REPUBLIC OF TURKEY PRIME MINISTRY

Size: px

Start display at page:

Download "REPUBLIC OF TURKEY PRIME MINISTRY"

Prosper Williamson
5 years ago
Views:

1 REPUBLIC OF TURKEY PRIME MINISTRY Investment Support and Promotion Agency of Turkey ISPAT Investment Climate in Turkey

2 AGENDA Turkey with some key figures FDI in Turkey Top reasons to The Agency Why Turkey?

3 Beautiful landscape

4 Combination of contemporary and traditional

7 Turkey with some key figures

8 17 th largest economy in the world and 6 th when compared to the EU Countries in 2014 (IMF GDP at PPP) The largest youth population when compared to the EU countries

9 40 million broadband internet subscribers (2014) 71,9 million GSM users (2014) 57 million credit card users & 105 million credit cards (2014)

10 Turkey is the 8th largest crude steel producer in the world and 2nd compared with the EU countries (world steel 2014) Turkey is the 17th largest automotive producer in the world (OICA 2014)

Turkey is the 6th most visited holiday destination in the world (2013) International tourist arrivals Country 2013 (million) 1. France 83.0 2. USA 69.8 3. Spain 60.7 4. China 55.7 5.

11 Turkey is the 6th most visited holiday destination in the world (2013) International tourist arrivals Country 2013 (million) 1. France USA Spain China Italy Turkey 41.4* 7. Germany 31,5 8. UK Russia Thailand 26.5 Source: UNWTO 2014 edition, TURKSTAT* Out of world s top 100 best hotels 28 are from Turkey (TUI Holly, 2014)

12 It s not only a place to work, but also a fascinating place to live

13 Turkish Airlines is the best airline in Europe (Skytrax 2011, 2012, 2013, 2014) 166 million airline passengers in Turkey (2014) Istanbul Ataturk Airport is the best airport in Europe (Skytrax 2013)

14 FDI in Turkey

15 FDI in Turkey Soaring FDI inflows 150 FDI inflows ($ billion) Number of companies with foreign capital 41, ,6 37, ,5 23, ,7 29, ,7 8,8 6,7 5, Source: Central Bank of Republic of Turkey & Ministry of Economy

16 FDI in Turkey Turkey ranked among the 22 countries with high FDI confidence in 2015 Source: A.T. Kearney

FDI in Turkey Transnational Corporations top prospective host economies for 2013-2015 Percentage of

17 FDI in Turkey Transnational Corporations top prospective host economies for Percentage of respondents selecting economy as a top destination for investment Source: UNCTAD. Based on 159 company responses

18 Top reasons to

Top reasons to Benchmarking performance of the Turkish economy 800 700 800 2014 GDP

100 56 0 6 5 4 3 4,7 4,4 4,1 3,9 3,4 3,4 Average annual real GDP growth (%)

19 Top reasons to Benchmarking performance of the Turkish economy GDP (Current Prices, $Billion) ,7 4,4 4,1 3,9 3,4 3,4 Average annual real GDP growth (%) ,1 3,0 2,5 2,4 2 1,9 1,4 1 0,8 0,8 0 Source: IMF, Eurostat and National Sources

Percentage contribution to real GDP growth 2002-2014 40% 32% 28% 20% 11% 4% 0% -2% -20% -40% Private

20 Top reasons to Main drivers of the economic growth Turkey has an economy driven by entrepreneurial spirit of private sector, robust domestic market and lucrative export opportunities 80% 60% 66% Percentage contribution to real GDP growth % 32% 28% 20% 11% 4% 0% -2% -20% -40% Private Consumption Exports Private Investment Public Consumption Public Investment Stocks -38% Imports Source: TurkStat

Q1-2009 Q2-2009 Q3-2009 Q4-2009 Q1-2010 Q2-2010 Q3-2010 Q4-2010 Q1-2011 Q2-2011 Q3-2011 Q4-2011 Q1-2012 Q2-2012 Q3-2012 Q4-2012 Q1-2013 Q2-2013 Q3-2013 Q4-2013 Q1-2014 Q2-2014 Q3-2014 Q4-2014 Top

21 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Top reasons to The fastest recovering economy since the onset of global financial crisis in 2009 Quarterly Real GDP Growth (Index: Q1-2009=100) Seasonally adjusted Fastest growing economy in Europe and one of the fastest growing economies in the world 140,0 135,0 130,0 125,0 120,0 115,0 110,0 105,0 100,0 Turkey Poland Brazil Russia Hungary Czech Rep. 95,0 Source: Indicators are based on the compilations of OECD, Rosstat & TurkStat data

