direct investment turkey

INTERNATIONAL

INVESTORS ASSOCATION

OF TURKEY

INSIGHT YASED

30th YEAR SPECIAL ISSUE

PublisherPiraye AntikaBarbaros Bulvarı Morbasan Sokak Koza İş Merkezi B Blok K:3 Beşiktaş-İstanbul

Chief EditorMustafa AlperBarbaros Bulvarı Morbasan Sokak Koza İş Merkezi B Blok K:3 Beşiktaş-İstanbul Yayın Kurulu / Publication BoardDilek Yardım,Tamer Haşimoğlu, Adnan Nas, Atilla YerlikayaGünseli Özen Ocakoğlu, Ahter Kutadgu, Burak Tezcan

Publication typePeriodical

Date of publishingNovember 2010

Head OfficeYASED Barbaros Bulvarı Morbasan Sokak Koza İş Merkezi B Blok K: 3 Beşiktaş-İstanbulTel: (0212) 272 50 94 • www.yased.org.tr

EditorsSerpil Kaya, Hande Akkaş, Savaş BatmazSerpil Işıldar, Pınar Karaman (YASED)

DesignPınar Yıldız

Visual ApplicationMurat Helvacı

ProductionRota Yayın Yapım Tanıtım Tic. Ltd. Şti.Prof. N. Mazhar Ökten Sok. No.1 Rota Binası 34360 Şişli-İstanbulTel: 0212 224 01 44 • www.rotaline.com

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Contact AddressYASEDBarbaros Bulvarı Morbasan Sokak Koza İş Merkezi B Blok K: 3 Beşiktaş-İstanbulTel: (0212) 272 50 94 • www.yased.org.tr

INSIGHT YASED magazine supplement.

All of the photos in the magazine article andINSIGHT YASED or part of the consent can not be used in any way.

Our member companies who have provided support

for this 30th year special issue

THANK YOU

MESSAGES

Piraye Antika - Chairman YASED ................................................................................................................................................................................................................................6Mustafa Alper - Secretary General ............................................................................................................................................................................................................................8Ali Babacan - Deputy Prime Minister and Minister of State..................................................................................................................................................................10Egemen Bağış - Minister of State and the Chief Negotiator for EU Affairs.................................................................................................................................12Süleyman Demirel - 9th President of the Republic of Turkey ................................................................................................................................................................14

CURRENT AND FORMER REPRESANTATIVES OF THE PUBLIC SECTOR

Durmuş Yılmaz - Governor, Central Bank of the Republic of TurkeyThe role of investments in economic development and the Turkish economy .............................................................................................................................18İbrahim Çanakçı - Undersecretary of the Treasury of TurkeyLiberalization of foreign capital and changes witnessed in the Turkish economy ..........................................................................................................................20Berrin Bingöl - Advisor to the Undersecretariet of Treasury of TurkeyTurkey’s foreign investment journey: From 1980 to 2010, and to the future..................................................................................................................................22Hüsnü Doğan - Former Minister of Agriculture Forestry and Village Works, State, National Defense, Energy and Nature ResourcesForeign investment in the 1980s ................................................................................................................................................................................................................................24Namık Kemal Kılıç (PhD) - Former Undersecretary of Treasury and Foreign Trade of TurkeyForeign investment in the last 30 years ................................................................................................................................................................................................................26Ali Tigrel - Former Undersecretary of the State Planning Organization of TurkeyInvestors need to be convinced of the transperancy of the politics and bureaucracy..............................................................................................................28

FORMER CHAIRMEN AND THE FIRST SECRETARY GENERAL OF YASED

Erdoğan Karakoyunlu - First Chairman of YASED (1980-1987)YASED’s contribution to Turkey’s economy .......................................................................................................................................................................................................30Yavuz Canevi - Former Chairman of YASED (1992-1997)International capital is no longer a stranger in Turkey ...................................................................................................................................................................................31Christoph Urban - Former Chairman of YASED (1997-1998)YASED should continue contributing to improve Turkey’s competitiveness ....................................................................................................................................32Faruk Yöneyman - Former Chairman of YASED (1998-2003)YASED undisputedly contributed to the development of the country ..............................................................................................................................................33Şaban Erdikler - Former Chairman of YASED (2004-2007)YASED between 2004–2007; during my chairmanship ................................................................................................................................................................................34Tahir Uysal - Former Chairman of YASED (2007-2009)Taking office at YASED is like running in a never-ending relay race.......................................................................................................................................................36Birsen MidilliliIn memory of Atilla Midillili, Former Chairman of YASED (1987-1992) ...........................................................................................................................................37Ayşe Semiha Baban - First Secretary General of YASED (1983-1991)YASED became a reliable source of information for potential investors ...........................................................................................................................................38

BUSINESS WORLD AND NGOs

Rahmi M. Koç - Honorary Chairman, Koç HoldingContribution of international investment to organizational culture .....................................................................................................................................................42

Bülent Eczacıbaşı - Chairman, Istanbul Foundation for Culture and Arts (İKSV)Investors helped to establish the concept of CSR in our country .......................................................................................................................................................43Rifat Hisarcıklıoğlu - President, Union of Chambers and Commodity Exchanges of Turkey (TOBB)Building a greater Turkey, hand on hand.................................................................................................................................................................................................................44Tuğrul Kutadgobilik - President,Turkish Confederation of Employer Associations (TİSK)Turkey’s need for foreign direct investment indisputable.............................................................................................................................................................................46Ümit Boyner - President,Turkish Industry and Business Association (TÜSİAD)It is crucial for Turkey to accelerate the policies to improve investment climate .........................................................................................................................48Mehmet Büyükekşi - Chairman,Turkish Exporters Assembly (TİM)Foreign capital means new investments, new employment, new exports .......................................................................................................................................49Murat Coşkunkan - Chairman,Young Businessmen Association of Turkey (TÜGİAD)Turkey is a bright and safe haven for foreign investors.................................................................................................................................................................................50

MEMBER COMPANIES

Can H. Suphi - BP Turkey PresidentBP, contributing to Turkey’s economy for 100 years .......................................................................................................................................................................................52Mustafa Sayınataç - Executive Board Member, Cargill TurkeyWe are responsible for the future ............................................................................................................................................................................................................................53Atilla Yerlikaya - External Relations Director, CCIWe have become a regional Turkish company ..................................................................................................................................................................................................54Serdar Urçar - General Manager, HP Turkey We brought the newest products and solutions to Turkey .......................................................................................................................................................................55Aylin Erdem - Manager of Accounting Dept., Mercedes-Benz TürkYASED has led the public to understand the importance of international capital ......................................................................................................................56Müjdat Altay - General Manager, Nortel NetaşWe need to transform the historic Silk Road into the technology road...........................................................................................................................................57Andrea Pirondini - General Manager, Türk PirelliYASED has a tradition of promoting communication between existing and new investors..................................................................................................58Süha Topaloğlu - General Manager, Roche TurkeyYASED successfully serves as a bridge in the integration of Turkish economy.............................................................................................................................59Ahmet Erdem - Shell Turkey Country ChairmanShell:Turkey’s pioneering investor ..............................................................................................................................................................................................................................60Tamer Haşimoğlu - Head of Strategic Planning, Koç HoldingWe should take advantage of Turkey’s potential...............................................................................................................................................................................................62Orhan Özer - General Manafer and CEO,Toyota TurkeyTurkish employees undersign Toyota’s success ...................................................................................................................................................................................................63Erdem Koçak - President and CFO,Türk HenkelYASED has a prestigious position..............................................................................................................................................................................................................................64

ACADEMICIANS AND COLUMNISTS

Prof. Dr. Erdoğan Alkin - Ph.D. Professor and Department Head İstanbul Ticaret University Department of International TradeContribution of foreign capital to economy and society.............................................................................................................................................................................66Prof. Dr. Şükrü Kızılot - Gazi University Faculty of Economics and Administrative Sciences - Head of Public Finance DepartmentForeign direct investment and Turkey......................................................................................................................................................................................................................67Mahfi Eğilmez - ColumnistForeign investors believe Turkey will become a member of the EU....................................................................................................................................................68

MAJOR ACTIVITIES IN YASED’s HISTORY

Content

As the Chairman of the current term of YASED International Investors Association celebrating its 30th anniversary, I greet all our readers withmost sincere feelings on behalf of myself and the Board of Directors of this term.

Our Association was founded 30 years ago by 14 international companies, which interpreted Turkey’s development potential and prospectivevision correctly, and took a step which should be considered as a giant one under the conditions of that time. Thankfully, with 212 members,YASED is now the leading representative of international investors operating in Turkey. Our vision as YASED is; to contribute to the efforts givenfor making Turkey as one of the most attractive countries for international investment and building a stable business environment for investors.Our mission, established on this vision, is to promote proactively a business environment which matches the best global practices, and toencourage free trade of goods and services, a free competition environment, the freedom of investment and free movement of capital.

We are determined to develop our collaboration, communication and coordination with other organizations, which represent the business world,strengthen the awareness of the public on the improvement of the investment environment in our country, and increase the consciousness of allour stakeholders on the importance of international investment in our country. Developing the arrangements to be made in order to harmonizethe legislation in force in Turkey and our business life practices with international standards, ethical values and the principles of corporategovernance, are among our most important priorities. After the turbulent period experienced in the world’s economy, caused by the adverseimpacts of the global crisis, we have gradually entered a recovery period. I believe that all actors of the economy should take the most accuratestrategic steps in this period and aim to take advantage of the opportunities of the post-crisis period. I believe that our country’s existing potentialhas increased on account of being one of the countries which have demonstrated a fast economic recovery after the crisis, and in case furthersteps for improving the investment environment are taken,Turkey will become a center of attraction in investors’ eyes. Today we all know thatinternational direct investment generate countless constructive developments in a country, such increasing employment opportunities, adoptionof corporate governance principles, and attraction of know-how to the country. The fact that our country has grasped the importance ofinternational direct investment and started taking the proper steps in this connection, is very satisfying for us.We envisage a future where Turkeyhas, as a result of our intensive efforts of today; established the rule of law on all areas, secured a competitive tax and incentive system forattracting international direct investment and a predictable economic and business environment, won its struggle against informal economy,removed the bureaucratic barriers which stand as one of the most important problems faced by investors, risen to a regional base position forworld’s giant corporations, established intellectual and industrial property rights by means of its legal infrastructure, brought up all its universitygraduates as a qualified workforce oriented to meet the requirements of the industry and the business world, become a full EU member. I wouldlike to repeat and underline that we as YASED will always be ready to contribute our share and give all the efforts we can for this vision.

Our Association, which supports every step taken for the improvement of Turkey’s investment environment and leads constructive developments,will continue to serve the making of a much better investment environment for many years yet to come, thanks to the valuable contributions ofour members, the positive feedback of the public and cooperation of state authorities. Relying on its strong foundations and its background, whichis full of accomplishments, we strongly believe that YASED will continue to act as a driving force for the improvement of Turkey’s investmentenvironment.The momentum generated by YASED’s accomplishments and our members’ vision will ensure the subsistence of our Association asa powerful and indispensable organization in Turkey and in the international business world - today and in future.

I heartily celebrate the 30th anniversary of YASED, and express my earnest gratitude to all our members, who have not spared their contributionssince the day our Association was founded; to YASED Secretariat, which carries out YASED’s operation with success, and to all our businesspartners in the public and private sector.

Piraye AntikaChairman, YASED

Message of the Board

Message of the Secretary General

We are most happy to share this special issue we have prepared on the occasion of the 30th founding anniversary of our Association with you.

We aspired to prepare a publication that would leave a mark on history on both YASED’s 30th anniversary and the development of foreigninvestment in Turkey from yesterday to our day. We, therefore gave efforts to give place to persons having many different experiences, views andevaluations in this publication. We are most pleased for having benefited from the contributions of former Chairmen, Secretary General andmembers of YASED, who have witnessed the past 30 years of the Association, and the persons who have witnessed to and served for thedevelopment of foreign investment in Turkey, our politicians who are currently in office, the valuable names of the business world, NGOs, academiccircles and the press.We owe thanks to all who have contributed.

We would like to express our special thanks to our esteemed Ministers Ali Babacan and Egemen Bağış and the doyen of politicians, our Esteemed9th President Süleyman Demirel for their courtesy of sending their special messages for this publication.

We believe that the views and evaluations of our high level bureaucrats who are providing exceptionally important services at the public offices,which are in direct relationships with foreign investment; namely Central Bank Governor Durmuş Yılmaz, Undersecretary of Treasury İbrahimÇanakçı, and Berrin Bingöl who has been holding the office of the Director General of Foreign Investment since many years, have enriched thiswork.

We are additionally pleased to welcome our former ministers and bureaucrats who have taken office at very critical times as regards thedevelopment of foreign investments, in this special publication.We believe that you will read the evaluations of the Minister responsible for foreigncapital during Turgut Özal period, Hüsnü Doğan, Former Undersecretary of Treasury and Foreign Trade Namık Kemal Kılıç and the FormerUndersecretary of the State Planning Organization (SPO) Ali Tigrel at the time when the Foreign Investment Department was established underthe roof of SPO, with keen interest. We give our most sincere thanks to our former Chairmen, namely Erdoğan Karakoyunlu, Yavuz Canevi,Christoph Urban, Faruk Yöneyman, Şaban Erdikler and Tahir Uysal, the first Secretary General of the Association Semiha Baban and to BirsenMidillili, who contributed in memory of our former Chairman Atilla Midillili as his wife, who have handed over to us their valuable notes concerningYASED’s quest from the past until today, by means of this publication.

We are honored to receive the evaluations of one of the most distinguished names of the business world, Rahmi Koç, who has rich partnershipexperiences with international companies. The evaluations of Bülent Eczacıbaşı as the Chairman of İstanbul Foundation for Culture and Arts, onthe impacts of international investors on culture and art life have added a different color to our work. The evaluations of the Chairmen of thenotable organizations of the business world; Rifat Hisarcıklıoğlu (TOBB), Ümit Boyner (TÜSİAD),Tuğrul Kutadgobilik (TİSK), Mehmet Büyükekşi(TİM) and Murat Coşkunkan (TÜGİAD) have been very consequential for having put forth the impacts of international investors to Turkey’sbusiness life from different perspectives.

Again, we are pleased to present the evaluations of the valuable names of the press and the academic world, Erdoğan Alkin, Şükrü Kızılot andMahfi Eğilmez in this special work. And finally the contributions which came from our member companies, which were willing to participate inthis special work, by sharing their journey in Turkey on the occasion of our 30th anniversary, have made up the indispensable parts of thispublication. In addition to the special page we have allocated in the preface section, we would like to express our thanks here once more to ourmember companies, which in addition to the contributions they have made to our content, have given material support for the realization of thispublication.

We aimed to create a memorable journal, worthy of YASED’s 30th anniversary and I hope that you all enjoy reading it.

Mustafa AlperSecretary General, YASED

YASED’s contributions to the efforts to build a better investment environment in Turkey and to make the country an attractive investment centerfor global investors are extremely important. At the same time,YASED is successfully continuing its mission to increase social awareness of thebenefits of international direct investments in the country’s economy.

Considering the needs and expectations of the private sector while designing public policies, diagnosing investors’ problems correctly, andgenerating quick and concrete solutions to these problems are all essential for private sector-focused growth aiming at increases in productivityand employment. YASED plays an important role in establishing a constructive environment for dialogue among international investors, policymakers and public institutions involved in the implementation of government policies. We expect YASED to continue these activities in the comingterm, contributing to the success of structural reforms.

On the occasion of the 30th anniversary of its founding, I congratulate YASED management and members for their devoted efforts. Asrepresentatives of our international investors, they have sought solutions to investors’ problems on every platform and have directly contributedto the improvement of the investment environment with a proactive approach since the day YASED was founded.

Message of the Deputy Prime Ministerand Minister of State Ali Babacan

As the debate heats up about how to recover from the global economic crisis, foreign investment has become even more important for all countriesaffected by the crisis. Because of the contraction in global trade, economic recovery strategies exclude exports as an option to support growth, atleast in the short-term. Consequently, countries today include foreign investment inflow in their recovery strategies in order to create the positiveeffect that exports fail to provide under existing conditions.

In Turkey, considered an “emerging market", foreign investment is vital if it is to live up to its growth potential. In addition to the primary benefits offoreign capital, it will be a catalyst to strengthen our economy in terms of technology transfer, training of the labor force, access to internationalmarkets, and competitive power and also in terms of integration into the global economy. Turkey’s strong economic structure, qualified work force,easy access to raw material and energy resources, vast domestic market, and strategic geographic location offer attractive oppotunities for foreigndirect investments. However, for many years, our country was able to attract investments far below its full potential.

Foreign investment inflow to Turkey was boosted by the liberal economic policies of the 1980s. It reached a cumulative level of USD12 billion by theend of the 1990s, under the impact of 1996 Customs Union. However, the real breakthrough was in the period from the year 2000 to 2004, whenthe structural reforms in the economy led to greater macroeconomic stability and predictability, the legal framework for foreign direct investmentswas improved, and Turkey became an EU accession country. During this period, inflows totalled USD10 billion and foreign direct investments increasedby nearly 350%, surpassing the gross amount of 20 years in just 5 years.Today,Turkey is the 6th largest economic power in Europe and the 16 th inthe world with its robust and stable developing economy.Turkey’s economic stability and he beginning of EU membership talks have made the countryan attractive and reliable destination for foreign direct investments like never been before.As the EU talks progress and reforms continue in all areas,Turkey is becoming a stronger, more reliable and more investable economic power. Consequently, in the 5-year period from 2005 to 2009,Turkeyreceived a historically high level of nearly USD80 billion foreign direct investment inflow. Corresponding with the increase in foreign direct investments,following the 2001 national economic crisis,Turkey enjoyed a period of unbroken economic growth and stability (except for 2009, with its severeglobal economic crisis), and was the 15th most attractive destination for foreign direct investments for 2008-2010 period. As one of a handfulcountries weathering the global crisis with minimal damage,Turkey has reinforced its standing as an attractive destination for investors seeking stabilityand a strong base. In order to activat this potential and attract even more foreign direct investment,Turkey must develop a strategy that gives priorityto foreign investments in the growing sectors of the information age and to investments that generate employment.This strategy must be formulatedwith the participation of all parties concerned, and must take into account both the country’s subjective conditions and international trends. In thisprocess,YASED has made invaluable contributions with its active role in improving Turkey’s investment environment, molding public opinion, and liaisingwith international capital circles ever since its foundation. YASED acts with an innovative and contemporary mindset, well aware of the shifts in theworld economic system and in global dynamics. Founded 30 years ago, when globalization was still an emerging concept,YASED was created byvisionary and entrepreneurial business people and investors.YASED has made valuable contributions to Turkey’s full EU-membership talks and remainsan indispensible player in the negotiation process.We believe YASED’s EU Working Group, founded to ensure Turkey’s proactive participation in theEU membership process and to coordinate EU-related efforts, will continue its actvities. The more individuals, organizations, and enterprises whobelieve in the work being done Turkey, the more we as politicians continue to work with enthusiasm and determination.We have always believed inthe European Union Project, and our ultimate goal is to be a full member. In this tough and long process,YASED's support is an important motivationfor us.

