TBY talks to M. İlker Aycı, President of the Investment Support and Promotion Agency of Turkey (ISPAT), on Vision 2023 targets, diversifying FDI sources, and Istanbul's potential as a financial center.

İlker Aycı
Having worked as a researcher at the University of Leeds, and later Istanbul Metropolitan Municipality, İlker Aycı began a successful career in the insurance sector. He became the General Manager of Başak Sigorta, one of Turkey’s leading insurance firms, and later took the helm at Güneş Sigorta. In 2011 he was appointed as the President of ISPAT. Additionally he has served as chairman or board member of various organizations, including the Foreign Economic Relations Board (DEIK).

How would you assess Turkey's progress toward achieving its Vision 2023 goals for the economy?

Turkey is progressively approaching its Vision 2023 goals for the economy. Turkey aims to be one of the top 10 economies in the world by 2023 with an economy of $2 trillion, exports of $500 billion, and GDP per capita of $25,000. We have more than a decade ahead of us to achieve these targets. Our economic performance over the last decade is a testament to our future goals. Over the past decade, the Turkish economy has more than tripled in size, reaching $786 billion as of 2012, while GDP per capita soared to $10,000, up from $3,500. Similarly, Turkey's exports more than quadrupled, exceeding $150 billion by the end of 2012. If all of this was achieved in a decade, then Turkey can achieve more than that over the next decade.

Fitch upgraded Turkey's sovereign credit rating to investment grade in late 2012. How do you expect this to impact foreign investment inflows in 2013?

Fitch's upgrade is a clear indicator of the increasing confidence in the Turkish economy. Confidence is essential to any kind of investment, be it domestic or foreign. In a time of economic and financial crises, confidence has gained even more importance. As such, Turkey is offering a safe haven for foreign investors in many areas. Foreign investors had been increasing their investments in Turkey long before Fitch upgraded the country. Fitch's upgrade is just a vindication of what has been going on in the Turkish economy.

How has the continued uncertainty in the eurozone affected foreign investment inflows, and what steps is ISPAT taking to attract FDI from a more diverse range of sources?

In the face of uncertainty in the eurozone, we have been diversifying the sources of FDI inflows to Turkey. We have developed specific strategies to attract FDI from Asian countries, such as Japan, China, and India, as well as from the Gulf countries and the US. Our efforts have yielded results; we have managed to attract large-scale investments from diverse sources, such as Aditya Birla and Polyplex from India, Sumitomo Rubber Industries and Bank of Tokyo-Mitsubishi from Japan, and 3M from the US. Gulf countries have also been increasing their investments in Turkey. They have recently invested in areas such as energy, finance, real estate, retail, and many other sectors.

“Fitch's upgrade is just a vindication of what has been going on in the Turkish economy."

How would you assess Istanbul's potential to become an international financial center, and what steps is the government taking to promote foreign investment in the field?

Considering its geostrategic location, vibrant local economy, skilled labor force, and technological infrastructure, Istanbul is a perfect candidate to be an international financial center. Today, many multinational companies are already using Istanbul as a hub to manage their operations in the region. They have been relocating their regional headquarters to Istanbul, from where they manage dozens of countries. Moreover, today, more than half of foreign companies established in Turkey are in Istanbul. In regard to promoting foreign investment in the finance sector, the government has already taken the necessary actions to boost foreign investment in the area. With a strong regulatory environment, Turkey's financial sector has been the most attractive sector in terms of FDI over the past decade, attracting around $40 billion between 2002 and 2012.

What are ISPAT's FDI goals for 2013, and what is your strategy to achieve them?

Turkey's economic potential suggests that FDI inflows correspond to 3%-4% of its economy. That is an annual figure of between $20 billion and $30 billion. Our goal is to realize Turkey's economic potential and make it one of the most attractive FDI destinations in the world.

What is your outlook for the Turkish economy in 2013?

After robust economic growth in 2010 and 2011, the Turkish economy rebalanced in 2012. Despite the ongoing economic risks in the eurozone, the Turkish economy will grow by around 4% in 2013. If the eurozone can weather down the potential risks, then Turkey will even grow faster than expectations.