Turkish Forum

Tag: Zafer Caglayan

  • Turkey enters new level and creates Turkeywood

    Turkey enters new level and creates Turkeywood

    Earlier this year, the Ministry of Economy of Turkey announced the economic areas that would be provided with government support. They include such industries as education, medical tourism, film and science. Turkey’s Economy Ministry announced that one of the priorities would be creation of an equivalent of Hollywood and Bollywood. The name of the new production company would be Turkeywood.

    49241The government will provide financial support to studios producing Turkish films. In addition, the Turkish government promised to help those who represent the country’s film production at the international level. This initiative was discussed on numerous occasions, and in 2011 Economy Minister Zafer Caglayan met with representatives of the film industry of Turkey to speak about it.

    According to the world’s analysts, the Turkish economy has reached a new level. This is evident from the country’s position in the world, growing volume of foreign investment, and reduction of unemployment. The dynamic private sector that recently received government support in the form of low interest rates and tax incentives for private entrepreneurs is also worth mentioning.
    As noted by the current Minister of Economy Mehmet Simsek, a key element of the development of the Turkish economy is attracting foreign capital. According to him, last year, Turkey recorded the highest number of financial mergers that confirm financial inflows from abroad. The Minister believes it to be an indicator of a very effective year in terms of increasing amounts of foreign investment.

    According to specialists of Ernst & Young, an international auditing and consultancy firm, in the past year alone there were over 180 mergers and acquisitions of local companies in Turkey, and over 130 of international ones. The total value of these companies, according to the Minister of the Economy, is approximately $23 billion dollars, but, according to experts from Ernst & Young, this number may exceed $30 billion, as many business owners refuse to disclose the cost of transactions.

    For comparison, Mehmet Simsek cited data for 2009 and 2011. In 2009 the total value of transactions amounted to $3.9 billion, and in 2011 – $11 billion. The Minister argued that this sharp increase in foreign investment had a positive effect on the growth of the Turkish economy. Furthermore, many foreign investors are confident in the restoration of the Turkish economy after the financial crisis.

    As noted by a corporate financial manager of the Turkish unit of Ernst & Young, the most attractive sectors for foreign entrepreneurs are considered to be light industry and energy.

    One of the priority sectors that would be receiving government support, according to Minister Simsek, is medical tourism. Currently, some major countries are facing serious health challenges that would allow Turkey to provide substantial support to the economy through medical tourism.

    Opportunities in the provision of health services were discussed in January of this year at the exhibition Istanbul Health Expo. According to the head of the Istanbul Medical Tourism Association, today many foreign nationals, for example, people from Russia or the United States, are dissatisfied with the quality of medical services at home and looking for suitable clinics abroad. At the moment Turkey is not as popular in this respect as other countries, and the government should change the situation as soon as possible.

    In addition, it was stressed that Turkey should make an effort to announce the developments in the field of health care. Currently, this budget sector is estimated at $100 billion. This information was confirmed by a representative of an American medical consulting firm who noted that many U.S. citizens were dissatisfied with the quality of medical services and expertise of local doctors. Every year, over 1.5 million of U.S. citizens choose to be treated abroad and spend approximately $20 billion for services of foreign doctors each year.

    Despite the improvement in the economic situation in the country, many analysts do not have an overly optimistic outlook, considering that the situation is still far from acceptable. According to the Minister of Economy Mehmet Simsek, Turkey’s GDP in 2012 was not high. In addition, in 2012 the budget of the country incurred costs in the amount of 360 million Turkish Liras, while revenues to the Treasury amounted to only 331 million.

    However, analysts of the Ministry of the Economy noted that in the last months of 2012 there was a decline in inflation to five percent. According to the Minister of the Economy, this trend will continue in 2013. In addition, he noted that the government was making every effort to keep the inflation at that level.

    Certain proposed laws will make the lives of ordinary citizens more difficult. For example, in January of 2013 the Turkish government approved a new tax rate on real estate purchases. If previously the tax rate was one percent of the purchase price, now it may reach 18 percent. The new law was met with criticism, but the government indicated that it would come into effect.