I would like to thank YASED and all of its prominent members for their support of our EU membership process, and wish all of them success in theirfuture endeavors.

Message of the Minister of State andthe Chief Negotiator for EU Affairs Egemen Bağış

The first motto adopted by the United Nations, founded in the aftermath of World War II, was “Peace and prosperity are indivisible”. Peace isthe fundamental requirement of humanity.The humanity is obligated to establish peace.This can be done only with prosperity, which is achievedby getting rich.The road to richness actually runs through the entire development of nations, and this development is very closely related to theindividual and joint efforts of nations.

Rich countries produce more than they need.This surplus production turns into savings. On the other hand, countries in need of developmentrequire resources beyond their own. This necessity brings about the issue of international borrowing and international debts. The solution forcountries in need of development is to invest by depending on strong resources and in sound projects. Countries which need financial supportcan find resources in proportion to their repayment capabilities.

The essential factor here is investing the savings that accumulate all over the world in sound projects, and then recouping the investment.This inturn serves ‘International Development’.

Capital accumulation which could be used for international purposes started in the 1950s and 60s, and has continued since. Capital started movingacross borders.The country where the investment is made lost its significance to the investor; the criterion became a ‘quest for credible countries’.Correspondingly, countries that needed to develop lost interest in who the investor (domestic or foreign) was, and started looking at the resultingbenefits. Consequently, ‘Foreign Direct Investment’ and ‘International Investor’ concepts developed and ‘International Cooperation’ spreadthroughout the world.

In fact, in today’s globalized world, everybody produces for the ‘World Market’, and buys from and sells in this market. Capital as well has turnedinto a commodity. Foreign capital, which was considered a tool of imperialism only yesterday, is now sought everywhere. Investors are also soughteverywhere. Investments with competitive power will be made wisely and will survive in the world’s markets. To do this requires knowledge,experience and technology.

The countries which benefit from Foreign Direct Capital, such as the USA, China and the Russian Federation, actually have large economies.Turkeyis a country in need of resources. It has a large balance-of-payments deficit, and is ranked 19th in the world in terms of development. It dependson ‘International Capital’ and ‘International Investors’ to maintain its economy. As well, Turkish capital and Turkish investors, provide services invarious countries.

International Investors serve both ‘International Prosperity and ‘Global Peace’.

Message of the 9th President of the Republic of TurkeySüleyman Demirel

CURRENT AND FORMERREPRESANTATIVES OFTHE PUBLIC SECTOR

20

Nestle, one of the oldest foreign capital companiesin Turkey, made the acquaintance of the Turkishmarket in 1875, eight years after its establishment.Nestle opened its first sales point in 1910. In 1927,Nestle established Turkey’s first chocolate factory atFeriköy.

1875

oreign direct investments play a significant role inthe development process of countries. Theseinvestments have supported many countries ingaining on rapidly with the level of welfare of

developed countries through their contribution to the capital stockon one hand, and throughtransfer of technology fromdeveloped countries toother countries, on theother hand. Althoughaccessing the markets ofother countries and regionsis an important spur inforeign capital investments,the fundamental andsignificant factor in theseinvestments is the level ofefficiency of theinvestments. In fact thisevaluation, which has asignificant place ineconomics literature, is thebasic dynamic that explains

the capital flows between the countries. As a result of thisdynamics, the capital moves from developed countries, where theproductivity is low, towards countries with higher productivity. It isevident that this situation creates a significant opportunity forcountries like Turkey, which are in need of rapid development, buthave inadequate domestic savings. However, in order to benefit

INTERNATIONAL INVESTORS ASSOCIATION

The foundations of the collaboration between Turkey andSiemens were laid with the decision of the OttomanEmpire to establish a telegram system in the country.Siemens Halske laid the first telephone lines in Istanbul in1881. In the first years after the declaration of theRepublic, Siemens Electric Turkish Company was engagedin importing radios. With the commencement of radiobroadcasts in 1927, the Siemens name entered the homes.

1856

F

The role of investments in economicdevelopment and the Turkish economy

from this opportunity, the countries need to establish a suitableproduction or investment climate. In this respect, factors such asestablishing macroeconomic and political stability, bringing legaland corporate infrastructure to the global standards, improvinghuman and physical infrastructure, have major importance.

In the world, foreign capital investments have acceleratedespecially from the 1990s onwards. However, our country could notbenefit from this opportunity sufficiently. Although the efforts inbringing foreign capital to our country have become moreprominent in 1980s, these efforts remained inconclusive due toinadequacies in certain critical areas such as macroeconomicstability and characteristics of legal and corporate infrastructure.

Following the low and unstable growth period in 1990s, Turkisheconomy has encountered deep economic crisis in 2000 and 2001.Above all, this situation that has emerged showed that thecontinuing structural problems in the Turkish economy preventattaining sustainable and high growth rates. Based on thisevaluation, comprehensive economic reform process has beeninitiated. The basic aim of the reforms was to prepare themacroeconomic frame that would establish a robust ground forproduction activities. On the other hand, the establishment ofpolitical stability and the initiation of EU accession negotiations in2004 have supported the reform process. Turkish economy hasresponded strongly to the reform efforts in a considerably shorttime. While the process has produced its fruits in terms of nominalindicators such as inflation and interest rates, comprehensiveimprovements were recorded in terms of real indicators as well

such as growth, productivity and competitive power. As a result,Turkey has rapidly converged toward developed economies both interms of nominal and real indicators and the reform process hasincreased the credibility of the Turkish economy. It is possible toevaluate the increase in the foreign capital investments after 2004 asa major indicator of this credibility. As a matter of fact, directinvestments which were less than USD 1 billion on an annual basisin the past period have increased to USD 8.5 billion dollars in 2005and to 19.1 billion dollars in 2007. In addition to the banking sector,foreign capital investments have taken effect in industrial sectors aswell, especially in automotive and in this sector, Turkey has becomeone of the major production bases in the world.

Although the foreign capital investments have declined due to theglobal crisis environment, I believe that in the coming term ourcountry will be a major center of attraction for these investments.The basic reason behind this opinion is mainly the fact that as aresult of the structural transformation policies that weresuccessfully applied in 2000s, our economy has become more robusttoward external shocks, the economic structure became moreflexible and strengthened its capability of adaptation to changes.This structure has importance in enabling Turkey to achievesustainable and high growth rates. As a matter of fact, the robustgrowth rate portrayed by our economy both after 2001 andfollowing the global crisis verifies this evaluation. However, thisopinion does not mean that the Turkish economy does not havestructural problems. On the contrary, the need for structural reformon a wide range from unregistered economy to increasing the well-educated human power still continues. In this respect, I believe thatrenewing the economic structure through structural reforms hasvast importance; and this is not a requirement for one time orspecific to one period, but has a continuous nature depending onthe changing global and domestic conditions. In this context, I seethe steps we shall take in the field of structural reforms as the mostcritical factor that would determine the level and composition offoreign investments oriented toward our country.

Durmuş YılmazGovernor, Central Bank of the

Republic of Turkey

First Foreign Capital Companies

in Turkey

Company Years

Fiat 1954

Sandoz 1956

Pfizer 1957

Roche 1958

Pirelli 1960

Goodyear 1961

Bayer 1962

BMC 1964

Coca-Cola 1964

Siemens 1964

Pepsi 1964

AEG 1964

MAN 1966

Tuborg 1967

Mercedes 1967

Renault 1969

Bosch 1970

22

Ericsson, one of the first foreign companies toinvest in Turkey, laid telephone line in DolmabahçePalace in the 1890’s.

1890


In 1886, the first Singer sewing machine was sold inTurkey. Singer opened its first shop on Istiklal Avenue in1904. From 1930 onwards, Singer started organizingfree training courses in Turkey. Singer was the firstestablishment to use “direct marketing” and “permittedmarketing” methods, to prepare user instructions, tostart the “guarantee coupon” application, and toprovide sewing and embroidery training.

1886

process of 150 years. Equal treatment of international capital anddomestic capital policy was first applied at the pre-republic period in1830s. Again, the first direct investments with international capital inTurkey were realized at the same period. However, at that period,investment amounts were quite limited since international investmentconcept was considerably new in the world and the industry was notdeveloped yet. At the post-republic period, generally protectionistpolicies were applied toward international investments until 1950s andthe first attempt for the encouragement of these investments came withthe “Encouragement of Foreign Capital Law”, adopted in 1954.However, due to the ambiguous and complex permit proceduresstipulated by the mentioned Law and the negative public approachtowards international investments, the liberty prescribed in the Lawcould not be attained at that period as well.

As a matter of fact, Turkey’s opening to international investments wasrealized in 1980s together with the 24th January decisions. TheDecree numbered 32 and dated August 7, 1989 has revoked amountlimitations over the international capital and foreigners were permittedto trade in the stock exchange of Turkey and the privatizationprograms were accelerated. Together with the Foreign DirectInvestments Law numbered 4875, which came into effect in 2003,permit and approval obligations of international investors wasreplaced by declaration obligation, amendments were brought to thedefinitions of investment and investors in order to ensureharmonization with the international standards, the minimum capitalcondition was revoked and equal treatment principle was reinforced.In the past 30 years, significant changes took place in the Turkeyperception of international investors and as of today, Turkey has takenits place among the preferred investment centers. While internationaldirect investments inflows of Turkey in 1980s were below USD 500million level, in 2000s these inflows have exceeded USD 20 billionlevel. In this process, in addition to the macroeconomic stabilityachieved through the private sector centered growth strategy andstructural reforms put into effect in Turkey, policy measures put intopractice in line with the expectations of the private sector for the

improvement of the investment environment also had a significantcontribution. 1980s onwards, international direct investment trendshave also considerably diversified in terms of sectors. In the first yearsof the Republic, international investments were mostly tended towardindustry, textile, food, cement and electricity industries, in 1980s itcentered around tourism and defense industry fields and in 90s aroundtelecommunication, automotive and infrastructure (such as energy,roads, dam construction) sectors. Whereas in 2000s, sector baseddiversity was achieved in international investments and significantamounts of international direct investment flows have entered almostevery field. One of the major characteristics of 2000s was the increaseof international direct investments in sectors with high added valueand the significant development that has emerged with the spillovereffects of the know-how brought by the international investors in theindustry. Investments in the energy sector, which have recorded arapid increase in the recent 3 years, and major investment projects infood-chemistry and automotive sectors have been the driving forces ofthis period.

As for the sectoral breakdown of international investments, with thecontribution of the developments to be achieved through the IstanbulFinance Center Project, it is expected to register increases in financialsectors in the coming period, which has the capacity to produceservices with high added value. Investments in these fields will createnew areas of employment and at the same time, contribute to theTurkish economy by means of service export.

Turkey shall continue its resolved and consistent growth in the comingterm as well and it is anticipated to register international directinvestment inflows in increasing amounts in various sectors due to thestructural reforms continued to be applied in order to render theinvestment environment more attractive for local and internationalinvestors as well as to strengthen the macroeconomic equilibriums.Turkey’s persistence in its investor friendly applications even in theglobal crisis environment, when many countries have opted forprotectionist policies will be very effective on this increase.

Liberalization of foreign capital andchanges witnessed in the Turkish economy

n the economic history of Turkey, 1970s recorded a periodmarked with external shocks that emerged due to petrolcrisis, in which macroeconomic stability was considerablylow and the country has faced significant deficit balance and

foreign exchange gap problems. This period was followed by anotherperiod in 1980s, in which anoutward-oriented economicstructure was adopted.During the 1980s, significantsteps were taken in theliberalization process of theTurkish economy. Turkey’sgrowth axis has shifted froman import-substitution modelin which the local productionwas protected by highcustoms wall to a model inwhich the import is liberatedand the export isencouraged. Liberalizationin the financial sector andcapital movements wererealized and flexible

exchange rate policy was adopted. Public finance management wastaken in hand with a new approach and steps were taken towardsincreasing the effectiveness of the public sector.

Unfortunately, the reform and transformation progression initiated in1980s could not be sustained during 1990s and Turkey has drifted to

I an instable macroeconomic environment which can be pictured withelements such as high public deficits, high inflation, and floatinggrowth structure.

With the economic policies applied from the beginning of 2000s,significant steps were taken to enable structural transformationoriented towards establishing the macroeconomic stability andimplementing market mechanisms in a healthy way. At the precedingterm prior to the effect of the global financial crisis over the Turkisheconomy through various channels, Turkish economy has attained astable and high growth performance. At this period, Turkey hasintegrated with the world economy both in terms of commerce andtrade and foreign direct investments.

One of the most important gains of Turkey in this period was theimprovement of the investment environment and establishment of adynamic economic structure under the leadership of the privatesector. In this process, constant increase in the international directinvestments tagged along many other benefits in addition to economicgrowth such as; technology transfer, employment, increase in exportand tax revenues, and it has played a key role in Turkey’s fight againstpoverty, unemployment and income inequality. As of today,international direct investments have a significant share in manyeconomic factors in Turkey such as; production, export, import,employment. Similarly, these investments that contribute toincreasing our global competitive power also play an important role infinancing the current deficit in Turkey.

The history of international direct investments in Turkey covers a

İbrahim ÇanakçıUndersecretary of the Treasury of Turkey

24

MAN Company started the construction ofGalata Bridge in 1910, and opened it to service in1912. In 1966, MAN Türkiye founded the MANTruck and Bus Company (MANAŞ) in partnershipwith the Ercanlar Company that had been carringout import and sales of MAN vehicles.

1910

by the investments in the supplier industries have laid thefoundation of the sector’s current level of development.

Again in the 1990s, FDIs also took an interest in infrastructuralinvestments such as energy, transportation, communication,however the FDI inflows failed to reach the expected levels.

The long awaited development in FDI came with the USD 1.7billion inflow in 2003. In the following years, FDI inflow followeda significant upward trend: USD 2.8 billon in 2004, USD 10 billionin 2005 and USD 20 billion in 2006. With USD 22 billion FDIinflow received in 2007, suddenly international investors turnedtheir eyes to Turkey. Political and economic stability coupled withthe initiation of EU membership accession talks, and moreimportantly, worldwide publicity for the international investorfriendly approach are the most central elements that havecontributed to this outcome.

The 2000s have witnessed the worldwide FDI inflows to reachtrillion dollars. Countries have intensified the competition toincrease their share of the pie, making serious reforms in theirpolicies and corporate structures. As efforts to improve investmentclimate have turned into a competition among the countries,international organizations have set out to create indexes to reflectthe rankings. In this competition Turkey took a critical step,making a right decision at the right time, to create an optimalclimate for investors and founded the Improvement of theInvestment Environment Coordination Board (IIECB). Thisplatform, on which public and private sector get together toproduce solutions, has been conducive to materialization of manyreforms for the improvement of the investment climate to this day.Additionally, the international platform, which was founded toserve to the same purpose as the Investment Advisory Council,formed the other strong leg of this structure.

In the 2000s, billion dollar worth projects have come to the fore inTurkey’s the FDI portfolio. Gigantic projects in communications

and energy sector, on-going investments for manufacturing newmodels in automotive sector, R&D investments reaching significantamounts with incentives have been the leading FDI investments ofthat period.

Reforms to improve the investment climate are continuingsuccessfully. However, some other countries around the world aremoving up faster in the indexes by being even swifter with thereforms. Turkey should continue its efforts tenaciously, resilientlyand persistently. Our country has got everything to be one of themost popular destinations, a shining star of the future with respectto FDI.

YASED has always been a prominent player in Turkey’sinternational investment journey of 30 years. Always constructiveand in close cooperation with the public, YASED continues towork on offering solutions to international investors’ problems andimproving the investment climate in Turkey. I would like tocongratulate the management and members of YASED on its 30thanniversary.

assed in 1954 and embraced a liberal stance that wasfar ahead of its time, “Law on Encouragement ofForeign Capital” number 6224 had been interpretedand implemented with a rather conservative manner

until 1980. A more liberal implementation of the same law wasmade possible with the cabinetdecrees issued as part of theEconomic Stability Package datedJanuary 24, 1980.

Intended to oversee theimplementations within the contextof the said package, Foreign CapitalAuthority (later, restructured asGeneral Directorate) was formedwithin the State PlanningOrganization and continued itsoperations by adhering to solution-oriented, constructive, positive andexpeditious working principles.

In the 1980s, foreign directinvestment (FDI) permits issued in Turkey were hovering aroundUSD 500 million and mainly tourism, pharmaceuticals, defenseindustry etc. sectors were receiving the majority of the FDI inflow.Started in the 1980s, the tourism investments drive gained thecountry numerous world-class touristic resorts and significantnumber of international investors has been involved in thoseprojects in the capacity of partner, owner or operator. Among the


Deutsche Bank opened one of its first branches outsideGermany in Istanbul in 1909.1909

P

Turkey’s foreign investment journey: From 1980 to 2010, and to the future

most remarkable projects of that period was the restoration ofÇırağan Palace in Istanbul to reintroduce it back to the tourismindustry. Also, initial and replacement investments ofpharmaceuticals industry, F-16 war aircraft investment andopening of the first foreign brand (franchising) hamburgerrestaurant coincides with this period.

While one-stop office for foreign direct investors was still anunfamiliar concept for many countries, Turkey partially created thisstructure through Foreign Capital Authority and this unit handledvarious procedures such as investment permits, incentives, foreignpersonnel work permits for those companies with foreign partnersat that time.

Throughout the 1990s, Turkey couldn’t somehow manage tosurpass USD 1 billion psychological threshold for FDI inflows.Unfortunately, economic and political instability impeded thedevelopment of an attractive investment climate sought byinternational investors. During that period, Foreign CapitalGeneral Directorate first served under Treasury and Foreign TradeUndersecretariat but after Treasury and Foreign TradeUndersecretariat split into two separate divisions as TreasuryUndersecretariat and Foreign Trade Undersecretarat, the agencybegan to serve under the former.

The early 1990s witnessed an increase of investments in theautomotive sector in Turkey. Arrival of new investors into thecountry, investment initiatives of the then-existing investors tomanufacture new models and main industry investments followed

Berrin BingölAdvisor to the Undersecretariat of Treasuryof Turkey (2006-2010 Director General for

Foreign Capital)

Turgut Özal formed his single party government after the 1983 elections,and brought a new approach to the Turkish economy.The most noticeabledecision of Özal’s government was about foreign exchange regime.International Investors Association’s (YASED) advertisement published inDünya Newspaper on 25 July 1983.

