in to improve the country’s infrastructure especially in the western parts, through upgraded roads, new bridges, seaports and the world’s largest airport to be opened in 20185,23. Moreover, Turkey has the 3rd largest labor force market in Europe with around 29.7 million people5, yet the amount and the quality of the education level of the work force are reported to be relatively low even though there is an effort to improve the country’s education policy with an increasing percentage of GDP spent on education. Other competitive disadvantages are identified as access to financing, inefficient government bureaucracy, less transparent tax regulations and corruption16. Nevertheless, the country’s high population growth and its young population makes it a relatively attractive market and is ranked 55th out of 136 countries in the Global Opportunity Index and 69th out of 190 in the “Ease of Doing Business Index” 26. Turkey is home to several clusters, with the highest employment in textile, apparel, construction, automotive, logistics, processed food, and tourism and hospitality.