Turkey - Policies and prospects for growth (Vol. 2 of 2) : Statistical annex

FILE COPY Report No. 2657a-TU Turkey: Policies and Prospects for Growth (In Two Volumes) Volume II: Statistical Annex December 12, 1979 Country Programs Department II Europe, Middle East and North Africa Region FOR OFFICIAL USE ONLY Document of the World Bank This document has a restricted distribution and may be used by recipienits only in the performanice of their official duties. Its contents may not otherwise be disclosed without Worlcl Bank authorization.  CURRENCY EQUIVALENTS Turkish Liras Turkish Liras per US$ per US$ 1976 - average 16.053 1978 - January - March 19.443 1977 - January - March 16.053 - March - December 25.250 - March - September 17.500 1979 - January - April 25.250 - September - December 19.443 - April - June 26.332 /1 - June to date 47.100 /2 /1 A premium of 40 percent was paid on workers' remittances and tourism receipts, raising the rate of TL37.1 per $1.00, with an additional TL10 paid for exchanges made during April 10 - May 9. /2 For most agricultural exports, and imports of petroleum and fertilizer, the rate is TL35 per US$1.00. GLOSSARY OF ABBREVIATIONS BIS - Bank of International Settlements CTLD - Convertible Turkish Lira Deposit CPI - Consumer Price Index DRC - Domestic Resource Costs DRS - Debt Reporting System GATT - General Agreement on Trade and Tariffs IGEME - Export Development Center ILO - International Labor Office ITC - International Trade Center LIBOR - London Interbank Offer Rate LFPR - Labor Force Participation Rate MB - Monetary Base M&LT - Medium and Long-term MI - Annual Survey of Manufacturing Industries MIC - Middle Income Countries OECD - Organization for Economic Cooperation and Development SDR - Special Drawing Rights SEE - State Economic Enterprise SII - Social Insurance Institute SIS - State Institute of Statistics SPO - State Planning Organization TCEA - The Turkish Confederation of Employer Associations TEK - Turkish Electricity Authority TL - Turkish Lira TPAO - Turkish Petroleum Company TSKB - Industrial Development Bank of Turkey VAT - Value Added Tax FISCAL YEAR March 1 - February 28  FOR OFFICIAL USE ONLY This Report is based on the findings of a Special Economic Mission that visited Turkey in April 1979. The mission consisted of the following: Messrs. Vinod Dubey (Mission Chief), Shakil Faruqi (Deputy Mission Chief), Eduardo Aninat (Consultant), Bela Balassa (Adviser), Surjit Bhalla, Sawai Boonma, Ray Christensen (Consultant), Thomas Klein, Sherman Robinson, Saul Rothman, Jivat Thadani, Wouter Tims (Consultant), Herman van Wersch, Adrian Wood and Mesdames Cynthia Angeles and Fan-Fan Walker. The Report also draws upon research and studies undertaken by the Bank Staff on related areas. In Two Volumes: Volume I : The Main Report Volume II : Statistical Annex This document has a restricted distribution and may be used by recipients only in the performance of their offcial duties. Its contents may not otherwise be disclosed without World Bank authorization.   TURKEY: POLICIES AND PROSPECTS FOR GROWTH VOLUME II STATISTICAL ANNEX Table of Contents Page No. Notes of Data Sources and Problems 1 A. National Income Accounts 1 B. Balance of Payments 1 C. Public Finance 2 D. Employment and Wages 3 List of Statistical Tables 5 Symbols Used in Statistical Tables 7 Statistical Tables 8   NOTES ON DATA SOURCES AND PROBLEMS A. National Income Accounts 1. Before 1960, the national income of Turkey was estimated by the General Directorate of Statistics (predecessor of the State Institute of Statistics--SIS). In 1960, the State Planning Organization (SPO) was established, and it started to compile another set of estimates to supply its needs for planning purposes. As a result, two official national income series were published. These series often differed. 2. In 1971, the SIS and SPO began to jointly revise the estimates, adopting the methodology of the UN System of National Accounts. The SIS is responsible for estimating national income from the production side, while the SPO undertakes the estimates from the production side. Estimates for 1962-73 at current and 1968 prices, both from the production side and from the expenditure side, have been reconciled. After 1973, however, only estimates from the production side were available on both the current prices basis and on the 1968 prices basis. From the expenditure side, only the current price estimates were available, with those for 1977 and 1978 being slightly different from the SIS figures. 