26

British Petroleum Company (BP) started its activitiesin Turkey in 1912, and continued its operations underthe name Steaua Romana until 1949. In 1953, it tookthe name, “BP Aegean Limited,” and in 1957, it wasreestablished and registered as a Turkish company.

1912

extension. I immediately called the related associate and instructedhim. When the visitors left, the said associate came in again and asked“Sir, the request is for two years. Should we grant a one yearextension?” I replied, “No, give him two years.” This incident repeatedtwo more times. He was inclined to give only half of what the foreignexecutives were requesting. On the third occasion I asked, “Why doyou always want to give only the half of the extension period askedfor?” and got a “But sir, we have always done it like this so far” reply.I instructed, “We will not do that anymore. It is not our business todecide on who will manage those companies.”

In May 1980, the government decided to utilize the non-guaranteedcommercial debt in foreign capital investments. Trading of these debtsbetween companies gradually increased in the following years. Morethan USD 600 million of the cumulative non-guaranteed commercialdebts, which were estimated to be around USD 1.5 billion in early1980 were used in the portfolio and new direct investments of foreigncapital companies. Until that time, the purchasing or sales value ofportfolio investments and stock sales of foreigners were determined bythe specialists of the Ministry of Finance. The process and the relatedcommunications were very time consuming; it sometimes took sixmonths to reach a decision. In some cases the whole process becamefutile, if foreign exchange rates changed during this period. In 1980,stock value determination authority was delegated to the ForeignInvestment Department. In early 1981, I developed a simplecalculation method. With this method, the present values of companystocks were assessed by taking into account the approved balancesheets of the related companies and the inflation rates during the last5-year period. The method was permitting sales prices to be fixed 30%below or above the set value, thus leaving a bargaining marginbetween the seller and the buyer. We discussed the method at acommittee we established within the Department for two weeks, andgave it its final shape. The value determination process, which took upto six months previously, could thus be completed in one day. Thismethod remained in force for many years. A decision of the Council ofMinisters was required for foreign capital investments over USD 50

million. Some decisions deadlocked at the government formed afterthe 12 September coup. The problem was solved by a letter addressedto President Kenan Evren by Deputy Prime Minister Turgut Özal.The constructive steps taken in the foreign investment area in duecourse paved way to the foundation of YASED.

30 years laterNow it is 2010… A long time has passed since then. Turkeyaccomplished great reforms between 1983 and 1991, particularly inthe period Özal was the Prime Minister. A great transformation wasmade and an enormous modernization leap was taken. China, now aneconomic superpower, was in its infancy in the 1980s. The Sovietblock crashed in the 90s.

Globalization has changed lots of things. Information andcommunication technology has made great developments. Computersand the internet have opened up the doors of a new era. Nanotechnology heralds new horizons. In spite of its risks, GMOtechnology gives hopes for our world’s ever increasing population.Significant developments can be expected in energy technologies inthe coming decades. Competition in R&D is fierce.

The political and economic balances of the world are changing. Chinaand India, each with populations of over one billion, are rapidlyimproving. The world’s center of gravity is shifting eastward.Compared to the past, capital movements are very fast. The US dollaris not as strong as it used to be, but foreign investment movements arevoiced as billion dollars - not million dollars as before. All aside, democracy, human rights, peace and social justice are veryimportant. Compared to the previous terms, Turkey has startedattracting significant amounts of foreign investment inflows. Turkishentrepreneurs’ investments overseas are also growing. Thecontinuation and increase of these developments depend on economicand political stability. The road ahead for Turkey is clear, as long aseconomic policies are implemented realistically, consistently and freefrom populism.

efore 1980, foreign investment permits were issued bya decree of the Council of Ministers. The secretarialworks of the permit procedure was carried out by adepartment under the State Planning Organization. In

case of a permit application, this branch first asked for the views of theMinistry of Finance and theMinistry of Industry,Technology and Commerce,and then prepared a draftdecree, provided that theseviews and its own werepositive, and presented it tothe Council of Ministers forsigning. Any revision in thedecree concerning a foreigncapital company, which wasalready in operation inTurkey, was also subject tothe same procedure. Onaccount of the severebureaucracy and itsunfavorable approachtowards foreign capital, the

unwillingness of governments for foreign investment and their lack ofefforts, and particularly the economic problems Turkey wasexperiencing; the cumulative amount of foreign investment inflows toTurkey was only USD 228 million until the end of 1979.

In early 1980, I worked together with Turgut Özal - then the


Robert Bosch started operating in Turkeywith an agency in 1910. In 1915, OttomanEmperor Mehmet Reşat Han awardedRobert Bosch with a medal of appreciation.Today, Bosch Group comprises six differentestablishments.

1910

BForeign investment in the 1980s

Undersecretary of the Prime Ministry and the Undersecretary of theState Planning Organization Prime Minister - in the preparation of the“Foreign Capital Decree”, which can be regarded as the mostimportant milestone in Turkey’s foreign capital policy. The draft decreewas put on paper by my hand writing. This decree was one of the mostcritical constituents of the “Economic Stability Measures” packagewhich was unveiled on 24 January 1980. The newly establishedForeign Investment Department was authorized for issuing foreigninvestment permits and the foreign investment permit procedure wasstreamlined by a Framework Decree.

I worked as the head of this Department from its date of establishmentin February 1980 until I entered politics in May 1983. In May 1980, Idrew up a draft amendment with the purpose to fix the problems facedin the implementation of the decree, which had come into force fourmonths ago. Once Turgut Özal forwarded this draft to the Council ofMinisters, State Minister Ekrem Ceyhun called me and asked;“Hüsnü, we issued this decree only four months ago. Why do you needthis change?” My answer was; “If we do not make this amendment, Iwill have to sign the important decisions while the Council of Ministerswill sign the trivial ones.”

The early months of 1980 were really hard times. The government wasgiving efforts to put an end to shortages and queues. We were far offfrom an environment where foreign capital would show some interestin Turkey. A short time after I took office, the general managers of anumber of foreign capital companies located in İstanbul came to myvisit. Some of them had working visa extension requests. The firstexecutive who had his put forth his request was asking for a two-year

Hüsnü DoğanFormer Minister of Agriculture Forestry and

Village Works, State, National Defense,Energy and Natural Resources

28

A 25-year concession agreement was signed in the year 1928between the government and the Ford Motor Company. TheFord Motor Company established an assembly facility inIstanbul in 1929, and started production with 450 employees.In 1959, Vehbi Koç started the assembly of Ford trucks atOtosan. With the mass production of Anadol, launched in1966, the first seeds of the automotive industry were plantedin Turkey. And on October 14, 1983, the Ford – Koçpartnership was established.

1928

plants, airports, and ports projects were developed under thisframework.

One of the main goals of Özal Government was to redefine the roleof the government, and limit its activities to those what governmentshould be doing; such as defense, justice, security, education, health,big infrastructures, and other public services oriented for theimprovement of the welfare of the people. Another goal was toprivatize State Economic Enterprises (SEE) by opening them to thedomestic and international private sector. To accomplish thisobjective, State Planning Organization initiated a study to develop aMaster Plan for the privatization of SEEs. However, the progress ofthe privatization implementation was slow due to the legal challengeof the opposition parties in 1990s. Eventually the majority of SEEswas privatized by the current government in the last 6-7 years, andthe budget deficit ratio reduced to 2-3%, while the economic growthrate increased to 6-8%.

The favorable results of the liberal investment policies implementedand the incentives adopted by the Turkish government can easily beobserved in foreign direct investment inflows. Whereas thecumulative amount of foreign investment in Turkey between 1954and 1980 was only USD 278 million, this figure reached to USD 4.3billion in 1992, then to USD 15.1 billion in 2002, and is expected toreach USD 104 billion in 2010. As you can see, foreign capitalinflows increased exponentially since 1980.

Like many other developing countries, one other problem ofTurkey’s economic development constituted of low income, lowsavings, low public revenues, lack of good cash management andmisuse of capital formation. To break this vicious cycle, Turkeyadapted positive interest policies to improve savings and optimizecapital allocation. At the same time, the government implementeddaily adjustable exchange rate policies, in the beginning, anddeclared convertibility in 1989 to promote a stable economicenvironment.

As part of the financial reform, the government improved the legalframework in the area of capital market, leasing, and factoring, byenacting the necessary laws and regulation and opened the countryto international banking. As part of the fiscal measures, VAT wasintroduced and other tax reforms aiming to improve public financewere made; special new and innovative funds were established tosolve specific problems in education, health, social housing anddefense industry. Turkey also signed investment protection andavoidance of double taxation agreements with leading countries ofthe world to promote foreign investment.

Consequently, Özal Government reduced government interventionin economic activities and developed the legal framework in order toimprove the business climate in Turkey. Subsequent governmentscontinued to improve the efficiency and competitiveness of theTurkish economy, by implementing the necessary measures foroptimum allocation of resources. Turkey has now put its housepolitically and economically in good order, and decided to join theworld economy as a country,confident of its ability tocompete and succeed. And itscurrent macroeconomicoutlook is a distinct indicatorof the country’s present andprospective business climate.

would like to remind our reader where Turkey has come

from in last 30 years, and how we created the right business

climate for foreign investment in Turkey. As you may

know, direct foreign capital investment makes great

contribution to the economic development of a country by reducing

the deficit in balance of

foreign currency payments

while improving production

and employment opportunities.

Prior to 1980, Turkey’sbasic strategy of developmentwas based on importsubstitution in a closedeconomic model, supportedby heavy state controls.This model initially wasselective and satisfactory,but became progressivelyinefficient and stagnant indue course. Turkisheconomy, instead ofintegrating with the world

economy, chose to isolate itself from international competition.Furthermore, foreign invested companies could not increase theircapitals and nor could transfer their profits or license fees. Duringthis period, Turkish economy failed to attract significant foreigninvestment. Much of the foreign investment that came in was for thedomestic market and did not contribute greatly to the development


Shell initialized its activities in the Turkish market inyear 1923 with the distribution of fuel oil. Receivingits first oil prospecting permit in Turkey in 1955,Shell found the first oil in Turkey in 1963, andestablished the first oil well in Kurkan, Diyarbakır.

1923

I

Foreign investment in thelast 30 Years

of Turkish economy. These policies steered the Turkish economyinto an acute problem of inflation and balance of payments in late1970s.

In January 1980, Turkey took the first step towards making a cleanbreak with its economic past and implemented a comprehensiveeconomic stabilization program by removing price control andliberalizing the Exchange, Import and Export Regimes. Days ofproducing only for the domestic market which was tied foot andhand, behind an import protection wall were over. Knowing thattrade is a two-way street, Turkey was determined to become a majortrading partner of Europe.

For the first time, the government established a Foreign InvestmentDepartment (FID) in State Planning Organization, with atransparent Foreign Investment Decree. FID hired Lazard Brothersto study the investment and business climate in Turkey andimplemented their findings to the administrative and financialinfrastructure, while promoting investment and export incentivesfor domestic and international investors. Major foreign companieswere organized under YASED to represent the interests of foreigncapital in Turkey. These programs improved Turkey’s stagnanteconomy, reined inflation and restored country’s internationalcredit-worthiness.

Some of the infrastructure projects, which were necessary, but didnot fit the budget outlays, were opened up to the private sectorwithin the framework of Build- -Operate-Transfer (BOT) andBuild-Operate (BO) models. Some of the hydraulic dam, power

Namık Kemal Kılıç (PhD)Former Undersecretary of Treasury

and Foreign Trade of Turkey

nnual foreign investment inflow to Turkey today ismuch higher than in my term of duty (1988 – 1991).Although this is initially pleasing, foreign capitalinvestments are still far below the desired level.

Especially recently, a significant portion of the foreign investment inour country has beenspeculative and short-term;hot money, as it’s called.

Turkey needs an increase inproductive foreign capitalinvestments, which wouldbring technology, know-how,and enlarged employmentcapacity. To this end, thefinancial, commercial, andindustrial policies of todayrequire a major review.

Turkey’s external deficit,financed mostly by hotmoney, is ballooning. As aresult of excessive, world-

wide fiscal expansion, the amount of foreign currency flowing into therelatively stable Turkish economy is more than it can absorb.Consequently, the Turkish lira has become over-valued and thecompetitive edge of our economy is being worn away. Bear in mindthat two thirds of stocks traded on the ISE are owned by foreigninvestors. Because this can easily create market volatility. In brief, the

On February 21, 1948, the Cabinet gave permission for theestablishment of “General Electric Turkish, Incorporated,” whichwould manufacture the first local light bulb.The partners of thecompany were Turkish IşBank, International General ElectricCompany,Vehbi Koç, Fazıl Öziş and Turkish Trade Society.Thefoundations of the factory were laid on July 22, 1948.The firstTurkish light bulbs, manufactured in June, 1951, were presentedto the market at the Koç Trade Beyoglu Branch.

1951

risks to our economy are increasing.

We must establish a new model in order to attract more foreign directinvestment. In this respect, China -a country more successful inattracting FDI- sets an interesting example. However, it is difficult todetermine what is actually the best model for Turkey.

If we want to attract more FDI, macroeconomic stability is notenough. We also have to convince investors of the transparency,reliability and consistency of the politics and the bureaucracy.

Despite everything, Turkey today holds a position of strength andadvantage. Global circumstances are in our favor, and we need moreof an effort to properly benefit from them.

A

Investors need to be convinced of the transperancyof the politics and bureaucracy


Ali TigrelFormer Undersecretary of the

State Planning Organization of Turkey

FORMER CHAIRMEN ANDTHE FIRST SECRETARY

GENERAL OF YASED

Ali Tigrel, Atilla Midillili, Klaus Schwab

32

Migros Turk, established through the initiatives of theSwiss Migros Union of Cooperatives and the IstanbulCity Council, has been one of the institutions that hascreated a shopping culture in Turkey. Migros openedits first “self-service” shop at Balıkpazarı in 1957, andthe first modern supermarket at Şişli in 1971. From1975 onwards, a new era began for Migros with Koç.

1954

s a country striving to develop, Turkey requirescapital. Since its domestic capital accumulation isinadequate, Turkey has always sought foreigncapital and foreign resources. Foreign direct

investment is especially important here, but the young Republic ofTurkey approached foreigncapital rather coldlybecause it was veryunfavorably affected byforeign capitulations. Foreigninvestment inflows toTurkey thus remained atthe very low level ofUSD229 million, evenafter the enactment of Law6224 (Encouragement ofForeign Investment).

The founders of YASEDfaced two important tasks.One was to attractmembers to the association- accomplished despite the

great difficulties faced. The second was to end discriminationagainst foreign investors-the cause of strong complaints fromforeign investors. Intense efforts were made to change theregulations and to eradicate the bureaucratic problems facedduring implementation. These efforts gradually bore fruit. TheForeign Capital Encouragement Law and associated regulations


The Unilever – Iş company, established under thepartnership of Unilever company and Turkish İşBank,was approved on March 15, 1951. The factory, with acapacity to produce 8 thousand tons of margarineannually, was opened by Celal Bayar, President of thetimes, on January 5, 1953.

1953

A

YASED’s contribution toTurkey’s economy

were amended. The obstructive bureaucratic practices of the StatePlanning Organization, Ministry of Industry and Commerce,Ministry of Finance, and Ministry of Customs were graduallyeliminated once the law came into effect.

The reports and decree and regulation drafts prepared by YASEDwere welcomed by the administration and the ministries. All ofthis had a positive effect on foreign-invested companies in Turkey,and YASED’s memberships increased.

Evaluating the last 30 years, we see a significant change in thedevelopment and the developmental model of Turkey’s economy.We also see governments adopting the “liberal economic model”,in line with global developments. With this model, discriminationbetween domestic and foreign capital has lost its significance inTurkey. Foreign-invested companies now operate in a fair,competitive environment.

YASED has gained significant ground during the last 30 years.Their economic potential and their labor and managementpotential in Turkey will assist them in making significant leapsforward. I congratulate YASED’s executives, and wish themcontinued success.

Erdoğan KarakoyunluFirst Chairman of YASED (1980-1987)

mbitious to grow despite insufficient domestic savings in1950’s, Turkey passed the direct international capitalincentive law in 1954, as the best viable means ofresorting to international savings. Yet, YASED, a Non-

Govermental Organization (NGO), marking its 30th anniversary today,was founded in 1980.However, over the course ofthe said 26 years period, from1954 through 1980, thenumber of foreign capitalenterprises that had actuallycome and operated in thecountry was no more than1500. The same was barelyhitting 4500, but over thefollowing six years period,from 2001 through 2007, thenumber of foreign capitalenterprises made a giant leapforward to exceed 15thousand. This massiveincrease in the number offoreign capital enterpriseswas also reflected on the

actual capital inflow into the country, and while total capital inflow overthe course of the 50 year period, from 1954 through 2004, accounts forbarely USD 20 billion, annual capital inflow in recent years has alreadyexceeded USD 20 billion level. As one of the indisputable milestones wemay mention the preparations for the 8th five-year plan, SPO’s specialattention to the matter, and again SPO’s offer in 1999 to YASED, a

A

International capital is no longer astranger in Turkey

NGO representative that represents organizations, which have actuallyinvested in the country having faith in Turkey and in its future, to chairthe exclusive specialty commission, which was founded to serve thispurpose. Efforts focusing on “Improvement of Investment Enviroment”started off in this fashion, have lead to International Capital Draft Law,which measures up to the current competition conditions. YASED tooka second leap forward in 2000 and invited James Wolfenson, WorldBank’s president, to the first Annual Foreign Capital Conference it held.Wolfenson requested that the factors contributing to Turkey’s failure inattracting international capital beyond USD 1 billon trash hold to beexplored. Therefore, FIAS (Foreign Investment Advisory Service), asubsidiary of the World Bank and IFC, took on this mission, and after ayear-long in-depth research, submitted a detailed report to thegovernment. As suggested in this report, a platform under the title of“International Investment Advisory Council” was immediately formedand the Prime Minister chaired all of the annual meetings himselfincluding the first one. I have to say that Prime Minister Erdoğan’s keenpersonal interest in these meetings coupled with well-organized, high-profile annual international conferences held by YASED have made avery favorable impact on investors and participants. Since 2001: Turkeyset off its transition from an average “developing country” into a countrythat engages in the process of the “EU accession talks”, that is stable andan influential member of G-20. If, today, Turkey is being referred to asthe “new BRIC”, “the Brazil of the Region” or “the China of the Region”in the global media and at conferences, we wouldn’t be exaggerating bysaying direct foreign investment is no longer and will never be a strangerin Turkey. Looking from this perspective, YASED, as an Organizationleading those successful NGO’s that “have a drop in the bucket”,deserves a pat on the back once more on the occasion of its 30thanniversary.