    Analysts believe that the government is seriously engaged in supporting the economy. Only in 2013 over 1 million jobs will be created. As noted by Mehmet Simsek, the EU will create no more than 400,000 jobs this year.

    In addition to film and medicine, the Turkish authorities turned to research activities. Last year, the Global Competitiveness Report for 2011-2012 ranked Turkey 59th out of 142 countries. Interestingly, in terms of availability of engineering and scientific personnel the country is in 44th place, while in terms of quality and effectiveness of research institutions it was ranked 89th. This situation, according to the representatives of Turkey, deserves close attention of the government.

    According to local media, the country has already implemented the “National Strategy for the development of science, technology and innovation for 2011-2016”, which provides for support to research organizations. In addition, the government plans to provide substantial support to the education sector. Currently, scientists working in Turkish universities represent the majority of Turkish scientists, over 65 percent. But, despite this, the country is experiencing an acute shortage of specialists in the field of computer science and mathematics.

    Sergei Vasilenkov

    Pravda.Ru

  • Turkey economy minister slams EU sanctions on Iran

    Turkey economy minister slams EU sanctions on Iran

    Turkish Economy Minister Zafer Caglayan has slammed European Union’s (EU) pressures on Ankara to stop gold-for-gas trade with Iran, saying the EU’s demand would fall on “deaf ears.”

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    “The EU has decided on sanctions…. Another’s sanctions don’t concern me,” Caglayan said on Friday in Istanbul.

    According to the Turkish Weekly, Ankara imports 8-12 billion cubic meters of gas annually — around 20 percent of its total natural gas — from Iran.

    Caglayan emphasized that pressure on Turkey to stop trading with Iran would fall on deaf ears.

    On December 26, Turkish Energy Minister Taner Yildiz said his country will keep buying natural gas from Iran regardless of the Western sanctions against the Islamic Republic.

    Caglayan said on December 11 that Turkey’s total trade volume with Iran has hit around USD45 billion dollars so far this year.

    The United States, Israel and some of their allies accuse Iran of pursuing non-civilian objectives in its nuclear energy program with Washington and the European Union using this false claim to impose illegal unilateral sanctions against the Islamic Republic.

    Iran refutes the allegation and argues that as a signatory to the Non-Proliferation Treaty and a member of the International Atomic Energy Agency, it is entitled to develop nuclear technology for peaceful purposes.

    MYA/SS

    via PressTV – Turkey economy minister slams EU sanctions on Iran.

  • AFP: Turkey export growth ‘hits record in 2011’

    AFP: Turkey export growth ‘hits record in 2011’

    (AFP) – 22 hours ago

    531120111124024410440ANKARA — Turkey’s exports increased by a record 18.2 percent in 2011, reaching $134.6 billion, Economy Minister Zafer Caglayan said on Monday.

    “This is a record in the history of the republic,” the minister was quoted as saying by the Anatolia news agency.

    Turkish exports in December 2011 increased by 4.5 percent compared to the same month in 2010 and hit $12.1 billion, he added.

    Turkey, a country of about 73 million people and the world’s 17th-biggest economy, shows one of the highest growth rates in the world, but the government expects output to roughly halve next year because of the eurozone crisis.

    The economy grew by 8.9 percent in 2010 and the government forecasts growth of 8.0 percent for 2011.

    via AFP: Turkey export growth ‘hits record in 2011’.

  • Turkey breaks historic record as exports reach $134 billion

    Turkey breaks historic record as exports reach $134 billion

    Speaking at a conference hosted by the Ankara Chamber of Commerce in Ankara, Çağlayan said Turkey had reached the highest level of exports in its history as of Thursday. (Photo: AA)

    08 December 2011, Thursday / TODAY’S ZAMAN, ANKARA

    Turkey’s exports have reached $133.97 billion in the past 12 months, indicating that the country has now broken a new record with the highest level of exports in the history of the republic, Economy Minister Zafer Çağlayan said at a meeting in Ankara on Thursday.

