TÜRK EKONOMİSİ - Deneme Sınavı - 6

According to the WTO (World Trade Organization), there are twelve primary services in the services sector. These services are announced in the WTO’s “Services Sectoral Classification List.” The services in the “List” as follows:

Business services

Communication services

Construction and related engineering services

Distribution services

Educational services

Environmental services

Financial services

Health-related and social services

Tourism and travel-related services

Recreational, cultural and sporting services

Transport services

Other services not included elsewhere (WTO, 1991).

WTO (1991). Services Sectoral Classification List. [online] Available at: http://www.wto.org/ english/tratop_e/serv_e/mtn_gns_w_120_e.doc [Accessed 1 Oct. 2019].

Goods are tangible physical entities, but services are beneficial activities provided by other people. Goods’ owners can change, but the services’ owners can not. Goods can be evaluated easier than services because services are highly variable for each provider. The purchaser can return a good, but services cannot be returnable in most cases. Goods can be separable from the seller. Services can not. A specific good is highly the same for every product. However, services can vary each time. Goods can be stored, but most of the services cannot be stored.

Goods are tangible physical entities, but services are beneficial activities provided by other people. Goods’ owners can change, but the services’ owners can not. Goods can be evaluated easier than services because services are highly variable for each provider. The purchaser can return a good, but services cannot be returnable in most cases. Goods can be separable from the seller. Services can not. A specific good is highly the same for every product. However, services can vary each time. Goods can be stored, but most of the services cannot be stored.

Goods are tangible physical entities, but services are beneficial activities provided by other people. Goods’ owners can change, but the services’ owners can not. Goods can be evaluated easier than services because services are highly variable for each provider. The purchaser can return a good, but services cannot be returnable in most cases. Goods can be separable from the seller. Services can not. A specific good is highly the same for every product. However, services can vary each time. Goods can be stored, but most of the services cannot be stored. Goods have a multistage life cycle; they are produced, stored, transported, sold, consumed, disposed, and recycled if possible. However, the services’ life cycle is bound with the time that the activity occurs.

“Engel’s Law,” which is named after statistician Ernst Engel, states that income elasticity of demand for foods is between 0 and 1, and income elasticity of demand for services is greater than 1. Engel’s Law means that when per capita income increases, the percentage of food spending share decreases.

“Exogenous Demand Shock Hypothesis” states that there is a change in an exogenous variable, which causes an increase in the total demand for services.

“Cost Disease Hypothesis of Baumol (1967)” states that there is a productivity gap between manufacturing and services. This theory was made considering the field of art. Now it takes the same number of musicians as the 19th century to perform a work of Beethoven. So, productivity growth in such areas is nearly zero. As a result of this, services/manufacturing prices ratio go up inversely correlated to services and manufacturing productivity ratio. However, this hypothesis fails in productive technology-based services such as telecommunication (Hyun, 2006).

Hyun, J. (2006). The Shift to the Service Economy. [PDF] Faculty.washington.edu. Available at:https://faculty.washington.edu/karyiu/confer/ seoul06/papers/kim_hj.pdf [Accessed 1 Oct. 2019].

“Deindustrialization Hypothesis” states the situation caused by the transfer of the labor-intensive manufacturing industries to less developed countries and the expansion of the trade between developed and less developed countries. So, trade-related services grow in the World economy, and the manufacturing sector ratio in developed countries decreases which causes a passive increase in the percentage of the services in the developed countries’ GDPs (Hyun, 2006).

Hyun, J. (2006). The Shift to the Service Economy. [PDF] Faculty.washington.edu. Available at:https://faculty.washington.edu/karyiu/confer/ seoul06/papers/kim_hj.pdf [Accessed 1 Oct. 2019].

The factoring sector operates within the framework of the “Law on Financial Leasing, Factoring and Finance Companies” numbered 6361 dated 21/11/2012. According to article thirty eight of this law; factoring agreement defined as “The contract that includes any or all of the financing or factoring guarantee functions as well as the functions provided by factoring company such as keeping of debtor and customer accounts and collection of debts by taking over receivables that certified by invoice arising from the sale of goods or services and that will arise from the sale of goods or services that can be certified in accordance with the procedures and principles determined by the committee (Official Newspaper, 2019).

Official Newspaper (2019). Finansal Kiralama, Faktoring ve Finansman Şirketleri Kanunu. [online] Available at: http://www.resmigazete.gov. tr/eskiler/2012/12/20121213-1.htm [Accessed 1 Oct. 2019].

There is no natural gas pipeline know as Raman-Garzan Natural Gas Pipeline (RGNG). However there is a  Raman-Garzan petroleum pipeline.

These services are announced in the WTO’s “Services Sectoral Classification List.” The services in the “List” as follows:

• Business services

• Communication services

• Construction and related engineering services

• Distribution services

• Educational services

• Environmental services

• Financial services

• Health-related and social services

• Tourism and travel-related services

• Recreational, cultural and sporting services

• Transport services

• Other services not included elsewhere

Goods are tangible physical entities, but services are beneficial activities provided by other people. Goods’ owners can change, but the services’ owners can not. Goods can be evaluated easier than services because services are highly variable for each provider. The purchaser can return a good, but services cannot be returnable in most cases

The three-sector model is the most basic model to classify a modern economy. This model was built by economists Allan Fisher, Colin Clark, and Jean Fourastié. This model divides the economies into three. The first sector is the primary sector that covers the extraction of raw materials. The second sector is the secondary sector that covers manufacturing. The third sector is the tertiary sector that covers services. The quaternary sector model and the quinary sector model are the extensions of the three-sector model.

“Exogenous Demand Shock Hypothesis” states that there is a change in an exogenous variable, which causes an increase in the total demand for services.

The services sector in Turkey has increased its share in the GDP from 52.7% to 60.2% in the last 20 years, from 1998 to 2017. However, if we look closely at the historical change, we cannot see any increase after 2001. After 2001, the share of the services sector in the GDP fluctuates between 60 and 63.9% instead of regularly increasing... There is a steady increase in the services sector share in employment until the 2007-2008 global financial crisis. With the impact of the financial crisis, the services sector share in employment fluctuated between 2008 and 2011 and entered into a steady increasing trend after 2011. As a result, the share of the sector, which was 47.3% in 2005, increased to 54.1% in 2017

The technical testing market includes services such as technical inspection, automotive testing, composition, and purity testing. Annual turnover in these services has increased over the last decade. In Turkey, the growth of sectors such as manufacturing, automotive, chemicals, and ICT (Information and Communication Technologies) increases the need for technical testing services (ISPAT, 2016).

According to the survey conducted by TÜBİSAD, the sector’s biggest problems are foreign exchange fluctuations and lack of qualified talent

Also, as in the case of Russia, bilateral political relations are of great importance. In the 1972-2018 period, according to the country distribution of the international works undertaken by Turkish contractors, the Russian Federation (19.3%), Turkmenistan (12.6%), and Libya (7.6%) were in the top three. These three countries accounted for about 40% of all work.

Consumer services are essential in terms of increasing employment. However, the added value produced in this group is proportionally low. Therefore, this group is less likely to improve the living conditions of the working population in the long run. Policymakers have to confront their choice to increase employment or increase competitiveness and productivity and promote activities that will have a multiplier effect on the overall economy (Vasquez, 2008). Turkey is not exempt from this challenge.

While 71.3% of those employed in cultural employment worked full time, 28.7% worked part-time (TurkStat, 2019-i).