Yavuz CaneviFormer Chairman of YASED

(1992-1997)

The founders of YASED faced two importanttasks. One was to attract members to theassociation-accomplished despite the greatdifficulties faced.

34

The Mannesmann Pipe Factory, established underthe partnership of Sumerbank and Mannesmann,was opened in İzmit on October 13, 1955.1955

uring my term on the Board we focused onbenefiting from the experience of foreign boardmembers and founded a Privatization Committee.This enabled us strong representation on the

ongoing privatization issue in Ankara and provided opportunity ofcontinuous discussions withthe Public ParticipationAdministration (PPA). AsTurkey did not have theluxury of time, works weredone and publications wereissued on how to attractforeign investors byprivatizing state ownedenterprises. YASED published‘Turkey: The Opportunity’.But concrete progress inprivatization was slow andthere was a lack of informedpublic debate.

Consequently YASEDpublished ‘Privatization in

Turkey: The Myths and Misconceptions’, which dealt with 6 majormisconceptions. This work found great attention amongst the foreigncommunity and created vast respect in and ensured intensecollaboration with Ankara. With our mixed expertise from differentcountries we were able to guide governmental authorities into an openand transparent dialogue on privatization, albeit – seen in


The Istanbul Hilton Hotel, built jointly by theGovernment Retirement Fund and the AmericanHilton Hotels, was opened to service in 1955. WithHilton Istanbul, which had a special place in the Hiltonchain, Istanbul opened its doors to modern tourismwhile Hilton International took the first step in itsdevelopment outside the USA.

1955

D

YASED should continue contributingto improve Turkey’s competitiveness

retrospective - a positive influence of our work seemed to haveemerged rather ‘subcutaneously’. My outside-in view is that the on-going work of YASED helped Turkey tremendously to climb up fastthe experience curve as an emerging market. In my opinion we canfind Turkey already at the top end as opposed to countries which seemeconomically to be much stronger, like China and India. Managingcrises, showing resilience in difficult times, but holding on to beattractive for foreign investors, are good indications for an everimproving international competitiveness.

Success through blendingYASED’s work should continue as a contributor to improve Turkey’scompetitiveness in a global world. YASED is unique to make adifference as the internationality of its board members is an assetwhich no other institution has. So, continue ‘Blending’ the mainstrengths, which the Turks have as being enormously entrepreneurial,creative, flexible and passionate with the skills internationalcorporations can bring to the table through their members. Act as a‘Learning Campus’ and pick the best elements of each nationality,benchmark them with the best of the best and transfer them in a‘blended’ form to the benefit of Turkey. Also, never stop putting your‘finger into the wound’, fight for transparency in all matters thatinterest a foreign investor as ‘Transparency creates Confidence’ andthat is what influences most a positive decision for Turkey. And, afterall, don’t hesitate to align with other institutions and if necessary joinyour ‘competitor’ to be stronger than being alone! With sincerecongratulations to YASED’s 30th anniversary and best personalregards for sustainable success from a former Chairman who lovesTurkey.

Christoph UrbanFormer Chairman of YASED

(1997-1998)

ASED has undersigned great projects as the mostnotable representative of international investors in ourcountry throughout its 30 years of activity, and hasmade undisputable contributions to Turkey’s

development. The point reached today is the joint success of allexecutive boards and theirmembers. During the yearsfrom 1998 to 2003, when Iserved as Executive BoardChairman, we can summarizethe main problems in Turkeyregarding internationalinvestments thus: The lowlevel of gross national incomeper capita, the adverseperception of the word“foreign” in the public andthe reluctance within theranks of state, and the lowassessment of the country’seconomy by foreignestablishments. In thecompetitive environment that

emerged after the signing of the ‘Customs Union Agreement’ in March,1995, The Turkish economy started seeking international partnershipsand technology transfers in the name of increasing quality. The headlines of our operation plan as YASED were, • Providing information to state and government authorities on InternationalInvestments: Beyond frequent visits to Ankara, CCIIE (Coordination

Y

YASED undisputedly contributedto the development of the country

Council for the Improvement of the Investment Environment) wasestablished as a result of close relations with prestigious institutions suchas TOBB (Turkish Union of Chambers and Stock Exchanges) and TIM(Turkish Exporters Assembly), and with the participation of therelevant Ministers, information transfer reached high levels.Furthermore, the chief architect of the Irish miracle in InternationalInvestments, Chairman of the Ireland Investment Agency, DavidO’Donovan was invited to our country and gave conferences in Ankara.• Establishing closer relationships with the public and introducing YASED: Withthe support of our media, our view on economic subjects were madepublic, and YASED soon became a reference establishment. TheYASED Barometer meetings held every three months became awaitedevents creating continuing relations with the public.• Constant communications with YASED members: Communications weremaintained with members and solutions sought for their problems.• By emphasizing the “International Direct Investment” concept insteadof “Foreign Capital”, an effort was made to change the false impressionsof the public.

The event that best explains the point YASED has arrived at, was thevisit of Justice and Development Party Chairman Recep TayyipErdoğan and an accompanying committee to our establishment inJanuary, 2002, receiving information on the subject of InternationalDirect Investments, and including the solutions presented in the 2002election declarations.

As a YASED member who has lived through events such as the 1999Earthquake, 2001 crisis, I hope the successes of our prestigiousestablishment continue with enhancements in its 30th year, and presentmy respects.

Faruk YöneymanFormer Chairman of YASED

(1998-2003)

36

Turkey was introduced to Ipana, the toothpastedeveloped by one of the world’s largest pharmaceuticalcompanies, Bristol Myers, in 1956. Ipana was released tothe market under a license awarded to Eczacıbaşı. In1982, Eczacıbaşı purchased the usage rights of the Ipanabrand from Bristol Myers. The Eczacıbaşı - Procter &Gamble (P&G) merger in 1991 gave Ipana new life.Ipana was placed under the roof of P&G in 1998.

1956

n 24 January 1980, Turkey’s economic axis was

shifted by a series of decrees issued by the

Council of Ministers. Law No.6224

(Encouragement of Foreign Capital

Investments), which then came into effect, was prepared with an

approach which suited the

1950s. It embraced the

principle that domestic

and foreign capital should

be treated equally, and

authorized the Council of

Ministers to issue permits

to international investors

for production operations

in Turkey.

The Foreign Investors

Association (YASED) was

founded during this

period, to convey to

foreign investors operating

in Turkey the opportunities

opened by the new legislation, to encourage them to enlarge and

reorganize their operations and make new investments, to explain

the existing economic, political and social environments to

foreign investors considering investing in Turkey, and to provide

explanations which would assist investment decisions. I was in

touch with the Head of the Foreign Direct Investment


The foreign oil company Mobil received its first oilprospecting license on January 27, 1956.1956

O

YASED between 2004–2007;during my chairmanship

Department, which operated under the State Planning

Organization in Ankara. We exchanged views with YASED’s

executives on how the movement of capital could gain

momentum and intensify, and carried out complementary work.

In the following years I was a YASED Board Member and, after

Faruk Yöneyman’s term, was elected Chairman in 2003.

Besides financing the investments essential for Turkey’s

development, foreign capital also made direct contributions, such

as providing production and management know-how, opening

access to new markets, and increasing employment.

Furthermore, it made indirect contributions, such as eliminating

informality and unfair competition, generating consciousness of

product quality, and promoting public awareness of social

responsibility.

Foreign Investment Law No.4875, coming into force in 2003,

confirmed the principle of equal approaches, removed the

uncertainties stemming from implementation, and provided legal

security for foreign investors. In addition to this law, steps to

improve the legal environment (taken within the framework of

Turkey’s EU accession talks) and further efforts to improve the

investment environment both significantly raised foreign

investment inflows to our country.

YASED - with its new title International Investors Association -

played a major part in these achievements. Other important

players were Ali Babacan, then Minister of State and Deputy

Şaban ErdiklerFormer Chairman of YASED

(2004-2007)

Prime Minister, and the State Planning Organization, TOBB,

TÜSİAD, and TİM. In the issues of taxes and incentives,

company law, employment, and intellectual rights, YASED

played a critical role by developing recommendations which

shaped later legislation. YASED also contributed to reviews of

other countries’ practices, their adaptation to Turkey, and

evaluations of the results. YASED was able to analyze and

generate appropriate solutions to the following problems: permits

to establish businesses, market audits, real estate acquisition by

foreigners, expatriate employment, tax burden alleviation, and

improvement of the investment environment coordination

process and in explaining the present investment environment to

existing investors and to foreign companies considering

investments in Turkey.

For this purpose, it participated in meetings overseas and the

well-attended Foreign Investment Conferences in Turkey.

International organizations attending these events showed keen

interest, and the foundation was laid for their future

participation. In the same framework, International Investment

Council Meetings were held with the Prime Minister, the related

ministers and high-level bureaucrats. Concrete measures were

immediately implemented to solve investors’ practical problems.

YASED organized annual receptions in Ankara, attended by the

Prime Minister, where our members voiced their concerns. A

new tradition evolved here: the post-reception discussion,

conducted in an atmosphere of sincerity, with the most senior

government figures.

My advice to future YASED executives, is to market Turkey-its

investment opportunities-to both domestic and foreign

investors. Bringing new projects to the country, increasing

cooperation between domestic and foreign capital, and raising

Turkey’s legal infrastructure to the level of the EU’s should be

among YASED’s priorities.

I would like to voice my gratitude to my colleagues on the Board,

in particular, and to the entire YASED team for their

extraordinary efforts to realize YASED’s vision. I also would like

to express my appreciation to YASED’s members, who were

unsparing with their moral and material support for us and our

mission.

Foreign Investment Law No.4875,coming into force in 2003, confirmed theprinciple of equal approaches, removedthe uncertainties stemming fromimplementation, and provided legalsecurity for foreign investors.

38

Roche, established in 1896 in the town of Basel inSwitzerland as the first pharmaceutical company ofthe country, started its Turkish voyage in 1958 with8 persons at Esentepe.

1958

investments have been demonstrating an increasing trend inrecent years. The rearrangement of the Incentives Law wasanother issue we laid special emphasis on at that time, since thatwould facilitate a more rational utilization of our valuableresources. In view of the development line Turkey has followeduntil now, formalizing the informal economy is one of the mostimportant issues.

We however could not accomplish any progress in that term inneither legislation nor implementation against informaleconomy, except for the generation of awareness on the issue. Ibelieve that YASED will keep up working on this issue, as it isdoing today.

YASED’s first social responsibility project KOZAwas put into practiceAside from our works we carried on the legislative area in thatterm, we put into practice YASED’s first social responsibilityproject entitled the “KOZA/COCOON”.

By means of this project we are providing the students living inthe less developed regions of our country, the opportunity tomake their internships in Istanbul at internationally investedcompanies, and thus to gain experience and vision. The projectwhich initially started in Southeastern Turkey, reached 118students this year, on a larger geography. The project fits the“Everything begins with humans” motto perfectly.

YASED will sustain the valuable works it has accomplished inthese 30 years after the current demanding period the worldeconomy is going through.

I wish success, above all to YASED employees and then tomember companies, our Chairmen and the Board members.Aware of the privilege of having served a distinguishedorganization like YASED as a chairman and satisfied with this,I wish YASED productive works for many years to come.

ASED was founded 30 years ago from today. WhenI look back today, I deeply appreciate the foresightcapability of the persons who started out for thismission under the demanding conditions of those

days. Apparently, these persons or institutions - like us – earnestlytrusted in Turkey andTurkey’s developmentpotential.

During these 30 yearsYASED’s starting point hasalways been its belief that,the international directinvestments to be made inTurkey, would providebenefits for all the partiesconcerned; and during thisperiod YASED has alwaysacted with a purpose toaccomplish the better andbetter: As in an evergrowing spiral, contributingto the efforts for increasing

direct investment inflows to Turkey would fuel the transfer of know-how, experience and capital to the country, and investors’expectations would be satisfied in a secure environment.

The period between the founding of YASED and today is actuallyTurkey’s transition period from a self-enclosed economy to an


One of the first foreign capital pharmaceuticalcompanies in Turkey, Pfizer started its operations in1957.

1957

Y

Taking office at YASED is likerunning in a never-ending relay race

outward-looking economy. Some of us will hardly remember, butwe have once experienced times when, let alone direct investmentinflows, even privatization schemes with domestic capital causedgrave reactions. Finally, we now live in an outward oriented andcompetitive country where direct international capital investment isnot considered as a threat, and further partnerships with overseascompanies and business development prospects are sought for.

Establishment of Investment Support andPromotion AgencyAll throughout this period, YASED has worked with this vision;given persistent efforts for the improvement of the investmentenvironment by actively participating in the founding process of theCoordination Council for the Improvement of the InvestmentEnvironment (CCIIE) and subsequently during the works of theBoard. The Association did its full share in the making of variouslaws, decrees and regulations, in particular the Foreign DirectInvestment Law, the reduction of the Corporate Tax rate from 30%to 20%, and the establishment of the Investment Support andPromotion Agency. Taking office at YASED is actually like runningin a never-ending relay race. You have to conclude the productiveworks initiated by your forerunners with success and take up newissues which will be followed up by your successors, andconcentrate on these.

The enactment of the Law on Encouragement of R&DInvestments, which YASED had attached importance to during mychairmanship term, is one of the developments which has made meextremely happy. We now observe with pleasure that R&D

Tahir UysalFormer Chairman of YASED

(2007-2009)

Atilla Midillili always believed in Turkey. He used to say, “The 21st

century will be ours,” and he acted as YASED Chairman with this belief.

As YASED Chairman, he believed that Turkey would reopen the Pacific

countries, and Europe’s closed doors, by becoming a center of

production and exports. He believed that if we do not miss this

opportunity,Turkey would achieve the position of a country being able

to sell goods and services to the world’s richest communities.

He used to tell that in the 1980’s, Turgut Özal would attend meetings

of upper echelon executives of foreign capital companies from time to

time, and YASED was born from these opinion exchanges.

He acted as chairman of this association, which had 121 members at

the time. He kept YASED’s activities always in the foreground, and

never let it out of the agenda of the media.

He believed that it was essential to distance the state from being the

large partner of the economy. He was convinced that foreign capital

should be encouraged further, and that framework practices and

regulations should be consolidated and managed from a single center.

He also pointed out that the foreign investor did not want daily

changing practices and that privatization should be given momentum.

Atilla Midillili’s wish was to approach European standards with new

products and brands, and to emphasize qualified manpower and new

technologies.That was his dream for Turkey in the 21st century.

Birsen MİDİLLİLİNovember 2010

In Memory of Atilla Midillili, Chairman of YASEDduring the 1987-1992 Period, from His Wife,

Birsen Midillili

40

Henkel, one of the world’s leading cleaningtechnologies companies, established TurkishHenkel at Şişli Bomonti in 1963, to manufacturetextile and leather chemicals. Henkel became apartner to Turyağ company in 1965. In 2000,Henkel gathered all its activities in Turkey underthe roof of Türk Henkel.

1963

n April, 1983, I took on the duties of Secretary General atYASED, where I continued until 1991. The Association,under the Chairmanship of Erdoğan Karakoyunlu, withintensive efforts from Deputy Chairmen Can Göknil and

Mehmet Tanberk, joined later by Dr. Nuri Eren, and a staff ofthree, developed rapidly.

Actually, the Associationhad started off in 1980under the founderchairmanship of AsafYenisey from TurkishPirelli and fourteen foundermember institutions, butwhen the September 12thcoup prohibited allassociation activities, hadsuspended its operationsuntil 1983.

In two years, the Associationincreased its members tofifty, and published around

twenty books. The studies of Prof. Dr. Selahattin Tuncer on taxregimes related to foreign investments and Prof. Dr. Ünal Bozkurt onthe place of foreign investment in the country’s economy, the study ofProf. Cem Alpar investigating the resources of Turkish economy, itshistory of investments, its infrastructure, laws and regulations, are theones that I recall with pride from that period...


Turkey first met Pirelli in 1948, and in 1960 thePirelli Group decided to open a factory in Turkeyin 1960.The Pirelli factory, with the constructionbeginning on this date, started producing the firstvehicle tires in Turkey in 1962.

1960

I

YASED became a reliable source ofinformation for potential investors

In those years, during the struggle with the foreign debts crisis, theabsolute necessities of Turkey’s integration with internationaleconomy were defined as opening the economy to the outsideworld, developing the market mechanism, limiting publicparticipation, bringing the inflation under control and encouragingforeign capital.

In its work, the Association attached importance to the transfer oftechnical information and experience in the switch to transparencyand a new economic policy. During this period, there were manywell equipped, expert personnel, that closely followed globaldevelopments, both at the State Planning Institute’s ForeignInvestment Department, and in the economy press. It was bothYASED’s luck and its strength to be able to work with bilateralrespect and trust with both these fractions.

Bureaucrats from Spain to People’s Republic of China, responsiblefor organizing, auditing and encouraging foreign investmentsrelated the applications in their countries at widely attended“Foreign Capital Applications” seminars. The reports presented bythe World Bank and the European Union and at variousinternational conferences were translated and published as bookletsor bulletins.

YASED became a reliable source of information for thoseinterested in investments in Turkey. Almost every foreign investorgroup was received and entertained, the meetings of institutionssuch as the World Economic Forum and Business Internationalwere attended and spoken at. Through the contest series called

Ayşe Semiha BabanFirst Secratary General of YASED

(1983-1991)

“The Future of Foreign Investments in the World and in Turkey”directed at university students, discussion meetings were organizedin all corners of Turkey, in universities, colleges, variousassociations and chambers.

We can group YASED’s activities in three fields in this first period:legal studies, especially on suggestions for simplifying bureaucraticprocedures; introductory activities to mold public opinion; andmeetings and trips to bring together the executives of foreign capitalcompanies to enable information exchange and solidarity.

In time, different establishments focused on these fields of activity,and carried out effective work with expert personnel. But I still askmyself, are they getting the same enjoyment out of the work as wedid?

It cannot be denied that YASED members have raised the bar inthe field of business management. Even in fields where classicexpectations such as creating employment and the transfer oftechnology, generating external economy, is not clear, a wellequipped generation of business executives have been trained inthese companies. Today, corporate responsibility has gained priorityon the agendas of global companies, especially in the fields of jobsafety, environment and the protection of the consumer. My wish isfor YASED to also take on the leadership of these fields in Turkey.

