Country & Education Sector Profile
Republic of Turkey
Educational Holding Group
March 2010
Country & Education Sector Profile Republic of Turkey Page 2
Educational Holding Group
Chamber of Commerce,
P.O. Box 27215, Safat,
13133, Kuwait
Tel: +965-2224-0453
Fax: +965-2240-7048
http://edu.com.kw/
Adel Ansari
Investment Analyst
Investment Department
Educational Holding Group
Country & Education Sector Profile Republic of Turkey Page 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 Profile Republic of Turkey Page 4
Topic Page Number
1.0 Country Brief
1.1 Country Summary 6
1.2 Demographics 6
1.3 Political Stability 7
1.4 Economic Stability 7
1.5 Impact of Financial Crisis 8
2.0 Economy
2.1 Macroeconomic Indicators
2.1.1 Gross Domestic Product 9
2.1.2 Per Capita – Gross Domestic Product 10
2.1.3 Inflation 11
2.1.4 Public Finance 12
2.1.5 Labor Force 13
2.1.6 Foreign Direct Investment 14
3.0 Education Sector
3.1 Education System 16
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 Rate 21
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 23
Contents
Country & Education Sector Profile Republic of Turkey Page 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 Schools 26
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 Ratio 29
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 Schools 32
3.7.2 Sector wise Breakdown- Number of Student 32
3.8 Higher Education Statistics
3.8.1 Eligible Population 33
3.8.2 Higher Education Brief 33
3.8.3 Higher Education – Number of Students Growth Rate 34
3.8.4 Higher Education Analysis- Eligible Population 34
3.8.5 Higher Education – Enrollment Rate 35
3.8.6 Higher Education – Number of Students Breakdown 36
3.8.7 Higher Education Gap Analysis 36
4.0 Strategy
4.1 Overview 38
4.2 Target Sector Analysis 38
4.3 Target Region Analysis 39
5.0 Analysis
5.1 SWOT Analysis 40
6.0 Legal
6.1 Laws for Foreign Direct Investment 41
6.2 Taxation Laws 42
Country & Education Sector Profile Republic of Turkey Page 6
1.1 Country Summary
Turkey 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 of
Mustafa Kemal Ataturk, following the fall of the Ottoman Empire in the aftermath of World War I. Turkey
joined the UN in 1945 and in 1952 it became a founding member of NATO; it holds a non-permanent seat on
the UN Security Council from 2009-10. In 1964, Turkey became an associate member of the European
Community.
Turkey is a bridge between east and west, it is strategically located. Geographically, Turkey is located in
between Asia and Europe. The smaller northwestern portion (Thrace) is part of Europe, while the larger
portion (Anatolia) is part of Asia. Turkey’s proximity to Europe in west and Russia, Iran and Syria in east makes
it important for peace and understanding. Also because of its location it has become an important transit
route for gas.
Ankara is the capital city of Turkey and second largest city after Istanbul. The official language of Turkey is
Turkish however other minority languages such as Kurmanji (Northern Kurdish) are also spoken by large
number of people. Turkey is a secular state with no official state religion; the Turkish Constitution provides for
freedom of religion and conscience. However the majority of population is Muslim, according to 2009 data on
the world's 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-operation
and Development (OECD). Turkey has the 15th largest GDP in terms of Purchasing Power Parity; its GDP Per
Capita in terms of Purchasing Power Parity is much higher at US$ 13,111 which indicates that Turkey is an
upper middle income country. Over 70 percent of its population lives in urban areas Turkey successfully
recovered from a deep economic crisis in 2001.
Source: World Bank
Country Brief
Country & Education Sector Profile Republic of Turkey Page 7
1.2 Demographics
Turkey’s 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 years
which was around 43 % of the total population and also around 17.93 million was in 25 - 39 age groups.
The population projection estimates that Turkish population will grow to 83.5 million by 2025. Despite a
significant demographic shift expected in Turkey the under 24 population by 2025 is estimated to be around
30.8 million.
71. 08 72. 7
76. 6
80. 26
83. 57
60.
65.
70.
75.
80.
85.
2008 2010 2015 2020 2025
Chart 3: Total Population Projections (In Millions)
Mid-year Total Population Projections
By 2025 the population under 24 is estimated to be around 30.8 million
Source: Turkstat
70.59
71.52
72.56
69.50
70.00
70.50
71.00
71.50
72.00
72.50
73.00
2007 2008 2009
Chart 1: Total Population ( In Millions)
Total Population
(Source: Turkstat)
6.16 6.20
6.50
6.23
6.28 17.93
15.82
7.44
Chart 2: Population Breakdown- 2009 ( In Millions)
0 to 4 5 to 9 10 to 14 15 to 19
20 to 24 25-39 40-59 60+
Total Population under 24 was 31.37 million or 43% of the Total Population
(Source: Turkstat)
Country & Education Sector Profile Republic of Turkey Page 8
1.3 Political Stability
Turkey is a parliamentary representative democracy, since its foundation as a republic in 1923. The head of
state is the president; however the executive powers stay with Prime Minister. After a period of one-party
rule, 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. Turkey’s internal
politics is stable; as per foreign relations Turkey has conflict with Kurd fighters based in Iraq. In 2007 Turkey
launched an airstrike and followed it by ground invasion against Kurd fighters in northern Iraq. Turkey also has
an ongoing conflict with Cyprus over northern Cyprus; it maintains its troops in the island. None of its conflicts
are grave and threaten an immediate disturbance; overall Turkey is a political stable country.
1.4 Economic Stability
Turkey is closely related with world economy and has proximity with Europe and Asia alike. It has a track
record of good economic management and structural reform that drives its long-run economic prospects. Due
to its close relations with the world economy, through both trade and financial channels, Turkey was also
seriously 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 its
GDP, industry for 22 percent, and services for 69 percent. Turkey’s economy is among the world’s 20 largest,
with a GDP in 2008 of over US$790 billion. GDP per capita now exceeds US$9,300. Extreme poverty (those
living at below US$1.25 per day) is minimal in Turkey, but poverty remains significant around 18.5 percent in
2007. Turkey although going through crisis like most of the world economies still remains stable with sound
fundamentals.
Source: World Bank, International Monetary Fund
1.5 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 $5 billion in 2008.
The slow recovery of export sector and some protectionist measures by major economies have made it even
more difficult for Turkey. However, Turkey has been among the country that has not suffered as much as
worse hit economies. With positive data coming out of USA and other major economies recovery has begun
and with effective management by Turkish authorities using their previous experience of similar situation,
Turkey is poised to be among the first in EU to recover. The fundamentals of the economy remain strong.
Source: World Bank, International Monetary Fund
Young and Dynamic Population with over 31 million people (43% of the total Population) under the
age of 24.
Despite Demographic Shift, the population under 24 will remain significant.
It is Parliamentary Representative Democracy and overall is politically stable.
Strong Economic Fundamentals and closely integrated with world economy.
Among world’s 20 largest economy with a GDP of over US$ 790 Billion.
Country & Education Sector Profile Republic of Turkey Page 9
2.1 Macroeconomic Indicators
2.1.1 Gross Domestic Product
Turkey has the 15th largest GDP in terms of Purchasing Power Parity and 17th largest in terms of Nominal GDP.
The Nominal GDP in 2008 was at US $729 billion.
