South Korean firms eye more projects in Turkey, PM Yıldırım says

Prime Minister Binali Yıldırım answers journalists' questions on the plane on the return flight from his visit to South Korea.
Prime Minister Binali Yıldırım answers journalists' questions on the plane on the return flight from his visit to South Korea.

Returning from his visit to South Korea, Prime Minister Yıldırım said South Korean investors are very interested in more projects in Turkey

South Korean companies are looking to make more investments in Turkey, especially in mega-projects, Prime Minister Binali Yıldırım said upon his return from a state visit to the country. South Korean contractors have already successfully completed projects in Turkey under a build-operate-transfer model. Now, some of them are interested in the Kanal Istanbul and İzmir Gulf Transit Project, the prime minister said. Speaking about the slight downturn in foreign exchange and the pressure of interest rate hike, Prime Minister Yıldırım said the upward and downward movements in the currency were temporary. He recalled that the similar fluctuations were observed during the same period of last year. He stressed that the markets have been further stabilized with the measures taken by the central bank.

Prime Minister Yıldırım added that Turkey has a solid banking system and its real sector was also on a positive course. He also pointed out that Turkey's growth rate at year-end could range between 6 to 7 percent.

"Though the inflation seems a little high it is mostly related to exchange rate fluctuations. We are targeting 5.5 percent growth and single-digit inflation in 2018."

"We have taken our precautions. Turkey is also a country that generates current account deficit while growing," he said, adding that: "From now on, those who do not earn in foreign currencies will not be able to borrow foreign currency but only in Turkish lira."

He recalled that there was almost no exchange rate movement between 2002-2012 during when the rate was between 1.5 and 1.7 and even down to 1.17, adding that the currency did not move much for 10 years.

"However, since 2012, the demand for currencies has increased as the maturity of foreign currency borrowing approaches. The regional and global developments have also affected the exchange volatility," Yıldırım said, suggesting that the Central Bank has instruments in its possession, while there are also measures that can be taken by the government.

"We will hopefully get through this. There is nothing that our business world should be worried about," Prime Minister Yıldırım continued, underlining that the Turkish economy has overcome more serious problems than this one.

Yıldırım said even though there was pessimism before the referendum last year, the market kept growing after the Credit Guarantee Fund (CGF) was put into commission and additional measures were taken. About his visit to South Korea, the prime minister said they had important meetings that discussed major investments in Turkey, including Çanakkale Bridge. "We said that there was no superior or subordinate in a relationship between two siblings, other than they stand right next to each other. They were more than satisfied," he said.

Yıldırım suggested that the role Turkey played in the 1950 Korean War changed the perception about the country and added that the growing North Korea threat will only strengthen the relationship between Turkey and South Korea.

"Currently, the $7-billion trade gap is not in favor of Turkey. There is a difference of 10 to one. They want to close this gap," he said and stressed that this could only be possible with more investments from Korean companies in Turkey.

Underling that Yavuz Sultan Selim Bridge and the Eurasia Tunnel were made and financed by Korean companies, Binali Yıldırım said they want to complete the Çanakkale Bridge, the world's longest suspension bridge, on the 100th anniversary of the Republic of Turkey. "They see it as the symbol of the Dardanelles Victory. Korea Eximbank even approved credit worth 800 million euros before we came here. Beyond being the longest in the world, it will have an architectural aesthetic that will reflect Çanakkale's spirit and history."

The prime minister added that they were looking to encourage more Koreans to visit Turkey as well as cooperate in the railway, solar power and consumer electronics sector.

Yıldırım confirmed Hyundai will produce its new SUV in Turkey.

"They were planning 2021 for the plant, but we talked about moving it to an earlier date. Samsung is also planning to invest in Turkey."

"We met with the big Korean groups and talked about the incentives in Turkey. They are interested in many projects, like the İzmir Gulf Transit Highway Project and Kanal Istanbul, in a build-operate-transfer model," he said.

"They are also planning to produce solar panels here and agreed on building a 1,000-megawatt solar power plant in the country."

"They want to work on batteries for electric vehicles. They are also looking for support to build commercial air-conditioning plants," he said.

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