President Turgut Özal with Board Members of YASED at Çankaya

Chairman Atilla Midillili welcoming the Minister

First row standing 4. Namık Kemal Kılıç, 5. Hüsnü Doğan,6. Erdoğan Karakoyunlu, 7. Nuri Eren (1985)

BUSINESS WORLDANDNGOs

44

Coca Cola’s foundations were laid in 1964.The Coca-Cola Factory, belonging to theIstanbul Beverages Industry (IMSA), foundedwith a capital of 3.5 million Turkish liras,started production in Istanbul.

1964

nternational investment inflows to Turkey remained at minutelevels for many years, and gained momentum only recently. Twotypes of foreign investors come to Turkey. One plans to acquirean ongoing business or become its shareholder (in banking,

insurance, food, durable consumer products, automotive, etc.). The second,starting from scratch, comes toestablish a greenfield businessor industry. In the first case,foreign capital brings intechnology, enlarges thebusiness, and organizes leaneror more efficient management.Decisions are made jointly withthe founders or localshareholders. The companyexports when it gets theopportunity, and uses Turkeyas a production and supplycenter. The number ofemployees increases as thebusiness grows. Even if thebusiness is not enlargedsignificantly, the capital

somehow turns into an investment and contributes to the nationaleconomy. In the case of greenfield investments, a brand new, modern plantis set up. There are employment opportunities for local people, andcompetition grows because there is now another company in the sector.Some companies export their products and implement social responsibilityprojects. And, of course, they pay taxes when they make a profit. Theseinternational investment inflows also contribute to the country’s balance ofpayments. Working with a foreign shareholder, at its core, is a cultural


Goodyear Lastikleri were established in Turkey onSeptember 1, 1961, as the subsidiary of GoodyearTire and Rubber Company in Turkey.The foundationsof the factory at İzmit, Köseköy, were laid in 1962.Goodyear became one of the first tire manufacturingcompanies of Turkey, and produced the first Turkishmanufacture tire on January 2, 1963.

1963

I

Contribution of internationalinvestment to organizational culture

issue. It requires habituation, experience, and patience. As well, it bringsseveral advantages. The foreign shareholder introduces furtherinstitutionalization and professionalism to the company’s management.Board meetings are more regular and proper. The company is bettercontrolled. More companies with foreign capital in the country also narrowthe operational areas of companies working informally or in the grey zone.However, there are also disadvantages to working with a foreignshareholder. More bureaucracy is brought in to the company. The overseashead-office intervenes in some critical decisions. The decision-makingprocess slows down, and some initiatives are blocked. If the foreignshareholder lacks financial strength, the investment or export strategies areblocked, channeled or restricted in line with the strategies of theshareholder’s parent company. If the contributions of both parties are notwell balanced, the shareholding does not last or does not turn out to beequally profitable. If, for instance, the technology and the trademark belongto the foreign shareholder, it is in a more powerful position than thedomestic shareholder. If the company buys any goods or services from theforeign shareholder’s parent company, there is the possibility of payingprices inflated for the purpose of making a profit for the parent company.Management changes made every three or four years because of the foreignshareholder’s personnel policies weaken relationships, obstruct streamlinedwork, and create continuity problems with the top executives. The maincontribution of a foreign shareholder to organizational culture is employingprofessional managers and eliminating the father-to-son transfer of power.Other positive contributions are preparing proper job descriptions,performing duties according to prescribed rules, allocating salaries andbonuses according to performance evaluations, having a longer termplanning strategy, implementing a dress code, and avoiding luxury.Furthermore, social rights develop, reach down to the bottom of theorganization, and no longer depend on the arbitrary decisions of thefounder, owner or majority shareholder-and this is important.

Rahmi M. KoçHonorary Chairman, Koç Holding

ne of the achievements of the Istanbul Foundationfor Culture and Arts (IKSV) since its establishmentclose to 40 years ago has been its pioneering role inrecognizing the need for private sector sponsorship

of culture and the arts in Turkey and developing the relationshipsto attain this. Starting froma single, one-and-a-halfmonth long summerfestival, IKSV noworganizes six internationalfestivals, including the newIstanbul Design Festivalbeing launched this year, aswell as a wide range ofspecial events. Privatesector sponsorship has beena crucial facilitator ofIKSV’s growth: as a non-profit institution, we rely onsponsorship to fundbetween 70 and 80 percentof our budget.

As in many countries, the public sector budget set aside for cultureand the arts in Turkey is not nearly sufficient to respond to thepublic’s growing demand for these activities, and in times ofeconomic difficulty, it’s one of the first items to be cut back.

For all these reasons, the sponsorship system is vital not only forIKSV but also for every other institution involved in culture and the

O

Investors helped to establish theconcept of CSR in our country

arts. In this environment, in my view, international companies’experience and familiarity with the sponsorship tradition have hada positive impact on the development of culture and art sponsorshipin Turkey. Aware of the need for social development as well asbusiness growth, international investors have helped to establishthe concept of corporate social responsibility in our country andcontributed to the enrichment of culture and the arts in Turkey.Over the years, IKSV has collaborated with numerousinternational companies in the realization of the İstanbul Festivalsand special events through co-sponsorship agreements and specificevent/project funding. Many international companies also haverepresentatives on IKSV’s Board of Trustees. One of the importantissues for supporting culture and art is to ensure sustainability. So,from our point of view, existence of international companies in ourBoard of Trustees, is absolutely essential. When culture and artsponsorship becomes an integral and permanent component ofcorporate culture, we see that societies advance rapidly.

For this reason, I hope that international investors in Turkey willmaintain their far-sighted approach to this issue and continue toinspire all investors here with their experience, principles andvision for the future.

Bülent EczacıbaşıChairman, Istanbul Foundation for

Culture and Arts (IKSV)

For all these reasons, the sponsorshipsystem is vital not only for IKSV butalso for every other institution involvedin culture and the arts.

46

Türk Tuborg Beer and Malt Industry was foundedin Izmir. With the production of Tuborg, one ofthe first beer brands of the private sector,Turkeyreceived its first taste of private beer.

1967

We must now set a new target for foreign investments: attracting high-technology investments to Turkey...That this country will be unable toproduce high technology in the 2010s is inconceivable. An economycapable of producing the most up-to-date technology is needed to builda greater Turkey. We can expedite this process of technologyproduction with the technology transfers that follow investments inhigh technology.

In particular, we need to attract investments to the fields of energy,electronic chips, and space technology. Investment in these areasboomed throughout the world in the 1990s and early 2000s;unfortunately we missed the opportunity, and these investments wentto Eastern European countries.

“Made in Turkey”:A Reason to ChooseIn 2007, the CEO of Toyota Group said, “We have factories on sixcontinents, in more than 20 countries. But there is only one factorywhich operates with zero defects, and that is our factory in Turkey.”The “Made in Turkey” stamp has become a reason to choose a product.This proves that Turks, properly trained and working under the rightconditions, can produce the most durable and highest quality work inthe world. The late former President Özal was one of the first torecognize this ability in our people. When Özal said that we were goingto open up the country to foreign markets, everybody exclaimed,“What is this man doing?” We did not know anything. We thought hewould turn Turkey into Europe’s outlet. We did not know what wecould sell to Europe. We thought that we could not produce, could notsell, and could not accomplish. We lacked self-confidence, but Özal hadconfidence in his people. Look where we are now.

Turkey’s annual exports were only USD 3 billion in 1980-and almost allof them were agricultural products. They now exceed USD 130 billion-93% of them are industrial goods, and 60% of them go to the world’smost competitive and quality-sensitive markets. What has changed?The human factor is the same! The only difference is in the businessenvironment. The only change was to improve our business

environment to our competitors’ standards. In 2003, you required 19different signatures of approval to establish a company in Turkey. Nowa company can be established with only two signatures.

Two of the most important elements in Turkey’s rapid growth were thestrengthening of public-private partnerships, and faith in the benefits ofconsulting before acting.

Previously, every economic decision was made at a bureaucrat’s desk.How could someone who had never employed a single soul in his wholelife realize how difficult it is to run a business, understand the essentialelements of a business environment, or produce solutions to investors’problems?

The private sector must participate in the decision-making process. Thewhole world operates like this, and we must do the same. In thiscontext, our governments have made substantial contributions to thedevelopment and institutionalization of the public-private sectorsdialogue. The Economic Social Council, CCIIE, and other suchorganizations have all established institutional characteristics. Thelatest constitutional amendment has been of particular benefit to theEconomic Social Council, which must now be operated with the utmostefficiency.

Turkey: One of the Top 10 Economies by the Republic’s100th AnniversaryWe have set a target: by the 100th anniversary of the Republic, Turkeywill be one of the top 10 economies in the world. The national incomewill be USD 2 trillion, and our exports will be USD 500 billion.

We can reach this target if we continue with reforms and always matchthe conditions of our investment environment to our competitors’. Theessential factor here is correct understanding of the reform process.Reform is not something to be completed and then discarded. It is nota static object, but a dynamic action.

By doing this, we will build a greater Turkey, hand in hand.

ormerly, foreign investors received a cold welcome, orwere even unwanted, in Turkey. People believed thatforeign investors would exploit the country’s resourcesand transfer the profits to their own countries without

providing us with any advantages. This perception has changed in ourday; Turks have accepted theworld and realized that this isa win-win deal. Foreigninvestors definitely invest tomake profits, and they arecertainly entitled to transfertheir profits. But our countrywins as well. For developingcountries like Turkey,investments from abroad areespecially beneficial.

The taxes paid and theemployment generated byforeign investors are, inthemselves, gains for Turkey.However, the real gains-medium and long-term-of

foreign investment are the promotion of competition, the opening up tonew business methods, and the transfer of technology. This is true forboth the services and the industrial sectors because companies investingin a foreign country are systematized corporations of a certain size,operating at top productivity and employing modern technology andbusiness methods.


Türk Philips manufactured the first black andwhite television set in Turkey on May 19,1967. In 1967,Türk Philips founded a factoryin İzmit for the production of light bulbs,starters and ballasts.

1967

F

Building a greater Turkey,hand in hand

Domestic companies operating in a sector which receives foreigninvestment are compelled to offer goods and services of the samequality and with the same speed in order to compete and to survive inthe market. They are obliged to improve their business methods, adaptto new technologies, and increase their productivity in order to protecttheir profit margins. The industrial sector in particular benefits from thetransfer of technology and training of qualified personnel which followforeign investment. Domestic companies supplying secondary orintermediate products receive new product orders which conform tothe new technology, and they are obliged to improve their productquality. These are extremely important factors for the medium andlong-term development of industry.

The growth stemming from the post-2001 reforms, the resulting stableeconomic environment, the adoption of modern business methods byprivate sector companies, the improved relationships with ourneighbouring countries, and a more active international role have allturned Turkey into a major center. Even though credit rating agenciespersistently refuse to raise Turkey’s credit rating to “investment grade”,the country reached this level long ago in the eyes of foreign investors.Turkey’s potential and opportunities are so obvious that these investorsfeel no need for approval from these agencies; they simply come andinvestment.

Only 10 years ago, foreign direct investment inflows to Turkey wereless than USD 1 billion. In the last 6 years, however, inflows haveexceeded USD 80 billion. Even in the middle of the global crisis, FDIinflows were USD 7 billion. These figures clearly indicate that Turkeyis an investment-grade country.

Rifat HisarcıklıoğluPresident, Union of Chambers and

Commodity Exchanges of Turkey (TOBB)

48

In 1967, the Netaş Northern ElectricTelecommunications company was founded.The company manufactures communicationsequipment.

1967

or a country like Turkey, which has both the will and

the potential to reach high levels of growth, income,

and prosperity, the need for foreign direct investment

(FDI) is self-evident. Today, the positive effects of

FDI on a county’s growth rate are beyond argument.

A number of recent

economic studies clearly

demonstrate the positive

correlation between growth

and FDI. In addition, the

potential effects of FDI on

employment, technology

transfer, foreign trade,

integration with the world’s

economies, and public

finance are no longer

disputed. Doctrinaire

criticisms of FDI are

infrequent nowadays, and

the subject is discussed

within sensible economic

parameters.

However, it has been extremely challenging to reach this point.

Anti-foreign capital views have always existed, particularly in

Turkey. These sentiments were the result of the economic

capitulations made to foreigners during the declining years of the


Mercedes-Benz Turk was established in 1967under the name of Otomarsan in Istanbul, asa trade partnership of Daimler-Benz AG, HasOtomotiv and Mengerler. 0302 was the firstbus model produced by Mercedes in Turkey.

1967

F

Turkey’s need for foreign directinvestment indisputable

Ottoman Empire, and of the problems these concessions caused.

But identifying the Ottoman Empire with the Republic of Turkey

on this issue would be a big mistake. The great Atatürk used his

opening address to the İzmir Economic Congress of 1923 to voice

the official policy of the Republic of Turkey to foreign capital:

“Regarding the economy, we should not mistake foreign capitalists

for antagonists. No! Our country is very large. We need lots of

effort and capital. We are ready to give the necessary assurances to

foreign capitalists, provided they abide by our laws. Let foreign

capitalists integrate their efforts with ours in order to benefit the

both of us.”

There were always suspicion to foreign investmentsUnfortunately, these extraordinarily prescient words of Atatürk did

not influence government policies or change public opinion-a

failure that was as a direct legacy of the Ottoman capitulations-and

Turkey’s reservations about foreign capital investments remained.

This suspicion was rampant in the country’s bureaucracy (the first

line of contact with foreign capital), meaning the 1954 law

Encouragement of Foreign Capital Investments could do nothing to

improve the situation. Turkey always had failing grades on its

foreign capital report cards.

Turkey’s annual average of FDI was a mere USD1.4 billion

between 1995 and 2000. Our hopes rose when this figure surged-

partly on account of privatizations and property sales-to USD10

billion in 2005, to USD20.2 billion in 2006, and then to USD22

Tuğrul KudatgobilikPresident,Turkish Confederation of

Employer Associations (TİSK)

billion in 2007. But FDI inflows decreased to USD18.3 billion in

2008 and to USD7.6 billion in 2009, owing to the impact of the

global economic crisis.

The latest figure (for the first half of 2010) is USD3.2 billion,

prompting speculation that we are regressing. The most recent

forecasts indicate that FDI inflows this year will remain below last

year’s, and will not exceed USD7 billion.

In fact, the global crisis has constricted FDI movement world-wide.

The decrease of 16% in 2008 deepened to 37% in 2009, with global

FDI inflows dropping to USD1.1 trillion. FDI inflows to Turkey

decreased 18% in 2008 and 58% in 2009. This means that FDI

inflows to Turkey dropped dramatically more than the international

average. The question now is whether this drop stems only from the

global crisis or from other causes.

It is impossible not to appreciate YASED’s effortsIt is not yet clear why FDI inflows to our country were USD7.6

billion in 2009, while FDI inflows in the same year were USD95

billion to China, USD38.7 billion to Russia, USD34.6 billion to

India, and USD25.9 billion to Brazil. Equally unclear is why we fell

from 20th to 32nd in world FDI rankings in just one year. Despite

this, it is impossible not to appreciate YASED’s efforts to make

Turkey more attractive to FDI.

Much work remains in this area, and some of the most important

tasks are:

• Reducing the unregistered economy.

• Ensuring effective operation of the judicial system and law

enforcement.

• Simplifying the complex tax system.

• Protecting intellectual and industrial property rights.

• Reducing the burden on employment.

• Developing incentives and taxation mechanisms to attract

investors.

TİSK, representing employers in the Turkish labor arena, would

again like to emphasize that we consider the inflexibility of current

Turkish labor legislation to be a barrier to FDI inflows---a barrier

which must be removed, as was pointed out in the Economic

Survey on Turkey published by the OECD last September.

TİSK has concerns about the amendments (resulting from the

recent constitutional referendum) to Articles 51, 53, and 54 of the

Constitution. These amendments to the collective labor laws

endanger the environment of labor peace and stability in Turkey

which has contributed to the power of our economy for 20 years.

Bringing labor peace to Turkey was a bitter, costly experience.

Losing it now will weaken our competitiveness and adversely affect

the FDI inflow we need for growth. Therefore, great care must be

exercised in the post-referendum legislative process.

A number of recent economic studiesclearly demonstrate the positivecorrelation between growth and FDI. Inaddition, the potential effects of FDI onemployment, technology transfer, foreigntrade, integration with the world’seconomies, and public finance are nolonger disputed.

50

TOFAŞ (Turkish Automobile Factories), which startedproduction on February 12, 1971, through apartnership of Koç Holding and the Italian Fiatcompany, was opened with a ceremony attended byPresident Cevdet Sunay and Prime Minister SüleymanDemirel.

1971

he added value of international investments to growth,employment, and global competitive power is evident. Ina country like Turkey, where the youth unemploymentrate is 25%, the savings rate is low, and the economic

growth and development targets are high, the need for Foreign DirectInvestment (FDI) is beyondquestion. FDI inflows toTurkey were around USD1.1billion between 1993 and2002, and then graduallyincreased to their historicpeak of USD22 billion in2007. However, due to theimpact of the global economiccrisis and the completion ofmost of the country’sprivatization projects, theydeclined in 2008 and 2009:down 16% to USD18.3billion and down 58% toUSD7.6 billion, respectively.Total FDI worldwidedeclined by 14% in 2008 and

by 29% in 2009, meaning Turkey’s FDI decline was sharper than theglobal trend. In this respect, it is crucial for Turkey to accelerate thepolicies, strategies and efforts aimed at improving its investment climate.Keep in mind that when investors determine investment destinations,they consider not only macroeconomic and political stability, but alsomicroeconomic factors pertaining to the investment environment and the


Renault founded the OYAK–Renault partnershipwith OYAK and Yapı Kredi Bank in 1969.The firstproduction at the OYAK-Renault Automobilecompany’s factory in Bursa took place on May14, 1971.

1969

T

It is crucial for Turkey to accelerate thepolicies to improve investment climate

national regulatory framework. In the 1980s, international expansion ofTurkey’s economy, liberalization of capital mobility, proliferation ofprivatization, and incentives for mergers and acquisitions were allmilestones for the nation’s business and investment environments.Parallel to these developments, FDI gained velocity. From thisperspective, the reform process in Turkey lost its vitality from the secondhalf of 2007 onward, compared to the 2003 to 2006 period. With theadvent of the global crisis, we have entered a highly competitive phase.This situation demands reinforcement of a competitive environment andimprovement of the investment environment.

By supporting this process with micro-reforms, the cooperation ofprivate and public sectors is undoubtedly important. The CoordinationCouncil for the Improvement of the Investment Environment (CCIE)has accomplished significant work. The CCIE platform, achievingsuccess in Turkey and setting an example on the international stage,continues to guide us through the lingering global crisis.

