Turkey seeks investment from GCC states in four key sectors

BY LUCIA DORE (Assistant Editor, Business)

24 February 2008

DUBAI — Turkey is seeking increasing investment from the Gulf States in four key sectors — energy, infrastructure, tourism and real estate — Turkey's Minister of Economy, Mehmet Simsek, said in Dubai on Thursday.

He was on a three-country tour of the region, including Qatar and Kuwait, to convince GCC countries to "invest their surplus savings" in Turkey and advocated it as a good place for investors "to diversify their assets". He said here was a "lot of synergy between Turkey and the UAE, Qatar, Oman and Saudi Arabia".

Simsek said that the key message he wanted to convey to public and private investors in the region is that Turkey has "significant potential" and needs stakeholders to take a stake in its fast growing economy. "We want to tell investors the outlook for Turkey and the opportunities," he said, adding: "We are convinced that Turkey can sustain 6 to 7 per cent GDP growth on an annual basis over the next few years."

The fact that Turkey has the sixth largest economy in Europe, strong GDP growth (which averaged 7.4 per cent between 2002 and 2006), high and rising productivity, a stable economy and an effective structural reform process means that investors will get a good return on their investments, he said. "We offer good return on equity," he added.

Moreover, the annual inflation rate —- although still too high, admitted Simsek — had also fallen to 8 per cent in January this year. But if one-off shocks, such as those pertaining to energy and food, are taken into account, the current real rate of inflation is 3.1 per cent, he said. Turkey's target rate of inflation is 4 per cent and Simsek said he was optimistic of achieving that. He also said that Turkey aimed to achieve $10,000 per capita GDP income by 2012, from $7,300 in 2007. However, he added: "We must continue to deliver on structural reforms to ensure economic growth."

Simsek also said he was confident "about moving forward" on a free trade agreement (FTA) without giving any specific timelines. "I will give no date for an FTA but it will happen over the next few years," he said.

And on Turkey's quest for membership of the European Union he said he was "very confident" that Turkey would join Europe. "Europe needs Turkey and Turkey needs Europe," he said, adding: "That it was a win-situation for everyone. Turkey can also use the process to put our house in order."

Simsek's visit comes one week after Turkey's Trade Minister, Kemal Unakitan, visited the UAE. At this time both countries emphasised their commitment to boost economic ties between the two countries and forge a strategic partnership.

The volume of trade between the UAE and Turkey grew by 400 per cent in the past five years, according to figures available at the end of 2007. Turkey now accounts for two per cent of the UAE's total foreign trade, which includes trade through free zones. In the past two years, the volume of mutual investment has touched $2.5 billion.