Prime minister Recep Tayyip Erdoğan said on Friday that credit agencies such as Standard & Poor's (S&P) make their ratings decisions based on rumors and called on economists to question the credibility of these agencies.
Speaking to participants at the seventh meeting of the Investment Advisory Council for Turkey (YDK) at the Prime Ministry's Dolmabahçe office in İstanbul, Erdoğan went on to criticize S&P for its decision to change its outlook on Turkey from positive to stable, saying the credit rating agency did not even visit Turkey prior to making the revision. “Credit rating agencies are either not visiting Turkey or issuing their ratings based on rumors. We'll continue on our way, without paying any attention to these unfair rating decisions,” Erdoğan said.
Erdoğan stated that Turkey is an economically strong and fast-growing country and that there must be other reasons behind S&P's rating revision. Noting that Turkey attracted $119.5 billion in foreign investment between 2006 and 2008, he said, “Turkey has even outpaced the historic figures between 2006 and 2008. Employment has increased by 3.5 million people in the last two years. We will continue on our way with controlled economic management."
Recalling that experts have also criticized S&P for its decision, Erdoğan called on economists to seriously discuss the motives of the rating agencies and question their credibility. He said, “Do not blame me for criticizing because as we have been working hard towards achieving our goals, facing such a downgrade is not acceptable and we won't tolerate such a move. It is natural for us to look for the decision's ulterior motives,” adding, “The S&P rating will certainly result in a change of our approach toward the agency.”
Erdoğan stressed that the government will continue to work hard to make progress by disregarding the smear campaign against Turkey and carry on building the country to make it one of the top 10 economies of world by 2023. “We have been actively working to better the investment environment in Turkey by making reforms and holding investment advisory councils which have been greatly contributing to our progress. Our government takes the suggestions of these meetings very seriously and works hard toward their implementation.”
Erdoğan also said some of the companies there are present at the meeting have already moved their regional offices to İstanbul, and stressed that İstanbul has become a center where many important international firms conduct operations. He stated, “We will continue our efforts to make İstanbul an international financial center and a regional oversight center.”
Speaking to Today's Zaman, President and CEO of General Electric Healthcare John Dineen said that the decision of the ratings agency is not concerning for his company, explaining, “Our interest in Turkey is driven by local demand and as long as the government continues to support health care and energy fields, our interest will remain.” Noting that Turkey's health care sector has been growing more than any other country in the world and accessibility to health care is world class, he stated, “The presence of great doctors, good public and private hospitals as well as increase in specialty hospitals demonstrate [Turkey's] potential; however, there are needs for high-technology products and we are looking to serve those needs as well as creating local manufacturing opportunities. In addition, policies implemented by the government have contributed majorly to this progress.” He also commented, “Investments in health care and energy fields up to this date have been successful and we have actively been in dialogue with the government. GE's future investments include the health care sector and locomotive production for the transportation sector.”
At the YDK meeting International Monetary Fund (IMF) head Christine Lagarde and World Bank head Sri Mulyani Indrawati were present. It was Lagarde's first visit to Turkey since her appointment. Also present at the meeting were Coca-Cola Company CEO Muhtar Kent, CEO of Vodafone Group PLC Vittorio Colao, the Turkish Union of Chambers and Commodity Exchanges (TOBB) President Rifat Hisarcıklıoğlu, Turkish Industrialists and Businessmen's Association (TÜSİAD) President Ümit Boyner and Turkish Exporters Union (TİM) President Mehmet Büyükekşi.
Economy Minister Zafer Çağlayan informed the press after the meeting that 19 people had given speeches on their views of the general economic issues as well as the investment environment in Turkey, highlighting possible opportunities in the country. “In the second session, agreements were made for a joint declaration to be announced at a later time.”
Çağlayan stated that many companies had expressed plans to invest in Turkey, and some had announced that they will transfer their logistical operations to Turkey. He said: “With the contribution of an incentives package, Turkey is expected to attract more investments than it has before, especially in the chemicals sector. Additionally, textile giants like Zara and Mango will make major investments in southeastern Turkey, particularly in the province of Muş. In the next 15 days, we will share the details of these upcoming investments.”