Size of counterfeit and pirate economy: $10.8 billion

The British investor I met during the “Investing in Turkey Forum” meeting in London was curious about two things. First, he was interested in whether or not Deputy Prime Minister in charge of economy Ali Babacan and Finance Minister Mehmet Şimşek will take part in the economy management after the June elections.

This is an understandable curiosity because both Babacan and Şimşek are two names that foreign investment circles know closely and can easily dialog about. 

His second concern was whether or not there was an improvement in the protection of intellectual property rights in Turkey. 

The answer to the first question we will see after the June elections. 

The significance of the second question is reflected by the occasion of the World Intellectual Property Day on April 26. 

The International Investors Association (YASED) issued a message that day, emphasizing the importance of Turkey harmonizing with international standards protecting intellectual property rights in order to raise Turkey’s competitive power.

According to the Property Rights Alliance Index 2014, among 97 countries, Turkey ranks 44, right above countries such as China and India. 

The Aegean Chamber of Industry’s (EBSO) head, Ender Yorgancılar, said, “In a country where trademarks and intellectual and industrial property rights are not adequately protected, the power to draw investments weakens. For Turkey to grow steadily, it needs investment.”

Now, the other side of the medallion is the size of Turkey’s pirate and counterfeit economy. 

The spokesperson for the Brand Protection Group (MKG), Dr. Ali Ercan Özgür, said the size of the pirate and counterfeit economy has reached $10.8 billion. “In order to become one of the biggest economies in the world, our global competitiveness should be strengthened. An important road to this is an active protection of trademark rights,” he said.

An increase of one point in the Patent Rights Index, they say, facilitates the inflow of nearly $1.9 billion of international investment to the country.

Meanwhile, this issue of pirate and counterfeit products is under the magnifying glass of the European Commission. 

According to their report, the total value of counterfeit products originating from Turkey and caught at EU customs in 2012 was 30 million euros. This figure became 51 million euros in 2013. The report said we rank third after China and Hong Kong in counterfeit and pirated products. 

Despite all the warnings, Turkey has not improved on this subject. I know of visitors who go after “counterfeit brand bags” in Istanbul’s Covered Bazaar as soon as they come to Turkey. 

For foreign tourists, counterfeit bags and textile products are factors that make Turkey more attractive. This is true of Istanbul, Antalya, Bodrum and many other resorts. 

Most probably, because it is an item that increases tourism incomes, there is not much of an “appetite” to fight counterfeit products. 

However, on the other hand, there are foreign investors questioning intellectual and industrial property rights, and trademark rights. 

Let us say an unsolvable paradox.