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Gov’t to turn crisis woes into opportunity with incentives
The government is currently working on a plan to invite some of the world's largest firms to invest in the country in anticipation of compensating for any possible loss due to ongoing volatilities in global markets. Accordingly, the government also contemplates improving investment conditions in the country along with a series of new incentives for investors. The first step is expected to be extending incentives that had earlier been given but will expire by the end of the year.
Global markets have been extremely volatile amid rumors about the health of European banks, mounting questions about the stability of money markets and growing fears that the US economy may tip back into recession or a prolonged period of tepid growth. Turkey's economy and financial markets are unlikely to suffer a long-term impact from developments rocking global markets because of its strong political stability and healthy macroeconomic base, the government has long been saying. The country's economy, however, will not remain completely unscathed and will sustain certain losses since it is integrated with the rest of the world's markets, pundits argue.
A senior government official, who spoke on condition of anonymity, told Today's Zaman on Friday that most companies, particularly in the EU, face problems in making new investments at home, and that the government has mulled over asking these people to start investing under relatively more favorable conditions in Turkey instead. The official said the government worked on projects for all regions by dividing each of them into smaller areas and focusing on a different sector in each area to determine what incentives should be provided. The government in 2009 preferred to offer a series of incentives to reinvigorate domestic demand and boost investment instead of acquiescing to the requests of the International Monetary Fund (IMF), which asked Turkey to introduce more taxes and reduce public investment. Turkey was among the few countries to bounce back strongly from the 2009 global financial turbulence to maintain sustainable growth in its economy.
Economy Minister Zafer Çağlayan, who is in the South Korean capital for bilateral talks, was the first from the government to articulate the anticipated plan publicly. Speaking to reporters during a meeting with Korean business representatives in Seoul on Friday, the minister said the government expected to frame an incentive package for new investments in the country. He said the new plan would particularly focus on automotive and high-tech investments, adding that tax exemptions are among the anticipated incentives.
Underlining that Turkey is expected to see $120 billion in energy investments within the coming 10 years, Çağlayan said the country also boasted serious potential for new investments in infrastructure, food and agriculture.
Çağlayan said Turkey was an important bridge and an important energy corridor and logistics center between Asian and EU markets, adding that the country offered numerous business opportunities. Making mention of the latest developments, he said: "No country was prepared for such a crisis. … Turkey has a dynamic market. I invite you to make more investments in Turkey." In the Korean audience Çağlayan addressed were executives from Samsung, Hyundai, Korea Electric Power, GS Engineering, Posco Engineering and K Engineering.
“We have no concerns about experiencing serious problems in the Turkish economy. … We will stick to a strict budgetary discipline,” he said. Çağlayan added that they expect the share of total debts to fall below 40 percent of the national income, also adding that the economy will secure a growth rate of 7 percent this year over 2010.
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