Turkish gov't plans to establish its own world giants with unusual incentives
by Şeyma Eraz
ISTANBULOct 20, 2016 - 12:00 am GMT+3
by Şeyma Eraz
Oct 20, 2016 12:00 am
Economy Minister Nihat Zeybekci has hinted at plans in the new investment program that aim to launch worldwide Turkish companies. Speaking at the Foreign Economic Relations Board (DEİK) meeting late Tuesday, the minister shared some details about the incentives to be provided within the program, which was originally aimed to be announced in July. The government hasn't been able to announce it due to the failed July 15 coup attempt, which cost 241 lives, according to Zeybekci.
After achieving an economic transition by jumping from the lower-middle income bracket to the high-middle income bracket, which helped Turkey's income per capita increase by 48.6 percent in the last 10 years, the country's businessmen and economists are now looking for a new phase in growth strategies. The country's income per capita is around $10,500, whereas the economic targets eye far higher levels. The government aims to reach $25,000 in income per capita by 2023, which is the 100th anniversary of the Turkish Republic.
"Turkey has written a success story so far as a subcontractor, but we cannot go beyond this as things are," said Zeybekci. He underlined that Turkey needs to launch its own worldwide firms to be able to write a new success story.
According to the new investment program, the government will negotiate with some promising firms in fields like petrochemicals, health technologies, pharmaceuticals, agricultural technology, energy technologies and the defense industry. "After defining the optimum capacity per company, we are going to sit and discuss the matter with selected firms," Zeybekci said. The negotiations will be held in a transparent format, he added.
Whatever the firm needs as incentives, they will be open to discussion, according to the minister. Land, fixed energy costs for 20 years, zero tax for a certain period of time, support for insurance, guarantee purchase and investment finance costs are all expected to be involved in the new investment program.
The government is expected to partner up with these companies with an up to 49 percent share. "We will never take 50 percent or more shares. We will not cause trouble for you," Zeybekci said.
In the early years of the 1980s, South Korea was the 30th biggest automotive exporter in the world, followed by Turkey being 31st. However, in 30 years, the country managed to become the fifth largest automotive producer and sixth biggest automotive exporter, while Turkey was only able to come 15th in the list. South Korea and Germany, especially after World War II, applied their government policies to develop world-known companies. Reminding about the examples of these two, which are unusual for Turkish companies, Zeybekci said now Turkey has to do the same.