    Turkey sold $114 billion worth of goods to overseas markets last year. It witnessed a record in export volume in 2008 with $132 billion, but saw the same figure plunge below $100 billion the following year due to the 2009 global financial crisis. Observers argued this year’s exports data could mean a new record and that the latest figures are proof of this. The country aims to reach $500 billion in exports by 2023, the centennial of the foundation of the republic.

    Speaking at a conference hosted by the Ankara Chamber of Commerce (ATO) in Ankara, Çağlayan said Turkey reached the highest level of exports in its history as of Thursday, adding that the country is poised to maintain this performance. “This is a success which many could not even dream of … but we are here to work harder, and even exceed these figures in exports,” he stressed.

    Underlining that the government has intensified efforts to diversify export markets, Çağlayan said the government will increase the number of trade offices abroad to 250, currently at 109. The minister also said these offices will work to help attract more foreign direct investment (FDI) to Turkey than in the past. “Our trade representatives in Europe tell us that investors, particularly from the UK, Italy and France, are interested in new investments in Turkey,” he explained.

    Making mention of improvements in attracting foreign investment in Turkey, the minister recalled that Turkey received $10.9 billion in FDI in the first nine months of this year, more than twice the amount for the same period a year ago. “One important fact was that 87 percent of international capital inflows to Turkey in the given period were from financially troubled EU countries. … Turkey maintained its appeal to European investors despite the ongoing crisis,” he said.

    Çağlayan cited political stability in the country as the driving factor behind Turkey’s economic success and growth. Regarding the EU crisis, he said the government expected EU leaders to reach a healthy solution at today’s summit in Brussels before the troubled eurozone could maintain a speedy recovery. As regards an International Monetary Fund (IMF) estimate of a 2.5 percent growth rate for the Turkish economy in 2012, the minister said the government believes the IMF will revise this figure following positive developments in the economy.

    With reference to ongoing political instability in Syria, Çağlayan called on the Syrian government to reconsider an earlier decision to suspend a free trade agreement with Turkey. “Syria is facing economic difficulties every month due to sanctions, particularly on oil,” Çağlayan said, adding that “it is not a wise move” for Syria to also place obstacles before Turkish trucks entering the country. “We are looking for new trade routes bypassing Damascus and negotiations are under way with Egypt, Lebanon and Iraq to this end. … We will launch a ro-ro service from the Port of Mersin to Beirut and Alexandria in a few days,” he added.

    via Turkey breaks historic record as exports reach $134 billion.

  • Querying Erdogan Zero Rates Plan Creates New Turkey Enemies List

    Querying Erdogan Zero Rates Plan Creates New Turkey Enemies List

    By Benjamin Harvey

    Nov. 16 (Bloomberg) — As Prime Minister Recep Tayyip Erdogan pursues his vision of an economy with real interest rates at zero, critics of Turkey’s monetary policies are increasingly being portrayed as enemies.

    Trade Minister Zafer Caglayan says analysts who find fault with the initiative belong to an “interest-rate lobby” that wants to force Turkey to raise rates to help create higher returns. Erdogan says interest rates should be close to zero after inflation. He said during a speech in May to the Islamic business association Tuskon in Istanbul that Turks should earn their money “through work, not interest.”

    The skeptics are seeking to “suck Turkey’s blood,” stop its growth and keep the country indebted to foreigners, Caglayan was quoted by state-run Anatolia news agency as saying in July. In a written response to questions on Nov. 3, Caglayan said the government’s view hasn’t changed. He declined further comment.

    “This is very typical Turkish politics,” Mert Yildiz, an emerging markets economist at Renaissance Capital, said in an interview in Istanbul. “You find an enemy that doesn’t exist, but then that enemy can become real.”

    Muharrem Karsli, chairman of TC Ziraat Bankasi AS, the country’s largest state-run bank, said Sept. 22 the lobby used its influence to keep Turkey’s credit ratings low, forcing the nation to pay higher yields to holders of its debt.

