Ladies and Gentlemen,
Namaste! (Merhaba)
I would first like to thank you for giving me this opportunity to join you here at this wonderful gathering. It gives me great pleasure to address today such a distinguished audience. I am delighted to be in your beautiful country.
Turkey and India are proud inheritors of two old civilizations. The initial contacts between our peoples date back to ancient times. The first sentence of the “Treaty of Friendship between Turkey and India” which was signed in 1951 reads; “recognizing the ancient ties of friendship which have happily existed between the two countries”.
This historical legacy, as well as the principles of secular democracy, the rule of law and pluralism form the firm foundations of our partnership.
I hope that my visit will further strengthen our determination to fully exploit the vast potential that is available to us.
I sincerely believe that members of the business community of our countries need to play a more active role to further our economic relations and to expand our trade volume.
In other words, all members of business community have a vital contribution to bring to our bilateral relationship.
Ladies and Gentlemen,
I have served for almost five consecutive years as the Minister of State in charge of the economy under the past two Governments established by the ruling Justice and Development Party.
This meeting is an invaluable opportunity for me to acquaint you further with the achievements in the Turkish economy over the last five years.
The economic growth is also impressive in India. It is no wonder global businesses and investment companies are trying to get into such a dynamic market.
I am pleased to say that, like India, Turkey has also enjoyed a remarkable economic track record since 2001. Sound fiscal and monetary policies created a stable macro economic environment, which in turn has facilitated economic growth, stronger balance sheets and surging foreign direct investment (FDI).
Since 2001, we have embarked upon a profound structural reform in the economy. Disciplined fiscal and monetary policies were the backbone of this transformation process. Our primary objectives were to restore the macro-economic balances and to achieve a sustainable export –led growth.
So far, we have reduced the inflation and the real interest rates, improved public finances, achieved a stable business environment, and most important, secured a remarkable economic growth rate of 7 % in average over the last 7 years. This adds up to 47.5 % on cumulative basis.
Ladies and Gentlemen,
The legal framework for the expansion of our economic and commercial relations has almost been completed. Hence, there is a wider scope of cooperation between our private sectors. The continuously growing and outward-looking Turkish and Indian economies present significant business opportunities for the business communities of the two countries.
Let us take a closer look at what Turkey offers for future cooperation with India.
Today, Turkey is the 17th largest economy in the world with a GNP of 410 billion dollars in 2006. The GNP reached almost 500 billion dollars by the end of 2007. In 2007, our exports surpassed 100 billion dollars with an increase of around 20 % in comparison to 2006. We are proud of our flagship industries, namely textiles, automotive, electronics, foodstuff, construction and mining. We target 125 billion dollars of export in 2008. Furthermore, we are committed to expanding the benefits of economic development to all segments of the society.
It is also important to call your attention to the fact that the private sector has been the engine of growth during this period.
At the same time FDI inflows into Turkey have reached record levels over the last five years. With 20 billion dollars FDI inflow in 2006, Turkey has found its place among the 7 OECD countries which attracted the highest amount of direct investments in the last decade. It is important to note here that we received the same amount of FDI in 2007.
FDI into Turkey is expected to increase over the next years since global interest in the Turkish economy is increasing.
This is mainly because of structural reforms that produced the current economic environment and a comprehensive and radical privatization program that allows foreign investors to have an access to lucrative sectors such as telecommunication, transportation, energy, mining and industry in Turkey.
The new “Foreign Investment Law” grants equal rights to foreign investors with Turkish firms and nationals. It abolishes requirements on the minimum level of capital and other prohibitions on the purchase of real estate by foreign firms and nationals in Turkey.
In addition, we have 20 free trade zones in Turkey. The Turkish legal system has been revised in a way to allow foreign companies to operate in those zones and make export-oriented investments. Entrepreneurs are exempted from all forms of taxes, and allowed to carry out international transfers without prior permission from the Turkish authorities.
Today, with all those reforms put into practice, our economy is more resilient facing domestic and international fluctuations. Despite the present difficulties in the international markets, Turkey is poised to move towards a new period of growth and prosperity. Our target is to make Turkey world’s 11th largest economy by the year 2023.
In fact, Turkey offers a lucrative investment environment with its geographical location, a rising productivity level, developed transport network and industrial infrastructure, young and skilled human resources, investment incentives and low tax burden.