Turkey’s European Union membership process parallels Turkey’sinvestment environment improvement process. The EU process providesan indispensable opportunity to create employment, increase our level ofwelfare, and position ourselves as a competitive economy at a time whenthe world is restructuring politically and economically . One of the concepts frequently emphasized by the EU is a dialogue withcivil society, and Turkey has progressed in this field. The importance ofcommunication between government institutions and their shareholders,both businesses and non-governmental organizations, during thedecision-making process is now understood. We believe that thisdialogue will be more effective in due time.

Ümit BoynerPresident,Turkish Industry and Business

Association (TÜSİAD)

here is a direct relationship between the great

surge of Turkey’s exports after the 2001 economic

crisis and the foreign direct investments that came

into our country. The Turkish Exporters Assembly

has always supported foreign capital investments in Turkey

because we believe that

direct foreign capital

means new investments,

new employment, and new

exports.

We think that foreign capital

contributes significantly to

our country’s economy and

exports.

Foreign-owned firmsare playing animportant role inexportsThe 2009 results of TEC’s

annual “Turkey’s First 1000

Exporters” study show 148 foreign capital companies among the

top 1000, and four of the first 10 companies are foreign capital

companies: Oyak Renault, Ford, Tofaş Türk and Toyota. This

demonstrates that foreign capital companies play a large role in our

exports.

T

Foreign capital means new investments,new employment, new exports

Aim to export USD 500 billion in 2023We attach great importance to the export transformation we

experienced after the 2001 crisis. Companies which turned to

exports and away from production for the shrinking domestic

market developed an awareness of exports when they saw the

potential and stability of foreign markets. Consequently, our

exports rose from USD25 billion to over USD100 billion. The

state also recognized the importance of exports in a rising

economy, and paid more attention to them.

Our exports will change track in the foreseeable future. TEC has

an exports target of USD500 billion for 2023, and is gathering the

support of all state institutions to reach this target. We aim to

increase the shares of high value-added products and of those that

require advanced technological infrastructure in our target. In

addition, we shall focus on different markets by speeding up the

process of market diversification.

Mehmet BüyükekşiChairman,Turkish Exporters

Assembly (TİM) The 2009 results of TEC’s annual“Turkey’s First 1000 Exporters” studyshow 148 foreign capital companiesamong the top 1000.

n Turkey, especially in the period before the global crisis,we witnessed significant foreign capital inflow. With itsstrong and institutionalized economy attracting overUSD 83 billion foreign direct investment in the last

seven years, it is the world’s 15th most attractive country for foreigndirect investment for theyears 2008 – 2010.

In recent times, it is essentialfor Turkey, the presentgrowth of which is based onimports and trying to makeup its current budget deficitthrough imports and thedomestic market, to achievethe sustainability of itsposition and policies, and toadopt a growth model basedon investments andproduction, in order tosustain its attraction ofbeing “a bright and safehaven for foreign

investments” and to continue attracting foreign direct investments.

Gives strong confidence to countries willingto invest in TurkeyIn its geographical location, Turkey is known as a “productionbase”. At the same time, its identity of an “energy corridor” also

Sabancı Holding and BridgestoneCorporation founded the Brisa BridgestoneSabancı Tire Industry on February 28, 1974.

1974

I

Turkey is a bright and safe havenfor foreign investors


comes to the fore. Its strong image in the region is an importantinput for Turkey and for countries and companies who wish toinvest in Turkey. Historically, the most significant changeexperienced in the business and investment environment is, firstof all, Turgut Özal. After the martial law years, he gave themessage to Turkey to “become civilian.”

TÜGİAD is the only national Young Businessmen Associationestablished in Turgut Özal’s period. Those were importantchanges, in the days when Turkey opened up to the world, actedparallel to AB norms. The Customs Union in 1996 and Turkey’sEU candidacy in 1999 were periods when change was trulyexperienced in Turkey.

Half remained in the public - civil society dialogueIn this process, changes have been experienced within the contextof Public – Business World – NGO dialogues, however, at thepoint we are, we observe that it is very weak, it has developed onsome platforms, but still can’t keep up with the times.

Especially the sharing of ideas and solutions in the bilateralrelationships of public – NGOs, the lobbying power of NGOs onthe decision makers, their participation in the decision makingprocess, remained very weak. The Public – NGO dialoguesfocused on different points due to the intervention of Institutionsthat qualified as “Semi-Public”. sides were formed.

Neutrality became a problem. Therefore, imrovement of pulic-NGO dialogue in time, will be very useful for both sides.

Murat CoşkunkanChairman,Young Businessmen

Association of Turkey (TÜGİAD)

MEMBERCOMPANIES

54

The Foreign Capital Department wasfounded under the Prime Ministry.1980

P has been making significant contributions to theTurkish economy for nearly a hundred years, with itsventures in fuel oil distribution, marketing and refining. BP started its commercial activities in our country in

1912. The first operations of the company started with the registration ofthe ‘Lion and Sun’ and ‘PalmTree’ brands in 1912 for useby the British-PersianPetroleum Company. Thisevent was one of the manymarketing initiatives thatappeared after the discoveryof oil in Iran in 1908.

Turkey is one of the fewcountries where BP’s“exploration and production”and “refinery and marketing”sections are both present. Weare one of the largest foreigninvestors in Turkey. BP isrepresented in Turkeythroughout many business

sectors, including fuel oil, mineral oils, LPG, aeronautics, and navigation.At the same time, we have extensive collaboration with Turkey onprojects such as the Baku–Tbilisi–Ceyhan (BTC) Crudeoil Pipeline,which has great global significance for the energy sector, and thetransportation of the Shah Sea Natural Gas. As BP Turkey, we haveundersigned many firsts and are continuing our contributions to the

YASED, influencing governments on the subject ofliberalizing laws and regulations about internationalinvestments capital in Turkey, was founded by 14multi-national companies on May 30, 1980, under thename of “Foreign Capital Coordination Association”.

1980

B

BP, contributing to Turkey’seconomy for 100 years


development of both the energy sector and the Turkish economy. We areone of the largest taxpayers in Turkey. The number of our stations isincreasing, which means an increase in employment. In addition, ourprimary goal with the BTC crude oil pipeline, which is under ourmanagement, is to transport the oil across these lands safely. At the sametime, improving environmental and living conditions in the settlementsclose to the route of the pipeline is an integral part of our corporateresponsibility and sustainable business management principles. In linewith the global vision of our company, we will continue investing in theTurkish economy and the energy sector without sacrificing our corporatevalues.

YASED improves investment environmentYASED, celebrating its 30th year in 2010, plays an important role inefforts to improve the investment environment in Turkey, and to attractmore international investment. YASED takes its place on manyplatforms, and carries out activities that improve the investmentenvironment. As BP Turkey, we are proud of having supported YASEDfor many years, and closely follow YASED’s activities. We are also happyto have further supported these activities through the Chairmanship ofYASED’s Board in previous terms.

The world economy has gone through a challenging time. The globalfinancial crisis and economic strictures have reduced the financialresources going into developing economies. Positioning Turkey as anattractive center among these countries and achieving sustainability ofthis position will be accomplished with the contributions of YASED andothers. YASED has important tasks in shaping the both extension ofinternational standards and the competitive environment in our country.

Can H. SuphiBP Turkey President

argill is an international producer and marketer of food,agricultural, financial and industrial products andservices. Founded in 1865, Cargill is operating in 66countries -including Turkey- and currently employs

131,000 people. Cargill’s operations in Turkey, which had started in the1960s, continue today withthe company’s investments ofover USD 120 million, nearly300 employees, andthousands of stakeholders,from farmers and suppliers totransporters. Cargill’s initialoperation in Turkey wasgrain trade it had commencedwith local partners. Cargillacquired the Vaniköy StarchPlant located at Pendik,Istanbul in 1989, and startedstarch and starch based sugarproduction in Turkey. Thecompany’s largest investmentproject in Turkey has beenthe wet corn milling plant in

Orhangazi, which started to be constructed in 1998 and went intooperation in 2000. Cargill’s Orhangazi Plant received the “Cargill’s BestPlant” award twice – in 2005 and 2010 - from among more than 1000Cargill plants all over the globe. Orhangazi Plant was found worthy ofthe BUSİAD (Bursa Businessmen and Industrialists’ Association)Environment Award in 2003, and was chosen as the Most Energy

C

We are responsible for the future

Efficient Plant of 2008 in the Energy Efficiency Enhancement inIndustry Competition organized by the Electrical Power ResourcesSurvey and Development Administration of Turkey.

Products which come out during corn processing, such as bran, proteinsand corn germ fulfill the needs particularly of the feedstuff industry to alarge extent. Cargill significantly contributes to Turkey’s economy sincethe bran it produces meets a major portion of the country’s totalconsumption. The corn protein produced in Turkey by Cargill replacesits soya bean pulp equivalent, which is dependent on imports, andcontributes to the economy. Cargill is also carrying out sales andmarketing operations in Turkey for a variety of products which thecompany is not producing locally, such as cocoa powder, cocoa butter,cocoa liquor, modified starch, polyol, flavors, fruit juice concentrate,lecithin, pectin and soybean. Today, the regional responsibilities ofCargill Foods Turkey also cover the accomplishment of Cargill’s growthstrategies in North Africa and the Middle East. This delegation, whichhas enlarged the responsibility and influence area of Cargill FoodsTurkey, is a strong indication of how deeply Cargill Global confides inits team in Turkey and in Turkey. Turkey is now Cargill’s export basefor the Middle East and North Africa. Cargill Foods Turkey also runsvarious social projects in line with its “We are Responsible for theFuture” motto. While the company contributes to the creation of abright future through its investments in education and health areas, the“Regional Relationships Committee” it has established for this purposeconstitutes a regional development model. The elementary school, thecommunity health center, domestic waste collection, agricultural andirrigation projects are all regarded as model social responsibilityprojects.

Mustafa SayınataçExecutive Board Member,

Cargill Turkey

56

Philip Morris International entered the Turkishcigarette market in 1984, when the worldfamous Marlboro cigarettes were firstimported and distributed through the stateowned cigarette monopoly.

1984


DHL, initializing services in Turkey in 1981 asan agency, started fast air transportation inthe country. In 1992, DHL Turkey totallybecame a part of DHL International.

1981

orty-six years after Coca-Cola İçeçek (CCI) startedproduction in Turkey in 1964, the company hasgrown, and Istanbul has become the company’sregional center. Today, İstanbul is the site of Coca-

Cola System’s bottling operations for Turkey, the Middle East,Middle Asia, and Pakistan.At the same time, Coca-Cola’s management centerin Istanbul, headed byAhmet Bozer, covers morethan 90 countries inEurasia and Africa.

We had five factories inTurkey in 2005, and sincethen have greatly expandedour operational geography.In 2006, our shares begantrading on the IstanbulStock Exchange.

We continued developingin both the domestic market

and foreign markets on the strength of our partnership structureand business model, and these became examples for Coca-Colaunits all over the world. With the additions of Kazakhstan,Azerbaijan, Kyrgyzstan, Tajikistan and Turkmenistan in MiddleAsia, of Jordan, Iraq and Syria in the Middle East, and of Pakistan

We have become a regionalTurkish company

in 2008, we now operate in 10 countries.

Today, with 20 factories---8 of which are in Turkey--and with 9,000employees, we provide 10 billion glasses of beverages to 350 millionconsumers every year.

Over the last 10 years, Turkey has become an important destinationfor international direct investments. And Istanbul is, without doubt,the hub of the region.

Although we still have some problems with implementation, almostno discriminatory regulations remain in Turkey for internationalinvestors. In this regard, I believe that YASED has been successfulover the last 30 years in explaining its mission to the state.

Another role of YASED is explaining to Turkey and to variousshareholders the vital importance of international investment fordevelopment. For many years, YASED has conveyed the views,ideas, suggestions and questions of international investors to theTurkish public and authorities.

For the last 30 years, YASED has undersigned significant studies,and has made serious efforts to attract international investors toTurkey and to explain their problems.

In terms of Turkey’s development, the continued elaboration of theperspectives of international investors is YASED’s most importanttask for the future.

Atilla Yerlikaya External Relations Director, CCI

F rom the day of its establishment 21 years ago, HPTurkey’s mission has been to help Turkey achieve itstarget to become a country that effectively usesinformation technologies. In this regard, we have

undersigned many innovations in information technologies, and havebrought the newest productsand solutions to Turkey inorder to accelerate theprocess of benefiting frominformation technologies.This progress was two-pronged. On one hand, wehelped companies and publicinstitutions (as in the case ofe-government initiatives) toestablish state-of-the-art datacenters and to achieve thebest communication over theinternet and local networks.On the other hand, weestablished a real informaticsecosystem by reachingindividual users -especially in

the fields of printing technologies, personal computers, and software-with our wide network of solution partners. HP also fulfilled itscorporate responsibilities during this process, and undersigned manysocial responsibility projects in areas varying from environmentalpollution to reducing global warming, from waste-recycling projects tothe protection of our cultural treasures through technological training.

F

We brought the newest productsand solutions to Turkey

We have served millions of institutions and hundreds of thousands ofusers in “HP Style” since 1989. We believe that with the value we placeon our customers, the respect we have for our employees, and theextensive ecosystem we have formed with our business partners andsuppliers, we make a difference in the Turkish economy. As a sign ofthis, we aim to place Turkey in a strategic position to export technologyto international markets with the opening of our PC manufacturingplant in Çorlu in 2011 in partnership with Foxconn.

We also aim to provide added-value with the future expansion of ourecosystem with national suppliers, and to make the country an R&Dcenter with the Software Innovation Center opened at IstanbulTechnical University with our support. This is why we are the numberone information technologies company in Turkey. It is our duty as theHP Turkey family to thank our country for making it possible for us toreach this point.

YASED has metamorphosized from a young NGO into one with broadparticipation and power, able to represent foreign capital enterprisesand companies in Turkey most strongly. The importance of foreigncapital flow to the development and prosperity of Turkey, a countrywith limited capital accumulation of its own, is undeniable. One of themost important platforms and most effective channels to this end isYASED. We are very happy to be a member, a part of such an NGO.

YASED must assign the utmost importance to increasing technologyinvestments in Turkey in the coming years. YASED’s success in thenext 30 years will depend on how much innovative, paradigm-changingcapital it manages to attract to Turkey.

Serdar UrçarGeneral Manager, HP Turkey

58

TNT Express Turkey, came to the country since1988, is providing services came to at 29locations with 715 employees and 370 vehicles.

1988

n bringing the Turkish telecommunications industry to itslevel of today, which was only established approximatelyhalf a century ago, one of the most important moves - in factthe most important move - was the investment decision

adopted by the state to establish a privately owned manufacturingcompany in this field. Withthis move realized at the endof 1960s, Netaş has become apioneer in almost everyphase of communicationtechnologies’ development inour country, from thoseyears up until today. In1990s, telephone serviceswere provided to thousandsof villages and towns withthe rural switchboardsdeveloped by the R&D ofNetaş. In 2000s, Netaşcontinued to contribute tothe modernization of thecommunications infrastructure of our country

during this journey of more than 40 years, Netaş has provided andcontinues to provide to its customers from end to end, innovativeservices and solutions in installation and operation of communicationnetworks with the cutting-edge technologies. Undoubtedly,international capital is the leading aspect among the determiningfactors of a country’s economic growth. YASED is carrying out its


Entering the Turkish market in 1987, P&G hasundertaken the position of a regional center byexpanding its field of coverage to includeCaucasia and the Central Asian Republics, avery rapidly developing market with over 70million consumers, from 1998 to the present.

1987

I

We need to transform the historicSilk Road into the technology road

activities with the vision of “to promote proactively a businessenvironment which matches to best global practices and to encouragefree trade of goods and services, free competition, investment andmovement of capital” and I find its contribution of 30 years to theimprovement of investment environment in Turkey, to the protectionof existing international investments as well as gaining newinvestments through its long-running and systematic works and thesupport it gives to the concerned establishments, very valuable.

We are especially following the works in the field of R&D-one of thepriorities of YASED- with interest. With the new movement that hasemerged in 2000s, we observe that the big firms are shifting their R&Dto the countries that have advantages in incentive and investmentenvironment. Therefore, we observe that the technology production isshifting from the West to the East. As Turkey, we should not miss outthis wind. Our target as the business world should be transforming thehistoric Silk Road to the technology road with the support of the stateand the government and the contribution of YASED. I believe that

YASED will have a significant contribution in brining out our existing

potential for the target of “R&D Base in Europe – Turkey”, which I

believe would support our country in becoming the 10th biggest

economy in 2023 and I wish YASED many 30 years full of success.

Müjdat AltayGeneral Manager, Nortel Netaş

ercedes-Benz Türk was founded in Istanbul in1967 under the name Otomarsan. In 1968, thecompany started the production of O 302 modelbuses in Davutpaşa (İstanbul), in accordance

with Turkey’s passenger transportation requirements. Only twoyears after its foundation,the company started toexport and was appointedthe general representativeof Mercedes-Benz inTurkey in 1984.

In 1986, truck plant startedproduction in the CentralAnatolian province ofAksaray, parallel to Turkey’sgrowth potential.

In November 1990, thecompany name was changedto Mercedes-Benz TürkA.Ş. Today, Mercedes-Benz Türk A.Ş. is one of

the largest foreign companies in Turkey with its investment volumeof over EUR650 million. It has 4,000 employees and another 2,500people are employed in its nation-wide network of retailers andafter-sales agents. The facilities of Mercedes-Benz Türk -manufacturing city buses and coaches at the Istanbul Hoşdere BusFactory and light, medium, and heavy duty trucks at the Aksaray

M

YASED has led the public to understandthe importance of international capital

Truck Plant - are important components of Daimler AG’sdevelopment and production network.

Vehicles, including those manufactured only in Turkey, are soldlocally and exported by Mercedes-Benz Türk. All Mercedes-Benzlight commercial vehicles and all automobile brands under DaimlerAG are also imported and sold by Mercedes-Benz Türk. Thecompany is the market leader in the local city bus market and truckmarket over 6 tons.

YASED member international companies are thetouchstones of the developmentThroughout the past 30 years, YASED has enhanced its ability torepresent foreign capital in Turkey by increasing its membership,and has achieved considerable progress with its activities.

By publicizing the contributions of international investments in ourcountry through various channels, it has led the public inunderstanding how important and beneficial these investments areto the country’s economy.

The progress of socities is only possible through economic progressand increasing employment. YASED, serving in Turkey for the past30 years, and the international capital companies that have beenoperating in Turkey for many years, are the most importantbenchmarks of our country’s progress.

YASED, in its 30th year, must continue to emphasize the economiccontributions of foreign capital.

Aylin Erdem Mercedes-Benz Türk

Manager of Accounting Dept.

