‘Turkey lungs of EU economy’

ISTANBUL - Hürriyet Daily News

Economy Minister Çağlayan (C) talks to İzzet Karaca (L), the head of the International Investor’s Association, at the association’s general assembly. Turkish economy is a breath of fresh air for Europe, Çağlayan says. AA photo

urkey’s rapidly growing economy is providing crisis-hit Europe a breath of fresh air thanks to its status as a leading goods supplier, Economy Minister Zafer Çağlayan said yesterday.

“Turkey is the lungs of the European economy,” Çağlayan said at the International Investors’ Association (YASED) General Assembly in Istanbul.

He said Turkey had managed to attract nearly $15.7 billion in foreign direct investment (FDI) by the end of 2011 despite the growing volatility in the European economy and political turmoil and protests in the Middle East and North Africa.

“Turkey remains the main goods supplier for the European market,” said Çağlayan, adding that nearly 72 percent of FDI came from European countries.

Çağlayan also announced that the new draft law for private sector incentives would be introduced to Prime Minister Recep Tayyip Erdoğan today.

“We will conclude the draft law with all the details as soon as possible,” said Çağlayan, noting that the new incentive law would contribute to the country’s bid to narrow its increasing current account deficit.
“We are aware of the power that we have,” said Çağlayan, adding that the dynamics of the country should be controlled in order to achieve successful growth.

He said Turkey’s import volume last year was $240.8 billion, while its export volume was nearly $135 billion during the same period.

‘Buy domestic goods’

“We have examined the reasons behind why we import more than we export,” said the minister, noting that the rise of the country’s imports stemmed from rising energy costs.

Turkey conducted nearly $38 billion worth of energy imports in 2010 but increased this figure by $16 billion in 2011, Çağlayan said, emphasizing that the country’s energy costs would go up due to volatility in energy prices in international markets.

“Nearly $100 billion of imported goods have been produced already in Turkey,” said Çağlayan, adding that businesses located in Turkey should be encouraged to purchase Turkish goods.

 “Renault should not import sheet steel as there are also Turkish companies manufacturing this,” said Çağlayan, claiming that the Turkish automotive industry had only 44 percent of local production.
“Turkish Prime Minister Recep Tayyip Erdoğan’s calls for the manufacturing of a domestic automobile [amount to] more than giving a Turkish name to a car model,” said Çağlayan.

 “It’s an initiative to increase the high technology input of Turkish industry in the automotive sector,” he added, noting that Turkey imported nearly $10 billion worth of automotive parts last year.

“The savings ratio and capital accumulated are still low in Turkey,” said YASED Chairman İzzet Karaca, adding that the country’s current account deficit was not expected to fall below $65 billion until at least 2014.

“This is why the sustainability and localization of FDI play a crucial role in providing high quality and a secure way of financing the deficit in the long term,” said Karaca.