UPDATE - Turkey set to open new era for investment incentives

UPDATES WITH MORE REMARKS FROM PRESIDENT, REVISES HEADLINE

By Burak Bir and Tuba Sahin

ANKARA (AA) - Announcing a series of recovery plans on economic policies, including structural reforms and financial stability, the Turkish president Wednesday vowed to open a new era to improve the country's investment environment.

Speaking at the parliamentary group meeting of the ruling Justice and Development (AK) Party in the capital Ankara, Recep Tayyip Erdogan said new steps will be taken soon to improve the investment climate and make the country's economic policies more effective.

"We will achieve our goals by building economic policies on three pillars: price stability, financial stability, and macroeconomic stability. For this, we are preparing a favorable environment for long-term savings and investments," he said.

Erdogan went on saying that Turkey will focus more on gaining confidence and credibility in economic policies and reduce the country's risk premium.

Thus, maintenance of economic growth and employment in a healthy, sustainable and strong way will be ensured, Erdogan said.

"We are building a growth structure which creates qualified employment, does not cause inflation and current account deficit, and is financed mainly by domestic savings and direct international investments," he explained.

Stating that price stability which means keeping inflation under control is the key for sustainable solid growth and boosting job creation, Erdogan said the government is determined to reduce inflation to single digits as soon as possible.

The president stressed the government's determination about making Turkey a low-risky, reliable and profitable attraction center for both domestic and international investors.

"We will ensure that our policies are implemented as planned through strengthening coordination and harmony in economy management," Erdogan pledged.

- Structural reforms

Beside strengthening macroeconomic stability, the government will focus on creating more attractive business and investment environment, Erdogan underlined.

"We will provide all kinds of convenience and support to domestic and international investors who trust in the Turkish economy and Turkish lira," he vowed.

Turkey will hold a series of meetings with international investors to talk about opportunities, potential and support the country will provide for them, Erdogan said.

"We are also in preparations for structural reforms such as improving the investment environment, increasing the depth of financial markets, increasing the quality of public revenues and expenditures, preventing informality and good governance," he added.

The country will also take new steps in strengthening the rule of law, predictability, easy accessibility, as well as fast and efficient judicial system in upcoming months, the president said.

"We will strengthen macroeconomic stability by increasing the harmony between monetary and fiscal policies and financial policies, thanks to effective decision-making mechanisms," he stressed.

Erdogan also said that everyone will see that Turkey is among the leading countries in providing the highest and most secure earnings for investments.

"With the Treasury and Finance Ministry and the Central Bank in finance side, the Trade Ministry and the Industry and Technology Ministry in the real sector side, along with other ministries and business people, we all are working together to make a new economic leap in Turkey," he highlighted.

Turkey is launching a new mobilization focused on stability, growth and employment, with the awareness that a country without a strong economy cannot protect its gains in other areas, Erdogan added.

"The positive trend in market indicators, with the appointment of our new Central Bank governor and the new treasury and finance minister, indicates we are on the right track," the president said.

He also refuted speculations on the Cabinet reshuffle.

Stressing that the changes in economy management was welcomed by the market, Erdogan said international investors put $2.7 billion in Turkish assets following the move.

The US dollar/Turkish lira exchange rate fell rapidly following Erdogan's speech, trading around 7.90 versus 8.1190 at the opening on Wednesday.