22 China India Indonesia Turkey Chile South Africa Korea Argentina Brazil Israel Australia Russia Slovakia Mexico Estonia Poland Norway Sweden Luxembourg New Zealand Czech Rep. Switzerland US Canada OECD Austria UK France Finland Belgium Netherlands Ireland Hungary Germany Slovenia Euro area Denmark Japan Iceland Spain Portugal Italy Greece -0,5 3,8 3,7 3,5 3,3 3,3 3,2 3,2 3,0 2,9 2,7 2,7 2,6 2,4 2,1 2,1 2,0 2,0 1,9 1,7 1,7 1,5 1,5 1,5 1,4 1,4 1,3 1,2 1,1 1,0 1,0 0,8 0,8 0,8 0,2 0,1 4,1 4,6 5,1 5,0 6,0 6,9 8,4 Top reasons to Let your business blossom in a thriving economy and promising future Potential Average Annual Real GDP Growth (%) Forecast The fastest growing economy among the OECD countries Source: OECD Economic Outlook No.93, May 2013

23 Top reasons to Potential of the Turkish economy GDP per capita nominal (USD) Source: TurkStat

24 Top reasons to A visionary economy: road to year GDP ($ billion, current prices) times times GDP per capita ($) (Target) times times Turkey's 2023 (Target) Source: TurkStat, Hedef 2023

20,9 20,0 16,4 15,0 13,3 10,0 5,0 8,4 6,8 4,4 3,7 2,8 2,3 2,1 0,0 2002

25 Top reasons to Enriching population eradicating poverty Percentage (%) of poor people living less than USD 4,3 per day 35,0 30,0 30,3 25,0 23,8 20,9 20,0 16,4 15,0 13,3 10,0 5,0 8,4 6,8 4,4 3,7 2,8 2,3 2,1 0, Source: TurkStat, 2013

26 Top reasons to Real increase (%) in household income ,6 Percentage increase in decile (10%) Income Groups Lowest income group 50 47, ,5 40,2 39,8 39,2 34,3 30,8 25,1 top income group , Source: TurkStat, 2013

27 Turkey Mexico Ireland Greece Belgium Spain Hungary Italy Slovakia Portugal UK Netherlands Poland Czech Rep. Japan Norway Korea France USA Austria Switzerland Australia Germany Finland Denmark Canada Sweden Top reasons to Decreasing income inequality 0,06 Percentage point changes in the Gini coefficient (Mid-1990s to Mid-2000s) 0,04 0,02 0,00-0,02-0,04-0,06-0,08-0,10 Source: OECD

28 Top reasons to Emergence of a new middle-class Number of shopping malls Stock of consumer loans* ($ Billion) 4,2 123 Private consumption per capita ($) 2,390 6,840 Motor vehicle sales (thousands) 174 1,270 Number of cars in traffic (million) Airline passengers (million) Source: Turkey Council of Shopping Centers, OSD, Ministry of Transport, TurkStat, CBRT, Ministry of Development * including credit cards

29 Top reasons to Changing consumption culture with increasing purchasing power Allocation of household consumption expenditures (%) Other 46% Food & Housing 54% Other 55% Food & Housing 45% Source: TurkStat, 2013

Top reasons to Rise of the middle-class in Turkey Number of households by their annual income level ( 000) 12000 12251 Annual Income

30 Top reasons to Rise of the middle-class in Turkey Number of households by their annual income level ( 000) Annual Income Level: $5K< Income < $10K $10K< Income <$50K Income > $50K Source: EIU

31 Top reasons to Increasing wealth Wealth per adult (USD) 1,5 Total wealth (USD Trillion) , , ,141 0, end-2002 mid end-2002 mid-2014 Source: Credit Suisse Global Wealth Databook 2014

32 Top reasons to Household liability % of GDP Turkey Euro Area USA Source: Central Bank of the Republic of Turkey, European Central Bank, FRED

33 Top reasons to Stability and high performance in the economy EU Defined General Government Gross Debt Stock (% of GDP) EU 87, , ,3 Maastricht Criteria: 60% TURKEY ,5 Source: Treasury, Eurostat, IMF

34 Top reasons to Stability and high performance in the economy Central Government Budget Deficit (% of GDP) 12 10,2 9 6 EU 3 2,6 2,9 0 TURKEY ,3 Maastricht Criteria: 3% Source: Treasury, Eurostat, IMF