    Sabah newspaper, owned by Calik Holding, whose Chief Executive Officer Berat Albayrak is the prime minister’s son-in- law, has led the charge in the media, including a Sept. 27 piece that says Bloomberg News quotes analysts who question the government’s policies and publishes articles that mislead investors.

    Rate Cut

    Central bank governor Erdem Basci surprised investors in August by cutting the benchmark lending rate by 50 basis points to a record low of 5.75 percent. Analysts at Edinburgh-based Royal Bank of Scotland Group Plc and Societe Generale SA in Paris said the reduction, the third since December, risked stoking inflation and causing the current account deficit to widen from a record 10 percent of economic output.

    Basci may be acting under government influence, Yavuz Canevi, a former central bank governor and now chairman of BNP Paribas Turkish unit Turk Ekonomi Bankasi AS, said in an interview in Istanbul in August. Basci, 45, was deputy governor until Erdogan appointed him to head the central bank in April. He’s a school friend and former adviser to Deputy Prime Minister Ali Babacan.

    Growth Question

    Fitch Ratings said Sept. 30 the key question before an upgrade of Turkish debt was whether the country could achieve “sustainable growth without major economic imbalances such as high inflation.” Analysts at New York-based Goldman Sachs Group Inc. said Oct. 20 that either the currency or the interest rate “will have to give.”

    Erdogan, 57, told parliament in July that the central bank would “continue to decide on its monetary policy in an independent manner.” In a response to questions about the interest lobby, Basci said Oct. 10 that the relationship between the bank’s interest rate and the value of the currency “isn’t something we have to learn from foreign analysts.”

    The rate cut was justified in August because the European debt crisis and slowing regional growth should cause inflation to decelerate next year, Basci said.

    Inflation was 7.7 percent in October, exceeding all eight estimates in a Bloomberg survey, up from 6.2 percent in September and a four-decade low of 4 percent in March. The central bank said Nov. 4 that inflation would end the year at about 8.3 percent, exceeding its 5.5 percent target.

    Reserve Rules

    Rather than raise the benchmark rate, Basci has sought to control inflation by increasing bank reserve requirements to as much as 16 percent for the shortest-term deposits to limit lending and consumer demand.

    Basci also reached for alternatives to defend the lira when it tumbled to a record low against the dollar in August and the central bank spent about 10 percent of its $84.4 billion of foreign-exchange reserves in three months to buy the currency. He announced plans last month for dual lending rates to banks ranging from 5.75 percent to 12.5 percent, saying he may switch between them on a daily basis. The policy rate remains at 5.75 percent, he said.

    Basci said Oct. 26 his policies give him the flexibility that “no other bank in the world” has to strengthen the currency while retaining the option of cheaper money should Europe’s debt markets worsen.

    The dual-rates initiative represents a “distinct shift” by Basci that will lead to “much higher interest rates” in Turkey, Amer Bisat, a money manager at hedge fund Traxis Partners LP and a former senior economist at the International Monetary Fund, said in a Nov. 7 phone interview from New York.

    ‘Mixed Messages’

    The policy sends “mixed messages,” according to analyst Michael Harris and economist Turker Hamzaoglu at Bank of America Merrill Lynch in London. It has “confused” investors, according to Simon Quijano-Evans in London, head of emerging markets at ING Groep NV, and introduced “significant uncertainty and volatility,” said JPMorgan Chase & Co. analysts including David Aserkoff in London.

    JPMorgan and Morgan Stanley, both based in New York, cited Basci’s policy as a reason for downgrading their ratings of Turkish equities and banks over the past month.

    “We believe the central bank should have already raised rates,” said Melissa Ball, an economist at Lombard Street Research in London, adding that there isn’t an interest-rate lobby. “We are independent financial analysts trying to see the likely future of the Turkish economy.”

