Babacan released data on the incentive program at a press conference on Monday in Ankara. The minister revealed that applications for new projects had amounted to 1,532 between July 2009 and December 2009 and that the anticipated cost of these projects was TL 22.5 billion. Babacan said the government was “greatly encouraged” about further recuperation in the country’s economy following an investment stimulus program, launched in the second half of 2009, as a result of a period when world markets were suffering from heavy stagnation in business. “We are glad to see that both local and foreign entrepreneurs have not refrained from embarking on new investments in Turkey in such an atmosphere.” The applicant businesspeople will have to put their investments into action before the end of 2010 so as to be able to benefit from the incentive program, the major target of which is to increase the competitiveness of various sectors, minimize differences in regional development and encourage large investments.
Babacan stated that some TL 12.7 billion of investments would be undertaken by local investors, while foreign entrepreneurs had applied to start new projects worth TL 9.8 billion. The minister asserted that the government appreciated foreign companies’ determination to start and continue investments in Turkey. Babacan mentioned that the incentive program was different from the previous one in that it introduced incentives for every province. “We did not exclude any province,” he said. New incentives, such as a reduction in income and corporate tax and an exemption from social security premium payments for a specified period of time, were also included in the program implemented in July, he recalled.
Private sector sees loss in investments
Mentioning current developments in global markets, the minister said uncertainty lingered, particularly in the eurozone and that the government monitored these developments closely so as to take the necessary measures in the economy. Babacan said the private sector suffered the most in regards to new investments during the global financial crisis. “Having been adversely affected by the contraction in the markets, private sector investments in Turkey plunged by 27.7 percent in the first nine months of 2009 over the same period a year before,” he noted.
The minister added, however, that private industry investments started to pick up in the final quarter of 2009 and that the government expects this positive position to be maintained in the months to come. The minister said some other additional indices suggested that the market would see an increase in new investments. This increase will create a domino effect to eventually trigger a recovery in employment and the entire economy as well. Steady growth in the economy depends on a continuous increase in new investments,” he opined.
Plan to boost capacity utilization
Babacan said the government expects, with the anticipated investments, that Turkey will enjoy a noticeable increase in capacity utilization in its manufacturing sector. Some part of the TL 18.4 billion of new investments will contribute to increasing the capacity utilized in manufacturing, while the remaining TL 4.1 billion will be an incentive for modernization projects.
The government in the program divided regions into four categories based on investment opportunities along with their current level of economic development. The first category, mainly including western provinces, is the most developed, while the fourth category covers the least developed regions, particularly in the eastern and southeastern parts of the country.
Five-hundred eleven investment projects will be put into operation in the first category, while the second, third and fourth categories have 264, 467 and 281 projects, respectively. In regards to the size of investments, the first category gets 45 percent of the money, while the third category’s share is 26 percent. Some 20 percent of the money will be spent for investments in the second category and 10 percent for the fourth category. Babacan recalled that investors in relatively less-developed regions will be able to make use of such incentives for an extended reduction in taxes.
When looking at the new investments’ share among sectors, the highest amount goes to manufacturing with TL 10.3 billion, while investments in energy follow with TL 7.1 billion. The service sector comes in third with TL 4.5 billion, followed by mining with TL 600 million. Babacan said among the large-scale projects, the automotive industry had the biggest share, while port management, machinery manufacturing and pharmaceuticals followed.
Meanwhile, mentioning an anticipated stand-by deal between Turkey and the International Monetary Fund (IMF), the minister said talks were still underway to this end. Asked about a recent report that said the IMF deal would be finalized in May, the minister said people should not count on such news. The future of the anticipated deal still remains uncertain following recent declarations by some government officials.
Benzer Haberler 
National
