Global investors voice support for Turkey's economy

ISTANBUL (AA) - Senior officials from leading foreign companies have expressed their confidence in Turkey's economy following the July 15 defeated coup.

After nine hours of discussions in Istanbul at the Ninth Investment Advisory Council (IAC) for Turkey, David P. Hess, executive vice president and chief customer officer aerospace for the United Technologies Corporation, read a declaration on behalf of the companies at a news conference, which was also attended by Prime Minister Binali Yildirim.

Hess said the UTC already had large investments in Turkey in four different sectors. "These businesses are increasing their footprint and investments in Turkey right now, we continue to do so too as the economy grows in Turkey," he said.

Hess said government incentives were vital for international investors. "The Turkish government has been very helpful to UTC to invest in Turkey... With this kind support and system, we expect to continue to invest here," he said.

International investors noted Turkey’s growth rates in recent years, which outperformed emerging economies, excluding China and India.

"The medium-term economic program for 2017-2019, which was announced this month, also reiterates the government’s commitment to higher growth performance – projected to reach 5 percent in 2018 from 4.4 percent in the next year – by focusing on five strategic policy objectives: developing human capital, activating the labor market, enhancing technology and innovation capacity, strengthening physical infrastructure and improving institutional quality," the declaration read.

Investors emphasized on the importance of the government’s valuable efforts to upgrade the structure of the Coordination Council for the Improvement of Investment Environment and a public-private sector dialogue platform, in order to run the structural reform agenda of Turkey effectively.

"We think the medium-term program, 10th development plan and the government program are strong strategic documents to address the challenging issues in transforming Turkey into an innovation and productivity driven economy," it said.

The declaration said the current global conjuncture poses opportunities alongside challenges for countries.

"In this regard, we advise the government to prioritize maintaining a stable macroeconomic environment to provide better predictability for investors, carrying forward the structural reform agenda, prioritizing the development of ICT [Information and Communications Technology] as a strategic sector, elevating innovation through new generation of technology, improving the quality of education in the period ahead until the next IAC meeting."

The declaration also advised the Turkish government to merge electronic trade with conventional trade flows; increase participation of women, youth and disadvantaged groups in the labor force; and to use analytical approaches to focus on industries with comparative advantages and to boost infrastructure.

The business people said they observed that there was a significant gap between the reality and perception of Turkey as a safe and attractive investment destination.

"We advise the government to make more efficient use of communication channels with all segments of international business community. The IAC is committed to work with the government to overcome this gap in perception.

“We support the continued commitment of the government to reform at all fronts and acknowledge the significant achievements in the investment environment so far. We believe that progress in implementation of prioritized policy issues here will strengthen Turkey’s international competitiveness as an investment destination.”

- ‘Opportunity to get rich’

Cyril Muller, vice president World Bank, noted Turkey’s success in the past decade in enhancing its growth and reducing poverty, while maintaining economic resilience against global fluctuations.

Muller said Turkey currently had favorable demographics.

He said Turkey has an opportunity to get rich before it gets old, but only if it creates jobs fast enough to accommodate the youth and women entering the workforce, and if those youth and women are sufficiently well-educated to succeed in those jobs.

He said Turkey’s key challenge – now that most labor has moved out of agriculture – is to improve productivity growth in manufacturing and services, which requires boosting technology, innovation and experimentation.

He also highlighted the importance of accelerating institutional reform so that rule of law and arms-length market regulation become firmly established.

Attendees of the Ninth Investment Advisory Council meeting included top officials of 20 multi-national companies including Alstom, Alzahid Group Holding, APM Terminals, Bank of China, Bombardier, BP, Burgan Bank, Gemalto, Khazanah Nasional Berhad and Microsoft.

These firms come from 14 countries and manage over $700 billion.

Deputy Prime Ministers Mehmet Simsek and Nurettin Canikli, Energy and Natural Resources Minister Berat Albayrak and Economy minister Nihat Zeybekci also attended the meeting.

The IAC was founded in 2004 with the participation of senior executives from prominent multinational companies to improve Turkey's image as an investment center, improve the global investment environment and provide an international perspective to the ongoing investment climate reform agenda.