    Argentina Conflict

    Turkey isn’t the only country where economists are coming under fire for criticizing government policy. In Argentina, South America’s second-biggest economy, the government began fining economists as much as 500,000 pesos ($120,000) this year for saying consumer prices are climbing at more than twice the official annual rate of 9.9 percent. The country’s interior minister said economic consultants stand to profit by reporting annual inflation they estimate to be 24 percent, the highest in the world among major economies after Venezuela.

    While some analysts are critical of central bank policies in Turkey, the country’s credit-default swaps trade at 259.5 basis points, less expensive than 12 of the world’s 52 investment grade-rated countries. Turkey’s foreign-currency debt is ranked two levels below investment grade by Standard & Poor’s and Moody’s Investors Service.

    Turkish bond yields have gained 340 basis points this year to 10.51 percent, including a 90 basis-point increase since the adjustable rates policy was announced, according to an index of securities published by Turk Ekonomi Bankasi. The rate is the highest among emerging markets globally, data compiled by Bloomberg show. The lira has declined 14 percent against the dollar this year, the biggest slump in emerging markets after the South African rand.

    SocGen to JPMorgan

    The central bank will eventually raise rates to slow Turkey’s economy and protect the currency, Benoit Anne, chief emerging markets strategist at Societe Generale, said in an e- mail. Delaying a switch to an interest-based defense risks a “rapid and painful correction,” he said.

    JPMorgan economist Yarkin Cebeci and Morgan Stanley economist Tevfik Aksoy, who have supported Turkey’s rates policy even as their banks downgraded Turkish stocks, declined to provide comment on the government’s claims of an alleged interest-rate lobby.

    To accuse analysts of pushing Turkey to raise rates against the country’s interests is “a pretty ludicrous suggestion,” said Tim Ash, chief economist for emerging markets at Royal Bank of Scotland in London. The allegations are “probably a case of domestic party politics,” he said. “I think Turks and Turkish policy makers have valued people giving honest opinions, and I’d hope this is still the case.”

    –With assistance from Bill Faries in Buenos Aries, Selcuk Gokoluk in Istanbul, and Steve Bryant and Ali Berat Meric in Ankara. Editors: Mark Bentley, Gavin Serkin

    To contact the reporter on this story: Benjamin Harvey in Istanbul at bharvey11@bloomberg.net

    To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

  • Has Turkey Distanced Itself From Syria?

    Has Turkey Distanced Itself From Syria?

    Michael Rubin | @mrubin1971 10.13.2011 – 12:35 PM

    Early on in Turkish Prime Minister Recep Tayyip Erdoğan’s premiership, he bent over backwards not only to repair Turkey’s traditionally dicey relations with Syria, but also to promote Syrian dictator Bashar al-Assad. Erdoğan, for example, invited Bashar to vacation in Turkey as Erdoğan’s personal guest, and when tensions rose between Syria and Lebanon during Lebanon’s Cedar Revolution, Erdoğan put Turkey more in Syria’s camp than in Lebanon’s.

    Things appeared to turn, however, as Bashar al-Assad’s crackdown on demonstrators accelerated and grew steadily bloodier. Erdoğan on several occasions gave Syria ultimatums to stop and reform or face a cut-off of Turkey’s ties. Too often in Western capitals, Turkey seeks benefit from such rhetoric no matter what the reality of its policy. There was the case, for example, of the forcible return allegedly by Turkey of a Syrian opposition defector to Syria. Now, despite the crackdown and Turkish ultimatums, a Turkish minister is assuring the public that trade with Bashar al-Assad’s regime in Syria is actually increasing. According to a Turkish wire service:

    Turkish Economy Minister Zafer Çağlayan has said Turkey’s trade with Syria continues to increase. Commenting on Syria’s decision to ban import of products that have more than a 5 percent customs duty, Çağlayan said yesterday that Syria has lifted the ban, and thus, Turkey’s exports to Syria maintained the same level with last year. “We have a serious amount of products shipping to the Arabian Peninsula via Syria,” he said.

    One of the reasons why it is so important the United States stands up for principle is so few other countries are willing to do so.

    via Has Turkey Distanced Itself From Syria? « Commentary Magazine.