OECD Economic Surveys: Turkey 2016 (eBook)

Oecd (Autor)

eBook Download: PDF

2016 | 1. Auflage
136 Seiten
OECD Publishing (Verlag)
978-92-64-25942-3 (ISBN)

Infos

This 2016 OECD Economic Survey of Turkey examines recent economic developments, policies and prospects. The special chapters cover: Strengthening manufacturing and Participating in global value chains.

Inhalt

Table of contents 5
Basic statistics of Turkey, 2015 9
Executive summary 11
Growth has been robust despite adverse circumstances but must be rebalanced 12
Growth has picked up but inflation remains high 12
Removing structural bottlenecks would boost productivity 12
Employment is concentrated in less productive firms 12
Deeper participation in global value chains could help rebalance growth 12
A large trade deficit has built up (2015) 12
Assessment and recommendations 15
Figure 1. Long-term macroeconomic performance 16
Table 1. The 2016 Action Plan 17
Figure 2. Growth and social inclusion 18
Figure 3. Well-being indicators 19
Figure 4. Income inequality has declined despite low redistribution 20
Figure 5. Convergence with the upper half of OECD countries has slowed 21
Recent economic developments and short-term macroeconomic outlook 22
Table 2. Macroeconomic indicators and projections 23
Figure 6. Recent economic developments and outlook 24
Table 3. Shocks that might affect economic performance 25
Economic rebalancing to make growth sustainable and more inclusive 25
Figure 7. Structural imbalances 26
Figure 8. International competitiveness 27
Box 1. Integrating Syrian refugees 28
Strengthening the resilience of the economy 29
Table 4. Macroeconomic imbalances 29
Coping with a high dependence on capital inflows 29
Figure 9. Gross external debt 30
Preventing excessive credit growth and mitigating contagion risks 30
Figure 10. Private sector debt 31
Figure 11. Banks remain well capitalised 32
Curbing inflation and reducing exchange rate volatility 32
Figure 12. Monetary policy and inflation expectations 33
The role of fiscal policy 33
Figure 13. Fiscal performance in international comparison 34
Restructuring the tradable sector by upgrading the business environment 35
A large potential for productivity-enhancing structural change 35
Figure 14. Turkish manufacturing underperforms international peers 37
Figure 15. Significant productivity divergences 38
Figure 16. Investment obstacles reported by fully formal firms 39
Figure 17. Global value chain participation indices 40
The 2016 Action Plan 41
Priorities for reforms 42
Table 5. Educational indicators in international comparison 43
Figure 18. Overview of human capital 44
Figure 19. Overview of basic institutions 45
Figure 20. Overview of specific regulations 46
Figure 21. Overview of the tax system and knowledge-based capital 47
Reforms and green growth 47
Figure 22. Green growth indicators for Turkey 48
Figure 23. Greenhouse gas emissions 49
Figure 24. Air pollution 50
Bibliography 50
Annex. Progress in key structural reforms 55
A. Education 56
B. Product and labour markets 56
C. Transparency 56
D. Environment 57
Thematic chapters 59
Chapter 1. Rebalancing growth by strengthening the manufacturing sector 61
Introduction: upgrading manufacturing to rebalance the economy 62
The development of manufacturing has strengthened social inclusion but has hit a glass ceiling 62
Figure 1.1. Broad-based industrialisation has promoted social inclusion 63
Box 1.1. Manufacturing led broader employment growth in many emerging regions 63
Table 1.1. Estimation results 63
Figure 1.2. Job creation in manufacturing led broad-based employment growth in catching-up regions 64
Figure 1.3. Previously less active groups are better mobilised 65
Figure 1.4. Turkish manufacturing underperforms international peers 66
Disaggregated analysis confirms deep fragmentation 67
Box 1.2. Business sector segmentation 68
Frontier, intermediary and laggard firms 67
Figure 1.5. Manufacturing employment according to firm size and technology level 69
Figure 1.6. Productivity divergence within the manufacturing sector 69
The surviving tail of micro businesses 70
Figure 1.7. Skills in informal firms 71
Figure 1.8. Allocation of wage earners according to their education level 71
Fully formal firms tend to perform better 71