35 J 03 A J O J 04 A J O J 05 A J O J 06 A J O J 07 A J O J 08 A J O J 09 A J O J 10 A J O J 11 A J O J12 A J O J13 A J O J14 A J O Top reasons to Stability and high performance in the economy Annual inflation 35,0 30,7 30,0 25,0 20,0 15,0 10,0 8,17* 5,0 0,0 Source: TurkStat * As of December 2014

36 Top reasons to Stability and high performance in the economy Exports Billion USD Source: TurkStat

37 Top reasons to Product & market diversification of exports Number of export products with over $1 billion 9 37 Number of export markets with over $1 billion 8 34 Share of top 5 countries in total exports (%) Share of MENA in total exports (%) 13 28,6 Share of North America in total exports (%) 10 4,6 Share of EU in total exports (%) Less dependent on the crisis-ridden markets Source: TurkStat, Products with 2-digit HS Codes, EU includes 27 countries (new members in 2004 were included in 2002 figures)

38 Top reasons to Customs Union with the EU Turkey has launched initiatives to start negotiations with USA, Canada, Thailand, India, Indonesia, Vietnam, Central American Countries, other ACP Countries, Algeria, and South Africa. Free Trade Agreements with 36 countries (6 countries pending, 13 countries in ratification process): Albania Jordan Faroe Islands* Congo** Bosnia & Herzegovina Syria Cameroon** Mercosur** Egypt Tunisia Seychelles** GULF Cooperation Council** Georgia Montenegro Libya** EFTA Serbia Colombia** Israel Chile Ukraine** South Korea Ghana* Ecuador** Macedonia Lebanon* Peru** Morocco Moldavia* Mexico** Mauritius Malaysia* Japan** Palestine Kosovo* Singapore** Source: Ministry of Economy 2013, *pending, **In ratification process

9 trillion Import : $308 billion Population : 144 million MENA GDP : $3.9 trillion Import : $1.

39 Top reasons to Access to multiple markets 1.6 billion people; $27 trillion GDP; $8 trillion trade EUROPE GDP : $20.8 trillion Import : $6.7 trillion Population : 670 million RUSSIA GDP : $1.9 trillion Import : $308 billion Population : 144 million MENA GDP : $3.9 trillion Import : $1.1 trillion Population : 703million CENTRAL ASIA & CAUCASUS GDP : $440 billion Import : $97billion Population : 85 million Source: IMF World Economic Outlook and WTO; GDP, Imports and population figures as of 2014

40 Top reasons to International connectivity 116 countries & 354 int l destinations Source: Turkish Airlines, 2015

41 Top reasons to Business capital for regional HQs Multinational Companies (MNCs) MNCs Number of Countries Managed from Turkey Coca Cola 90 GE Healthcare 84 Microsoft 79 Intel 67 Unilever 34 VeriFone 50 GlaxoSmithKline 30 BSH 42 Schneider Electric 27 Alstom 17 Ericsson 22 Cargill 20 Volvo 30 BASF 34 Source: Respective Companies, Invest in Turkey 2013

42 Top reasons to Turkey as and energy corridor and terminal Existing Natural Gas Pipelines Existing Oil Pipelines Natural Gas Pipelines under Construction Natural Gas Pipelines Underway Proposed Natural Gas Pipelines Oil Pipelines under Construction Source: Invest in Turkey

43 Top reasons to Potential of the Turkish economy - young population - Population Pyramid Age Group % TURKEY Female Male Age Group EUROPE % Female Male Half of population in Turkey is under age 30.7 Source: UN & TurkStat, 2014

44 Top reasons to Favorable Demographic Trend Working Age Population*, 2011= Turkey Europe Total Dependency Ratio (%)** Europe Turkey 50 Source: UN *Number of people between ages of 15 and 64 **[Age Age 65+ ]/ Age

45 Top reasons to Skilled labor force 2014 Availability of Skilled Labor Force Turkey Romania Italy Czech Republic Japan Slovenia India Korea Germany Poland Slovak Republic 5,96 5,94 5,90 5,78 5,78 5,76 5,75 5,74 5,45 5,42 5,28 Availability of Qualified Engineers Availability of Competent Senior Managers Turkey Hungary Romania Russia Slovenia Slovak Czech Republic Germany China 7,08 6,77 6,70 6,57 6,40 6,39 6,22 6,12 5,96 Turkey France Belgium Czech Romania Poland Ital Russia Spain 5,20 5,17 5,15 5,15 5,07 4,89 6,00 5,93 5,81 Source: IMD WORLD COMPETITIVENESS ONLINE (Updated: May 2014), IMD WCY Executive Opinion Survey based on an index from 0 to 10

