Representatives of business organizations state that while economic and legal reforms will lead to a leap in direct investments, the country will offer the advantage of being a supply base to foreign investors much stronger.
Abdurrahman Kaan, Chairman of the Independent Industrialists’ and Businessmen’s Association (MUSIAD), talked to Anadolu Agency (AA). He emphasized that the efforts of public institutions and organizations alone will not be sufficient for public reforms to be accepted and resonated in the capital, raw material, and labor markets, and it is important that non-governmental organizations support this process.
Kaan pointed out that legal reform will play a very important role in achieving sustainable economic growth and said:
“The crisis that arose due to the Covid-19 outbreak once again showed the importance of the national industry. As a matter of fact, economies that rely solely on the services sector suffer much more serious damage in this process. Turkey differs from other countries positively with its current industrial capacity in this period. We believe that this opportunity will provide a wide range of opportunities to cover many of our sectors and production power in all capacities. We can say that the possible opportunity environment that will emerge in the post-crisis period has the potential to provide great advantages for medical supplies and services, food production and retail, information and communication technologies, and e-commerce sectors. Of course, among these sectors, the food sector also stands out. With regard to the global supply problem for food products, we can state that our country, which has a positive image in the consumer perception around the world, will have a seriously advantageous position.”
Stating that the epidemic negatively affected not only goods, services, and human mobility, but also capital mobility, Kaan stated that in 2020, global foreign capital investments decreased by 33% compared to the previous year, from $1.5 trillion to $1.03 trillion.
“Foreign direct investments will increase again”
Abdurrahman Kaan emphasized that it is difficult for capital movements to catch up with the old level in 2021 and predicted that capital movements will present a stagnant outlook this year.
Pointing out that the recovery in foreign investments to come in Turkey will accelerate by 2022, Kaan said that the country has important advantages in direct foreign capital investments.
Kaan said, “We believe that Turkey will make a serious leap forward in the upcoming period with the accelerating effect of these reforms, with the opportunity to focus on value-added products with its strong manufacturing industry infrastructure and to serve as a logistics base for a wide geography thanks to its geographical location.”
Stating that the volume of company mergers and acquisitions realized by foreign investors last year increased by 35% compared to 2019 and reached $4.6 billion, Kaan said that with the restoration of price stability and economic confidence, direct foreign capital investments will increase again.
“Reform preparations will restore investor’s confidence”
Istanbul Chamber of Commerce (ITO) Chairman Sekib Avdagic stated that the reforms prepared in the field of law and economy mean “the basic fee on which the strong infrastructure and economic development sought by international investments”.
Stating that the comprehensive reform preparations in the field of law and economy announced by President Recep Tayyip Erdogan will refresh the trust of the investors, Avdagic said, “Turkey will offer its advantage of being a supply base to foreign investors in a much stronger way, together with the reform efforts in law and economy.”
Emphasizing that Turkey owes its achievements in 20 years to its determination to reform the triangle of law, democracy, and economy, Avdagic said, “In this way, Turkey became the 13th largest economy in the world in terms of purchasing power parity according to World Bank data. While our country was ranked 60th in 2018 in the World Bank’s Ease of Doing Business Index, our country has made a significant leap by ranking 33rd in 2020.”
“Turkey stands out as the most preferred supply center”
Stating that Turkey stands out as the most preferred supply center with its close location to EU countries and strong production capacity, Avdagic made the following evaluations:
“We anticipate that the acceleration in the industrial sectors will continue in 2021. We believe that it will be another successful year for sectors such as ready-to-wear, furniture, automotive, and chemicals that stand out in foreign trade. On the domestic demand side, demand in sectors such as food, furniture, electrical, and electronics, which accelerate due to changing consumer preferences with the isolation process, is likely to continue intensely in 2021. An important opportunity is open for both domestic and foreign investors who focus on electronic commerce in line with the expected volume of ₺400 billion.”
Sekib Avdagic said that the global value chains are gradually changing in the world economy and that the global epidemic has also affected these changes radically.
Stating that the epidemic that started in China, the world’s largest exporter, and the disruptions in the supply chains led other countries to seek new supply networks, Avdagic said:
“Turkey is one of the countries that could potentially move to a more advantageous position within the framework of alternative searches. The potential of our country to experience a wave of opportunities that includes new investments and commercial partnerships with its geopolitical advantage is very clear. With Istanbul Airport, the fastest growing airport in Europe, it can fly to more than 120 countries today. It is possible to reach 146 destinations from different continents within 3 hours. This is a great advantage for investors. Geographical location, qualified population, and production power are the foundations of our country’s strong structure.”
“We are of the opinion that we will be the engine of the production of many European products”
Stating that Europe is withdrawn and aging as a population, Aydin made the following evaluations:
“Today, many countries are about to realize their industrialization. Raising this bar requires more participatory projects. Turkey has begun to prove its share of high technology products. We do not think that EU countries will remain indifferent. They will meet with us to carry out joint projects very soon.
Likewise, our energy is great with our young population. In this context, we are of the opinion that we will be the engine of the production of many European products. It is highly probable that the EU will not remain indifferent to Turkey, next to it, in order not to experience the trouble it has faced in the pandemic. With the reopening of the doors in the near future, we will see many agreements involving these cooperation.”
Expressing that they estimate that more than $16 billion of hot money has entered Turkey since November 2020, Aydin said, “This momentum will continue to increase. New reforms will increase the confidence environment, reduce the impact of the pandemic, the revival of tourism, and our country’s position as a sought-after country in the new process will raise this rate.
Source: AA / Translated by Irem Yildiz