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OECD Economic Surveys: Turkey 2006

image of OECD Economic Surveys: Turkey 2006

This edition of OECD's periodic survey of the Turkish economy presents an overview of recent economic performance and suggests that Turkey needs to improve management of economic risks and resilience to shocks.  It discusses enhancing competitiveness and growth through regulatory simplification, which should also reduce incentives to operate in the informal economy.  It alo assesses the pension system, making quality education accessible to the whole population, and freeing the potential of agriculture.

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Freeing the Potential of Agriculture.

The productivity and competitiveness of Turkish agriculture have been constrained by socio-economic weaknesses in rural areas and a protective trade and subsidy regime, which has created a status quo of highly fragmented, low-skilled, low-technology and domestic-market-driven farming. A major reform based on cutting distortive price and input subsidies and replacing them with direct income support was introduced in 2000-01, but there are risks that the reform will be less successful than anticipated. The reform effort should be reinvigorated and backed by improved framework conditions – legal infrastructure, technology transfer services, irrigation and other infrastructures – needed for the stronger development of commercial agriculture.

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