3. To arrive at the constant 1968-price estimates from the expenditure side for 1974-1978, growth rates and ratios of various GDP components found in publications of the SPO were used. Since the main cause of the difference between the two GDP estimates for 1977-1978 is in the exchange rates--the SIS used monthly exchange rates, but the SPO used the average yearly exchange rates--minor adjustments were made,on the external account components, using the SIS figures as a basis. These estimates should be regarded as preliminary. As in the past, the SIS and SPO are expected to revise them and the final official figures will be consistent. 4. The sectoral fixed investment data (Tables 2.5, 2.6) came from the SPO estimates. Since some of them differed from the investment estimates in the national accounts (Table 2.3), adjustments were made to the investment in "others" category. These adjustments, however, are minor and would not significantly affect the analysis on sectoral allocation of investment. To derive the investment series at 1968 prices, the current price data were deflated by the implicit deflator derived from the expenditure side of GDP. B. Balance of Payments 5. Statistics of merchandise exports and imports (by value, by volume, and by destination, in tremendous sectoral detail) are compiled by SSI on the basis of customs returns, and made available in the form of computer print-out to other government departments, including SPO. From this print-out, all of the various published trade statistics are derived. In using these published statistics, there are three main problems:  - 2 - (a) The classifications used vary between publications (e.g., the SSI "Monthly Bulletin", the Ministry of Finance "Monthly Economic Indicators", and the SPO "Annual Program"); nor can one classification be aggregated into another, because the underlying principles of classification vary. A good example of this problem relates to "mining" exports. (b) The sectoral classification of exports in the trade statistics does not correspond perfectly with the sectoral classification in the input-output table, which causes problems in matching trade flows to production flows. In particular, the trade statistics treat ginned cotton, cured tobacco, and dried fruits and nuts as agricultural commodities, while the input-output table classifies them as the product of manufacturing activities. (c) The official statistics omit quite large illegal exports, especially of livestock, and quite large illegal imports--the latter being either smuggled in the ordinary sense, or under-recorded in the "imports with waiver" category. 6. Detailed data on invisible flows are compiled by SPO. Little is known about the methods used to estimate non-factor service flows, or about the reliability of the statistics. The official estimates for receipts from tourism, however, are believed to be a substantial under-estimate, due to a high level of illegal transactions in recent years. 7. The principle factor service flow, along with interest payments, is workers' remittances, statistics concerning which are based on Central Bank records. As a consequence, they omit unofficial remittances, which are believed to have been very large (between $500 and $1000 million per year) in recent years. Part of these unofficial remittances finances illegal imports; the remainder (illicitly) finances licensed imports, for example through the cash against goods scheme. 8. Turkish authorities produce two versions of the balance of payments table, one for the "Monthly Economic Indicators", and one for the IMF Balance of Payments Yearbook. Their capital account data, especially debt flows, often differ from those generated through the World Bank Debtor Reporting System. The balance of payments table (Table 3.1) represents an attempt to reconcile the differences. C. Public Finance 9. The data for general budget revenues and expenditures are given on a fiscal year basis (from March 1 to February 28) published by the Ministry of Finance. The data for annexed budget are compiled from the final accounts of the individual institutions such as various state directorates and  - 3 - universities. Most of the figures for more recent years in these tables were obtained from unpublished but official sources during the mission's visit to Turkey, and also from various IMF reports. The data for budgets are normally revised as more updated information becomes available until the budget is closed