The ongoing global economic downturn has hit Turkey hard. Real GDP growth rate was just 0.9% in 2008 as
against 4.7 % in the previous year and was lower than the average Real GDP growth from 2004 -2007 of
around 7.3%.
This implies stagnant per capita income; also the Turkish economy contracted in the fourth quarter of 2008 by
6.2 percent relative to one year earlier and year-on-year quarterly growth fell further to -13.8 percent in the
first quarter of 2009, However by mid 2009 there were signs of recession bottoming out and positive data was
flowing in from US. Despite these positive signs, the Turkish economy is expected to shrink. IMF estimates a
steep decline in Real GDP growth rate in 2009.
The government’s response has combined monetary easing with foreign-exchange liquidity and confidence
building measures in the financial sector (banks are well-capitalized and well-regulated), some employment
measures, and temporary tax cuts.
On comparison it shows that Turkish Economy has not been hit as badly as some other OECD high income
economies or Euro economies; it has performed better than others in the area. Turkish Nominal GDP growth
was higher than the High Income OECD average of 0.69%, Euro area average of 0.73% and world average of
2.01 %.
Source: IMF, World Bank.
39
2.2
1
48
2.6
9
52
9.1
9
64
9.1
3
72
9.9
8
59
3.5
3
59
0.7
0
61
0.4
7
63
8.4
2
67
3.7
5
71
0.8
3
9.4%8.4%
6.9%
4.7%
0.9%
-6.5%
3.7% 4.0% 3.5% 3.5% 3.5%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
-
100.00
200.00
300.00
400.00
500.00
600.00
700.00
800.00
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Chart 4: Gross Domestic Product
Gross domestic product, current prices (US $ Billions)
Real Gross Domestic Product Growth Rate (Percentage)
Source: International Monetary Fund (IMF)
*IMF Staff estimation from 2009 onwards
Economy
Country & Education Sector Profile Republic of Turkey Page 10
2.1.2 Gross Domestic Product - Per Capita
Turkey saw a surge in GDP Per Capita Income (Current Prices) from 2004 onwards, in 2008 it was at 10,479
US$. It’s GDP Per Capita in terms of Purchasing Power Parity is much higher at US$ 13,139 making it an upper
middle income country.
Due to financial crisis the growth has been downward. IMF estimates that in 2009 the nominal GDP to shrink
by US $ 593 billion and further to US$ 590 billion by 2010. However the GDP Per Capita as per Purchasing
Power is estimated to remain strong.
Source: World Bank, International Monetary Fund
2.1.3 Inflation
Turkey has witnessed high inflation rates throughout its period of development. It has been one major area of
concern for the Turkish economy. Annual Inflation which was at around 8.3% in 2007 rose to over 10% at the
end of 2008 remaining above the upper limit of uncertainty band. The events in global economy became main
determinant of inflation throughout 2008 which became 11.1 percent by September 2008. Despite the
considerable increase in exchange rate in last quarter of 2008, the effect of this on prices remained below
levels of previous years, due to slowdown in import prices.
In the first quarter of 2009 positive development on cost based effects and further slowdown in economic
activities , the annual rate of inflation maintained its downward trend. By March it reached a level of 7.89%
which was well within the uncertainty band, IMF projected the annual rate to further go down to 6.2% by end
of year. However Inflation dropped to 5.73% in June below the lower bound of uncertainty band set at 6.8%.
5,8
62 7,1
08
7,7
67 9
,42
2
10
,47
9
8,4
27
8,2
95
8,4
78
8,7
69
9,1
53
9,5
51
9,8
44
11
,00
6
12
,10
7
12
,89
1
13
,13
9
12
,33
9
12
,84
9
13
,40
5
13
,96
6
14
,57
7
15
,21
3
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Chart 5: GDP - Per Capita
Gross domestic product per capita, current prices (US$)
Gross domestic product based on purchasing-power-parity (PPP) per capita (US$)
Source: International Monetary Fund (IMF)
*IMF Staff estimation from 2009 onwards
Country & Education Sector Profile Republic of Turkey Page 11
The future forecast projected by IMF for Turkey projects that average consumer prices will decline in price rise
and has projected it to be at around 4% till 2014.
However, commodity price have picked up during April and May this year amid hopes of an earlier than
expected recovery, higher demand boosted by China & India and weaker dollar.
The outlook of inflation in Turkey much depends like all the major economies on growth and recovery of
economies across. After reeling under high inflation for a long timer the financial crisis has for once got
Turkey’s inflation rate within uncertainty band but this may not be very desirable for the Turkish economy as it
looks to push itself out of the financial downturn with increased demand, internally as well as globally.
Source: International Monetary Fund, Turkstat
2.1.4 Public Finance
Central Government budget revenue and primary expenditure rose by 9.7 and 12.9 percent respectively in
2008. As the rise in total expenditure became 10.7 percent, the ratio of expenditures covered by revenues
decreased by 0.9 percentage points compared to 2007.
Table 1: Government Budget Performance (In Billion TL)
2007 2008 % Change Jan-Apr 2008 Jan- Apr 2009 % Change
Expenditures 204.1 226 10.7 70.2 87.4 24.5
Interest Expenditure 48.8 50.7 3.9 17.9 21.1 17.9
Primary Expenditure 155.3 175.3 12.9 52.3 66.3 26.8
Revenues 190.4 208.9 9.7 64.8 6748 4
Tax revenues 152.8 168.1 10 53.2 51 -4.1
Revenues to Expenditure 93.3 92.4 -0.96 92.3 77.1
Budget Deficit -13.7 -17.1 24.8 -5.4 -20.1 272.2
Primary Surplus 35 33.6 -4.1 12.5 1.1 -91.2 Source: Central bank of Turkey
8.75%
10.44%
6.20%6.78%
5.74%
4.66%4.00% 4.00%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
2007 2008 2009 2010 2011 2012 2013 2014
Chart 6: Inflation (Current & Projected)
Average Consumer Price (Percentage change)
Source: IMF, Turkstat
Country & Education Sector Profile Republic of Turkey Page 12
In 2008 the largest increase in primary item was due to capital expenditure because of investment GAP. Tax
revenue went down on account of low domestic demand. However the central government budget deficit was
just below target due to increase in capital funds at TL 7.3 billion were transferred from Privatization and
unemployment fund. In 2009, there was a trend of an evident increase in budget deficit, which is because of
fiscal measures taken by Turkey to alleviate the effect of downturn. In first four months of 2009 while
expenditure increased by 24.5 percent revenues just rose by 4 percent. The ratio of expenditure covered by
revenues went sharply down to just 77.1 percent. Primary and interest expenditure increase had the maximum
impact as they rose by 26.8 and 17.9 percent respectively.
However this has been an extraordinary period with fiscal measure taken against financial crisis had their
implication on budget deficit.
Source: Central Bank of Turkey, International Monetary Fund
The ratio of public net debt stock to GDP declined and became 28.6 percent at the end of2008. The domestic
debt stock included in 2008 was TL floating Rate debt 42.5% TL fixed rate debt 45.9% .CPI indexed bonds at
3.2% and FX indexed bond at 6.4%. This composition didn’t change much in 2009.
Given the current economic development, rising budget deficit is a worldwide phenomenon. In the first four
month of 2009 the central government budget was parallel to the macroeconomic developments and to fiscal
measure enforced to contain the financial crisis.
