Turkey, which for years was a large recipient of remittances (5 Billion in 1998) has seen a significant market change with a vibrant sending market that might reach USD $0.5 Billion in 2015 while the inflow that started declining in the year 2000 has dropped to less than USD $1 Billion two years in a row.
Inflows have been coming down for 15 years
Funds sent by Turkish migrants in Western Europe and other parts of the world have been in a declining trend for the past 15 years. Although some figures show that In 1998, 2.8 million Turkish expats sent USD $8.2 billion to Turkey, the World Bank data shows $5.4 Billion; the difference being on the accounting of personal transfers vs. capital transfers probably. But the decline started in the year 2000 when the drop in remittances went from $4.6 B to$ 2.8 B the year after. In 2012 it hovered above $1 B dropping slowly year after year.
Outflows have been going up for 10 years
At the same time, Remittance Outflows have been taken an upward trend in the last ten years, coming from close to $100 Million in 2005 doubling in year 2011 to $200 Million with estimates for 2014 standing at $400 M with $ 500 M just around the corner. A Wealth Amnesty Law was passed in 2009 to convince Turks to bring funds deposited abroad back without fines or punitive taxes and help mitigate the effects of the global financial crisis: $28 billion were reported back. In 2012 the Parliament issued new amnesty legislation taxing the returned funds 2% instead of the 30-40% and promising that Turks would avoid investigations of whether or not the wealth was generated in Turkey and improperly kept overseas.
Remittance Service Providers (RSPs) in Turkey
The Central Bank of the Republic of Turkey (Türkiye Cumhuriyet Merkez Bankası, TCMB) is the main regulatory body of remittances in the country. A Licensed is needed to provide international money transfer operations. Banks are allowed to provide the service.
Some of the major RSPs are banks: UPT – Universal Payment Transfer (formerly part of Aktif Bank), Garanti Bank, Yapi Kredi,Finansbank (Western Union agents), DENIZBANK, BANK ASYA (MoneyGram Agents).
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Migration & Remittances in Turkey
Traditionally, Turkey has been known as a country of emigration.Since the early 1960s and for close to twenty years large numbers of Turks migrated to Western Europe, particularly West Germany and Belgium. After that family reunification programs kept migration high. But Turkey has for centuries been a country of passage between East & West and the home to many migrants and refugees coming from the unstable regions south & west of the country’s borders.
Transit migrants coming from Asian countries such as Afghanistan, Bangladesh, Iraq, Iran, and Pakistan and the Middle East, like Iraq and Syria have passed through Turkey but some have stayed. The Balkan War drove many Bosnian Muslims and Pomaks (Bulgarian-speaking Muslims) . into the country, as well as Kurdish refugees from Iraq. Turkey, with a population of more than 70 million, has also become a destination for irregular migrants from the former Soviet Bloc countries. http://bit.ly/1OgyxCv
Incoming migration creates remittance outflows as these newcomers need to send money home and the statistics and the destination of remittances gives us a good view of the market. At IMTC EMEA we are going to have a first seat to this interesting panorama developing in front of our eyes.
Turkey, which is inching closer to become part of the EU, knows that it needs to control its borders. More than 1.3 Million Syrians have arrived under a temporary protection system but the country is not able to provide jobs and security for all the i migrants arriving and overstaying the easy to obtain Visas. The situation is complex but very interesting. For more on the up-to-date situation I encourage you to read this article from September 2014.
Turkey’s Gross Domestic Product
The Gross Domestic Product (GDP) in Turkey expanded 2.60% in the fourth quarter of 2014 (Q4) over the same quarter of the previous year (2013 Q4). GDP Annual Growth Rate in Turkey averaged a robust 3.90% from 1999 until 2014, reaching an all time high of 12.60% in the first quarter of 2010 and a record low of -14.70% in the first quarter of 2009. Considering full 2014, the GDP grew 2.9%, lower than a 4.2% increase in 2013. This handsomely beats the indexes of its neighbors, specially Greece who is finally out of negative territory and growing less that 1% in the last quarter (4Q 2014 was 1.20%.
FROM TRADING ECONOMICS
Turkey Remittances 1984-2015 | Data | Chart | Calendar | Forecast | News
Remittances in Turkey increased to 50 USD Million in February of 2015 from 47 USD Million in January of 2015. Remittances in Turkey averaged 183.89 USD Million from 1984 until 2015, reaching an all time high of 574 USD Million in September of 1998 and a record low of 43 USD Million in February of 2003. Remittances in Turkey is reported by the Central Bank of the Republic of Turkey.