46 Top reasons to Skilled labor force Number of graduates in the selected engineering fields (undergraduate) Field Mechanical Eng Electric-Electronics Eng Computer Eng Civil Eng Number of graduates in vocational technical training schools Source: OSYM

47 2007 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q4 Top reasons to Productive and cost-effective labor force Productivity and Real Unit Wages Index in Industry (Per Worker; 2010=100) Productivity Index 121,2 128, , , Real Unit Wage Index Source: TurkStat, Ministry of Development

48 Top reasons to Labor productivity in total economy Real GDP per hour worked (Index: 2001=100) 175 Turkey Poland Czech Republic Hungary Mexico 100 Source: OECD

49 Top reasons to Productive and cost-effective labor force 25 Days Annual average number of sick days per employee in Europe* ,6 5,5 5,7 6,6 6,7 7,8 8,3 8,3 8,3 9,7 10,8 11,9 0 Turkey UK Spain Germany Italy Romania France Hungary Belgium Poland Czech Hours Rep. Portugal Bulgaria 55 51,4 Hours worked per week of full-time employment Annual average** ,3 43,0 43,0 42,8 42,4 41,8 41,9 41,7 41,6 41,6 41,5 41,2 40,9 40,6 40,5 40,5 40, Source: *MERCER - Pan-European Employer Health Benefits Issues Survey 2008, **EUROSTAT 2015: The average number of hours corresponds to the number of hours the person normally works. This covers all hours including extra hours, either paid or unpaid, which the person normally works

50 France Austria Germany Ireland Italy UK Spain Slovenia Estonia Slovakia Czech Rep. Croatia Poland Hungary Turkey Top reasons to Productive and cost-effective labor force 2014 Labor Cost Per Hour in Industry, excluding agriculture and public - administration* ( ) 35 34, ,5 31,4 29,8 28, ,3 21, ,6 10 9,8 9,7 9,4 9,4 8,4 7,3 6,3* 5 0 Source: Eurostat 2014, * TurkStat 2012, approximately at the same level in 2014

51 Turkey US Germany Korea Chile Canada Australia Sweden Switzerland France Belgium Norway Austria Czech Rep. Japan Slovakia Slovenia Ireland Denmark Poland Portugal Italy Greece Spain Top reasons to Employment generating economy Increase in Employment ( 000) Turkey generated ca. 4,2 million new jobs since the onset of the global financial crisis in ,0 13,0 12,0 11,0 Unemployment* (%) EU 10,0 9,0 Turkey 8,0 7,0 OECD Source: OECD * Harmonized Unemployment Rate, seasonally adjusted

52 Top reasons to Turkey: A manufacturing hub Turkey will be the 16 th manufacturing hub in the world and 2 nd in Europe over the next 5 years. T U R K E Y Source: Deloitte TURKEY TURKEY TURKEY

53 Top reasons to Key elements of structural reform agenda Public Sector Reform Financial Sector Reform Social Security Reform Tax Reform Enhancing Private Sector s Role in the Economy Opening the Key Markets to Competition, and Regulation by Independent Agencies Improving the Investment Environment Accelerated Privatization New R&D and Innovation Support Law

54 Top reasons to Structural reforms Corporate Income Tax %20 Protection Against Expropriation National Treatment New FDI Law & Other Legislation Guarantee of Transfers Freedom to invest Access to Real Estate Employment of Expatriates International Arbitration

55 Top reasons to Turkish Commercial Code effective as of July 2012 Transparency Accountability Institutionalization Improvement in investment & business environment Adoption of institutional management principles Opportunity to perform legal procedures electronically

56 Top reasons to Improving Doing Business: Number of days to set up a company Turkey in Turkey 6 UK 10 Switzerland Japan Russian Spain Turkey in Finland Sweden Romania 27 Russia India Poland China Bangladesh 30 Bulgaria 30 Poland 31 Morocco 36 Cameroon 37 Turkey 38 Guatemala 39 Source: World Bank Doing Business Report

57 Top reasons to Structural reforms: Yielding results & Increasing competitiveness Global Competitiveness Index Year Number of Countries Turkey s Rank Turkey s Rank (Percentile) , , , , , , , , , , ,2 Source: WEF