Source: Central Bank of Turkey
13
.4
6.5
4 1.4
2.1
35
.6
35
.1
30
28
.1
26
.5
49.00
41.60
34.0029.50 28.60
0
10
20
30
40
50
60
2004 2005 2006 2007 2008
Chart 8:Public Debt (% of GDP)
Net External Debt Net Domestic Debt Total Public debt
Source: Central Bank of Turkey
Country & Education Sector Profile Republic of Turkey Page 13
2.1.5 Labor Force
Out of total economically active population of around 39 million in 2008, 21 million people of age over 15
years were employed. The unemployment rate in 2008 was around 10.7 %, higher than last year’s rate of 10
percent. Turkey has since 2004 had a high unemployment rate, with the average unemployment rate of 10.2
percent for last 5 years. Still Turkey is the 5th largest labor force amongst EU countries. Turkey has a young
and dynamic labor force with the average age of 28.5 years
Table 2: Labor Force Breakdown Industry wise (In '000)
INDUSTRY GROUP 2004 2005 2006 2007 2008
Agriculture& Fishing 7,400 6,493 6,087 4,867 5,016
Mining 104 118 130 127 115
Manufacturing 3,801 4,083 4,187 4,088 4,233
Electricity, Gas, water 83 79 92 97 92
Construction 1,029 1,171 1,267 1,232 1,242
Wholesale & Retail 3,307 3,610 3,731 3,568 3,576
Hotels & Restaurant 872 937 1,000 989 999
Transport & Storage 1,100 1,131 1,162 1,135 1,089
Financial 237 238 237 249 259
Real estate 549 634 773 806 910
Public Administration & defense 1,252 1,246 1,225 1,260 1,265
Education 818 905 907 869 920
Healthcare 469 530 590 561 594
Other community services 583 871 942 890 884
Unemployed seeking their first job 612 553 490 430 394
Unemployed previously employed 1,886 1,967 1,956 1,946 2,217
Unemployed 2,498 2,519 2,446 2,376 2,611 Source: International Labor Organization
39,550 40,330 41,085 39,169 39,813
21,791 22,046 22,330 20,738 21,194
2,498 2,519 2,446 2,376 2,611
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
2004 2005 2006 2007 2008
Chart 9: Labor Force (in '000)
Economically Active Populationbetween age ( 20-64)
Total employment over 15 years
Total Unemployment
Source: International Labor Organisation
Country & Education Sector Profile Republic of Turkey Page 14
Agriculture has historically employed a large number of labor forces however it is declining as more and more
labor force move towards other employment avenues. It has reduced from 34% of total labor force to around
23 % in 2008. Other important sector for employment has been manufacturing. Manufacturing in 2008
employed around 4.2 million of the total labor force which was around 20% of the total labor force as against
18 percent in 2004. Manufacturing has increased its share when it comes to employment; however it is the
hardest hit sector by financial crisis hence large number of unemployment in this sector is inevitable.
Source: Turkstat, International Labor Organization
2.1.6 Foreign Direct Investment
Table 3: Foreign Direct Investment (Millions of USD)
2005 2006 2007 2008
FDI Flows
Inward 10,031 20,185 22,046 18,198
% Gross Fixed Capital Formation 17.10 15.60 12.30
Outward 1,064 924 2,106 2,585
% Gross Fixed Capital Formation 0.80 1.50 1.70
Net FDI Inflows 8,967 19,261 19,940 15,613
Average Net FDI Inflow last 4 years 15,945 Source: United Nations Conference on Trade and Development (UNCTAD)
FDI inflow has been steady in Turkey; the average FDI inflow reached a high of US$ 22 Billion in 2007, however
due to financial crisis the FDI inflow has been affected. The net inflow for 2008 was at US$ 15 billion for the
year 2008 compared to over US $ 19 billion last year. Turkey has seen good FDI inflows and hence it is an
important part of current account deficit. The inflows further decreased in 2009 averaging about 1 Billion US$
for first 2 months. The Central Bank of Turkey has set a target of US$ 10 Billion for 2009, which would account
for 40-50 percent of current deficit.
Turkey also dropped 10 places in World Bank Doing Business Report in ease of doing business. Turkey was
ranked at 73 out of 183 economies for the year 2010 as compared to 63 for the year 2009.
Source: Reuters, World Bank
Country & Education Sector Profile Republic of Turkey Page 15
Turkish economy has had its share of crisis since 2001 and recently it has been impacted by global meltdown,
however it has shown resilience and strong fundamental. Turkey has the 15th largest economy in the world
and has a high GDP Per Capita Income of US$ 9,300. It is poised for recovery earlier than any other EU
countries.
Inflation has been a problem for Turkish economy. Current situation has helped it curb inflation but it is not
desirable. As economy starts recovering the government will have to maintain a check on inflation.
Overall with strong FDI flow and positive signs, Turkey is set to continue being an emerging market and better
placed than most of the other EU neighbors. This growth will fuel the need for better and bigger education
infrastructure.
Among 20 Largest Economies in the world with GDP of over US$ 790 Billion in 2009
An upper middle income group country with GDP per capita of over US$ 13,000 in 2009
Historically high inflation however got in control due to global meltdown. It is expected to rise once
demand grows and economic growth picks up.
High unemployment rate of 10.7% in 2008
Average FDI inflow for last 4 years was around US$15.9 Billion
Country & Education Sector Profile Republic of Turkey Page 16
3.1 Education System
The Turkish National Educational System is composed of two main sections: Formal Education and Non-formal
Education.
Formal Education
Formal education is the regular education of individuals in a certain age group and given in schools. This
includes Pre-Primary education, Primary education, and Secondary education and Higher education
institutions.
Pre-Primary education
Pre-Primary education is an optional education for children between 3-5 years of age who are under
the age of compulsory primary education.
Primary Education
With a new Law in 1997, eight years of Primary school is compulsory today (former system was five
years of compulsory primary school, followed by three years of middle or junior high school
education). Primary education is compulsory for all boys and girls at the age of 6-14, and is given free
of charge in public schools. These schools provide eight years of uninterrupted education. There are
also private (and paid) schools under State control.
Secondary Education
Secondary education covers general, vocational and technical high schools) that provide four years of
education (used to be 3 years until 2005).It is optional for students from 15-19 years of age. General
high schools prepare students for higher learning institutions. Some of the secondary schools and the
private secondary schools have foreign language preparatory classes.
Higher Education
Graduates of the high schools can attend universities if they can pass admission exams. Universities,
faculties, institutes, higher education schools, conservatories, vocational higher education schools,
police and military academies and colleges, and application-research centers are considered as Higher
Education institutions.
Non Formal Education
Non-formal education in Turkey is offered by a network of training centers that are supervised by the Ministry of National Education (MEB). Non-formal education services aim to teach reading-writing, help to continue education of students for finish their incomplete education, teach balanced nutrition and a healthy life style, teach people from various professions the knowledge and skills they need to improve themselves, and so on.
