In addition, Turkey was among the top ten countries in terms of improving its score on the United Nations’ human resource development index, which is based on a country’s literacy rate, per capita income, and life expectancy. Of course, such a nation-wide measurement takes no account of the wide differences between urban and rural conditions. Be that as it may, the strong growth of the working age population, the high degree of urbanisation, and increased numbers of well-educated young workers are all favourable to strong growth in labor productivity. - Turkey has a strong, dynamic and competitive private sector. The nonagricultural private sector recovered quickly from the financial crises in spite of unsettled political conditions and extremely high interest rates. In addition, it is the private sector that has been mainly responsible for capital formation. · - There have been interesting developments connected with Turkey’s foreign exchange earnings. Even though the official trade account and current account figures reflect sizeable deficits, I would like to emphasise that the level of merchandise exports is significantly understated due to its omission of rapidly growing but unrecorded “shuttle” trade with neighbouring countries. We are on the verge of being able to include these activities in our balance of payments figures. In addition, there has been serious underreporting of the value of transactions connected with some of Turkey’s foreign direct investments, a problem that the Central Bank is working to resolve. Now let me touch briefly on Turkey’s financial system. Turkey’s financial sector is still dominated by the banking sector.
Starting with the useful content of a resolution plan: a detailed balance sheet for all relevant corporate entities in the group at the most recent month end; a clear mapping of financial and operational interdependencies between affiliates; wind-down plans for all business areas linked to a comprehensive information data room; and a contact plan for major stakeholders. Now, listing the changes to Lehmans’ organisation and operations that should have resulted from drawing up robust RRPs: corporate entity based accounts and management information to supplement the business-line version (because corporate entities fail); clear segregation of handling client asset activities; controls over depositing client money with affiliates; employees hired by the entity for whom they work; a clear record of each entity’s title to business and associated intellectual property; robust risk systems that allow ready provenance of the balance sheet; contracts for the provision of key business services (eg banking systems) that allow continuity of provision of services in the event of a resolution; and arrangements for continuity of access to payment and settlement systems. This has been a very brief run through some very relevant case studies. But I hope it has illustrated the role that RRPs should play and the pressing need to have them in place. RRPs have come a long way in a short period of time, which is both essential and gratifying. But, of course, we haven’t actually produced any yet.