after about four years. This revision has been sizeable in the recent past partly ,lue to the rapidly increasing rate of inflation. In some cases, total figures, such as Total Consolidated Budget Revenues, are more updated than individual items, although the resulting differences are small. The items which include "other items" or "errors and omissions", if applicable, are used to absorb these discrepancies when it was not possible to obtain correspondingly updated figures for evety individual item. 10. There have been several ways of channelling funds from the Central Bank, the State Investment Bank and other establishments to the budget and to the operational and other State Economic Enterprises. Details are not shown here to avoid the complications arising from the changes in the exact contents of such items. Since different forms have been adopted to channel funds to SEEs and finance the budget (and cash) deficits, relevant figures in Tables 5.1 and 5.6 are recordedl in net terms. 11. These considerations also apply in the case of figures concerning changes in the SEEs' cash accounts which consist of many different items. Items concerning foreign. financial sources have been updated with different frequency from those in the case of other domestic figures; consequently, the items are shown only at a rather aggregate level, although some of the relevant and more detailed figures are shown in tables in other sections. Different sources of information used to provide more updated figures tend to show certain discrepancies. D. Employment and Wages 12. There are three sources of information concerning employment and wages: (i) census data; (ii) annual surveys of manufacturing industry; and (iii) Social Insurance Institute (SSI) data. Although the census is a potentially rich source Of data, it has the disadvantage of being conducted every five years, the last one being in 1975. It also has problems of definition and reliability. For instance, the 1975 census shows an unrealistically low unemployment rate of 0.5 percent. 13. The annual survey of manufacturing industry has the advantage of being conducted annually. Since it covers only firms employing 10 or more workers (except for 1963 and 1970), it has no information on the important small scale sector. Wage data are available at a highly aggregate level-- total payments made, total employment in different manufacturing industries. No information is available on the composition of the work force or wages by occupational categories. 14. The SII data for average wages of employees covered by social insurance are available on an annual basis. Wages by occupational categories are not available. Data ignores in-kind wages and benefits, and the increasing coverage of social insurance makes annual data uncomparable.  - 4 - 15. Despite the above problems, data on the size of labor force, employment by sectors and unemployment exist on an annual basis. These estimates are the results of the research done at the SPO. Briefly, the estimation technique is as follows: the structure of the population, along with "trends" in the labor force participation rate determine labor supply. Demand for various sectors is estimated on the basis of output growth (national accounts data) and data contained in the censuses. Agricultural employment, for instance, is based on a formula relating employment to acreage and technology, such as, number of tractors. Employment in manufacturing is estimated by noting changes in output as obtained,-from the survey of manufacturing industry, and assuming a fixed output-labor elasticity. Since the annual survey does not contain data on small scale establishments, the 1970 census data on this sector is used to adjust both output and employment.  -5- List of Statistical Tables Table Number Section 1: Population and Employment 1.1; Demographic Characteristics 1.2: Labor Force, Employment and Unemployment 1.3: Employment in Manufacturing Industry 1.4: Annual Emigration and Workers Employed Abroad 1.5: Sectoral Labor Productivity 1.6: Comparative Data on Population and Labor Force 1.7: Employment by SEEs Section 2: National Income Accounts 2.1: Gross Domestic Product at Current Prices by Sectoral Origin 2.2: Gross Domestic Product at 1968 Prices by Sectoral Origin 2.3: Expenditure on Gross National Product at Current Prices 2.4: Expenditure on Gross National Product at 1968 Prices 2.5: Sectoral Fixed Investment at Current Prices by Government and Private Sector 2.6: Sectoral