I think the efforts of YASED since 30 years todevelop the investment environment in Turkeyand its support to the relevant authorities arevery valuable.

60

One of the most important buyers of Turkishtobacco, JTI (Japan Tobacco International),started its activities in Turkey in 1990.The firstdomestic production was realized in 1993.

1990

aving made its first investment in Turkey in 1958 asthe manufacturer of Bepanthene Ampules, Rochelaunched its Gebze factory in 2001. Tirelesslypursuing innovation in the manufacture of

pharmaceutical products, Roche Turkey has always taken the firststeps in technology andenvironment-related issues.This approach has won thecompany many awards. Inline with Roche’s globalstrategy of “manufacturinginnovative pharmaceuticalproducts and developingmethods for diagnosis” andfocusing on hard-to-treatillnesses, Roche Turkeytransferred its healthcareproducts unit to Bayer in2005, and then its Gebzefactory to Sandoz in 2006.Following this streamlining,Roche continues to embracea perspective that does not

compromise innovation, as in the past, and that supports“Personalized Health Care” by putting patients and their needsfirst. Our company is also part of the Roche E7 project, becauseTurkey is among the E7 countries (Turkey, Russia, India, China,Brazil, Mexico and South Korea) which are poised to make majorbreakthroughs in the pharmaceuticals sector and further


Toyota’s Turkey branch, Toyota AutomotiveIndustry Turkey (Toyota Türkiye), wasestablished in 1990 in Adapazarı by apartnership of Sabancı Holding and Mitsui.The ToyotaSa car factory started productionin 1994 with a ceremony.

1990

H

YASED successfully serves as a bridgein the integration of Turkish economy

contributions to the medical profession with their know-how andqualified physicians within the next 10 years.

YASED is a civil society organization that has successfully servedas a bridge integrating the Turkish economy into the increasinglyglobalized world economy ever since it was established in 1980. Weat Roche are proud to be a member of YASED. YASED initiatedthe required steps that gave rise to Turkey’s rapidly strengtheningeconomy and increasing FDI inflows of the past 30 years. YASEDcontinues to live up to its mission of “providing proactive supportto create a business environment that is consistent with the world’sbest practices and to promote the free trade of goods and services,free competition, freedom of investment, and the free movement ofcapital”. YASED has become one of the prominent playerssupporting the growth and development of our country’s economyby giving high priority to lobbying activities that promote effortsaligning Turkish regulations and business practices withinternational standards, and to initiatives that improve ethicalvalues and corporate governance principles. YASED is a prominentand influential civil society organization, which deserves to mark its30th anniversary in a memorable way on account of its majorcontributions to Turkish economy thanks to its solid achievementsto this day. As Roche, we hope that YASED continues to build onits track record of success, that it persists to promote knowledgeexchange among international investors that conduct business inTurkey and new and potential investors, and that it encouragescooperation and communication to facilitate better communicationespecially among those investors and YASED members as it hasbeen doing for the past 30 years.

Süha TaşpolatoğluGeneral Manager, Roche Turkey

ounded in 1960, Türk Pirelli Lastikleri A.Ş. was thefirst tyre manufacturer in Turkey and one of the firstinternational companies to believe in the industrialand economic potential of the country. Today, İzmit

industrial plant represents not only the largest factory of theGroup with more than1800 people employed butalso a center of excellencefor the production of topquality truck and car tyres.While a Tyre R&D centerwas established in thecountry in 2008, İzmit wasselected as the Pirelliproduction center forracing tyres in 2007.

Starting from 2011, ourfactory in Turkey will bethe manufacturing centerfor Pirelli Formula 1 tyresand with all this, İzmitfactory is being emphasized

as the "Factory of the Champions".

During 50 years, Türk Pirelli Lastikleri A.Ş. has achievedcountless successes from motorsports events to socialresponsibility and marketing activities. Since the very first year ofits foundation, the company has contributed substantially to the

F

YASED has a tradition of promotingcommunication between existing andnew investors

development of the region where its factory is located. Türk PirelliLastikleri A.Ş. was proud to contribute to the construction ofTürk Pirelli Elementary School located in Kocaeli (1968), andIzmit Koseköy High School (2008).

While also giving support to the cultural development of Turkey,Türk Pirelli was also the sponsor of classic music events(Orchestra della Scala,1997 and 2001) as well as jazz and filmfestivals organized by İstanbul Foundation for Culture and Arts.

Türk Pirelli Lastikleri A.Ş, applying the innovative,technologically advanced position of Pirelli to Turkey and creatingone of the leading brands of the company, shall keep its strongpresence in Turkey thanks to the trust it has created in 50 years.

During these 30 years, YASED has created an important value bypromoting a better business environment in Turkey. Theorganization has an outstanding tradition of promotingnetworking and communication between established and newinvestors.

In accordance with this long history in Turkey, YASED has builtan important success story by facilitating its members to share acommon vision and together by giving outstanding efforts to makeTurkey an attractive investment destination and by building astrong business environment in Turkey for international investors.

I would like to congratulate YASED for his dedication of 30 yearsas the voice of international investors in Turkey.

Andrea PirondiniGeneral Manager, Türk Pirelli

62

In 1992, the Anadolu Honda Automotive wasfounded by a 50% partnership between theAnadolu Group and Honda.The foundationsof the Honda Factory at Gebze Şekerpınarwere laid by President Süleyman Demirel in1996.

1992

Turkey. New indicators show that this stable growth will continuethroughout 2010. YASED must continue its efforts to protect andimprove the stability of Turkey’s investment environment, so thatthe country’s potential is fully utilized, international investments areincreased, and their permanency is ensured. Furthermore, it isimportant to continue with predictable and stable legal andfinancial policies, and to ensure full implementation of laws andregulations, in order to maintain Turkey’s attractiveness for foreigninvestors.

The energy sector is of prime importance for Turkey’s growthbecause of both its natural resources and its strategic position. Inorder to exploit these advantages to the fullest, and to make Turkeya preferred market in the energy field, it is necessary to expedite theEU harmonization efforts and to establish an effectiveinfrastructure. A strong infrastructure will increase investmentsand employment in this field.

Turkey is one of the six key countries in which the Shell Groupwants to grow. As a company that has been investing in Turkey forover 87 years, we are pleased to collaborate with YASED’s effortsto develop the energy sector.

hell, which started its commercial operations inTurkey in 1923 -making it the same age as theTurkish Republic-, is proud to be one of the firstforeign capital investors in Turkey. Beginning as a

distributor of fuel oil 87 years ago, Shell is now one of the leadingenergy groups in thecountry.

Shell became a giant familythrough harmonious relations with its dealersand business partners, andthrough constant extensionof services to customers. In2006, following a successfulmerger with Turcas Oil,Shell & Turcas Petrol A.Ş.was born. This companyhas continued its stronggrowth as leader in the fueloil sector.

Aided by the outstandingefforts of its employees and business partners, Shell & Turcas hasbecome an exemplary model in the energy sector and the entirebusiness world. Shell has improved market standards, increased itsemployees’, suppliers’, and subcontractors’ performances, andraised their awareness of health, safety, and environmentalprotection issues. Stepping up its investment rate in recent years,


BSH (Home Appliances Industry and Trade) hasbeen active in Turkey since 1992. With theinvestments it has made, BSH Home Appliancesis known as the largest white goods company inTurkey with foreign investment. BSH manages theMiddle East and Caucasia from Turkey.

1992

SShell: Turkey’s pioneering investor

Shell has increased its storage capacity to 12 facilities andterminals, has established a state-of-the-art supply and distributioninfrastructure, and has undersigned many technological andoperational innovations. This strategic partnership, with over 600employees, also operates a mineral and grease oil factory atIzmit/Derince---Shell’s largest facility in the Mediterranean region.This facility exports the mineral and grease oil produced here to 55countries, and contributes substantially to Turkey’s economy.

While we want to consolidate and strengthen our leadership in thesales and marketing of oil products in Turkey, we also want to helpmake Turkey the region’s energy hub. We aim to capitalize onbusiness opportunities in Turkey’s neighbors, and plan to invest andparticipate in projects to develop and distribute regional reserves toworld markets.

YASED and ShellWithout doubt, YASED’s and its member institutions’collaboration and successes have increased foreign capital inflowinto Turkey. Shell, one of the oldest foreign capital companies inTurkey, has long supported YASED’s activities to achievesustainable growth for Turkey. The country is an attractive marketfor foreign investors, and will continue to be so in the long run.Turkey’s developing young population and its well-trained andqualified human resources, including its expert and far-sightedprofessional work force, are prime factors in the decisions ofinternational investors. Turkey’s strategic geo-political position isanother of the country’s strong points. In recent years, 4% to 5%growth rates have been recorded in no European country except

Ahmet ErdemShell Turkey Country Chairman

Turhan K›l›çaslan, son of the founder of Shell K›l›çaslan Petrol established in1933 and one of the most prominent companies in Malatya today, tells thisstory:

Before the advent of gas pumps, my father, Mustafa Kılıçaslan, started sellingkerosene in tin cans for lamps in areas with no electricity in Malatya. Webrought the first gas pump to Malatya in 1956, when there were only 8 carsin the city. My father was a businessman with foresight, loved and trusted byeveryone. His working principle was to provide flawless service tocustomers, and he taught us the same. We tried to be a gas station thatprovided the cleanest and highest quality products and services, and wesucceeded. In the first years of our business, we also placed gas pumps onthe roads to Kayseri, Elazığ, Adana and Gaziantep, and later purchased theland where the stations still stand today.

Our affiliation with Shell, in which we shared a common vision of customersatisfaction, has played a great role in our success. Shell is an institution asold as our Republic. For an entrepreneur entering the fuel oil business, Shellwas the first choice then; it still is now, and will continue to be.

We share a 77-year history with Shell. In this life-long slice of time, the social,economic, and political conditions of Turkey have been reflected in our wayof business.We got over the hard times together, and we profited togetherin the good times. We have always been good business partners. Ourcollaboration based on long years of trust, loyalty and joint values hascarried us to success. It is important to establish customer satisfaction, andto sustain it. We never compromise on the quality of our services.That isthe reason behind our success carrying us to today from 1933.

SHELL SUCCESS STORY OF 77 YEARS

64

Danone companies were founded on March1, 1997, through a 50/50 partnership ofGroupe Danone and Hacı Ömer SabancıHolding. Danone Turkey started its activitieswith Hayat Water in the water sector.

1997

oyota Turkey was established in 1990, based on anagreement between Japanese and Turkish partners. Thefoundation of its Sakarya factory was laid in 1992. Twoyears later, trial production began in Turkey (chosen for

its advantages such as regional position), and then mass productionstarted with the ToyotaCorolla. The Sakarya factorymanufactured only theCorolla Sedan and StationWagon models for thedomestic market until 2001.Through these products, theTurkish consumer wasintroduced to Toyota quality,and Toyota came to know thededicated, hard-working,success-oriented Turkishpeople. These Turkishemployees, understandingthe world-recognized ToyotaProduction System in thebest possible way andimplementing it in all phasesof production nearly as well

as in Japan, have undersigned Toyota’s success. They have carriedToyota Turkey forward right from Day One. Toyota Turkey, whichbecame a 100% Japanese capital company in 2001, has continuallyincreased its exports since 2002. It became Turkey’s highest exportingcompany in 2007. Today, Toyota Turkey is the country’s largestautomotive manufacturer and largest exporter. It produces the high-

The Hyundai Automobile Factory, establishedthrough a Turkey – South Korea partnership,was ceremoniously opened to production byPresident Süleyman Demirel and PrimeMinister Mesut Yılmaz.

1997

T

Turkish employees undersignToyota’s success


quality Auris and Verso models, has 3,500 employees, and earns over14 billion dollars with exports..

YASED: 30 Years Ago to the PresentThe International Investors Association, YASED, is one of the mostestablished and active non-governmental organizations in Turkey. Withresearch and reports on the the investment environment in our country,it performs significant work to attract new investors to Turkey and tofacilitate the operations of those already here by determining theadvantages and disadvantages of investingTurkey. The investmentsthat totalled a billion dollars in 2000 became 20 billion dollars in thefollowing years. YASED’s activities to encourage internationalinvestors and to simplify bureaucratic procedures have contributedgreatly to this increase.

I believe that YASED, witness to many phases in the development ofTurkey’s economy since 1980, will have a great share in the continueddevelopment of Turkey’s investment environment in the coming years,and I celebrate your 30th year with the wish that your activitiesincrease and continue.

Orhan ÖzerGeneral Manager and CEO

Toyota Turkey

artnerships with international companies have alwayshad an important place in Koç Group’s portfolio. Koç’sfoundations were laid in 1926, and relationships withinternational companies were established soon after.

During Turkey’s firstindustrialization leap, KoçGroup was a pioneer. Itslight bulb factory-one of theGroup’s first industrialenterprises-set up with GEin 1948, was the firstT u r k i s h - A m e r i c a nmanufacturing partnershipin Turkey. Joint ventureswith US Rubber (Uniroyal)and with Siemens are otherexamples of the Group’sforeign partnerships in thatperiod.

Today, some of the mostimportant companies in our

portfolio have equal shares in international companies: • Yapı ve Kredi Bankası with Unicredit (banking).• Ford Otosan with Ford, Tofaş with Fiat, and Türk TraktörFabrikaları with Case New Holland (automotive).• Arçelik-LG Klima with LG Electronics (durable consumer goods).• Koçtaş with Kingfisher (retail trade).

P

We should take advantage ofTurkey’s potential

We paved the way for international investment in Turkey with ourearlier international partnerships. Siemens, Magnetti Marelli, BOC(Linde), and Allianz are all major companies whcih we formedpartnerships with and which still operate in Turkey. Pirelli, Unisys,Iveco, International Paper are other companies which started theiroperations in Turkey with the Koç Group.

There are also companies, operating today under other internationalgroups, that we originally established and developed: Döktaş –Componenta, Türk Demirdöküm – Vaillant, İzocam - St. GobainIsover, Migros - BC Partners. You can see from this extensive list thatwhile relationships with international capital has played a significantrole in the development of the Koç Group, we concurrently played amajor role in attracting foreign capital investments to Turkey.

YASED was founded when foreign direct investment (FDI) inflows toTurkey were very weak. In the meantime, YASED’s prestige,influence and member portfolio have grown with the increase in FDIinflows. Although influenced by fluctuations in the global economy,these movements will continue increasing in both the medium and longterm.

Every country is racing to get a bigger share of this pie. Turkey still hasa long road to travel in improving its investment environment andsolving the problems of international capital in order to attract furtherinvestments and take advantage of its potential. This is actuallyYASED’s key mission, and YASED has successfully fullfilled itsassignments to date. I believe it will continue working to this end, witheven greater zeal.

Tamer HaşimoğluHead of Strategic Planning, Koç Holding

Laying the foundations of theToyota Sakarya production facilities

in 1992

The ceremony celebrating the firstCorolla Sedan off the assembly line

in 1994

Novartis started its operations in Turkey in1997. In order to increase its productioncapacity, Novartis carried its factories atLevent and Bakırköy to the productionfacilities it had built at Kurtköy.

1997


enkel, established in 1876, and Turkey first crossedpaths more than 50 years ago. At the beginning of the1950’s, a group of Turkish entrepreneurs headed byAlber Bilen started a Henkel distributorship. After a

few years of collaboration, Bilen obtained an appointment with Henkel’shighest executive officer, andtook a thick file to thecompany’s headquarters inDüsseldorf to convinceHenkel to invest in Turkey.Bilen made an enthusiasticpresentation on theopportunities in Turkey.Henkel’s management wasinterested, gave Bilen somehomework, and said theywould meet again in 6months. Before parting, theytold Bilen it would be a goodidea to have an interpreter forthe next meeting, as it wasdifficult to conduct thediscussions in French. Bilen

replied, “That won’t be necessary. I’ll be speaking German at the nextmeeting!” In the meantime, Henkel sent a young member of the family(Henkel remains a family enterprise today) to Turkey to investigate.After a positive report and another meeting-conducted in German-Henkel decided to invest in Turkey. Henkel, like many multinationalinvestors, sees the chance for business in the right place with the right

HYASED has a prestigious position

people, studies it, and makes the decision to invest.

Henkel acquired the shares of its Turkish partners, at their request, afteran extremely harmonious partnership of more than 30 years. Henkelwas careful to adopt the technology and brands developedinternationally (and the experience gained through mergers in manyparts of the world) to the requirements of its Turkish customers, and torapidly place them in the market. Within this framework, Henkel alsoundersigned many firsts.

Throughout the past 50 years, Henkel has strived to be a real partner-ingood days and bad days-of Turkey, and to be at its customers’ sides withan innovative, solution-oriented approach. And it will continue to do so.

Without a doubt, those who undersigned the establishment of YASED30 years ago had a truly important vision. We do not know how muchof today’s level of international capital (and the added value it hascreated) YASED foresaw, but YASED’s contribution to thisdevelopment is undeniable. YASED, in its prestigious position, isheeded by both investors and political and administrative decisionmakers when it makes forecasts or constructive suggestions.

YASED is a young but experienced non-governmental organizationwhich has undersigned significant successes over the past 30 years. Thepresent level of the Turkish economy and the dimensions ofinternational capital offer further important and diverse missions forYASED. We believe in our hearts that our Association will achievethese tasks with ease, and hope to achieve many more in the next 30years.

Erdem KoçakPresident and CFO, Türk Henkel

ACADEMICIANSAND

COLUMNISTS

68

At its 25th General Assembly held onFebruary 15, 2006,YASED’s name of ‘ForeignCapital Association’ was changed to“International Investors Association” in orderto prevent importunities arising from thenegative connotations of the words ‘foreigncapital’.

2006

oreign Direct Investment (FDI) has always been thecounty’s most unassailable economic policy; nomatter what other economic policies were favored,attracting more FDI has remained Turkey’s primary

goal. For 60 years, Turkey tried a variety of policies to increase FDIinflows, but it wasn’t untilthe beginning of this centurythat they reached thedesired levels. In the 1980s,despite economic policiesimplemented to open theeconomy and increaseexports, regulationsamended for this purpose,and regulations issued tofacilitate and encourageforeign investment; FDI’sshare of the GNP remainedat 0.5%. In 2003, FDIinflows increased followingthe passage of the “ForeignDirect Investment Law No:4875”.

Increasing privatization, economic stability, steady high growth,and political stability propelled FDI inflows up to USD 22 billionin 2007. The effects on Turkey of the 2008 global financial crisis,postponements of privatizations, and political developmentsreduced FDI inflows to US$18 billion in 2008 and to USD 7 billion

YASED played an active role in thepreparation process of the Foreign DirectInvestment Law, approved in 2003. With theapproval of the new law, the 50 thousanddollar prepaid capital obligation previouslydemanded from the investor for investmentsto be made in Turkey was abolished.