Education Sector
Country & Education Sector Profile Republic of Turkey Page 17
The Turkish National Education System
27
26
25
24
23
22
21
20
19
18
17
16
15
14
13
6
5
3
Age
Pre Primary Education (Kinder Garten & Nursery)
2 years
Primary Education (Compulsory)
8 years
Preparatory Class ( Optional in Some Schools)
Age (6-14)
Secondary
(Normal /general)
4 years
Secondary
(Science High School)
4 years
Secondary
(Vocational/ Technical)
5 years
Preparatory Class (Compulsory for some University)
Age (6-14)
Under Graduate
(General/ Vocational)
4 years
Under Graduate
(Diploma)
5 years
Masters
2 years
Masters
(Medical Specialization)4 years
Doctorate
3 years
Open Education
Source: Governorship of Kocaeli- Turkey
Country & Education Sector Profile Republic of Turkey Page 18
3.2 Education Expenditure
Government lays strong emphasis on education and is committed to improve education for all. Turkish
government allocates funds from Central Government Budget for Ministry of National Education (MONE) and
Higher Education Council (HEC), which overlook disbursement of allotted funds. On an average the Turkish
Government for last three years provides funds close to 3.15% of GDP every year to MONE and HEC. There has
been a consistent increase in the government expenditure on education from 22.4 Billion Turkish Lira (TL) in
2006 to 36.65 Billion TL in 2009 at an average growth rate of 18%.
The Total Government expenditure on education in 2009 was 13.98% of Total Central Government and 3.30%
of the Total GDP. This indicates that there was no change in government policy towards education despite the
financial crisis. The government continued with same levels of expenditure as percentages of Total Budget and
GDP.
0
10
20
30
40
2006 2007 2008 2009
16
.56
21
.35
22
.91
27
.885
.84 6
.58
7.3
1 8.7
7
Chart 10: Budget allocation for Education ( Billion TL)
Ministry of National Education Budget Higher Education Council Budget
22.4
36.65
30.2227.9
Source: Ministry of National Education ( MONE)
12.80%13.57% 13.58% 13.98%
3.00% 3.30% 3.00% 3.30%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
2006 2007 2008 2009
Chart 11: Education Expenditure Percentages
Total Education Budget Percentage of Central govt. budget
Total Education BudgetPercentage of GDP
Source: Ministry of National Education ( MONE)
Country & Education Sector Profile Republic of Turkey Page 19
Table 4: Ministry of National Education Budget Description ( Billion TL)
Budget Breakdown 2007 2008 2009
Total MONE budget 21.35 22.91 27.88
Personnel Expenditure 13.48 15.4 18.48
Insurance Premium 3.16 1.81 2.13
Goods & Services 1.19 2.21 2.86
Current Transferable 1.9 2.07 2.47
Capital Expenditure 1.48 1.26 1.5
Capital Transfers 0.106 0.147 0.419 Source: Ministry of National Education
The budget breakdown shows the total breakdown of expenditure of the allotted budget to Ministry of
National Education (MONE). MONE on an average for last three years spends around 65% of the total allotted
budget on Personnel i.e. staff and teachers salary and around 10% on insurance premium. MONE also spends
on an average around 6% every year on capital expenditure to fill the gap in education.
Table 5: Higher Education Council Budget Description ( Billion TL)
Budget Breakdown 2007 2008 2009
Total Higher Council budget 6.58 7.31 8.77
Personnel Expenditure 3.41 3.85 4.572
Insurance Premium 0.77 0.505 0.565
Goods & Services 1.026 1.36 1.561
Current Transferable 0.0856 0.0992 0.2092
Capital Expenditure 1.28 1.49 1.863 Source: Ministry of National Education
Higher Education Council (HEC) has on an average spent around 52% on personnel i.e. staff and teachers for
last three years. HEC has been active in fulfilling the education gap as it has allocated on an average around
20% of the total expenditure on capital expenditure.
Country & Education Sector Profile Republic of Turkey Page 20
The investment made by Ministry of National Education (MONE) in 2009 was around 1.5 Billion Turkish Lira
(TL) compared to 1.29 Billion TL in 2008 and 1.49 Billion TL in 2007. The investments by MONE were 0.13% of
GDP in 2009 and 0.575 of the Total Central Government Budget in 2009. The total investment of central
government in 2009 was around 13 Billion TL and compared to around 8 Billion TL a substantial increase of
over 50%. However out of this total investment of central government in 2009 around 5.3 % was investment
made by MONE in education as stated above in the chart.
3.3 Education Statistics
3.3.1 Enrollment Rate
The enrollment rate for primary is higher as it is compulsory however the enrollment rates for secondary drop
below 60%.
1.2
4
1.4
9
1.2
9
1.5
0.22% 0.23%
0.18%
0.13%
0.00%
0.05%
0.10%
0.15%
0.20%
0.25%
00.20.40.60.8
11.21.41.6
2006 2007 2008 2009
Chart 12: Investment Budget of Ministry of National Education ( Billion TL)
Investment Budget of MONE ( Billion TL) MONE Investment %of GDP
Source: Ministry of National Education ( MONE)
89.8 90.197.4 96.5
56.6 56.5 58.6 58.5
0.0
20.0
40.0
60.0
80.0
100.0
120.0
2006 2007 2008 2009
Chart 13: Enrollment Rate in Schools
Primary Secondary
Source: Turkstat
Country & Education Sector Profile Republic of Turkey Page 21
3.3.2 Eligible Population Breakdown
The population eligible for school education is between the age brackets of 3 – 19 years. Below is the grade
wise breakdown of the eligible population.
Table 6: Eligible Population (Millions)
Pre Primary (3 to 5)
Primary (6 to 14)
Secondary (15 to 19) Total
2007
3.60
11.56
6.16
21.32
2008
3.66
11.53
6.19
21.37
2009
3.70
11.46
6.23
21.40 Source: Turkstat
3.4 Schools Statistics
3.4.1 Number of Students
*Note: 2007 is the base year for Growth Rate
The total number of students throughout all schools in Turkey up till secondary has grown to over 15.3 million
in 2009 from 14.82 million in 2008. The growth Rate for 2009 was 3.61% compared to negative growth of
0.38% in 2008.
14.87 14.82
15.35
14.50
14.60
14.70
14.80
14.90
15.00
15.10
15.20
15.30
15.40
2007 2008 2009
Chart 14: Number of Students- Turkey
Number of Students( Millions)
Source: Turkstat
Country & Education Sector Profile Republic of Turkey Page 22
3.4.2 Gap Analysis- Eligible Population
The total number of existing students in all the schools across Turkey when compared to population eligible for
education (age group of 3-19) gives a gap in number of students who need education. The total eligible
population for schools in 2009 was around 21.40 million while only 15.35 million were accommodated by all
schools across Turkey.
3.4.3 Gap Analysis – Eligible Population - Grade wise
There was a total gap of around 6.05 million students in the age group of 3-19 i.e. 6.05 million children didn’t
have access to formal schools. Out of the 6.05 million the highest gap was in pre –primary and secondary
education, leaving around 2.90 million children this may be because pre primary education is optional,
however importantly around 1 million students every year would graduate to primary education level.
Primary education had minimal gap, the reason was that primary education for 8 years is made compulsory
and free by Turkish government. At secondary level there is a high gap of around 2.40 million students, this is
because the student dropout rate is higher as secondary education is not made compulsory by government.