Figure 1.9. Fully formal firms achieve higher productivity growth but create fewer jobs 72
The emergence of “gazelles” and other well-performing firms 72
Figure 1.10. Productivity divergence within fully formal manufacturing 73
Figure 1.11. Gazelle firms in fully formal versus total manufacturing 73
The fully formal sector is not developing at full potential 74
Figure 1.12. Room for progress in corporate governance 75
Figure 1.13. Room for more growth by fully formal firms 77
Figure 1.14. Investment obstacles reported by fully formal firms 77
Export performance has weakened 78
Figure 1.15. Export intensity has weakened overall, but improved in dynamic areas 78
Labour allocation is particularly poor in labour-intensive industries 79
Figure 1.16. Resource allocation efficiency in total and fully formal manufacturing 80
Formalisation requires a coherent policy framework 80
Table 1.2. Industry-relevant measures of the 2016 Action Plan 81
Upgrading skills and reallocating labour 81
Financial transparency and corporate governance 83
A “diffusion-oriented” R& D infrastructure
The quality of service inputs 85
A supportive macroeconomic and rule-of-law framework 86
Policy recommendations 87
Recommendations to rebalance the economy by strengthening the manufacturing sector 87
Bibliography 88
Chapter 2. Reaping the benefits of global value chains 91
Turkey’s participation in GVCs 92
Figure 2.1. Value added origin of exports and its destination 93
Figure 2.2. Turkey's export market shares 94
Figure 2.3. Participation in global value chains 95
GVC participation by sector 95
Figure 2.4. Revealed comparative advantages 96
Figure 2.5. Sectoral contributions to global value chain participation indices 97
Figure 2.6. Share of high-value exports by sector 98
GVC participation by partner country 98
Figure 2.7. Turkey's main global value chain partner countries 99
Figure 2.8. Global value chain participation by export destination 99
Drivers of participation in global value chains 100
Figure 2.9. Governance types of global value chains 100
Non-policy drivers 101
Table 2.1. Non-policy drivers of GVC participation 101
Figure 2.10. Deviation from expected global value chain participation index 102
Quality of institutions, infrastructure and business environment 102
Figure 2.11. Network readiness indicators 103
Figure 2.12. Financial volatilities and exchange rate evaluation 104
Figure 2.13. Tariffs applied on primary and manufactured products 104
Trade and investment policies 103
Box 2.1. Depth of Turkey’s preferential trade agreements 106
Figure 2.14. Trade-weighted depth of preferential trade agreements 106
Figure 2.15. Non-tariff-measures by type 107
Figure 2.16. OECD trade facilitation indicators 108
Figure 2.17. Visa restriction index 108
Figure 2.18. Foreign direct investment 109
Innovation, R& D and knowledge-based capital
Figure 2.19. Diffusion of selected ICT tools and activities in enterprises, 2014 110
Figure 2.20. Research and development (R& D) expenditures
Figure 2.21. Government support for business research and development (R& D)
Box 2.2. Special investment zones in Turkey 113
Figure 2.22. Patent applications 114
Figure 2.23. Experimentation-enabling policy gaps 115
Education and skills 115
Figure 2.24. Percentage of adults who have attained at least upper secondary education 116
Figure 2.25. Reliance on professional management 117
Implications of participation in GVCs 118
Growth and external imbalances 118
Figure 2.26. Turkey's trade balance 119
Employment and social inclusion 118
Figure 2.27. Jobs sustained by foreign final demand 120
Figure 2.28. Low- and medium-skilled labour share in manufacturing GVCs 120
The environment 120
Recommendations to reap greater benefits from global value chains 121
Bibliography 121
Annex A1. Methodology for the “overview” figures 123
Human capital 124
Governance and rule of law 125
Specific regulations 127
Tax and incentive system 128
Annex A2. Sector definitions 129
Annex A3. Backward participation by source and exporting sector 130
Annex A4. Forward participation by source and exporting sector 131
Annex A5. Network visualisation maps 132
Figure A5.1. Manufacturing 133
Figure A5.2. Textile 134
Figure A5.3. Automotive sector 135
Annex A6. Drivers of GVC participation – an econometric assessment 136
Table A6.1. Drivers of GVC participation 137