58 Top reasons to Increasing confidence in the Turkish economy Investment Grade by Moody s in july 2014 Investment Grade by Fitch in Nov 2012 Investment Grade by JCR in May 2013 Turkey s Sovereign Credit Ratings S&P Moody s Fitch JCR Scale Jan 2010 Feb Dec Jan July Jan Nov Jan Mar 2013 Scale Scale Dec 2009 Scale AAA+ A A2 A AAA AAA- A+ A- A3 A- A A- BBB+ Baa1 BBB+ BBB+ BBB Baa2 BBB BBB Negative BBB- Baa3 Turkey BBB- Turkey BBB- Turkey BB+ Turkey Ba1 Turkey BB+ Turkey BB+ BB Turkey Ba2 BB BB Turkey BB- Turkey Ba3 Turkey BB- Turkey BB- Turkey B+ B1 B+ B+ B B2 B B B- B3 B- B- CCC+ Caa1 CCC+ CCC CCC Caa2 CCC CC CCC- Caa3 CCC- C SD Ca DDD D D Source: Respective rating agencies Feb 2010 May 2013

59 Top reasons to Investment incentives in Turkey 1. General Incentive System 2. Incentives for Large Scale Investments 3. Regional Incentive System 4. Incentives for Strategic Investments 5. Employment Scheme 6. Research and Development Supports 7. State Incentives for Export

60 Top reasons to NEW INCENTIVE SYSTEM 1. General Incentives 2. Regional Incentives 3. Incentives for large-scale Investments 4. Incentives for Strategic Investments VAT Exemption VAT Exemption VAT Exemption VAT Exemption Custom Duty Exemption Custom Duty Exemption Custom Duty Exemption Custom Duty Exemption Tax Deduction Tax Deduction Tax Deduction Employer s share for Employer s share for Employer s share for insurance premium insurance premium insurance premium payment payment payment Land provision Land provision Land provision Interest Support (except Interest Support 1st and 2nd regions) VAT Refund In the 6 th Region; income withholding tax and employee s share for insurance premium payment

61 Top reasons to Regional Incentive Map

62 The Agency

63 The Agency Established in 2006 to increase and attract direct investment Attached to the Prime Ministry & directly report to the PM Private sector approach with public sector capabilities ONE STOP SHOP approach HQs in Ankara; branch office in Istanbul

64 The Agency The International Network

65 The Agency Providing extensive services: Coordination with relevant governmental institutions Market information and analyses Site selection Matchmaking- potential partners Facilitating legal procedures, such as: - Establishing business operations - Incentive applications - Work/residence permits

66 The Agency WORLD BANK s GLOBAL INVESTMENT PROMOTION BENCHMARKING REPORT 2009 Among 181 National Investment Promotion Agencies, INVESTMENT SUPPORT and PROMOTION AGENCY of TURKEY ranked as; 15 th in the World in terms of General Performance Assessment 5 th in the World and 2 nd in Europe in terms of Inquiry Handling

67 Why Turkey?

68 n TUR KEY Agency for all potential investors!

69 Why Turkey? According to the projection by Goldman Sachs, Turkey will be the 9th largest economy in the world and the 3rd largest economy in Europe by China 2. U.S.A. 3. India 4. Brazil 5. Russia 6. Indonesia 7. Mexico 8. U.K. 9. Turkey 10. Japan Source: Goldman Sacks, 2008

70 Why Turkey? The Most Promising Sectors Automotive Target to produce over 2 million vehicles within 5 years Transportation Highway capacity planned to be tripled up until 2023 with 12 different project Real Estate Third most attractive real estate investment destination in 2012 (AFIRE); Istanbul is the most attractive real estate investment market in 2012 (PwC, ULI); more than $27 billion FDI over past decade. Finance Resilient to the global financial crisis with strong regulatory and supervisory framework, the most attractive sector with $39 billion FDI in the past decade; more opportunities with Istanbul Finance Center Energy Strategic location for energy terminal and corridor; rapidly growing demand: over $100 billion investment is needed to meet the demand till 2023; privatization and diversification opportunities. ICT Fastest growing IT companies in the region are from Turkey, 27 of the 500 fastest growing tech companies in EMEA are Turkish winner: Logic Bilişim (5-year revenue growth of 28,617% with 412% CAGR).

71 Enjoy your potential in Turkey

72 ON

73 THANK YOU FOR YOUR ATTENTION

REPUBLIC OF TURKEY PRIME MINISTRY

REPUBLIC OF TURKEY PRIME MINISTRY Investment Support and Promotion Agency of Turkey (ISPAT) Investment Climate and Doing Business in Turkey Murat OZDEMIR Country Advisor Canada ozdemir.murat@invest.gov.tr