Turkey’s strategic location to third markets like Europe, Central Asia, Middle East and North Africa is crucial. Turkey stands alone as an ideal hub of global business and investments.
The yearly turnover of the İstanbul Stock Exchange reached 223 billion dollars this year. Seventy percent of this volume has been produced by foreign funds.
Total assets of the Turkish banks reached 347 billion dollars in 2006. Scores of foreign banks are partners or sole owners of banks and financial intermediaries in Turkey.
The current population of Turkey is 71 million, and still % 66 of the population is below the age of 35. It is expected to be 98 million by 2040 which will make Turkey the most populous country in Europe with a dynamic and well-educated society.
All these impressive figures add up to one conclusion: growing confidence in the Turkish economy and greater prosperity for the Turkish people.
Dear Guests,
In 2008, Turkey will continue proceeding with the privatization program with a particular emphasis on the energy and transportation sectors. There are some big ticket deals on the agenda of the Turkish Privatization Authority. Operation of motorways, production and distribution of electricity will soon be handed over to the private sector.
With a rapid growth in the size of our economy, we need to invest more in the energy sector. The Government has a sound energy policy aiming at improving Turkey’s energy supply and distribution infrastructure. Turkey’s energy investment portfolio is worth 125 billion dollars for the next 15 years. In that respect, we encourage foreign investors to invest in the energy sector of Turkey, which also functions as a hub for the global energy supply.
Taking into consideration Turkey’s unique geographical location whereby three fourths of the proven oil and gas reserves of the world lie in its neighborhood, it should come as no surprise to see Turkey emerging with an important role in energy diplomacy. Turkey arises as an energy corridor and terminal particularly with respect to the potential of the Caspian, Central Asian and Middle Eastern regions.
For over a decade Turkey has been promoting the East-West and more recently the North-South Energy Corridors. In the framework of the East-West Energy Corridor, Turkey has successfully completed two major projects which are also of significant importance for European and world markets. The Baku-Tbilisi-Ceyhan (BTC) Main Export Oil Pipeline is the crucial element of the said corridor. The BTC pipeline is in operation since May 2006. About 285 million barrels of oil have been transported and loaded on 358 tankers by the end of January.
The Baku-Tbilisi-Erzurum (BTE) natural gas pipeline, which constitutes the second element of the East-West Energy Corridor, became operational as of 3 July 2007. We consider the BTE as the first leg of the Trans-Caspian natural gas pipeline. In other words, eastern originated gas, such as Turkmen, Kazakh and Uzbek natural gas, is essential to complete the East-West Energy Corridor.
We have also been working on the interconnection of the Turkish and European natural gas grids. In this respect, the Turkey-Greece Interconnector became operational as of 18 November 2007. Studies are also underway for the realization of the Nabucco project which envisages the transportation of natural gas via Turkey through Bulgaria, Romania and Hungary to Austria.
Taking into account the capacities of the BTC, the Iraqi-Turkish Oil Pipeline and the Samsun-Ceyhan by-pass pipeline which is under development, as well as the oil transported through the Turkish Straits, it is expected that 6 to 7 per cent of global oil supply will transit Turkey in the near future. Moreover, following the construction of an oil refinery and an LNG terminal, Ceyhan shall become the largest oil outlet in the Eastern Mediterranean. In this framework, we would appreciate very much India’s interest to be a shareholder in one of the refineries to be built in Ceyhan, to turn into reality. Furthermore, we hope that the participation of the “Indian Oil Corporation Ltd” in the Samsun-Ceyhan by-pass oil pipeline may set an example for new joint ventures in the field of energy.
Facing an ever-increasing energy demand and challenges related to climate change, nuclear energy has once more moved up on the agenda of several countries. In this context, Turkey also has decided to embark upon a nuclear energy program. We consider nuclear energy to be one of the main components of our strategy in addressing the rise in energy demand and reducing dependency on imported fossil fuels. The Law on Construction and Operation of Nuclear Power Plants and Energy Sale (no. 5710) has been adopted by the Turkish Grand National Assembly on 21 November 2007. The potential investors are expected to show their interest in the coming weeks to be able to be invited to participate in the tenders which will soon be announced. The investors interested in constructing and operating nuclear plants in Turkey will have to meet the 9 criteria set by the Turkish Atomic Energy Authority that you may find on their website. We believe that there is room for our countries and companies to cooperate in the nuclear field.
Moreover, we believe that there is a big potential for Turkish-Indian bilateral energy cooperation in third countries, with the Caspian, Central Asian Middle Eastern and African regions being the high priority areas.
