Business and investment opportunities in Turkey

Classified as the 20th biggest economy in the world by the World Bank in terms of income, with a population of 72 million and a geographic location that provides access to a market of almost 1 billion consumers, Turkey has many advantages thanks to a solid industrial base and prospects for growth in many fields. Its geographic location makes it a country of transit and an export platform for international trade in oil and gas, making the country an “energy hub”. Thanks to the many plans for construction of oil and gas pipelines with neighbouring countries, Turkey could become the fourth largest source of energy in Europe, after Norway, Russia and Afghanistan.

Several sectors have been liberalised (transport, electricity, telecommunications), independent regulation authorities have been created, and these reforms have helped the in-depth economic modernisation process. Banking and financial reform is under way, with restructuring of the main establishments (788 subsidiaries of public banks were closed), recapitalisation of the two largest public banks and some private banks, and adoption of international prudential standards. Although State intervention has been reduced considerably since 1985, public companies still control five percent of the non-agricultural sector.

Turkey is committed to its privatisation plan for the public sector, but privatisation efforts proceeded slowly, mainly due to the multiple economic crises and adverse international conditions. Between 1986 and October 2003, revenue from privatisation came to about $11.2 billion, including $1.3 billion from foreign investors. The breakthrough in privatisation finally came in 2005, when implementation generated $8.2 billion. With hydroelectric power plant deals and the sale of companies managed by SDIF (the Savings Deposit Insurance Fund), the government raised $29.8 billion from the sale of state assets in 2005. Foreign investors showed their interest in the Turkish market by participating in key privatisations such as the Tüpras oil refinery and the Erdemir iron and steelworks. The Saudi group Oger Telecom acquired 55 percent of Türk Telekom with a $6.5 billion bid, one of the largest deals in 2005. Another important deal was the Galataport tender and Iskenderun port tender secured by the PSA-Akfen consortium with an $80 million bid. The same consortium was also awarded the tender to manage the port of Mersin, Turkey’s largest, with a bid of $755 million. A public offering of 34.5 per cent of Petkim shares was completed in mid-April 2005, raising $288 million.

The list of privatisations is available on the privatisation administration’s website.

One of the Turkish economy’s strengths is its dynamic small businesses and SMEs, which have the ability to adapt quickly, particularly in agricultural and textiles/clothing. Turkey is the fourth largest supplier of clothing and tenth largest supplier of textiles in the world, the second largest supplier of clothing and fifth largest supplier of textiles to the EU. Despite local investment capacity, more materials and equipment will be required to boost output and profits in order to be ever more competitive in world trade and to meet the challenge of adhesion to the European Union. Furthermore, the country’s economic growth is creating new downstream investment opportunities for primary activities, for example in agrofood industries and agriculture.

This section's articles

	2.1. Investing in Turkey 14 March 2007. Turkish authorities recently took measures to improve the investment climate, under a new legal framework governed by law n° 4875 of June 2003 replacing law n° 6224 of 1995 on foreign investment. This legislation dictates that foreign investors be (...) more >>
	2.10. Electronics and information technology 14 March 2007. 2005 posted a record high level of foreign investment in telecommunications, with three major deals worth $14.4 billion. Several private firms have obtained licenses for the introduction of new telecommunication services and over 40 Turkish (...) more >>
	2.11. Energy market 14 March 2007. Turkish hydrocarbon production is low and the country’s proven reserves limited. There is a major deficit in the balance of energy for hydrocarbons, with a dependency rate of 91.6 percent for oil and 98 percent for natural gas. Energy consumption (...) more >>
	2.12. Water and Environment 14 March 2007. Turkey is currently undergoing high demographic growth (1.6 percent per annum) in the wake of vigorous urbanisation, 68 percent of the population living in urban environments vs. 22.5 percent in 1955. More people and greater industrial (...) more >>
	2.13. Transport 14 March 2007. Turkey is a rapidly developing country and its transport sector has grown significantly over the past few decades. Turkey is currently implementing several large-scale infrastructure projects: urban transport, interurban transit systems, (...) more >>

1 | 2 | 3