“This is a great time in Turkey’s history. As a booming country with a GDP growing at an average annual rate of 4.7 percent over the period of 2002 to 2014, Turkey represents tremendous potential with numerous investment opportunities for foreign investors. Experts agree that this trend will continue into the future as the country vigorously pursues its goal of becoming one of the top 10 economies in the world over the next 10 years.”
Right time, right place!
Turkey is a country that has experienced strong structural changes over the last decade. This factor has guided the country into a phase that numerous experts have characterized as a transformation process. And, as with all deep revolutionary reforms, new opportunities arise.
With a clear EU focus and a strong regional position, Turkey is playing an increasingly important role in its surrounding area and beyond. Turkey is an active member and term president of G-20, and is also a member of the North Atlantic Treaty Organization (NATO), the Council of Europe (COE), and the Organization of Islamic Cooperation (OIC).
Turkey’s status also changed once it became an official EU candidate country in October 2005. This has given a new strategic goal to the country, unifying a number of vectors towards a single direction: the Copenhagen political and Maastricht economic criteria. The structural reform process launched in 2003 has generated a new, dynamic and much more internationally-integrated Turkey.
This is a great time in Turkey’s history. As a booming country with a GDP growing at an average annual rate of 4.7 percent for a decade, Turkey is the land of opportunities. Over the past decade, the GDP has more than tripled, reaching USD 800 billion in 2014. Such an impressive economic growth made Turkey an industrial powerhouse in its region. Turkey is the largest commercial vehicle producer in Europe and the 16th largest automotive manufacturer in the world. Similarly, Turkey is the 2nd largest steel manufacturer as compared with the 27 EU and 8th largest in the world. Today Turkey offers highly lucrative investment opportunities in a variety of sectors, such as automotive, machinery, mining, energy, renewable energy, real estate, finance, ICT, agriculture, chemicals, petrochemicals, iron and steel, and so on.
The economic power of Turkey has drastically increased in the past decade. Turkey became the 16th largest economy in the world, and the 6th largest compared to the 27 EU countries in terms of GDP at purchasing power parity in 2013. The country’s strong economic performance over the past decade has encouraged experts and international institutions to make confident projections about the future of the Turkish economy.
Confidence in the Turkish economy has been recently approved by the credit rating agencies which upgraded Turkey to investment grade status and kept their grades. First, in November of 2012, the rating agency, Fitch upgraded Turkey to BBB-, then Turkey was upgraded by Moody’s to Baa3 and by JCR to BBB- in May of 2013.
Throughout the last decade, Turkey has been implementing an active policy to improve its investment environment. To start with, the new FDI frame law, which was passed by the Parliament in 2003, is the first installment of these significant economic reforms to change the investment environment in Turkey and make it attractive to global investors. This law guaranteed equal treatment to all investors without differentiating between local and international investors and enabled all international investors to enter Turkey without a preliminary authorization request, to transfer dividends freely, to access real estate, to be protected against expropriation, and to hire expatriates, etc. Turkey also decreased corporate tax from 33 percent to 20 percent for all companies. Important parameters, such as the acceptance of the international arbitration courts and the ongoing harmonization of laws with EU legislation have made Turkey one of the most liberal countries in the world, both in terms of the legal framework for FDI and the investment environment.
The sum of all the joint efforts has led Turkey to a very impressive economic output. Put differently, in a very short period of time, the FDI received by Turkey has benefited from these deep structural reforms. While Turkey attracted approximately USD 1 billion of FDI per year on average between 1992 and 2002, it has been attracting an average annual FDI of more than USD 12 billion since 2003.
Turkey ranks as the 7th most attractive emerging market according to Bloomberg Markets. According to expert opinion, Turkey will continue to climb up the ladder of top FDI recipient countries with its vast potential. Similarly, Turkey is among the top 20 countries in the United Nations Conference on Trade and Development’s (UNCTAD) World Investment Prospects Survey for 2013-2015. As a manufacturing hub, Turkey will rank as the 2nd in Europe over the next five years, according to a Deloitte report.
In the light of developments, it is certain that the Turkey of today is very different from the Turkey of 10 years ago. Similarly, the Turkey of 2023, a Turkey celebrating the centennial foundation of the republic, will also be strikingly different from today. With ambitious targets set by the current government, the Turkey of 2023 is expected to be a more prosperous and added-value generating member of the international community with a vital contributing role to global peace and welfare. Active on a global scale, Turkey is also offering investors a platform to benefit from emerging opportunities in other countries, particularly in the surrounding region. Turkey’s strategic location allows investors to access a potential market of 1.5 billion people, a combined GDP of USD 25 trillion and foreign trade of USD 8 trillion.
Turkey, with an improved and investor-friendly business environment, achieved considerable success in both domestic and foreign investments over the decade, not only raised the bar a notch, but is now also on track to realize its real and deserved potential; to be home to investments that will contribute to new jobs, new technologies and new visions.
Certainly, the right place to be at the right time…