Textauszug

Chapter 1. Rebalancing growth by strengthening the manufacturing sector

Turkey’s manufacturing sector has expanded considerably but not efficiently and competitively enough. This chapter documents the drivers of its recent growth and diversification, and the factors that have held it back. It documents its segmentation and the outsized tail of poorly performing firms, which undermines aggregate productivity growth. Low productivity eases job creation in the short term, but undermines it in the long run and holds back improvements in living standards because of competitiveness losses. A core of well-performing firms (“frontier firms”) is not growing at full potential because of shortcomings in the policy framework. Intermediary (“follower”) firms sustain competition and deliver jobs, but tend to fall behind in productivity. Lower productivity units (“laggards”), which employ a large share of the low-skilled majority of the working age population, survive mostly thanks to the incomplete enforcement of rules and regulations. The resulting stalemate requires a coherent strategy of “systemic upgrading” of the business environment. This would enable all firms to operate in compliance with the law and on a level-playing field, under supportive regulations, taxation and innovation incentives. All firms could then achieve stronger productivity gains and the most promising firms could grow faster. At the same time, a credible flexicurity system needs to be put in place that facilitates adjustment in the labour market while protecting those affected by structural change.

Introduction: upgrading manufacturing to rebalance the economy

Rebalancing Turkey’s growth path in order to make it externally sustainable requires a durable improvement in international competitiveness. Demand must be rebalanced between domestic and external sources, and supply between domestic and export-oriented activities. A more competitive manufacturing sector, with a heavier weight in the economy and higher net exports can deliver such rebalancing. Many other activities — including agriculture, mining, construction, tourism — generate tradeable value added but manufacturing is particularly important. Even in regions with poor natural resources and low local demand levels, manufacturing can generate higher-earning jobs and contribute to broad-based growth and social inclusion.

Manufacturing sector competitiveness can be enhanced via reductions in the cost of capital and labour. There is indeed room for such reductions. Real interest rates for premium borrowers declined sharply in Turkey since the mid-2000s (OECD, 2010a), but are still above comparable countries. Employment costs for low-skilled workers are high, especially after the 30% increase in the official minimum wage in January 2016. Social contribution cuts can serve to reduce those costs but entail a fiscal burden. Against this background, improving productivity via more efficient production processes, greater product differentiation and higher value added is the most reliable and sustainable avenue for durable competitiveness gains.

Faster productivity growth first and foremost requires a significant upgrading in the quality of Turkey’s human capital, as emphasized in the 2006 OECD Economic Survey of Turkey (OECD, 2006a). But productivity gains can also be achieved in the shorter term, with existing resources. Wide gaps in the productivity level and growth rates across different types of firms point to large potential productivity gains “within” and “between” firms (i.e. through efficiency gains in existing firms, and employment shifts from lower to higher productivity firms). Improving the diffusion of productivity-enhancing know-how, techniques and management practices can deliver such gains (Andrews et al., 2015).

The development of manufacturing has strengthened social inclusion but has hit a glass ceiling

Value added in Turkey’s manufacturing sector has expanded by around 70% and employment by nearly 30% between 2003 and 2013. The development of export-oriented manufacturing, not only in the traditional industrial strongholds of the West, which have expanded further, but also across the poorer regions of inland Anatolia, played a major role. This trend was documented in the 2014 OECD Economic Survey of Turkey (OECD, 2014a) and has persisted since (Figure 1.1 and Box 1.1).

Figure 1.1. Broad-based industrialisation has promoted social inclusion

Source: Turkish Statistical Institute.

