An international development bank that supports projects in central Europe and central Asia is has stated that it is wholly committed to Turkey for the long term.
"There should be no doubts in anyone's mind about the EBRD's movement in Turkey," Suma Chakrabarti, the president of the European Bank for Reconstruction and Development (EBRD), told Anadolu Agency (AA) yesterday.
Chakrabarti said the bank has invested 11.5 billion euros ($13 billion) in Turkey since 2009, adding that investments last year alone amounted to some $1.2 billion and $621.5 million in 2019.
"I am pretty confident that we will come close to a billion [dollars] this year," Chakrabarti said. "Given that Turkey has been going through some major economic issues in the last 12 to 18 months, that's a really good effort and shows you what could be done."
In 2019 the bank invested $7.5 million in the Turkish supermarket chain Migros to support a project on environmental sustainability, and nearly $1 billion in Arçelik, a major home appliances producer in Turkey, for its research and development (R&D) activities in energy-saving technologies, Chakrabarti said.
"We also do like lending in local currency. We have been upgrading the landfill in the historic province of Çanakkale. This operated under a public-private partnership (PPP) scheme," he said.
"Most recently, we are also proud to invest in a metro line with a syndicated loan in the city of Istanbul. We have seen the potential of the country. It's enormous and we could be part of this success story," he remarked.
Chakrabarti said Turkey needs to make more reforms for attracting investment.
"A lot depends in 2020 to what extent those reforms come through and the economy stabilizes," he said and added that the EBRD expected better growth in the Turkish economy and more investments next year.
Last year the Turkish economy started to narrow by the last quarter and posted a 2.6% growth rate annually. The economy also shrank by 2.4% and 1.5% in the first two quarters of 2019, respectively, according to the Turkish Statistical Institute (TurkStat).
Meanwhile, the World Bank's Global Economic Prospects report forecast that the Turkish economy would resume growth – 3% in 2020 and 4% in 2021.
More lending and projects
Speaking about the bank's new five-year strategy for the 2019-2024 period, Chakrabarti said that the bank would focus on strengthening economic resilience in Turkey, bringing in venture capital for innovation, raising female participation in the labor force, and supporting a greener economy.
Chakrabarti said the bank has good relations with the Turkish government as well, despite 97% of its investments going to the private sector.
"We also work very closely with the government to try reform the state and its policies so more investment would come to Turkey," he said.
The government and the central bank's tightening policy has made a huge difference in the right direction, Chakrabarti added.
"Of course that tightening led the economy to slow down, it has to slow down. There was too much consumption and easy money going on. I think now we can see the Turkish economy leaving the recession behind," he stressed.
He said the significant drop in the inflation rate and the current account deficit and the recovery in the Turkish lira are "signs of health."
"Our forecast going forward, is that it's going to be very important policymakers, government and central banks to keep a consistent policy framework. Foreign investors come and ask me what I think for the long-term prospects; I always say it's such a diversified economy. Long-term prospects will always be good, even if there is difficulty at the moment in the market for Turkey."