ONGOING ENDEAVOR

Turkey 2011 | DIPLOMACY | INSIDE PERSPECTIVE

Abdullah Gül, the President of the Republic of Turkey, comments on the Turkish economy, its ability to attract investment, and the country's foreign policy.

Abdullah Gül
BIOGRAPHY
Abdullah Gül worked as an associate professor at Istanbul University before being elected from Kayseri as a Member of the Turkish Grand National Assembly for five consecutive terms between 1991 and 2007. He served on various committees before becoming Prime Minister in 2002. After serving as the Deputy Prime Minister and Foreign Minister between 2003 and 2007 he was elected by Parliament to assume office as the 11th President of the Republic of Turkey on August 28, 2007.

Investors are always seeking an answer to the same question: “Why should I invest in this country?" The answer in Turkey's case is that the country is rising in many ways. The Turkish economy is the 16th largest in the world, the sixth largest in Europe, and is rightfully labeled by many as the BRIC of Europe. We grew by 11% in the first half of 2010 and we are expecting total growth of more than 7% for the year, reaching a GNP threshold of $1 trillion in PPP terms. We aim to be among the top 10 economies in the world by the year 2023, when we commemorate the 100th anniversary of the Republic of Turkey.

The developed infrastructure can also help facilitate growth and encourage investment. Turkey is a hub for transportation, telecoms, and energy. Turkey has become the energy corridor and terminal of Europe. Currently it has the capacity to transport 121 million tons of oil to the world's markets every year. This is projected to increase to 221 million tons plus 43 billion cubic meters of natural gas, with new natural gas and oil projects on the way.

The Turkish economy has become strategically important in its region during the last decade. An increasing focus on the private sector, with an ambitious privatization program, which generated more than $40 billion, has transformed the economy. In a nutshell, Turkey has moved from an inward-focused import substitution economic model toward an industrial export-led growth driven by knowledge accumulation.

Turkey's central strategic location at the point where the East meets the West and the South meets the North, and its ability to reach and serve its surroundings—Europe, Central Asia, and the Middle East—are key assets. The country has historic, cultural, and linguistic links with more than 1 billion people in its broader neighborhood, where Turkey's market penetration is strong particularly in automotive, durable, and consumer goods as well as in the construction sector.

From Istanbul, it only takes four hours by plane to reach more than 50 countries, which represent a quarter of the world's population and a quarter of the world's economy. As a result of this investor-friendly environment, Turkey attracted foreign capital worth more than $75 billion between 2003 and 2009. Ten years ago, the number of foreign companies was only around 5,000. This number has steadily increased and reached around 23,500 in 2009. We have registered an approximate 26% increase in the number of foreign companies during the last two years alone, despite the global economic downturn.

Turkey's foreign policy goal of effective diplomacy with its neighbors promotes unrivalled influence and regional cooperation. As economic interdependence is a foundation of a stable and prosperous environment, Turkey is encouraging regional development and integration schemes around it.

Going forward, in order to avoid the recurrence of financial instability, we must draw the proper lessons from this global crisis. We should remember that the crisis was caused by the irresponsible acts of some financial institutions in the most developed markets. Unfortunately, ordinary people have paid the highest price for the mistakes of a few.

The current economic crisis unveiled, once again, the weaknesses and deficiencies of the existing global and national financial and economic architecture, which lack efficient governance and regulation over those reckless financial institutions. I believe that the G-20 should continue to play a central role in putting together the right policies and measures to that effect. In that endeavor, we should act with the principles of free and fair trade, and avoid currency wars and protectionist tendencies. Let us not forget that we are in the same boat, irrespective of our development levels, in the face of these turbulent waters.