Hard to believe that just over a decade ago Turkey was virtually a no-go zone for FDI, attracting barely $1 billion in annual capital inflows. In 2006, three years after Recep Tayyip Erdoğan took office as Prime Minister, however, that figure shot up by a multiple of 20, demonstrating that the opportunities were always there even when the timing wasn’t always right.
Now the timing is most emphatically right, as Turkey gears up for its centennial celebration of nationhood in 2023 by authorizing a series of major infrastructure works that include a third airport serving Istanbul and a third bridge over the Bosphorus. It is also the target date for Turkey’s stated goal of entering the ranks of the world’s top 10 economies with a GDP of $2 trillion.
Helping to make it happen is ISPAT, the government’s investment promotion agency, whose president, İlker Aycı, likes to emphasize that Turkey’s greatest asset is its location. “Our geographical position enables companies to access a market of some 1.5 billion people, whose combined GDP is around $25 trillion with a trade volume of $8 trillion.
“ISPAT serves as a reference point for international investors, combining our private sector approach with backing from all government agencies to facilitate legal and legislative procedures,” notes Mr Aycı.
Another chronic optimist is Dr. Ibrahim Turhan, Chairman and CEO of Borsa Istanbul, which supervises all the country’s securities trading. He says FDI is of critical importance by allowing the economy to complete its recovery from the “lost decade” of the 1990s when huge gaps in domestic consumption, savings and investment were allowed to go unchecked.
“If Turkey grows at an annual rate of 5 or 6 percent, without overheating or triggering inflation, in real terms GDP will have doubled by 2023,” by Dr. Turhan’s reckoning. “Then there is an idiosyncratic trend of real appreciation of emerging markets’ currencies against those of the developed markets. If you factor in currency appreciation, you’ll have doubled your money. Potential investors might want to ask themselves where else would they get such returns.”