It has a strong and rapidly growing private sector, yet the state still plays a major role in basic industry, banking, transport, and communication. Its most important industry and largest exporter is textiles and clothing, which is almost entirely in private hands. The economic situation in recent years has been marked by rapid growth coupled with partial success in implementing structural reform measures. The government enacted a new tax law and speeded up privatization in 1998 but made no progress on badly needed social security reform. Ankara is trying to increase trade with other countries in the region yet most of Turkey's trade is still with OECD countries.
Turkey is a free market economy oriented to Western markets.
The share of agriculture in the economy is decreasing as industry and services continue to expand rapidly. Turkey continues to examine ways to improve its investment climate through changes in its IPR legislation. The Turkish privatization board continues to evaluate a series of significant privatizations including telecommunications, iron and steel, and banks. Turkey has a number of bilateral investment and tax treaties, including with the United States, that guarantee free repatriation of capital in convertible currencies and eliminate double taxation. Turkey has undertaken economic reforms over the past 15 years that have reduced the government's role in the economy and permitted the private sector to thrive.