Agenda

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Agenda

• Pictures from Turkey
• Description of the Economy
• How 2001 Crises Happened
• IMF agreement and Recent Developments
• Political Agenda EU
• Impediments to Growth
• Latin American Case
• Export Credit Agencies
• How to analyze country and sector risk Argentina

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Where is Turkey?
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Well, where the continents meet.
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A lot of history..
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.and history..
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and nature.
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..and Istanbul..
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Descriptive Statistics
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Main Trading Partners are European Countries
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Economy is becoming more integrated with the
world.
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GDP growth has been very volatile
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Budget deficit has been growing
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Debt Spiral
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How high real interest rates affect the budget
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What is currency crises Kemal Dervis explains
2001 Attack on TL to IMF
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Primary Budget Balance is within IMF targets
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Industrial production is growing
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Real GDP and Productivity Growth
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Investment is picking up increasing imports
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Inflation is decreasing
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Stock market 100 return in dollars
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However we did not see a recovery in the
employment statistics yet
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Dont Believe EIU Forecasts
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Dont Believe EIU Forecasts
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Other Major Problems Missing Attention of
Investors FDI inflows are low.
As a percentage of GDP
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Investment done by private sector but very low
rates of FDI
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Investors View Impediments to FDI
Source FIAS field survey.
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Turkeys Bid for EU

• German Chancellor Gerhard Schroeders official
  visit to Turkey in late February reinforced the
  already positive view of the current German
  government for Turkeys EU bid.
• British Foreign Secretary Jack Straw said last
  week in Turkey that he believed the EU would
  agree in December to start accessions talks with
  Turkey.
• This leaves France as the key source of
  uncertainty in shaping the EUs political view on
  Turkeys bid for membership.
• This leaves France as the key source of
  uncertainty in shaping the EUs political view on
  Turkeys bid for membership.
• Chirac seems to be supporting Turkey
• However his party publicly opposes
• What will happen if Turkey is turned down

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Comparison of Turkey with EU countries
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Expectations of Investors HSBC Survey
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Expectations of International Investors HSBC
Survey
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Expectations of International Investors HSBC
Survey
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Risk Insurance

• Litigation Insurance companies sue the US
  medical equipment exporter for not being careful
  in credit policies.
• US Exporter claims that bad debts are due to
  country risk

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Sources of funding for developing countries
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How ECA Credits Work
This was the missing part
Export Credit Agency
Importers Bank
Country Risk Guarantee
Exporters Bank
Credit Risk Guarantee
Credit Agreement
Money
Importer
Exporter
Goods
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Latin America
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Latin America
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Latin America
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Argentina Is it credit or sovereign risk?
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Health Care Sector, Structure

• Re-conversion of the healthcare system In the
  early 90s, the Government of Argentina began the
  process of a series of profound administrative
  and economic reforms.
• In 1995, the Argentine Government and the World
  Bank signed an Agreement to finance the
  restructuring of the Union-run healthcare
  organization Obra Sociales
• The aim of the restructuring is to reduce the
  number of OS and optimize the surviving ones thus
  making a healthier Healthcare System.
• Since 1997 the obras sociales have undergone
  restructuring through increased competition and
  consolidation. Whereas in 1996 there were 330
  health trust funds, there are now only 220.
• The funding of obras sociales has also diminished
  in recent years owing to lower compulsory payroll
  contributions and higher unemployment.
• According to an estimate, nearly half of the
  obras sociales are experiencing some financial
  difficulties.

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Argentina
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Argentina