By Dr. M. Mustafa Goksu.
TURKEY at the intersection of four continents, namely Europe, Asia, Africa and the Middle East had been a center of attraction for long. The rising interest is Turkey is not only about its geographic location but also about its 79 million educated population — many of whom live in major cities of Turkey: Istanbul, Ankara, Izmir, Busra and Adana — are among the main drivers of the investment, tax, tourism and other macro-variables.
Among the Emerging Markets Turkey’s presence is felt with annual growth rate of 4 percent over the last decade. Having the largest youth population compared to the EU countries, Turkey is the 7th largest economy in the world and the 6th when compared to EU countries in 2015 (IMF-GDP at PPP).
Being the 9th largest crude steel producer in the world and 2nd compared to the EU countries and the largest commercial vehicle and bus producer as compared to EU countries makes Turkey an industrial production hub . The rising power of Turkey would not be completed without it being the 6th most visited holiday destination in the world in 2015 and the Turkish Airlines being the best airlines in Europe.
FDI Inflow in Turkey
Turkey has an economy driven by the entrepreneurial spirit of private sector, robust domestic market and lucrative export opportunities. Between 1980-2002 Turkey had $15 billion FDI inflow only. After 2002, the government took a decision regarding budget, monetary and fiscal policies. As a result of that Turkey had $165 billion FDI between 2003-2015. Soaring FDIs show itself in the number of companies with the foreign capital coming to Turkey .
The strategic location of Turkey allows it to access multiple market including Europe, Russia, MENA region and the Central Asia & Caucasus where 1.6 billion people, $23.5 trillion GDP and $7.1 trillion trade volume are available.
All above-mentioned priorities of Turkey allow it to be the 16th manufacturing hub in the world and will attain 2nd spot in Europe over the next 5 years. The structural reforms throughout last decade, in every manner but more importantly on FDI laws and other related legislations, makes Turkey a good hub for any multinational companies that desires to be available in global market. Turkey is not only a transportation hub for international flights but also is an energy corridor and terminal too.
Turkey and Saudi Arabia are similar in that Turkey has Vision 2023 that is mainly to increase the GDP per capita by 2.3 times of 2013 while Saudi Arabia has Vision 2030 with a National Transformation Plan.
Both countries are working together in every level to reach their targets for the betterment of their societies. The value of the projects undertaken by Turkish contractors reached $17 billion by the end of 2015. However, the huge potential to improve bilateral trade and investment is available to deepen the special economic relationship between the two countries.
Although all the aspects are there that encourage development in Turkey, the world particularly the Middle East, is in political turmoil. KSA and Turkey, with increased mutual relations in every manner, deserves to be more connected during such times with complicated conditions. It is clear that Saudi investors are trying to make this happen by investing in Turkey more. Currently there are 744 companies in Turkey with Saudi Arabian capital. Although there is a perception that real estate activities are the main drivers of Saudi investors in Turkey, it is not. The real estate investment is only 20 percent of operating companies in Turkey with Saudi capital.
Turkey is a very close country to Saudi Arabia. There are several flights of many airlines to and from KSA. Lucrative business can be achieved once there are more connections between these two countries. It is high time that relationship is developed more and more.
