turkey country & education sector report

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  • 1. Country & Education Sector ProfileRepublic of TurkeyEducational Holding Group March 2010

2. Educational Holding GroupChamber of Commerce,P.O. Box 27215, Safat,13133, KuwaitTel: +965-2224-0453Fax: +965-2240-7048http://edu.com.kw/Adel AnsariInvestment AnalystInvestment DepartmentEducational Holding GroupCountry & Education Sector ProfileRepublic of Turkey Page 2 3. Summary This Report was prepared to look at investment opportunities in Turkey, in field of education. The report provides details of Turkey as an investment destination by understanding the current, economic, political & legal situation in the country and analyzing future prospects. It also looks in detail in the education sector of the country. Turkey is one of the major economies of EU and has strong fundamentals, although it has been impacted by current financial crisis it is slated to overcome it. The education sector in the country face challenges in terms of meeting the high standards set by the EU countries. There is a good education infrastructure however it is not sufficient to fulfill the growing need for education. Government of Turkey has pushed for more participation by private sector, which currently only contributes 4 % of the total education infrastructure; there are still great unmet demands. K -12 level is also lagging in some regions and with a huge base population as the target, it forms an attractive target sector. Istanbul with a significant gap in School education, and high Per Capita Income has good opportunity for high quality private education.Country & Education Sector ProfileRepublic of TurkeyPage 3 4. Contents Topic Page Number 1.0 Country Brief 1.1 Country Summary 6 1.2 Demographics6 1.3 Political Stability 7 1.4 Economic Stability7 1.5 Impact of Financial Crisis82.0 Economy 2.1 Macroeconomic Indicators 2.1.1 Gross Domestic Product9 2.1.2 Per Capita Gross Domestic Product 10 2.1.3 Inflation 11 2.1.4 Public Finance12 2.1.5 Labor Force 13 2.1.6 Foreign Direct Investment 14 3.0 Education Sector 3.1 Education System16 3.2 Education Expenditure 18 3.3 Education Statistics 3.3.1 Enrollment Rate 21 3.3.2 Eligible Population 21 3.4 School Statistics 3.4.1 Students Growth Rate21 3.4.2 Gap Analysis- Eligible Population 21 3.4.3 Gap Analysis Eligible Population Grade wise 22 3.4.4 Number of Schools 23 3.4.5 Gap Analysis- Number of Schools 23Country & Education Sector ProfileRepublic of Turkey Page 4 5. 3.5 Regional Analysis 3.5.1 Regional Analysis Eligible Population 24 3.5.2 Number of Schools 25 3.5.3 Regional Gap Analysis- Number of Schools26 3.5.4 Regional Gap Analysis- GDP per Capita 27 3.5 Gap Analysis Quality & Occupancy 3.6.1 Students School Ratio 28 3.6.2 Students Teacher Ratio29 3.6.3 The Estimated Gap 29 3.6.4 Affordability vs. Gap 30 3.7 Sectoral Analysis 3.7.1 Sector wise Breakdown- Number of Schools32 3.7.2 Sector wise Breakdown- Number of Student32 3.8 Higher Education Statistics 3.8.1 Eligible Population 33 3.8.2 Higher Education Brief33 3.8.3 Higher Education Number of Students Growth Rate 34 3.8.4 Higher Education Analysis- Eligible Population34 3.8.5 Higher Education Enrollment Rate35 3.8.6 Higher Education Number of Students Breakdown 36 3.8.7 Higher Education Gap Analysis 36 4.0 Strategy 4.1 Overview38 4.2 Target Sector Analysis38 4.3 Target Region Analysis39 5.0 Analysis 5.1 SWOT Analysis 40 6.0 Legal 6.1 Laws for Foreign Direct Investment41 6.2 Taxation Laws 42Country & Education Sector ProfileRepublic of Turkey Page 5 6. Country Brief1.1 Country SummaryTurkey is a new country in old land; it was formed from the remnants of Ottoman Empire. It is a democratic,secular, and constitutional republic. Its political system was established in 1923 under the leadership ofMustafa Kemal Ataturk, following the fall of the Ottoman Empire in the aftermath of World War I. Turkeyjoined the UN in 1945 and in 1952 it became a founding member of NATO; it holds a non-permanent seat onthe UN Security Council from 2009-10. In 1964, Turkey became an associate member of the EuropeanCommunity.Turkey is a bridge between east and west, it is strategically located. Geographically, Turkey is located inbetween Asia and Europe. The smaller northwestern portion (Thrace) is part of Europe, while the largerportion (Anatolia) is part of Asia. Turkeys proximity to Europe in west and Russia, Iran and Syria in east makesit important for peace and understanding. Also because of its location it has become an important transitroute for gas.Ankara is the capital city of Turkey and second largest city after Istanbul. The official language of Turkey isTurkish however other minority languages such as Kurmanji (Northern Kurdish) are also spoken by largenumber of people. Turkey is a secular state with no official state religion; the Turkish Constitution provides forfreedom of religion and conscience. However the majority of population is Muslim, according to 2009 data onthe worlds Muslim populations, around 98% of the total population in Turkey are Muslim.Turkey is a dynamic emerging-market economy and a member of the Organization for Economic Co-operationand Development (OECD). Turkey has the 15th largest GDP in terms of Purchasing Power Parity; its GDP PerCapita in terms of Purchasing Power Parity is much higher at US$ 13,111 which indicates that Turkey is anupper middle income country. Over 70 percent of its population lives in urban areas Turkey successfullyrecovered from a deep economic crisis in 2001.Source: World BankCountry & Education Sector ProfileRepublic of TurkeyPage 6 7. 