Dear guests,
Ladies and Gentlemen,

It is a distinct pleasure for me to address this distinguished audience and I would like to extend my sincere thanks to the Welsh Government and UKTI for organizing this event. I hope that today’s discussions will deliver comprehensive insight on the Turkish economy and an overview of investment opportunities in Turkey.

Let me express first that I am very pleased to be visiting Wales. Yesterday, I held very constructive talks with the Welsh officials and business circles. As you might remember, First Minister of Wales, Rt Hon Carwyn Jones visited Turkey last January upon the invitation of Minister Cağlayan, Turkish Minister of Economy, to explore the opportunities for the Welsh business in Turkey. I can safely state that contacts in Turkey will lead way to further improvement of our relations. I will be most happy to follow the outcomes of this visit and capitalize on the momentum created to increase the economic links between Wales and Turkey. Currently, bilateral trade volume (205 million dollars) between Turkey and Wales is far from reflecting its genuine potential. Our aim is to increase the level of contacts among business circles of Turkey and Wales in parallel to the current excellent state of bilateral relations between Turkey and the UK. I am confident that today’s seminar will contribute to this end.
Today firstly, I would like to touch upon the general performance of the Turkish economy over the last ten years in view of current trends in the global economic and financial system. Then I will elaborate more on opportunities of investment in Turkey.

Turkish economy has proved to be resilient and achieved impressive performance throughout decade. The reason behind this bright picture was that Turkey put necessary fiscal adjustments and structural reforms into implementation in time.

Several years before the global crisis, Turkey faced its own financial and economic crisis domestically in 2001. After this financial crisis, Turkey had progress especially in two areas, namely public finance and banking sector. It took significant steps to restructure and rehabilitate its banking sector, to boost its economic competitiveness and to put its fiscal balance on a sound and sustainable path. Turkey faced the crisis of 2008 with a very strong banking system and balanced public finances. Thanks to early implementation of structural reforms, the effects of the recent crisis on Turkish economy remained limited.

Turkey’s economic policy prior to the crisis was different, but what we have been doing during the crisis was different too. In 2009, while many countries employed fiscal stimulus programmes, Turkey introduced a three-years fiscal consolidation programme. As the reforms strengthened the economy, Turkish economy succeeded to grow at the record high levels during the last years. Between 2002-2011, average annual GDP growth rate was around 5.2 percent. In 2011, growth rate was 8.5 percent. In 2012, Turkish economy had a lower growth rate (2.2%) compared to last nine years. Yet, this was the result of a deliberate policy pursued to restrain domestic demand in order to avoid overheating in the economy. For 2013, we project a growth rate of 4 percent. It is worth highlighting that, even in 2013, Turkey will be one of the fastest growing economies in Europe.

Turkey’s sustainable growth rates over the last decade mainly originated from the activities of the private sector. Main sources of growth, on the production side include dynamically growing services sector and a booming industrial sector; on the demand side, basically private investments, consumptions and increasing exports have their impact. The export-orientated-growth-strategy entitles Turkey to reach out to the new markets. Besides its immediate neighbours, Turkey has economic and commercial connections with geographies like sub-Saharan Africa, Central Asia, the Far East, Latin America and the Pacific. There are only few countries in the world that Turkey does not have any economic links. An economy hugely relying on agriculture and textile a couple of decades ago is now breaking export records every year, busy with construction projects around the world and attracts vast investments due to its growing and stable structure

Significant improvements have registered Turkey on the world economic scale as a remarkable emerging economy, the 17th largest economy in the world and the 7th biggest economy in Europe. The May 2013 will be remembered in Turkey as the time when Turkey settled all credits received form IMF. From May onwards, Turkey will start negotiations with IMF as a donor.

Ladies and Gentlemen,

Inevitably, these developments have changed the focus of foreign investors and put Turkey under the spotlight on their radar screen. As one of the major recipients of foreign direct investment (FDI) in the region, Turkey stands as the 13th most attractive FDI destination in the world. As of the end of 2012, more than 33,000 companies with foreign capital operate in Turkey. Majority of FDI inflows to Turkey come from the EU, North America and the Gulf countries.