Ladies and Gentlemen,
Turkey’s Customs Union with the EU since 1996 provides another opportunity for furthering its economic relations with India by providing Indian companies access to European markets without being subjected to customs duties and other barriers to trade. Several Indian companies are already utilizing this advantage by investing in Turkey.
As a result of existing mutual political will between our governments to elevate our ties, our people to people contacts in trade and business have also reached new heights.
We have observed a significant increase in our trade volume and private sector ties for the last five years. The trade volume has almost tripled between 2003 and 2007 from 795 million USD to 2.6 billion USD.
Although there are prospects for giving greater content to our economic and trade relations, the trade deficit continues to increase in favor of India.
In order to balance our trade and place our economic relations on a fair ground, we are planning to implement a new “Trade Development Strategy” towards India in 2008.
Beyond these efforts, which both countries are committed to pursue, we need to look at other opportunities for stronger commercial links. We expect that the signing of a Turkish-Indian free trade agreement will help push our bilateral trade relationship to new heights.
My cabinet colleague Minister Tüzmen, who is responsible for foreign trade, will pay an official visit to India next month to meet Indian business circles and some of his colleagues in the Indian Government. His visit aims at enhancing economic and trade relations between our countries.
Minister Tüzmen will be accompanied by the representatives of prominent trade and construction companies of Turkey. We deem this upcoming visit as a political incentive and opportunity for business circles of both countries.
Distinguished guests,
We want to deepen the Turkish-Indian partnership between business circles of our countries through regular dialogue and engagement. Our aim is to generate awareness of market opportunities in both countries and to maintain regular information flow on areas where economic and trade cooperation between Turkey and India can progress further.
I believe that we need to work together more effectively in the sectors of: energy, construction, iron and steel, tourism, agriculture and food processing, information technologies including computer hardware and software, electronics, pharmaceuticals, automotive, minerals and mining, gems and jewellery.
We have reputable and experienced companies in every aspect of construction, architecture and engineering.
Partnership with Turkish companies for infrastructure projects in India and also in third countries can be mutually beneficial. Turkish and Indian construction and contracting companies should join their efforts to increase their market shares in the Middle East, Africa, South Asia, Russia and the other CIS countries.
Science and technology is another focus. In 2002, Turkey and India signed an Implementation Program on Science and Technology Cooperation. This agreement provides a solid ground to engage our experts from the academic, government and private sectors in a wide range of areas of research. We encourage researchers from both countries to work together to develop and commercialize tomorrow’s technological breakthroughs.
Following my address, we will witness the signing ceremony of the Protocol for the establishment of the “Turkish-Indian Platform” (TIP). On behalf of my Government, I would like to congratulate the Union of Chambers and Commodity Exchanges of Turkey and the Federation of Indian Chamber of Commerce and Industry for this initiative. We strongly believe that the Platform will contribute significantly to the promotion of our bilateral trade and investment through creating a common working ground in specified sectors.
Distinguished guests,
As part of our global strategy to build new networks and to move forward with a focused, results-oriented strategy, in 2006 a new agency, Investment Support and Promotion Agency of Turkey (ISPAT) was created, reporting directly to the Prime Minister, with representatives in 11 countries.
India occupies pride of place in Turkey’s endeavors to seek overseas investments. Our investment agency’s representative in India is Mr. Ravi Chaudhry and he is with us today. Mr. Chaudhry and his colleagues in Turkey shall ensure that each Indian company receives expert advice before, during and after their entry to Turkey.
Ladies and Gentlemen,
We will continue to work with the Indian Government to set achievable and realistic goals to strengthen our economic and trade relations. As a matter of fact, the business community is better suited to identify these goals and propose new ones. Governments tend to forget that it is not them who actually trade and invest but you and your Turkish fellow businessmen.
Finally, I want to underscore that your work today is more important than it has ever been. Because we want our prominent businessmen to show us the way forward. That is exactly what the Turkish-Indian Platform is for. We have high expectations from FICCI and TOBB.
The message I want to give you is clear: when it comes to economic and commercial opportunities, Turkey and India have much to offer to one another. Turkey and India have flourishing economies. As our economies grow, the opportunities they present grow as well. I trust that businessmen such as you will seize these opportunities, thereby enabling our economic and trade relations to develop further and for our bilateral ties to become even closer.
Thank you for your attention.