76.3 percent of the population resides in urban areas (compared to 25.2 percent at the beginning of the 1920s). Agricultural employment has fallen to 25.2 percent of the workforce, while 19.9 percent is employed in industry and 6.3 percent in construction. The service sector employs 48.6 percent of the workforce, a figure expected to exceed 50 percent in coming years.
Having reached 100 percent for many decades, inflation dropped in the 2000s and stood at 8.9 percent in 2010 and increased to 10.5 percent in 2011. According to an OECD report, Turkey showed great resilience in the face of the global monetary and financial crisis. Public-sector expenditures represent 14.7 percent of the GDP, while the revenues of the central government represent 22.5 percent of GDP. Most of the public debt, which is 48.8 percent of the GDP, is domestic (36.4 percent). While there is a great debate among economists and politicians on the actual level of savings (estimated by experts to be between 10 and 22 percent of the GDP), the transition to a consumer society was more pronounced in the 2000s – for the better, because consumption created true economic growth and strengthened the middle class, and for the worse, because it has been continuously increasing the foreign-trade deficit.
In 1990-2000, many new airports were constructed; there were 99 active airports in 2010.
Investments in the road and air sectors will continue in the coming decades, but, according to the Ministry of Transport, it appears that the Erdoğan government wishes to rebalance its policy in the infrastructure sector and construct at least 10,000 kilometres of high-speed railways, with the help especially of Chinese companies. Double-track railways between Ankara and Istanbul and between Ankara and Konya are currently under construction.
Of great importance in the infrastructure sector, Istanbul has become an ‘infinite city’, where not even the construction of a third bridge connecting Europe and Asia will solve the complex traffic problem. The underwater metro project between the European and Anatolian coasts, which is currently under construction, will probably not relieve the traffic congestion between the two continents.
A maritime country par excellence, Turkey has many ports, on the Black Sea (Rize, Trabzon, Giresun, Ordu, Samsun, Zonguldak) and on the Mediterranean (Dörtyol, Iskenderun), as well as Istanbul (on the Bosporus) and Izmir (on the Aegean). These are all relatively low-capacity ports, compared to those of Europe.
Turkey has two international pipelines, one originating in Iraq (Kirkuk-Yumurtalık) and another, the Baku-Tblisi-Ceyhan, which transports crude oil 1,768 kilometres from the Caspian Sea to southern Europe. The 3,300-kilometres Nabucco Pipeline (from Erzurum to Baumgarten an der March in Austria), which transports gas from Iran and the South Caucasus region to Europe, is scheduled to be launched in the late 2010s and will pass through Turkey (its completion is doubtful, because of costs and Russian opposition).
As a result of strong economic growth in Turkey, electricity demand has increased at approximately 8 percent per year. Electricity is supplied mainly by thermal power plants. According to official figures, the country produces around 131,400 kWh of thermally generated electricity, in addition to 44,200 kWh of hydro power, half of which is provided by the nineteen dams of the South-Eastern Anatolia Project. This huge complex, built over several decades in the heart of the Kurdish region, provides 12 percent of Turkey’s electricity.
Even though nuclear energy has been on Turkey’s agenda for decades, it is still in its embryonic stages, and no generating stations have yet been built. Plans for the construction of the Sinop plant are being studied.
Thanks to refinery complexes in the Kocaeli/İzmit and Aegean regions, Turkey is capable of refining more than 30 million tons of crude oil.
Earthquakes in the Marmara region (İzmit, 1999) and in Van (2011) have revealed the extent of corruption in the construction sector, the lust for money, and the lack of effective and genuine government supervision, as well as the poor quality of construction. In Istanbul, in particular, most of the buildings that were destroyed by the earthquake (which killed nearly 20,000 people), were home to lower-middle-class people who had invested their life savings in those newly constructed buildings.