14
.87
14
.82
15
.35
21
.32
21
.37
21
.40
-
5.00
10.00
15.00
20.00
25.00
2007 2008 2009
Chart 15: Gap Analysis - Number of Students- Turkey
Number of Students( Millions) Eligible for Education- Age 3-19 ( Millions)Gap
( millions)
6.456.56 6.05
Source: Turkstat
0.8
0
10
.71
3.8
4
3.7
0
11
.46
6.2
3
-
2.00
4.00
6.00
8.00
10.00
12.00
14.00
Pre Primary ( 3-5) Primary (6-14) Secondary (15 -19)
Chart 16: Gap Analysis (2009) - Grade wise
Number of Students ( Millions) Eligible Population ( Millions)
2.902.40
0.75
Gap( millions)
Source: Turkstat
Country & Education Sector Profile Republic of Turkey Page 23
3.4.4 Number of Schools
The total number of Schools in 2009 increased to over 66,000 across Turkey from 64,879 in 2008.
The average number of students per school was 232 in 2009, 228 in 2008, and 235 in 2007. Hence the average
number of students to schools for last three years is 232.
The Total number of schools in 2009 was 66,097 out of which Primary grade schools were around 33,769 and
only 8,675 schools in Secondary Grade. The average number of students in pre primary schools was very low at
34 students per school because this is an optional stage of education, whereas the average students per school
for primary was around 317 and even higher for secondary education which was 442 students per school. This
shows that there is lack of infrastructure for secondary schools.
63
,26
5 6
4,8
79
66
,09
7
61,500 62,000 62,500 63,000 63,500 64,000 64,500 65,000 65,500 66,000 66,500
2007 2008 2009
Chart 17: Number of Schools- Turkey
2007 2008 2009
228
Average Number of Students Per School
Source: Turkstat232
235
23,653
33,769
8,675
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Pre Primary Primary Secondary
Number of Schools by Grade- 2009
Number of Schools
Source: Turkstat
Average Number of Students Per School
34
317
442
Country & Education Sector Profile Republic of Turkey Page 24
3.4.5 Gap Analysis – Number of Schools
Considering the total eligible population entitled for education as 21.4 million in 2009 (Refer to chart 15), out
of which only 15.35 million are accommodated by 66,097 schools. Also, considering the average number of
students per school for the last three years as 232, (Refer to chart 17) it shows that, if all the eligible
population were to be accommodated at the rate of 232 students per school then there is requirement for
additional 26,179 schools other than the existing 66,097 schools all across to fulfill the need of education for
all the population entitled for it.
3.5 Regional Analysis
3.5.1 Regional Gap Analysis – Eligible Population
The highest difference between number of existing students and eligible population for education is in Central
Anatolia , Istanbul and Southeastern Anatolia of 1.06 million, 0.90 million and 1.54 million respectively in each
of provinces.
63
,26
5
64
,87
9
66
,09
7
91
,94
1
92
,16
4
92
,27
6
-
20,000
40,000
60,000
80,000
100,000
2007 2008 2009
Chart 18: Gap Analysis- Number of Schools- Turkey
Number of Schools Required Number of Schools
28,67626,17927,285
Gap
Source: Turkstat
1.7
4
1.4
1
2.2
0
1.4
6
1.8
8
2.6
1
2.0
0
2.0
4
2.3
6
2.0
4
3.2
6
2.1
8
2.1
5
3.5
2
2.3
1 3.5
8
-0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00
Chart 19:Gap Analysis - Number of Students (2009 ) Regionwise
Number of Students ( Millions) Eligible Population ( Millions)
0.62
1.54
0.31
0.90
0.270.72
1.06
0.63
Gap(Millions)
Source: Turkstat
Country & Education Sector Profile Republic of Turkey Page 25
However the highest numbers of students are in Istanbul which is 2.6 million students in all the schools
throughout Istanbul, this is mainly because apart from being the largest city and former political capital of the
country, Istanbul has always been the centre of Turkey's economic life, this is because of its location as a
junction of international land and sea trade routes. Istanbul is also Turkey's largest industrial centre; it employs
approximately 20% of Turkey's industrial labor and contributes 38% of Turkey's industrial workspace. Hence
Istanbul has a high population as it attracts people from all around Turkey.
The total population in Istanbul for 2009 was around 12.9 million with population in age group of 3-19 (eligible
population) at 3.52 million which was only second to Southeastern Anatolia at 3.58 million of eligible
population.
Southeastern Anatolia had the highest gap in number of students and eligible population which was around
1.54 million; this can be attributed to the economy of Southeastern Anatolia which is largely based on
stockbreeding, agriculture and also some oil production because of which Per Capita Income in Southeastern
Anatolia is lower than the average national Per Capita Income. Hence affordability for private education is low
and public infrastructure is insufficient.
3.5.2 Number of Schools
Central Anatolia has the highest number of Schools at 9,725 followed by Eastern Anatolia with 9,528 schools
and Black Sea with 9,076 schools. Istanbul has lowest number of Schools at 4,802 Schools whereas Istanbul has
the highest number of Students of 2.6 million students, hence Istanbul has the highest number of Students per
school of 544 and the National average of all schools across Turkey is 232 Students per School. This implies
that Istanbul has more number of students per school than the other regions, which means that the schools
are burdened.
8,439 9,076
9,725 9,528
7,575
4,802
8,098 8,854
207 155
226
154
248
544
247 231
-
100
200
300
400
500
600
-
2,000
4,000
6,000
8,000
10,000
12,000
Chart 20:Average Number of Students Per School- Regionwise
Number of Schools(2009) Average Number of Students per School(2009)
Source: Turkstat
Country & Education Sector Profile Republic of Turkey Page 26
3.5.3 Regional Gap Analysis – Number of Schools
Considering the average number of students per school (refer to chart 20), the total number of schools
required in each region to accommodate all the eligible population (refer to chart 19) in those regions are
stated above in the chart.
This implies that the highest gap in number of schools, in Southeastern, Central and Eastern Anatolia Regions.
3.5.4 Regional Analysis – Affordability vs. Gap
11
,43
0
13
,10
4
14
,43
5
14
,19
5
8,6
72
6,4
58
9,3
49
15
,53
7
8,4
39
9,0
76
9,7
25
9,5
28
7,5
75
4,8
02
8,0
98
8,8
54
-2,000 4,000 6,000 8,000
10,000 12,000 14,000 16,000 18,000
Chart 21: Gap Analysis - Number of Schools (2009)
Number of Schools Required Number of Schools
2,9912,9912,991
6,683
1,251
1,656
1,097
4,6674,710
4,028
Source: Turkstat
2,9
91
4,0
28
4,7
10
4,6
67
1,0
97
1,6
56
1,2
51
6,6
83
9,740
7,551 8,276
4,376
10,109 10,216
7,343
5,369
-2,000 4,000 6,000 8,000
10,000 12,000
Chart 22: Gap Analysis - Per Capita Income to Gap in Schools
2009 Gap In Schools 2009 Nominal GDP per capita in US $
Source: Turkstat, IMF
*Per Capita Estimates based on previous years.
Country & Education Sector Profile Republic of Turkey Page 27
When comparing the gap in schools to GDP per capita of the regions, it shows the affordability of the region to
fulfill the gap. Istanbul has the highest GDP per capita income of US$ 10,216 and also it has a significant gap in
number of schools. Aegean and Marmara also have a high GDP Per Capita and a Significant Gap, whereas
Southeastern Anatolia has high gap but low GDP Per Capita.
