Income gap between US, Turkey to close

ISTANBUL- Hürriyet Daily News

This local Tofaş factory produces LCV’s like the ones mentioned in the report.

According to the projection developed by Price Waterhouse Coopers (PWC), Turkey’s GDP per capita income will more than double by 2041 and exceed $35,000. The growth means Turkey will significantly narrow the income gap between it and developed countries like the United States over the next 30 years.

Presenting a vision of the Turkish economy in 30 years’ time, the “Turkey in 2041” report highlights five industries with the potential to become “regional centres of excellence”: Food & Beverage Processing, Agricultural R&D and Services, Alternative Energy, Automobile Production, and Tourism.

According to the report, Turkey is particularly specialised in the manufacture of light-commercial vehicles (LCVs). This has been fuelled by their advantageous tax treatment at home, which has boosted domestic consumption, and by the requirement for more labour-intensive techniques in the production of these models, where Turkey can offer lower wages relative to developed European economies. LCVs now make up half of total automobile production in Turkey, up from a quarter in 2000. There is the potential for this segment to grow and become a key centre of excellence for Turkey over the next thirty years, as more foreign carmakers partner with Turkish companies to benefit from existing production knowledge and a more competitive labour market, as well as establishing their own independent operations.

PWC UK Chief Economist John Hawksworth said: “Turkey has seen a remarkable turnaround in its economic fortunes over the past decade, and we see this strong performance continuing over the next three decades, pushing Turkey up to 12th in the global GDP league table by 2040.”