StatLink  http://dx.doi.org/10.1787/888933389023

Manufacturing jobs grew in all regions, albeit unevenly. Job creation was also dynamic in construction and services. Overall, and in particular in catch-up low-income regions, job creation in manufacturing appears to have provided a significant impulse to employment growth in other sectors (Box 1.1).

Box 1.1. Manufacturing led broader employment growth in many emerging regions

The profile and composition of employment in Turkey’s 26 NUTS 2 regions suggests that growth and job creation in manufacturing back broader-based employment in other non-farm activities (Figure 1.2 next page). This is possibly related to export-oriented activities’ generating an initial increase in local enterprise and household incomes, and generating induced demand for local services and construction.

The link between job creation in manufacturing and other non-farm activities (excluding construction) was tested econometrically across Turkey’s 26 NUTS-2 level regions between 2006 and 2013 (the period for which data is available) with Arellano-Bond dynamic panel estimation and fixed effect methods. The dependent variable is employment in services and other industry, and explanatory variables include manufacturing employment, both in per cent change. Both models include time dummies and variables that control for aggregate activity and regional circumstances. The data are from Turkstat’s AIS database.

Table 1.1. Estimation results

	Arellano-Bond	p-values	Fixed Effect	p-values

Dependent variable (t-1)

-0.316

0.000

-

-

Manufacturing

0.339

0.003

0.260

0.002

Manufacturing (t-1)

0.244

0.000

0.201

0.032

Source: OECD calculations based on data from Turkish Statistical Institute.

The results suggest that a 10% increase in manufacturing employment is associated with a 3.4% contemporaneous and 4.4% long-term increase (after taking into account the lagged dependent variable) in the “services and other industry” employment. The fixed effect model, similarly, suggests that a 10% increase in manufacturing employment is associated with a 2.6% contemporaneous increase, and a total increase of 4.6% in the other sectors. In level terms, the first model implies that for each job created in manufacturing, 0.77 jobs are created right away in the other sectors and 1.01 jobs over time. The corresponding gains in the second model are 0.59 and 1.05 respectively.

Figure 1.2. Job creation in manufacturing led broad-based employment growth in catching-up regions

Employment index, 2006 = 100

Source: Turkish Statistical Institute.

StatLink  http://dx.doi.org/10.1787/888933389031

As a result of these developments, a rising share of the low-skilled majority of the population has found employment in higher-quality occupations. Men and women with less than secondary education, who represent 65% of the working age population, have been traditionally employed at the periphery of the formal labour force. Low-educated women remained inactive in urban areas, or worked as unpaid family members in agriculture. Low-educated men were mostly self-employed in low-income jobs, or were hired by small informal businesses. Workers above age 45 had a low employment rate. All these groups have started to participate more actively and to take up wage-earning jobs in formal businesses (Figure 1.3). This helped reduce the rate of extreme poverty (Azevedo and Atamanov, 2014), which, according to official figures, declined from 13.3% in 2006 to 1.6% in 2014. The contribution of job creation to keeping income inequality in check contrasts with experience in other countries, where social transfers played a more important role (Taşkın, 2014; Şeker and Dayıoğlu, 2015).

Figure 1.3. Previously less active groups are better mobilised

Per cent, 2014

1. Persons with less than secondary education.

2. Including the self-employed.

Source: Turkish Statistical Institute.

StatLink  http://dx.doi.org/10.1787/888933389040

However, compared with other catching-up OECD economies, Turkish manufacturing has suffered from slower productivity growth, is less competitive, fares less well in international markets, and accounts for a smaller share of national...

Produkt-Details

• Erscheint lt. Verlag: 15.7.2016
• Sprache: englisch
• Themenwelt: Sozialwissenschaften ► Politik / Verwaltung ► Staat / Verwaltung
• Themenwelt: Wirtschaft ► Volkswirtschaftslehre ► Wirtschaftspolitik
• ISBN-10: 92-64-25942-2 / 9264259422
• ISBN-13: 978-92-64-25942-3 / 9789264259423