Fixed Investment at 1968 Prices by Government and Private Sector 2.7: Comparative Structure of Production 2.8: Comparative Structure of Expenditure 2.9: Comparative Sources of Growth of Total Gross Production .Section 3: Foreign-Trade.and Balance of Payments 3.1: Balance of Payments 3.2: Commodity Composition of Exports 3.3: Commodity Composition of Imports 3.4: Exports by Major Commodity Groups According to SITC 3.5: Imports by Major Commodity Groups According to SITC 3.6: Export and Import Price Indices 3.7: Invisible Receipts and Payments 3.8: Imports and 'Exports and Structure of Production, 1978 3.9: Geographic Distribution of Foreign Trade 3.10: Comparative Growth and Structure of Merchandise Exports 3.11: Comparative Growth and Structure of Imports 3.12: Share of Imports in Total Domestic Demand Section 4: External Debt 4.1: Long-term Debt Outstanding 4.2: Short-term Debt 4.3: Disbursements Received from Long-term Loans 4.4: Long-term Loan Commitments Received 4.5: Debt Relief Received by Turkey from OECD Countries Under the May 20, 1978 Multilateral Debt Relief Agreement  - 6 - 4.6: Debt Outstanding to Financial Institutions 4.7: Average Terms of Long-term Public Sector External Commitments Received Section 5: Public Finance 5.1: Consolidated Budget Summary 5.2- Consolidated Government Revenue 5.3: Internal Public Debt 5.4: Profit and Loss Account of SEEs 5.5: Profit and Loss Account and Factor Income of Individual SEEs 5.6: Financing of Investment by SEEs 5.7: Fixed Investment by SEEs 5.8: Comparative Tax Ratios 5.9: Projections of Real Growth Rates for Tax Revenues Section 6: Money and Banking 6.1: Monetary Survey 6.2: Distribution of Central Bank Credits 6.3: Consolidated Commercial Bank Credits 6.4: Composition of Bank Deposits 6.5: Lending and Deposit Interest Rates Section 7: Prices and Wages 7.1: Price Indices 7.2: Average Daily Wages of Workers by Economic Activity 7.3: Trends in Real and Nominal (Daily) Wages 7.4: Gross and Net Wages 7.5: Government Salaries by Grades, 1970-77 7.6: Public and Private Sector Wages 7.7: Collective Agreements and Coverage in Turkey Section 8: Agriculture 8.1: Principal Land Use 8.2: Land Areas for Cereals, Pulses, and Industrial Crops 8.3: Output of Cereals, Pulses and Industrial Crops 8.4: Yields of Cereals, Pulses, and Industrial Crops 8.5: Output of Nuts and Fruits 8.6: Animal Production 8.7: Use of Major-Agricultural Inputs 8.8: Agricultural Support Prices 8.9: Official Prices of Agricultural Inputs Section 9: Industry 9.1: Output of Selected Industrial Goods 9.2: Value of Manufacturing Production  - 7 - 9.3: Fixed Investment in Manufacturing 9.4: Fixed Capital Formation in Manufacturing Industry at 1965 Prices 9.5: Output of I'etroleum, Coal and Major Minerals 9.6: Production of Electricity (Gross) Section 10: Others 10.1: Construction Activity 10.2: Turkish Highways 10.3: Education Institutions, Teachers and Enrollment 10.4: Medical Institutions and Bed Capacity 10.5: Provincial Distribution of Population, Hospital Beds and Health Personnel, 1975 10.6: Fourth Plan Targets Symbols Used in Statistical Tables Not available Not applicable - Zero or negligible p Preliminary e Estimate  Table 1.1: DEMOGRAPHIC CHARACTERISTICS (In thousands) 1962 1967 1972 1973 1974 1975 1976 1977 1978 Population (mid-year estimates) e 28933 32750 37132 38072 39036 40025 41039 42078 43144 Rural-urban distribution Rural 19819 20960 22205 22462 22602 22774 22982 23185 23384 Urban 9114 11790 14927 15610 16434 17251 18057 18893 19760 Age structure distribution Ages 0-14 years 12473 14254 15984 15876 16278 16678 17113 13104 18466 Ages 15-64 years 15390 17120 19514 20521 21001 21533 22079 22038 22655 Ages 65 and over 1070 1376 1634 1675 1757 1814 1847 1936 2023 1960-65 1965-70 1970-75 1975-80 Crude birth rate /2 41.5 40.8 35.0 32.2 Crude death rate /2 15.3 13.5 10.8 10.0 Infant mortality rate /3 180 133 120 n.a. Life expectancy at birth: Male 50.3 52.8 58.3 60.3 Female 53.2 56.1 59.4 61.6 Gross reproduction rate 2.9 2.7 2.5 2.1 /1 Derived from census data of 1960, 1970, and 1975. /2 Per thousand of population. 73 The number of infants who die before 1 year of age, per thousand live births in a given year. Source: State Institute of Statistics; SPO, Annual Program (various issues); SPO, Third Plan and Fourth Plan; World Development Report, 1978, 1979.  - 9 - Table 1,2; LABOR FORCE EPLOYMENT AND UNEMPLOYMENT (In thousands) 19,52 1967 1972 1973 1974 1975 1976 1977 1978 Total civilian labor force 13133 13868 15013 15236 15462 15692 15925 16161 16161 Total civilian employment 12643 13238 13917 14213 14452 14668 14710 14784 14726 Agriculture 9740 9556 9307 9390 9426 9463 9280 9100 9085 Industry 995 1222 1491 1574 1650 1691 1763 1857 1906 Mining and quarrying 64 101 95 97 109 108 109 115 159 Manufacturing 9:12 1082 1343 1417 1461 1507 1569 1652 1653 Electricity, water and gas :L9 39 53 60 80 76 85 90 94 Construction 300 384 454 469 483 501 520 547 549 Transportation, storage and communications 261 312 391 416 434 451 479 497 506 Wholesale and retail trade 366 434 537 560 579 600 621 639 639 Banking, insurance and real estate 52 87 157 164 170 176 182 188 196 Services 7]1 916 1298 1361 1434 1513 1595 1686 1694 Unspecified 21.8 327 282 279 276 273 270 270 151 Urban and rural unemployment excluding agricultural labor surplus 4S90 630 1096 1023 1010 1024 1215 1377 1435 Agricultural labor surplus at peak season /1 950 1050 900 950 920 900 900 740 740 Domestic labor surplus 1440 1680 1996 1973 1930 1924 2115 2117 2175 Domestic labor surplus ratio 11 12.1 13.3 12.9 12.5 12.3 13.3 13.1 13.5 Labor stock abroad 13 204 634 767 758 711 805 815 711 Total labor surplus 1453 1884 2630 2740 2688 2635 2920 2932 2886 Total labor surplus ratio 11.1 13.4 16.8 17.1 16.6 16.1 17.5 17.3 17.2 /1 Appears also as part of employment in agriculture. Source: State Planning Organization  Table 1.3: EMPLOYMENT IN MANUFACTURING INDUSTRY (In thousand) 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 )od and beverage 75 76 79 78 83 88 93 98 104 109 112 )bacco processing 41 39 42 47 41 35 32 42 41 37 38 axtiles and apparels 114 120 126 127 129 136 135 138 152 159 163 )od products 8 9 9 9 10 12 12 14 14 15 17 aper and paper products 8 9 9 9 10 12 15 20 15 16 16 rinting 6 6 6 7 8 10 10 10 10 11 10 aather and fur 2 2 2 2 2 3 4 3 3 4 5 ibber products 7 8 8 9 9 9 9 10 11 11 11 .emicals 19 20 21 23 27 31 29 32 35 37 41 atroleum I 2 2 2 2 3 2 5 4 5 5 5 )n-metallic minerals 24 27 28 31 34 37 38 36 44 49 46 asic metals 20 21 27 28 31 31 34 36 47 54 65 otal products 25 29 30 32 36 34 29 34 34 34 35 achinery 9 10 13 15 17 21 22 27 38 38 42 Lectrical machinery 7 9 9 10 12 10 14 17 20 23 26 eansport equipment 19 23 26 29 33 33 34 43 49 50 52 )tal 385 409 436 458 485 503 516 564 622 651 683 of which: Public sector 170 179 188 195 203 185 198 216 226 229 247 Private sector 215 230 248 263 282 316 318 348 396 422 436 ource: Turkiye Imalat Sanayiinde Sermaye Ve Isgucer. Kutlav Ebiri, 1977.  Table 1.4; ANNUAL EMIGRATION AND WORKERS EMPLOYED ABROAD 1961-69/1 1970 1971 1972 1973 1974 1975 1976 1977 EEC 340874 111809 80106 77424 123712 13976 756 2304 2267 Germany 315741 96936 65684 65875 103793 1228 640 2101 2123 Belgium 13917 431 583 113 265 555 59 72 35 France 279 90:36 7697 10610 17544 10577 25 6 10 Netherlands 10925 4843 4853 744 1994 1503 32 98 79 United Kingdom 12 563 1289 82 116 113 - 27 20 EFTA 8661 12220 5962 5784 8192 3271 455 953 710 Austria 7662 10622 4620 4472 7083 2501 226 672 557 Switzerland 999 1598 1342 1312 1109 770 229 281 153 Others 1686 5546 2174 2201 3916 2964 3208 7301 11087 Australia 1077 1186 879 640 886 1138 401 339 438 Libya - - - - - - 1128 4098 5692 Others 609 4360 1295 1381 3030 1826 1679 2864 4957 TOTAL 351221 1295;5 88442 85229 135820 20211 4419 10558 14064 Total workers employed abroad/3 . 479320 567762 652991 788811 809022 813441 823999 838063 L Total for the period. First ten months only. Estimate, including illegal woirkers. Source: General Directorate of Employment Exchange, Ministry of Labor  Table 1.5: SECTORAL LABOR PRODUCTIVITY (In Turkish liras, at 1968 prices) 1962 1967 1972 1973 1974 1975 1976 1977 1978 Agriculture 2716 3224 3926 3507 3854 4257 4673 4770 4977 Industry 10877 14942 18826 19843 20498 21776 23029 23536 23711 Mining and quarrying 18219 16693 23179 23825 25633 28870 30615 41635 31126 Manufacturing 9777 14249 17943 19048 19760 20695 21853 21291 22001 Electricity, water and gas 38684 29667 33415 32183 26888 33145 34988 41633 41288 Construction 15250 17479 18744 19473 20075 20988 21894 2,1737 22417 Transport, storage and communications 19605 24631 31908 33647 34915 36310 37491 38569 39178 Wholesale and retail trade 18787 24988 32546 34782 37292 39383 41697 41930 43374 Other services 15424 14674 15317 15675 16104 16469 16952 17051 18538 Source: Tables 1.2 and 2.2  Table 1,6: COMPARATIVE DATA ON POPULASTON AND LABOR FORCE M4id-1977 Average Annual Percentage of Population in Percentage of Working Age Percentage of Labor Percentage of Labor *opul