Up, up and away
The numbers back-up the Turkish growth story, but moves are afoot to go even further and faster.
Located at the heart of the world, Turkey stands as a nation of contrasts. There’s the Asian-European contrast, the progressive- conservative polarity, and the culture vs. globalisation conundrum, amid this seeming confusion, there’s also a country that’s offering unparalleled opportunities for investment, growth and building a future.
The country’s Investment Support & Promotion Agency lists ten main reasons for investing in Turkey. These include its successful economy, a qualified, competitive workforce, its location, low taxes and incentives, large domestic market, developed infrastructure and its usefulness as an energy corridor, being appropriately located close to the world’s greatest fuel reserves and its largest consumer, Europe.
The numbers speak for themselves. The total foreign direct investment (FDI) inflow in 2014 was $12.5 billion, and the IMF said earlier this year that “growth last year was stronger than expected, and the current account deficit fell.” It continued: “Domestic demand is expected to continue to drive growth this year, owing to the higher minimum wage, lower oil prices, and supportive monetary and fiscal policies.”
An IMF team visited Turkey from January 20-February 1 for the annual evaluation of its economy. It said Turkey’s economy grew by 3.8 per cent last year, driven largely by resilient private consumption. Also, the fall in oil prices and the resultant decrease in imports brought the current account deficit to around 4.4 per cent of its GDP, and strong growth is forecast for this year as well. The IMF\s report stated: “The 30 per cent increase in minimum wage will raise consumption by an estimated 0.5-1 per cent of GDP this year. In addition, the recent further decline in oil prices, and the insufficiently tight monetary stance will also be supportive. GDP growth is expected to be between 3.5 and 4 per cent this year and inflation will exceed the authorities’ 5 per cent target once again by a wide margin.”
In an exceedingly vulnerable world, where guarantees are becoming a thing of the past, and economies are more dynamic than ever, Turkey looks to offer solid returns, and global brands are cashing in. Last month, Turkish Airlines and Boeing signed a deal to work on joint development, training and more to increase the competitiveness of Turkey’s aviation industry and support its R&D capabilities and aerospace infrastructure. Candy Hoover, the Italian home appliances brand, is also investing in an R&D facility in the country in the first quarter of 2016.
Prime Minister, Ahmet Davutoğlu, has been travelling around the world, speaking to investors and presenting the Turkish potential to major multinationals, and promising reduced bureaucracy and red tape to speed up FDI. He has held talks with heavyweights such as the Industrial and Commercial Bank of China, a recent entrant to Turkey’s banking market; Japanese conglomerate Mitsubishi, Meridiam, the French global investor and asset manager specialising in public and community infrastructure, logisitcs giant DHL; Maersk, the Danish business conglomerate; Khazanah Nasional, Malaysia’s sovereign wealth fund; and Sberbank, the Russian financial services company.
Needless to say, the personalised meetings with the prime minister have attracted several prominent companies into the Turkish fold. In addition to industrial sectors, Turkish real estate has also taken up a significant place in terms of places-to-invest-in right now. According to official figures released last month, foreign investment in property doubled in the first 11 months of 2015 from 2012 to hit $5 million. At least 22,830 purchases were made by foreign nationals last year - an increase of 20.4 per cent over 2014. Most buyers hailed from Europe and the Gulf countries, with Istanbul, Antalya and Marmara emerging as the destinations of choice.