Trade and Banking
Turkey has 48 banks, including 31 retail banks (3 public, 11 private, and 16 foreign), 13 development and investment banks, and 4 participatory-cooperative banks. These banks have more than 9,712 branches and 181,588 employees. The largest banks are Ziraat Bankası (Agricultural Bank), İş Bankası (Labour Bank), Akbank, and Garanti Bank.
Turkey, which is considered an emerging economy and was in the midst of economic transformations, was relatively unaffected by the 2008-2012 financial crisis. The strength of domestic consumption and the radical restructuring of the banking sector after the 2000-2001 crisis helped make Turkey somewhat resistant to the global shock, but many economists consider the lull a warning of upcoming storms in the Turkish economy. Between 2005 and 2010, the foreign-trade deficit increased from 5 to 10 percent of GDP, and growth was maintained by easy consumer access to credit cards, a form of consumption that may lead to a crisis similar to that in the subprime-mortgage business. The Bank Association of Turkey reported that the number of credit-card users increased from 3,735,000 to 5,136,100 from 2007 to 2011 and that credit-card consumption, which represented 16.5 percent of the GDP in 2007, increased to 22 percent over the next five years. Consumer debt amounted to USD 95 billion in May 2012.
Despite continuing drought, the agricultural sector has grown significantly in recent years (4.3 percent in 2008, 3.5 percent in 2009, and 1.6 percent in 2010), but agricultural employment decreased from 5,573,000 in February 2011 to 5,427,000 in February 2012.
Tourist attractions in Turkey
Given all these factors, economist Osman Altuğ estimated that, at the beginning of the 1990s, one-third of the labour force (around 5 million people) worked in the informal sector, with revenues sometimes exceeding 50 percent of GNP. The TİSK (Turkish Confederation of Employers’ Unions) estimated that 1,700,000 people worked in the informal sector at the beginning of the 2000s.
The State Planning Organization (Devlet Planlama Teșkilatı) has attempted since the 1960s to address these inequalities. With the creation of ‘large municipalities’ and new urban entities, followed by the establishment of Regional Development Agencies (Bölgesel Kalkınma Ajansları) in the 2000s, the state produced a new development policy that benefited the regions and provinces, but the results were occasionally disappointing. The cases of Diyarbakır and Urfa show how measures remain unimplemented due to the lack of necessary human, financial, and technical resources. The results were mixed: the per capita income in some Kurdish provinces, for instances, is one-tenth that of large cities in western Turkey. While the Central Anatolia region benefits from its proximity to the Aegean and Mediterranean regions and the emergence of new industrial centres, the coasts of the Black Sea, with the exception of some areas such as Trabzon, are still neglected.
Work and Migration
The emigration of labour has long been an issue in Turkey, but emigration has been stabilized today and even reversed. It is estimated that the number of Turkish nationals and their descendants in Europe, the US, and Australia totals 4 million, or more than 5 percent of the population in Turkey. According to the deputy chairman of the Turkish-German Chamber of Commerce and Industry, many highly qualified third-generation Turkish immigrant professionals are returning to Turkey from Germany to pursue an occupation, marginally reversing the migration to Europe that began in the 1960s.
Even if the rush to the western El Dorado is fading, internal migration continues. According to the above-mentioned SETA report, Istanbul, Eastern Marmara, and the Aegean region are home to nearly 68 percent of wage earners, which explains the continued migration of labour from the rest of Anatolia to these locations. Furthermore, the war and massive destruction in the rural areas in Kurdistan in the 1990s also strengthened internal migration, leading to the formation of large Kurdish communities in Istanbul, Ankara, Izmir, Adana, Mersin, and many other cities.
Turkey has become a transit hub for Afghani and Iraqi immigrants and sometimes African immigrants bound for Europe. The number of these immigrants is estimated at hundreds of thousands; they are often employed in the informal sector, pending possible departure for Europe. These immigrants represent 2 percent of the Turkish labour force, or nearly one million people. It is estimated that Turkey has about 80,000 Armenian immigrants without legal status.
Position in the Global Market
Although it has not made the top twenty in the world, the Istanbul Stock Exchange is important in the Balkans and the Black Sea region.