3.6 Gap Analysis- Quality & Occupancy
3.6.1 Students School Ratio:
Average Number of Students per School determines the standard of infrastructure of Schools in the region.
While most of the region have the students to school ratio around the overall average of 232, Istnabul has a
very high students to school ratio of 544. This implies that the school infrastructure in Istanbul is burdened,
catering to over 2.6 million population with just around 4,802 schools.
207 155
226 154
248
544
247 231
-100 200 300 400 500 600
Chart 22: Average Number of Students per School(2009)
Average Number of Students per School(2009)
Source: Turkstat
Country & Education Sector Profile Republic of Turkey Page 28
3.6.2 Students Teacher Ratio:
The Students Teacher Ratio gives an indication of the quality of education of a school. The overall average
number of students to teachers in Turkey was around 23 in 2009. Istanbul and Southeastern Anatolia had a
very high Student to Teacher ratio of 29 and 30 respectivley. This implies that the quality of education in these
regions have been compromised and there is need to increase the school infrastructure and bring in more
human resources to fulfill the gap qualitatively.
3.6.3 The Estimated Gap in School
As per above analysis, it indicates that Istanbul though does not show a huge gap in number of school, the
schoos in Istanbul are low on quality of education when compared to other regions. The School Infrastructure
in Istanbul is also burdenedwith more number of students per school. Hence to analyse the actual gap in
number of Schools the same quality benchmark which is across Turkey, needs to be considered.
91
,16
0
76
,75
1
11
4,2
96
59
,48
9
88
,52
7
91
,40
9
91
,13
5
66
,99
1
19 18 19
2521
29
22
30
05101520253035
-20,000 40,000 60,000 80,000
100,000 120,000 140,000
Chart 23: Student Teacher Ratio (2009)
Number of Teachers Students to Teacher Ratio
Source: Turkstat
10
,19
0
8,7
79
14
,05
1
9,4
04
9,2
66
15
,15
6
9,9
74
15
,45
5
8,4
39
9,0
76
9,7
25
9,5
28
7,5
75
4,8
02
8,0
98
8,8
54
-2,000 4,000 6,000 8,000
10,000 12,000 14,000 16,000 18,000
Chart 24: Gap Analysis - Number of Schools (2009) National Benchmark
Number of Schools Required Number of Schools
1,751
6,601
1,876
10,354
1,691(124)
4,326
(297)
Gap
Source: Turkstat
Country & Education Sector Profile Republic of Turkey Page 29
Considering the last three years average number of students per school of all schools across Turkey (as in chart
17) of 232, we can estimate the gap in number of schools in each region. If all the eligible population were to
be accommodated at the rate of national benchmark (chart 17) then each region will require the above stated
number of schools. Requirement for new primary schools was highest in Istanbul at around 8,000 schools.
The assumption considered in the above analysis is that in future all regions will have standard students to
school ratio.
The average number of students per school is not similar across regions (chart 20), hence some regions such as
Eastern Anatolia and Black sea (which have the students to school ratio less then national benchmark of 232),
show negative gap. Regions such as Istanbul which had the highest student to school ratio of 544 show the
highest gap.
3.6.4 Regional Analysis – Affordability vs. Gap
When comparing the gap in schools to GDP per capita of the regions, it shows the affordability of the region to
fulfill the gap. Istanbul has the highest GDP Per Capita Income of US$ 13,326 and also it has the highest gap in
number of schools of over 10,000. This implies that Istanbul can sustain the demand for a high quality private
education and should be the most likely target for investments in quality private schooling.
1,7
51
(29
7)
4,3
26
(12
4)
1,6
91
10
,35
4
1,8
76
6,6
01
13,217
10,176 11,594
5,873
3,614
13,326
10,042 8,897
(2,000)-
2,000 4,000 6,000 8,000
10,000 12,000 14,000 16,000
Chart 25: Gap Analysis - Per Capita Income to Gap in Schools
Gap In Schools GDP per capita in US $
Source: Turkstat
Country & Education Sector Profile Republic of Turkey Page 30
3.7 Sectoral Analysis
3.7.1 Sector wise Breakdown – Number of Schools
*Note: the above figures do not include Pre – Primary Schools.
Turkish education system gives private sector equal opportunity; however as evident it is highly dependent on
Public sector as it is free; however private schools have an enormous opportunity to expand.
There is a vast difference in number of schools in private and public sector. There were over 40,727 public
schools across all classes as compared to around 1,717 schools in private sectors. The Private schools have
risen steadily at an average rate of around 8% for last 3 years.
41,116 40,775 40,727
1,474 1,598 1,717
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
2007 2008 2009
Chart 26: Number of School- Sectorwise Breakdown
Public Private
The share of Private sector is around mere 4% , There is a vast opportunity
for Private sector to expand its share.
Source: Turkstat
Country & Education Sector Profile Republic of Turkey Page 31
3.7.2 Sector wise Breakdown- Number of Students
*Note: the above figures do not include Pre – Primary Schools Students
There are currently over 14.1 Million students in Public Schools while a marginal 0.35 million are in private.
There is a great demand to increase the school infrastructure further and demand for quality private education
is only set to increase.
13.93 13.80 14.19
0.30 0.32 0.35
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
2007 2008 2009
Chart 27:Number of Students - Sectorwise Breakdown
Public (Millions) Private (Millions)
Source: Turkstat
Country & Education Sector Profile Republic of Turkey Page 32
3.8 Higher Education Statistics
3.8.1. Eligible Population
The population eligible for Higher Education in the age brackets of 20 – 23 years was around 5.02 million in
2009.
Table 7: Eligible Population for Higher Education ( Millions)
Higher Education ( 20-23)
2007 4.99
2008 5.01
2009 5.02
3.8.2 Higher Education Brief
Since the passage of the Higher Education Law (No. 2547), the administration of higher education in Turkey
was comprehensively restructured and centralized. All higher education institutions were tied to the Council of
Higher Education (YÖK, COHE). COHE is a fully autonomous national board of governors and sets Turkish higher
education policies and strategies.
Until 1984, there were no private universities in Turkey. Higher Education Law allowed non-profit foundations
to establish universities that must be accredited periodically. The law requires all the private institutions,
governed by individual boards of trustees and completely autonomous in financial and administrative matters
(including setting tuition fees and salary scales and appointing rectors and deans), to comply with the
academic requirements set forth by the Council of Higher Education.
Student admissions are to be through the central admissions system, based on a competitive student selection
and placement examination, and the requirement that at least 10 percent of students must be admitted on
scholarships provided by the institutions themselves. Private universities are eligible for state funding for up to
half of per student funding at state universities. However, to qualify for such state aid, private institutions
must demonstrate performance at par with state universities. The Council of Higher Education closely
monitors the situation by measuring the numbers of students and publications per full-time faculty.
In terms of both the number of institutions and the share of total enrollments, private higher education in
Turkey falls way below the numbers commonly encountered in the Asia-Pacific rim, and Central and Eastern
Europe. Yet, the growth of private higher education in Turkey has been smooth.
Currently as per Council of Higher Education, As of October 2009, there are 137 universities out of which 92
universities were Public Universities and 45 Private nonprofit universities. Apart from these 137 universities
there were two higher institutes of technology and five private post-secondary vocational schools that are not
attached with any university. There are estimated 2.9 million students currently studying across all the 137
universities including technical, vocational and open study courses.
