. " gros, d. ( 2005 ) " economic aspects of turkey's quest for membership ". ceps working paper. under secretariat of state planning organization. ( november 2004 ). " possible impacts of the turkish membership on the eu ". 5 / 8 on the other hand, turkey s demographic profile makes it different than both the old and the new members of the union. turkey is a relatively large country with a young and fast - growing population. the turkish accession today would imply an increase of more than 17 percent in the eu population. indeed, between 1990 - 2003, the average population growth rate and the birth rate turkey have been 1. 8 percent and 2. 3 percent per annum respectively. 15 the turkish population is expected to stay young in the foreseeable future. whereas in the 2000 s, the eu - 15 has 0. 3 percent of population growth rate and 1. 1 percent of birth rate on average at highly decreasing trends. 16 according to certain estimations, in the year 2020, the average age in the eu - 15 will be 43, while it will be 33 in turkey17. this means that in the future, europe will probably be experiencing labour shortages rather than the unemployment problems of today18. what this argument implies that turkey s young and expanding population will reduce the negative impact of the eu s aging and diminishing work force in the coming 15 - 20 years. turkey with a young population would be an important asset in the long - term in competing with countries such as china, india and the us. as another variable in the equation, we observe an advantageous position for turkey regarding the dependency ratio. as a result of a young and growing population, the dependency ratio of the turkish population is in a decreasing trend. as of the year 2000, the share of the age group of 55 and above in total population is 29 percent in the eu - 15 while that of turkey is a mere 11 percent19. the international labour organization ( ilo ) estimates that the said ratio will increase to 36 percent in the eu - 15 by the year 2020. however, it is expected to be only 16 percent in turkey by that time. according to another study by the united nations, the eu would need an average of 6. 1 million immigrants a year from 2015 to 2040 to maintain a ratio of three working - age adults for each retiree20. this i believe clearly implies a substantial contribution of turkey to the eu on the demographic front. on

the 2001 crisis. the declining public debt burden and the diminishing fiscal dominance in turkey put an end to the crowding - out of the real sector. that boosted the supply of loanable funds. banks have returned to their traditional role of financial intermediation instead of financing government expenditures. share of public securities in turkish banking sector assets declined by onethird to 28 % in the last 5 years ; while share of credits to private sector more than doubled and reached to 49 % during the same period. the credits extended to the small and medium enterprises by turkish banking sector have also increased significantly to usd 95 billion as of 2007. this corresponded to almost 20 % of the gdp. as a further note, 32 % of these credits were in the category of credits extended to micro enterprises. the ratio of private sector credit used by households and firms to gdp has also rapidly increased, though it is still low in international standards. of course, raising the share of private credits in the financial system does not necessarily mean that each and every segment of the population would gain access to financial services. the low - income segment of the society, in particular, may not have access to capital and that would have two principal adverse effects. first, they may not be able to raise the expected value of their income and therefore of consumption and future investment and asset accumulation. second, due to lack of access to credit, the poor would face high variation in their income and consumption, and the downward risk on income threatens their ability to satisfy basic consumption needs. increasing the funds available for entrepreneurs that have micro - scale business plans but do not have access to credit, have merits such as contributing to the production level and unemployment ratio while also strengthening the social structure of a country. of course, it should be noted here that while the benefits from financing these activities are more or less common, selection of main business areas where these funds should be used obviously depends on country specific circumstances and needs. dear guests, in the last part of my speech, i would like to share with you my thoughts on the external sources of “ access to finance ”. as i touched upon initially, financial innovation and financial integration have led to explosive growth in the international movement of capital. these flows serve as an important catalyst for domestic financial market development, as reflected both in the size of the banking sector and equity markets, as well as the quality of institutions for supervision and regulation. in recent years, attention has been given on how macroeconomic policies should respond