Turkey's performance in attracting FDI during last nine years is remarkable. While FDI inflow to Turkey was 15 billion dollars between 1923-2002, the amount of FDI surged to 125 billion dollars between 2002-2012. Turkey follows a multi-dimensional strategy in order to attract FDI. This strategy aims at reforming every related sector and putting in place necessary regulations in order to create a friendly and favourable atmosphere for foreign investors.

Turkey’s structural reforms to create a friendly investment atmosphere have a comprehensive agenda ranging from restructuring public and financial sectors, social security and tax systems to enhancing private sector’s role in the economy, accelerating privatization programs and opening the key markets to competition. Turkey offers one of the most liberal legal systems for FDI among the OECD countries with the following main principles: equal treatment for foreign and domestic companies, no pre-establishment screening, unrestricted foreign ownership, free transfer of funds, acquisition of real estate, dispute settlement in local courts or international arbitration bodies, protection against expropriation, work permits for foreigners, favorable tax arrangements and minimum red-tape (bureaucracy). New Commercial Code, effective as of July 2012, stipulates new arrangements to reach international standards in terms of transparency, accountability and reliability in Turkish business life. To give an example how business environment has been improved in Turkey, I can underline the number of days to set up a company in Turkey. Under current legislation, it is possible to set up a company in 6 days for a foreign investor.

Besides improvements in legislation, foreign investors are able to benefit from the investment-friendly incentive system, which provides exemption from value added tax, customs duty etc. in accordance with the type and scale of the investment.

Beyond deliberate strategies pursued to attract foreign investors, Turkey has also inherited advantages like strategic geography and dynamic population with a qualified workforce.

Turkey is located in a strategic geography providing access to multiple markets. It functions as a gateway between Europe, Central Asia and the Middle East. Today, Turkey, particularly Istanbul, stands as a business capital for regional headquarters of some multinational companies. Beyond that, as an energy corridor and terminal, Turkey continues to be the focus of foreign investors in the field of energy as well.

Turkey’s dynamic and young population is also an advantage. 65 percent of the population in Turkey is under the age of 34. Turkey continues to provide productive, cost-effective and competent labour force in its region.

Turkey will continue to be an attractive area for further investment. You know that Istanbul is a candidate for 2020 Olympics. With its developing economy, urban transformation process, increasing experience in international organizations, İstanbul has the potential to successfully hold the 2020 Olympics. Istanbul is now on high demand by conference organizers as it is a regional hub for leading multinational companies. Turkish Airlines, as the 3rd largest airline of Europe, provides easy access to various destinations all over the world from İstanbul.

In Turkey, what do we expect for future? First of all, the Turkish government set an economic strategy for the next decade and has a number of goals to achieve by the year 2023. This is the year when Turkey will celebrate the centenary of the proclamation of the Republic of Turkey. By the year 2023, Turkey plans to take place among the top 10 economies in the world and achieve a gross domestic product of $2 trillion. Turkey plans to implement mega projects particularly in the fields of transportation, infrastructure, energy, health and urban transformation in the period ahead.

As part of our vision for 2023, Turkey also launched a project that aims at transforming Istanbul into an international financial center. This project offers global companies a chance to run their financial operations in the region through İstanbul, supported by various incentives, a skilled workforce and a cosmopolitan city with a vibrant local economy. Turkey continues to carry out necessary legal and financial regulations in line with its bid to reposition İstanbul as an international financial center. In order to enhance the legal infrastructure for the financial sector, a new Capital Markets Law was adopted. In accordance with this law, we are now working on the introduction of an institutional arbitration center and specialized courts for financial services. This mechanism will bring expeditious and effective solutions of disputes in this field. Moreover, Turkey has taken concrete steps to increase the diversity of financial products and services that will meet the demands of investors of any type. Markets for sukuk, warrants, and corporate bonds are growing rapidly.

Dear guests,
Ladies and Gentlemen,

Turkey is a fast developing economy with a population of 75 million and I hope that Turkey and Wales will develop closer economic and commercial ties.
In the period ahead, we will be happy to see delegations of Welsh businessmen visiting Turkey more frequently.

Thank you.