1.2 DemographicsTurkeys population in 2009 was 72.56 million compared to 71.52 million in 2008 and 70.59 million in 2007.The Turkish population since 2000 has grown at an average of 1.35%.The population breakdown shows that in 2009 around 31.37 million of this population was less than 24 yearswhich was around 43 % of the total population and also around 17.93 million was in 25 - 39 age groups.Chart 1: Total Population ( In Millions) Chart 2: Population Breakdown- 2009 (Source: Turkstat)( In Millions)73.00(Source: Turkstat)72.56 Total Population under 24 was 31.37 million or 43%72.50 of the Total Population72.0071.527.44 6.1671.50 6.20 15.82 6.5071.0070.596.2370.506.2817.9370.0069.502007 2008 20090 to 45 to 910 to 1415 to 19Total Population20 to 2425-39 40-59 60+The population projection estimates that Turkish population will grow to 83.5 million by 2025. Despite asignificant demographic shift expected in Turkey the under 24 population by 2025 is estimated to be around30.8 million. Chart 3: Total Population Projections(In Millions)Source: TurkstatBy 2025 the population under 24 is estimated to be around 30.8 million85.83. 57 80. 2680.76. 675.72. 771. 0870.65.60.2008 2010201520202025 Mid-year Total Population ProjectionsCountry & Education Sector ProfileRepublic of Turkey Page 7 8. 1.3 Political StabilityTurkey is a parliamentary representative democracy, since its foundation as a republic in 1923. The head ofstate is the president; however the executive powers stay with Prime Minister. After a period of one-partyrule, 1950 election saw multi party system prevailing. Since then, Turkish political parties have multiplied.Turkey is the founding member of NATO and is a temporary member of UN Security Council. Turkeys internalpolitics is stable; as per foreign relations Turkey has conflict with Kurd fighters based in Iraq. In 2007 Turkeylaunched an airstrike and followed it by ground invasion against Kurd fighters in northern Iraq. Turkey also hasan ongoing conflict with Cyprus over northern Cyprus; it maintains its troops in the island. None of its conflictsare grave and threaten an immediate disturbance; overall Turkey is a political stable country.1.4 Economic StabilityTurkey is closely related with world economy and has proximity with Europe and Asia alike. It has a trackrecord of good economic management and structural reform that drives its long-run economic prospects. Dueto its close relations with the world economy, through both trade and financial channels, Turkey was alsoseriously affected by the global recession since the fourth quarter of 2008.Over 70 percent of its 72.5 million people live in urban areas. Agriculture accounts for only 9 percent of itsGDP, industry for 22 percent, and services for 69 percent. Turkeys economy is among the worlds 20 largest,with a GDP in 2008 of over US$790 billion. GDP per capita now exceeds US$9,300. Extreme poverty (thoseliving at below US$1.25 per day) is minimal in Turkey, but poverty remains significant around 18.5 percent in2007. Turkey although going through crisis like most of the world economies still remains stable with soundfundamentals. Source: World Bank, International Monetary Fund1.5 Impact of Financial Crisis Turkey is not strange to macroeconomic crisis. The previous crisis in 2001 saw public debt climbed to 80% of the GDP. The Turkish economy showed resilience and was out of the crisis. However the current crises are far more widespread and need a consolidated effort from all the major economies in the world to crawl back to normalcy. Turkey is an open economy with trade contributing more than 50% of GDP and exports in 2008 were nearly a quarter of GDP, with more than half the export going to EU. Since EU is itself in deep recession there is sharp decline for goods from Turkey, this has in turn affected investment & credit flow adversely. Portfolio flows too turned negative with an outflow of nearly $5 billion in 2008. The slow recovery of export sector and some protectionist measures by major economies have made it even more difficult for Turkey. However, Turkey has been among the country that has not suffered as much as worse hit economies. With positive data coming out of USA and other major economies recovery has begun and with effective management by Turkish authorities using their previous experience of similar situation, Turke