Table 8: Number of Universities
Universities in 2009
Public Universities 92
Private (Non Profit) 45
Country & Education Sector Profile Republic of Turkey Page 33
3.8.3 Higher Education – Number of Students Growth Rate
The total number of students in all the 137 universities for all the programs i.e. undergraduate, vocational and
all the open courses was around 2.9 million (estimated as per 2007 numbers) in 2009. The number of students
increased, by over 15% over 2008.
3.8.4 Higher Education Analysis – Eligible Population
The total Eligible population in the age group of 20 -23 was around 5.02 millions in 2009 whereas all the higher
education institutions accommodated only around 2.9 million students for the year 2009.
2.2
2
2.5
6
2.9
8
13.05%
15.28%16.41%
0.00%2.00%4.00%6.00%8.00%10.00%12.00%14.00%16.00%18.00%
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
2007 2008 2009
Chart 28: Number of Students Growth Rate
Number of Students ( milions) Growth Rate (%)
2.222.56
2.98
4.99 5.01 5.02
0.00
1.00
2.00
3.00
4.00
5.00
6.00
2007 2008 2009
Chart 29: Higher Education Analysis- Eligible Population
Number of Students ( milions) Eligible for Education (20-23)( millions)Gap(Millions)
2.77
2.042.45
Source: Council of Higher Education, University of KOC- Report, Turkey- UK Seminar
Country & Education Sector Profile Republic of Turkey Page 34
3.8.5 Higher Education – Enrollment Rate
The current existing gap in higher education can be determined by difference in number of seats available and
students applying for higher education, currently Turkish Higher education infrastructure offers close to
910,000 new seats in both regular and open category while students who applied were close to 1.45 million in
2009. The gap between applications and enrollment is around 0.5 million. This gives an excellent opportunity
for private universities to fulfill the gap and also provides opportunities to start alternative courses to
accommodate the students who could not get through.
The GDP per capita for Turkey in terms of Purchasing Power Parity was US$ 12,339 in 2009. This puts Turkey in
high income countries and shows that it has good purchasing power. It can be ascertain that the affordability
for any private higher education is there.
1.681.78
1.65
1.45
0.60 0.630.76
0.91
0.000.200.400.600.801.001.201.401.601.802.00
2006 2007 2008 2009
Chart 30: Education -New Enrollment to Applications
Applications ( Millions) New Enrolled ( Millions)
The Current existing gap between students applied and available seats is 0.54 million
1.681.78
1.65
1.45
0.60 0.630.76
0.9112,107
12,891
13,139
12,339
11,40011,60011,80012,00012,20012,40012,60012,80013,00013,20013,400
0.00
0.50
1.00
1.50
2.00
2006 2007 2008 2009
Chart 31: Affordability for Higher Education
Applications ( Millions)
New Enrolled ( Millions)
Gross domestic product based on purchasing-power-parity (PPP) per capita (US$)
Source: IMF
Country & Education Sector Profile Republic of Turkey Page 35
3.8.6 Higher Education – Number of Students Breakdown
The total numbers of students in Higher Education across 137 universities in 2009 were around 2.9 million, out
of which around 30% were in vocational courses and over 64% were in undergraduate courses. The total
number of students in vocational courses was around 0.89 million. Students enrolled in Post graduates courses
were around 0.18 million.
Out of the total 2.98 million students in 2009 over 1.04 million students were enrolled in Open University
courses conducted by Anadolu University. Only around 1.94 million of total students were enrolled in regular
courses (including vocational) across Turkey.
1.38
1.64
1.91
0.14 0.15 0.18
0.70 0.770.89
0.00
0.50
1.00
1.50
2.00
2.50
2007 2008 2009
Chart 32: Number of Students Breakdown - Course wise
Undergraduate (Millions) Post Graduate (Millions) Vocational (Millions)
1.38
1.67
1.94
0.85 0.901.04
0.00
0.50
1.00
1.50
2.00
2.50
2007 2008 2009
Chart 33: Number of Students Breakdown - Typewise
Regular (Millions) Open (Millions)
Country & Education Sector Profile Republic of Turkey Page 36
3.8.7 Higher Education – Gap Analysis
The average number of students per university for 2.9 million students in 137 universities was around 21,771
students. Hence to fulfill the gap of 0.54 million students (chart 27) there is a need for around 25 universities.
Higher Education Gap
Source: Council of Higher Education, University of KOC- Report, Turkey- UK Seminar.
*Note: Data estimated as per the percentage of students in Vocational & Regular.
**Note: Number of Students Include Under Graduates (1.9 Millions) & Post Graduates (0.17 Million)
***All Data as of 2009
Higher Education
Number of Higher Education Institutions (Universities)
(137)
Vocational
Number of Students: (0.89 Million)
Applications*: 0.43 Million
New Enrollment*: 0.29 Million
Regular
Number of Students**: (2.08 Million)
Applications*: 1.01 Million
New Enrollment*: 0.61 Million
Country & Education Sector Profile Republic of Turkey Page 37
4.1 Overview of Gap
There are gap at all levels of education from K-12 to Higher education level. The opportunities for educational
investment in Turkey are vast.
At School level there is an estimated gap of over 26,000 schools which needs to be fulfilled. There are a total of
over 21 million eligible populations out of which only around 15 million students are accommodated in some
66,000 schools. This gap in number of existing students and eligible population is even more startling in
regions like Istanbul and Central Anatolia. The existing school infrastructure in these areas is also not sufficient
to fill the gap.
Higher education needs a lot of boost from private sector to fulfill the gap between supply and demand. The
difference between eligible population for higher education and existing number of students was huge at 2.04
million while only 2.9 million students were accommodated, There is an immediate gap in number of
applicants and new enrollment of 0.5 million. This shows that Turkey has to immediately increase the current
existing infrastructure for higher education to fulfill this gap.
Turkey is categorized in the middle income country group. It has a high Per Capita Income (Nominal) of US$
9,340 while Per Capita Income in terms of Purchasing Power Parity is as high as US$ 13,111. Turkey has the
buying power for quality private education.
4.2 Target Sector Analysis
As the demand for education is not met by the current existing schools & universities, there are still great
unmet demands for education. The Government of Turkey in recent times has pushed forward to increase the
participation rate for education, especially in higher education. It has set a target of 65% enrollment rate in
higher education by 2020.The government has high focus on science and technology higher education, the
number of colleges in the field have risen to 27 in the last decade and also number of new enrollment has
doubled. The government’s effort to include private sector has helped ease the burden of public sector, the
number of non profit private universities from being nonexistent until 1984 have risen tremendously to 45.
For a developing country like Turkey, it is of utmost important to improve human skills by expanding higher
education and making sure that there is enough sources for conducting scientific and technological researches.
University & K 12 investment looks very attractive. K-12 education in parts of Turkey is lacking and needs more
infrastructure to fulfill the government goals hence making private participation crucial at K -12 level.
Strategy
At K-12 level there is a huge base line population of 3-19 years of close to 21 million and an
estimated gap of over 6 million.
K -12 levels will require another close to 26,000 schools in future to fill the gap in education.
The share of Private Sector is around 4% which is estimated to significantly increase as government
puts in more effort for public-private partnership.
