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International Cooperation in Times of Global Crisis Onur SAZAK Istanbul Policy Center (IPC) October 18-19, 2012 1 Turkey is strongly in favor of a multilateral framework to ensure that the commitments on a national level are lasting There are a few international organizations that would assume this role Turkey views G20 as the most able among the existing international organizations because it is one of the few multilateral bodies that include both least developed countries and emerging economies The IMF can also serve this purpose given that the fast-growing countries such as BRICs and Turkey will have more representational and decision making powers in the upcoming decade 2 GDP Growth in Constant Prices 12 10 8 6 4 GDP growth 2 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 -2 -4 -6 -8 3 2009 2007 2005 2003 2001 1999 1997 1995 1993 1991 1989 1987 1985 1983 1981 1979 1977 1975 Per Capita GDP (current US$) 12000.0 10000.0 8000.0 6000.0 4000.0 2000.0 0.0 4 Other Major Accomplishments Reduction in inflation Reduction in public debt Fiscal discipline Strong regulation and supervision of the banking sector Major change in economic institutions under the influence and guidance of EU anchor independent regulatory authorities competition law started with Custom Union Agreement 5 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Structural Change 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 .0 agriculture industry Services 6 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Share of exports in GDP 30 25 20 15 10 5 0 7 Composition of exports 8 Sophistication of Exports 9 Economic Complexity Index Another indicator of export sophistication as Economic Complexity Index. As of 2009, in exports, Turkey ranks 43 out of 128. According to the Index, Turkey exports are more complex than those of the BRICs; Brazil, Russia and India, yet less than China, Thailand, Romania, Bulgaria, etc. Between 1968-2008 in terms of change in economic complexity Turkey ranks 10 out of 128. This corresponds to an 80 % increase in Turkey’s economic complexity over the last 4 decades In the last 10 years Turkey recorded 10% increase in its economic complexity Turkey ranks 15 out of 128 in terms of it’s projected contributions to global GDP growth by 2020 *Source: İl İl Dış Ticaret Potansiyeli Araştırması, Dış Ticaret Müsteşarlığı http://www.ekonomi.gov.tr/upload/7EF56F48-D8D3-8566452092D48A1F70B1/kitapmakro.pdf *Source: Ricardo Hausmann, César A. Hidalgo, et al. The Atlas of Economic Complexity Mapping Paths to Prosperity. 2011 10 Economic Complexity Index RANK 1 2 5 6 7 8 12 19 20 24 25 26 27 29 31 35 40 41 43 46 51 52 COUNTRY INCOME 2009/$ JAPAN 39,738 GERMANY 40,670 AUSTRIA 45,562 FINLAND 44,581 SINGAPORE 36,537 CZECH REPUBLIC 18,139 KOREA 17,078 ISRAEL 26,256 MEXICO 8,143 HONG KONG 30,065 POLAND 11,273 CROATIA 14,222 ROMANIA 7,500 CHINA 3,744 THAILAND 3,893 PORTUGAL PRT 21,903 BULGARIA 6,423 CANADA 39,599 TURKEY 8,215 RUSSIAN FEDERATION 8,684 INDIA 1,192 BRAZIL 8,230 11 Average Ubiquity and GDP per capita, selected countries, 2009 12 Import Dependence of Turkey’s Production Structure Turkey has been facing is large current account deficits Intermediate goods imports of Turkey have increased 2.5 times more than the increase in manufacturing output between 1994-2008. Share of traditional industries such as textiles and garments has decreased and the shares of motor vehicles, basic metals and fabricated metal products in manufacturing have increased Share of imported inputs and raw materials in the total has increased from 56 percent in 2002 to 62 percent in 2007 13 Conclusion Sustainable economic growth Sophisticated export Current account deficit Institutionalization, democratization, EU anchor 14