TURKEY - Economy
İlker Aycı was born in Istanbul in 1971, and graduated from Bilkent University Department of Political Science and Public Administration. He continued his studies at the University of Leeds and Marmara University, and began his professional career in 1994, holding positions in Kurtsan İlaçları A.Åž., the Istanbul Metropolitan Municipality, and Universal Dış Ticaret A.Åž. He then served as the General Manager at Başak Sigorta A.Åž. and became the General Manager at Güneş Sigorta A.Åž. in 2006. He has also been board member of organizations including the Association of the Insurance and Reinsurance Companies of Turkey, the Foreign Economic Relations Board (DEİK), the Turkish-Chinese Business Council, Vakıf Emeklilik A.Åž., and Vakıfbank Güneş Sigorta Sports Club. In January 2011, he became President of ISPAT and in 2014 became the President of WAIPA.
The national and local authorities in Turkey have been implementing numerous investment projects through PPPs, and are also keen to realize further opportunities in education, energy, defense, healthcare, transportation, and other public services. Similarly, opportunities are also available in privatization projects. While Turkey’s privatization efforts totaled more than $50 billion over the last 10 years, there are still several more areas to be privatized, such as infrastructure and energy generation, which have been partly privatized. Considering Turkey’s growing demand for energy, which requires more than $100 billion of investment over the next decade, there are lucrative opportunities for energy companies. Turkey has set specific targets to achieve by the year 2023, the centennial celebration of the foundation of the Republic of Turkey. The PPP model will be crucial to achieve Turkey’s grandiose targets ranging from health to economy and from defense to education. In order to utilize this potential, ISPAT is pro-actively promoting Turkey’s PPP projects abroad. We have organized roadshows and seminars for specific projects or sectors, with valuable contributions from governmental organizations, such as the Privatization Administration (ÖİB) or relevant ministries. ISPAT will keep promoting and facilitating PPP projects, as it did in the past.
Turkey has been one of the fastest recovering economies in the world, expanding by 9.2% in 2010, followed by 8.5% in 2011. Similarly, FDI inflows to Turkey dramatically went up over this period. We received $16 billion in FDI in 2011 and $13 billion in 2012, up from $8.5 billion and $9 billion in 2009 and 2010, respectively. When it comes to Turkey’s attractiveness to investors, we can show plenty of factors. First and foremost, Turkey has been a natural bridge between the East and West, as well as North and South. Turkey’s strategic location provides access to multiple markets of 1.5 billion people, a combined GDP of $25 trillion, and more than $8 trillion in foreign trade, which corresponds to around half of total global trade. The Customs Union between Turkey and the EU has been in force since 1996. In addition, we have free trade agreements (FTAs) with 23 countries, most of which have been signed with surrounding countries. FTAs with 25 countries including the US, Japan, Canada, India, Malaysia, and Indonesia are either in the official negotiation process or pending official negotiations. Current FTAs and the Customs Union enable investors to access multiple markets of $20 trillion in GDP, 780 million people, and $3.5 trillion in imports. That is to say, when you invest in Turkey, you can easily export your products to different destinations. So, it would not only mean investing in Turkey, but also in the entire region. That is why many global companies have either established their manufacturing bases in Turkey or moved their regional headquarters here. In addition to its strategic location, a large and rapidly growing domestic market, a young and qualified labor force, a business-friendly environment, and a strong finance sector are the key elements for Turkey’s attractiveness for investors.
The share of the manufacturing and energy sectors in total FDI has been on an upward trend in recent years. This means Turkey is now able to attract more qualified and value-added FDI. For example, FDI figures in electronics, pharmaceuticals, chemicals, and energy are on the rise. Abundant investment opportunities are available in many sectors, ranging from energy, finance, automotive, ICT, food and beverages, agriculture, renewable energy, and iron and steel to petrochemicals and real estate. More opportunities will come with the realization of Turkey’s challenging targets for 2023. In the energy sector in particular, we are making efforts to attract more foreign investments to Turkey, as there is a huge need for investment in this field. As the economy is growing, the demand for energy is increasing as well. In order to meet such rapidly increasing demand, investments worth tens of billions of dollars are needed in our country. Over the last 10 years, the Turkish electricity market has become one of the fastest growing markets in the world. Between 2002 and 2012, electricity demand in Turkey grew 6.2% annually on average. According to recent projections, our electricity demand is expected to grow with an annual average rate of 7.5% until the end of 2020. As investments are being made in order to meet this huge demand, we are also working to decrease our dependency on fossil fuels. Consequently, renewable energy has a crucial place in our energy strategy. Particularly in wind and solar, we are very confident that our country will develop its capabilities and reach its potential over the next decades. Our government’s energy strategy aims to increase the share of renewables in total electricity generation to 30% by 2023. In addition, it is a national target for Turkey to make Istanbul an international finance center. Having been tested by the global financial crisis, Turkey has one of the most solid and promising financial sectors in its region. The government’s International Finance Center (IFC) project offers global companies a chance to run their financial operations in the region through Istanbul thanks to various incentives, a skilled workforce, and a global, cosmopolitan city with a vibrant local economy. Hence, the financial sector could be seen as one of the most promising sectors in Turkey. In automotive, another sector of great importance for Turkey, we expect significant new investments. Turkey already has a broad experience in this sector and the capacity is being improved both in quantity and quality. Our government’s vision is to make Turkey the manufacturing base of Eurasia in the medium- and high-tech industries. To this end, our investment promotion strategy is aiming to attract more technology-intensive investments to Turkey. The incentives that our government provides are also in line with these goals. Thanks to the improving investment climate in technology-intensive industries, I expect related sectors such as biotechnology and ICT to continue to rise in the future.
Turkey’s main traditional investment partner has been the EU for many years. The EU still accounts for the lion’s share of Turkey’s total FDI. However, at the current global conjuncture, Asian economies are also emerging as new sources of FDI. China and India, in addition to Japan, are becoming increasingly important in terms of their potential to invest. Accordingly, similar to the export strategy of our government, we are now diversifying our target economies for FDI promotion in our investment promotion strategy. For example, China’s outbound investments amounted to $77 billion in 2012 and $90 billion in 2013. This is expected to be around $100 billion in 2014. However, the share of China in FDI inflows to Turkey is very limited for the time being. In order to increase Turkey’s share in this field, we have named China as one of our target economies, in addition to India and Japan. On a sector basis, ISPAT focuses on the manufacturing sector, aiming at high-tech and value-added industries. Investments in products not yet produced in Turkey are one of the most crucial aspects of ISPAT’s targets. Our aim is to attract more technology-intensive investments in the manufacturing sector, in order to ensure more technology transfer to Turkey. With our sector and country strategies, we are practicing pro-active promotion activities, including roadshows for target sectors and company visits. We are also monitoring target sectors in certain countries and specifying target companies that we consider to be potential investors. Subsequently, we contact these target companies with value proposals. We have had many positive results from this strategy in the recent past, and I hope it will keep serving our country by attracting more investments in 2014.
By sponsoring our events you are able to best participate in the discussions that matter to you, as well as gain unique networking opportunities.