K -12 gives an enormous opportunity to private sector for growth.
As Turkey is an unknown territory, the initial investment should be moderate and once, when well
versed with the market future diversification in higher education can be considered.
All the above suggest a good opportunity in Turkey for K-12 level private education
Country & Education Sector Profile Republic of Turkey Page 38
4.3 Target Region Analysis
Per Capita Income and gap in number of schools give an indication of opportunities present for high quality
private education. As evident from the above graph Istanbul, Marmara, Aegean and Central Anatolia provide a
good opportunity for high quality schools as these regions have a much higher Per Capita Income. The regions
also have significant school gap. Hence these regions are most likely investment targets. Among all the regions,
Istanbul has an enormous gap of around 10,354 schools and hence gives more & better opportunities.
1,751
(297)
4,326
(124)
1,691
10,354
1,876
6,601
9,740
7,551 8,276
4,376
10,109 10,216
7,343
5,369
(2,000)
-
2,000
4,000
6,000
8,000
10,000
12,000
Gap Analysis - Per Capita Income to Gap in Schools
2009 Gap In Schools 2009 Nominal GDP per capita in US $
Source: TurkstatMost likely InvestmentTarget
Istanbul is the largest city in Turkey and one of the major centers of the world.
It has a significant gap at K-12 level and also has the high GDP per capita to support the demand for
high quality private education.
Istanbul should be a prime target for an initial investment and in future the Istanbul model can be
replicated in other potential regions for diversification.
Country & Education Sector Profile Republic of Turkey Page 39
5.1 SWOT Analysis
Strengths
Strong Economic Fundamentals
High Government expenditure on education of close to 3.3 % of GDP.
A young Dynamic Population with over 43% population in under 24 age bracket
A high GDP per capita income and high disposable income.
Formidable Education system, with compulsory primary education
FDI laws at par with international standards.
Economic and political stability in the country.
Weakness
Historical high inflation.
Failure in long term planning.
Slow growth rate of education infrastructure.
High dropout rates after primary education
Government expenditure in education still
lowers the EU average.
Opportunities
High Gap in Supply and Demand for
Education.
Requirement for close to 66,000 schools and around 25 universities to fulfill education gap.
Demand for High quality education as level of qualification for workers increases
Private sector contribution in Education is only around 4%.
Low enrollment rates for secondary education
Ministry of National Education Investment in education sector has increased however still needs investment from private sector to fulfill the education gap.
Threats
Vulnerable towards Global Financial crisis
Government policy shift may limit private investment in education.
Current Decline in GDP growth rate may curb spending on education
Dependency on global economies
Increasing unemployment rate may increase dropout rates for school.
Volatile exchange rate movements
Recent increase in inflation.
Analysis
Country & Education Sector Profile Republic of Turkey Page 40
6.1 Laws Governing Foreign Direct Investment
Under the Turkish FDI law (Law Number 4875)
Freedom to Invest and National treatment
a) Unless stipulated by international agreement and other special law
Foreign investors are free to make foreign direct investment in Turkey
Foreign Investors shall be subject to equal treatment with domestic investors
b) Foreign Direct investment shall not be expropriated or nationalized, except for public interest and upon
compensation with due process of law.
c) Foreign investors can freely transfer abroad: net profits, dividends, proceeds from sale or liquidation of all or
any part of investment.
All the sectors are fully accessible to foreign investors except the below stated sectors which are only partially
or completely not accessible to foreign investors. Education sector is free from regulations on limit of
investment and it is fully accessible to foreign investors.
Media, radio and television broadcasting
Petroleum
Passenger-cargo air transportation
Airport ground handling services
Management of airports
Transportation railways infrastructure services
Port management
Transportation in coastal waters and rivers
Yacht ports management
Real estate acquisition
Foreign Companies
Commercial companies having legal personality established in foreign countries according to the laws of those
countries are able to acquire real estate or limited rights in Turkey provided they operate pursuant to the
special laws such as tourism encouragement law, the petroleum law, the industrial law etc. other foreign legal
entities apart from mentioned commercial companies such as foreign charities, foreign foundations and
foreign societies cannot buy property in turkey.
Companies established/ Participated by foreign nationals (FDI companies)
Legal entities established or participated in Turkey by foreign investors can acquire real estate or limited rights
in Turkey in line of operational purposes set in company’s article of association. If these properties are
acquired by another company established in turkey by foreign nationals or a Turkish company owning a
property is acquired by foreign investors same rule applies.
Source: Turkish Embassy, London (active link)
Legal
Country & Education Sector Profile Republic of Turkey Page 41
6.2 Taxation Laws
Income Tax structure for Corporate Tax:
Taxable Income
The corporate tax is levied on the income and earning derived by corporations and corporate bodies. The
Corporate Tax Law sets provisions and rules applicable to the income resulted from the activities of
corporations and corporate bodies.
Determination of Net Taxable Income:
Net corporate income is defined as the difference between the net worth of assets owned at the beginning
and at the end of the fiscal year. In addition to the expenses in Income Tax Code allowed to be deducted from
revenues, the followings may also be deducted regarding to the determination of business profit, by
corporations:
Expenses related to the issuance of stocks and shares;
Initial organization and establishment expenses;
Expenses incurred for general board meeting as well as expenses made for mergers dissolutions, and
liquidations;
Profits shares accrued to active partners of partnerships in commendams limited by shares;
Profit shares accrued to partners by participation banks for participation accounts;
Research and development deductions calculated as %40 of new technology and know-how research
expenses realized within business.
In determining net corporate income, the following deductions are not allowed:
Interests paid or accrued on the basis of equity;
Interest, exchange difference and other costs paid or accrued on the basis of disguised capital;
Disguised earning distributed by transfer pricing;
Any kind of reserves;
The corporate tax, fines, tax penalties and late payment penalties and interest.
Leased or registered motor vehicles’ depreciation and other expenses not related with business
activities;
Corporate income tax is applied at 20 % rate on the corporate earnings.
Source: Revenue & Administration. (Active Link)
Country & Education Sector Profile Republic of Turkey Page 42
6.3 Government Incentive
An investor in education sector certificate can benefit from the following incentives:
Tax reduction
Investment loans
Investment premiums
Access to education development funds
Loans with low interest rates and long maturity
Partial customs duty exemption
Source: FAQ Investment in Turkey Guide – (active link)
Turkey is an emerging economy with a young and dynamic population. It is closely related with world economy and hence was affected by global meltdown. However as the world shows sign of coming through the recession Turkey is also poised for a recovery. Education will play a crucial role in Turkey’s future as it looks to further trade with world economies. Turkey will require quality skilled labor force to achieve its objective as manufacturing and financial hub for Asia and Europe. There is a vast gap in supply and demand of education at all levels and hence government looks upon private sector to play an important role in fulfilling the gap, Turkey is keen to invite more foreign investment in education and has all the laws governing these investments at par with international standards. K -12 provides a good opportunity as it has a huge base line population of over 21 million and the current school infrastructure is not able to accommodate all. There is an estimated gap of around 26,000 schools. Further Istanbul should be a prime investment destination as it has significant gap in number of school and also has the highest GDP per capita implying that it can sustain high quality education. Turkey is a good opportunity however it still is an unknown territory for which initial investments should be limited. Further investments can be evaluated based on returns from the initial investments.
Conclusion