2003

F

Foreign direct investment andTurkey


in 2009. A sector analysis of FDI inflows for the period after 1980shows that the industrial share of FDI has decreased relative to thepre-1980 period, and that the service share has increasedconsiderably. The basic reason for these changes was the effects ofglobal shifts in FDI flows.

FDI in the 1990s targeted wholesale-retail trade because of highprofit margins. Sectors which could not export---banking, financeand insurance and communications---developed and when FDIbegan flowing to them, the service sector increased its share of thepie. The fundamental cause of the drop in the industrial share ofFDI was the fact that local automotive, textile, and durableconsumer goods companies were already operating below capacity.

International investors turned their attention to the increase inprivatization projects that began 10 years ago. The great majority ofthese privatized enterprises was in the service sector.

The sales of banks/companies meant that FDI was now going tonon-tradable sectors, and the service share of FDI increased to 70%between 2000 and 2009. The manufacturing share of FDI was 28%in the same period. FDI inflows to Turkey will likely increase again,fostered by continuing privatizations, stable and sustainable highgrowth, positive developments in the full EU membership process,and facilitations brought by the new incentive system.

But besides, the government should give FDI more priority, andshould increase its efforts to improve the investment climate inTurkey and to remove the bureaucratic and legal barriers to FDI.

Prof. Dr. Şükrü KızılotGazi University Faculty of Economics andAdministrative Sciences – Head of Public

Finance Department

ith the upcoming elections dominating the politicalagenda in Turkey, no political party has a cleareconomic program yet. Enactment of fiscal rulehas been put on the back-burner until after the

elections. We need to discuss the fate of the economic stabilizationprogram because adhering tothe program requiresmaintenance of its initialconditions. Enactment offiscal rule is important. On theother hand, providing at leastthe continuation of thecurrent program which hassecured a degree of fiscalstability without anyconcessions requires politicalsupport. Public support is alsovery important. All economicstabilization programs focusmainly on discouragingconsumer spending in orderto combat inflation on thefronts of supply and demand.This implies tight monetary

and fiscal policies. The political risks involved in seeking public supportfor implementing such policies amid the lingering problems of the recenteconomic crisis are clear. For the economic stabilization program tocontinue, underlying economic conditions should also be considered.Here, the value of foreign capital inflow enters the picture. As explainedabove, tight monetary and fiscal policies are indispensable for economicstability. Such policies may delay, to a degree, full recovery, and may limit

W

Contribution of foreign capital toeconomy and society

Prof. Dr. Erdoğan AlkinPh.D., Professor and Department Head

İstanbul Ticaret UniversityDepartment of International Trade

the favorable impact of economic growth on employment. Although fiscalstability in Turkey has been maintained, it is clear that rapid growth in thefirst half of 2010, the over-valued Turkish lira, and competition conditionsprevailing in international markets will continue to increase the foreigntrade and current account deficits. In recent years, foreign capital inflowhas been contributing to the solution of such problems. On the one hand,it accelerates growth, although to a limited degree, by contributingdirectly to production and employment. On the other, it plays asignificant role in funding the current account deficit.

Foreign capital has been one of the factors, in recent years, protectingTurkey’s economy from the distress of a foreign exchange squeeze -acommon problem in the past- by helping to fund the current accountdeficit triggered by an earlier growth in imports. Foreign capital’scontributions to the training of a qualified workforce in Turkey sincemany years are indisputable. Additionally, Turkish managers working inforeign capital companies gain valuable experience and then move toexecutive positions in domestic companies, where they spearheadquantum leaps in management practices. Some of these managers worksuccessfully in prominent international organizations and corporations.The bottom line is that making a plan which outlines what needs to bedone to prolong and increase foreign capital’s contribution to economicstability, performance and human resources is necessary because foreigncapital still faces countless barriers. More importantly, it is essential toeliminate the uncertainties that all international investors in Turkeycomplain about. These uncertainties exist in the legal arena as well as inthe political. The habits of suddenly amending or altering laws andresolutions pertaining to economic activities, and of bypassing laws andresolutions in order to conduct business must be abandoned. Marketscan tolerate political uncertainties, but legal uncertainties areunpredictable and are therefore intolerable.


YASED celebrated its 30th anniversary in theyear 2010.2010

oreign investors first look at the expected rate ofreturn on their investment in any given country. Also,it is important whether the risk of such an investmentis higher than an investment in his/her own country,

or in another country. The answers to these questions profoundlyinfluence the decisions offoreign investors.

Turkey provides investorswith several advantages atthe same time. Profitmargins in Turkey arehigher than those in westerncountries. With a rapidlygrowing and prosperingeconomy, the country isopen to innovation andpromises strong demand forgoods and services. Thecountry’s geographicalposition offers a uniqueadvantage as well.

Manufacturing in Turkey has transportation advantages inmarketing goods to the Balkans (and thus to Europe), the MiddleEast, Central Asia, and Africa.

In addition, Turkey is the most democratic country in the MiddleEast, and more democratic than any country in Central Asia or

F

Foreign investors believe Turkeywill become a member of the EU

Mahfi EğilmezColumnist

Africa. Within all these regions, Turkey is the closest country to theWest. It is negotiating for full membership in the EU, and hasalways considered itself a European country. After the 2001economic crisis,

Turkey improved and strengthened its economic structure,primarily in the banking sector. With this renewed economicstructure, Turkey emerged from the global economic crisis withminimum damage and most rapidly. The powerful banking sectorprovides two major benefits for international investors: easy accessto loans and low risks.

The 2001 crisis also brought a stronger public sector and more fiscaldiscipline to Turkey. As a result, foreign investors found a stablecurrency here. No doubt, foreign investors are well aware of thesedevelopments and advantages. That is why recent foreign directinvestment inflows to Turkey have increased rapidly.

Turkey’s pursuit of foreign capital investments reached its climaxwith the initiation of full membership talks with EU. No matter howwe interpret, foreign investors believe that Turkey will eventuallybecome a member of the EU, and they have therefore increasedtheir investments. For the future,

Turkey’s relations with the EU present the highest risk in the viewof international investors. These relations, and especially theinitiation of membership talks, were Turkey’s strongest attractionfor international investors. Today, however, they are the greatestrisk.

MAJOR ACTIVITIESIN YASED’s HISTORY

72

2010

• “The New World Order and Turkey” Conference and GalaDinner on the occasion of 30th Anniversary of YASED’sfounding

• Stay of execution decision as a result of YASED’s lawsuit against the Regulation regarding Acquisition of Real Estateby Foreign Capital Companies

• Process of work permits for foreigners improved with thecontributions of YASED

• Seminar on R&D Tax Incentives • Member Meeting with the

participation of Mehmet ŞİMŞEK,

Minister of Finance.

• 2nd KOZA Social Responsibilty

Project; internship opportunity

for 118 students from the less

developped region of Turkey.

• YASED Investors’ Expectation Index was announced for the firsttime along with the results of the first Barometer Survey of 2010.

• ACADEMIC RESEARCH COMPETITION XI: “Turkey: Regional Headquarterin International Investments”.

• 3 new Working Groups were formed.

• YASED’s Members Only Extranet site opened.• An exclusive Economic Coordination Council Meeting on

the issues of international direct investors chaired by the Minister of State and Deputy Prime MinisterAli BABACAN was held.

2009

• Piraye Antika elected as YASED Chairman

• TURKEY Where the Opportunities Abound: A Safe Haven For Investment CONFERENCE

• SEMINAR on Employment

• SEMINAR on New Incentive System

• ACADEMIC RESEARCH COMPETITION X: “The Effects of International Investments on Local Industry and SMEs in Turkey”

• 5 new Working Groups were formed.• YASED has filed a lawsuit against Regulation regarding

Acquisition of Real Estate by Foreign Capital Companies• Domestic ROADSHOW: Kocaeli, KOSGEB İMES• Participation to Kızılcahamam Conference

2008

• Regular Meetings of YASED Board with Minister of StateNazım EKREN

• “Protection of Intellectual Property Rights in Turkey: Impact on FDI” REPORT

• INTERNSHIP PROGRAM for Southern Anatolian Region University Students

• ACADEMIC RESEARCH COMPETITION IX: “The Role of International Investments in the Development of R&D Activities in Turkey”

• PPP Model SEMINAR• 5th Investment Advisory Council Meeting hosted by the

Prime Minister T.ERDOGAN was held with the support and participation of YASED

• Domestic ROADSHOWS to Balikesir and Izmir • SEMINAR on Draft Turkish Commercial Code• ACHIEVEMENT: YASED has been supportive of and an

active party in the process of the making of the Law on Incentives for Research & Development (R&D) Investments, which had become effective as of April 2008. YASED has also suggested and led to the setting up of an R&D Technical Committee under CCIIE framework, to follow up the related issues in this public-private platform.

• ACHIEVEMENT: YASED Free Zones Working Group’sdemands have been reflected on the Law on Amendments to be made in the Free Zones Law and The Customs Law.

2007

• Tahir Uysal elected as YASED Chairman.• SEMINAR on Competition Law• Participation to the Kizilcahamam Conference

• WORKING BREAKFAST on Working Permits of Expatriates

• TURKEY Where the Opportunities Abound on the Way to Success CONFERENCE

• Investment Advisory Council Meeting IV hosted by the Prime Minister R.T. ERDOGAN was held with the support and participation of YASED

• RESEARCH COMPETITION VIII: “The Role International

Investments in Preventing Unregistered Economy”

• YASED Web Site has been renewed.• PUBLICATION: “The Historical Development of Foreign

Capital in Turkey”. Prepared by journalist Şafak Altun for

YASED, the book covers three periods: the Ottoman Era

(1838-1923), the Republican Era (1923-1980), Globalizing

Turkey (1980-2007).

2006

• ACHIEVEMENT: New Corporate Tax Law which decreased the corporate tax rate to 20 percent has been passed by the Parliament. YASED was a major partner during the preparatory works.

• ACHIEVEMENT: Investment Support and Promotion Agency of Turkey has become operational and YASED wasan active partner in preparatory works.

• YASED's title was changed as the International Investors Association of Turkey.

• Investment Advisory Council Meeting III hosted by the Prime Minister R.T.ERDOGAN was held with the supportand participation of YASED

• PANEL on “Draft Bill on Land Planning and Development”• CONFERENCE on “Global FDI Movements: Myths and

Facts”, organized jointly with Koc University Institute of Management Investment FORUM in London titled “Eurasian Connection: The Regional Prospects in Russia, Kazakhstan and Turkey” held with the contribution of YASED

• RESEARCH COMPETITION VII: “The Impacts of Taxes and Incentives on Attracting Foreign Direct Investments”

• “Towards a Foreign Direct Investment Strategy for Turkey” REPORT, Dr. Kamil Yilmaz

• “Factors Influencing FDI in Turkey: An Implementation” REPORT, Ass. Prof. Aykan Candemir

• Traditional Ankara Protocol Reception• SEMINAR on “The New Features of the New Turkish

Commercial Draft Code”• International CONFERENCE on “Brand Counterfeiting:

The Global and Turkish Situation, Assessments and Solution Proposals” held with the support of YASED

2005

• ACHIEVEMENT: Consensus reached between domestic and foreign drug producers alongside the efforts of the Government on Patent Data Protection with the contribution of YASED since many years

• “The New FavouriteDestination for Foreign Investments: Turkey Wherethe Opportunities Abound” CONFERENCE

• International ROADSHOWS in Germany and Italy• Domestic ROADSHOWS in Konya and Eskisehir• Investment Advisory Council Meeting II hosted by the

Prime Minister R.T.ERDOGAN was held with the supportand participation of YASED

• RESEARCH COMPETITION VI: “Public-Private Sector• Relationship in Foreign Direct Investments: The Role of NGOs”

• “Executive Pay” SEMINAR organized jointly with Hay Group

• SMEs SEMINAR titled “A New Approach to Mergers andAcquisitions with Foreign Investor Corperations - Trade Your Stocks for Higher Returns” organized jointly with KOSGEB, IMES, BMCS

• Traditional Ankara Protocol Reception• YASED’s 25th ANNIVERSARY GALA

2004

• WORKSHOP on “Foreign Investors Council and Their

Role in the Economic Reform Process in Transition Economies”

• ACHIEVEMENT: YASED has took an active role and been a major partner in the initiation and consultation process of 25 new regulations legislated within the scope ofthe Coordination Council for the Improvement of Investment Environment (CCIIE) efforts.

• Mustafa Alper appointed as the YASED Secretary General

74

• SYPOSIUM on “Administrative Barriers Facing Foreign Investment in Turkey”

• CONFERENCE on “International Commerce, Financing and Investments”

• SEMINAR on “Brand Awareness and Protection”• International ROADSHOW in Germany• Domestic ROADSHOW in Kayseri• Participation to the 4th Congress of Economy of Turkey

organized by the State Planning Organization and REPORT on “Foreign Investments in Turkey” prepared by the working group coordinated by YASED for the Congress

• Investment Advisory Council Meeting hosted by the Prime Minister R.T. ERDOGAN, held with the support and participation of YASED

• YASED Ad in Dünya Daily• Ankara Protocol Reception

2003

• Şaban Erdikler elected as YASED chairman• ACHIEVEMENT: New Foreign Direct Investment Law

has been accepted at the Parliament. YASED was a majorpartner during the preparatory works.

• ACHIEVEMENT: Company establishment procedures decreased to 3 steps from 19 steps. Foreign companies areestablished as local ones after the Law and it takes 24 hoursto establish a company in Turkey.

• SYMPOSIUM on “Disposition of Immovable Property byForeigners” in cooperation with the Istanbul Regional Directorate of Land Registry

• International ROADSHOWS in UK, France, Germany• Domestic ROADSHOW in Denizli• FDI Attractiveness REPORT prepared jointly with TÜSİAD• Golden Horn Tour

2002

• FIAS REPORTS: "Foreign Investment Legislation" and "Investment Promotion Agency"

• CONFERENCE on "Improvement of the Investment Environment and Promotion Model for Turkey" organizedwith Treasury, the World Bank, TOBB and Finans Dünyası Magazine

• Meeting with President Süleyman DEMİREL• CONFERENCE on "Turkey in the Next Milennum -

Reconstruction and Foreign Investment" organized together with the World Bank and Undersecretariat of Treasury

• YASED ad in Finansal Forum newspaper for the CONFERENCE

• YASED ad in Milliyet daily for Helsinki Summit• YASED ad in Economic Dialogue Turkey for WEF meeting

• ACHIEVEMENT: As a result of the years-long efforts of the

YASED Pharma Committee, the Decree Law on patent

protection in the pharmaceuticals industry has come into force.

1997-98

• Christoph Urban elected as YASED Chairman• Rewriting of YASED Mission Statement• Works for the Restructuring of YASED• CONFERENCES on "Participation of Private Sector in

Infrastructure Building in Turkey" organized together withthe World Bank and the Financial Times

• "TURKISH ENERGY CONFERENCE" organized together with Economist Intelligence Unit

• CONFERENCE ON "The Aspects of Privatization in Turkey"

organized with PA, GTZ, FNS and the German Embassy

• Launching the WORLD INVESTMENT REPORT of UNCTAD

• YASED - İKV Joint Declaration• YASED Ad in Handelsblatt Newspaper of Amsterdam• YASED Open Golf Tournament II• YASED Search Conference• PANEL titled “Improvement of the Investment

Environment in Turkey” organized within the framework of the World Economic Forum Meeting held in Turkey

1996

• Meeting with President Süleyman DEMİREL• Committees and Problems meeting• CONFERENCE on the World Bank Guarantee Program• CONFERENCE on "Turkey: A Global Investment

Forum" organized together with Euromoney• YASED Open Golf Tournament I• GAP Trip, Golden Horn Trip• Increase in the number of members of the Board from 11 to 15

• Meetings with IMF• Meetings with OECD• YASED ad in the Financial Times• WORKSHOP on "Regional Workshop on Investor

Targeting" organized with WAIPA, OECD and TİKA• Works of the Coordination Council on the Improvement of

the Investment Environment (CCIIE) initiated and YASEDstarted to participate in the Council as a natural member.

2001

• FIAS REPORTS: "A Diagnostic Study of the Foreign Direct Investment Environment" and "Administrative Barriers to Investment"

• Public Opinion Project• TÜSİAD - İSO-YASED Cooperation• YASED is the founding member of Ethical Values

Foundation of Turkey (TEDMER).• CONFERENCE on "Globalization and the Turkish

Economy: Foreign Investment" organized with CSA.• CONFERENCE on "The Changing Face of International

Investments: New Opportunities for Turkey" organized with Treasury, the World Bank, FIAS/IFC, UNDP and Finans Dünyası

• YASED's 20th ANNIVERSARY GALA

2000

• "Industrial Property Summit - 2000" CONFERENCE• CONFERENCE ON "New Trends in Banking and the

Capital Markets"• Galata Trip, GAP Trip, Golden Horn trip• YASED chaired the Commission on Foreign Direct

Investment during the preparatory works for the 8th Development Plan organized by the State Planning Organization.

1999

• Faruk Yöneyman elected as the Chairman of YASED• The first issue of "INSIGHT YASED" Magazine published• YASED WEB SITE - www.yased.org.tr• YASED BAROMETER SURVEY has started to be conducted.

• YASED supported the repair of Yarimca Orphanage afterthe Marmara earthquake on August 17, 1999.

1995

• ACHIEVEMENT: Patent Production in International Standards

• Meetings organized with YASED contribution:- Privatization Conference in Brussels- Istanbul Stock Exchange Market meeting in Washington D.C.

- Joint US-Turkish Economic Committee meeting in Washington D.C.

• Joint Declaration on Customs Union with chambers of commerce and industry

• YASED Ad in the Wall Street Journal• Gates and Walls of Istanbul Trip

1994

• Meeting of the Board of Directors and Chairmen of Committees with Prime Minister Tansu ÇİLLERParticipation at the Prime Minister Tansu ÇİLLER's meeting with Associations

• CONFERENCE an "FOREIGN INVESTMENT AND PRIVATIZATION" organized together with the World Bank and Wall Street Journal(Opening: Prime Minister Tansu ÇİLLER)

• Formation of the YASED International Advisory Board (IAB)

• Customs Union Page of YASED in Daily Dünya

1993

• Initiation of the RESEARCH ON FOREIGN INVESTMENTS

• ACHIEVEMENT: Anti-Foreign Investment Article deleted from the Draft Bill on Intellectual Property and Works of Art (Article 69)

• Launching of YASED COUNTRY AWARDS• Publication of YASED MEMBER CATALOGUE

1992

• Yavuz Canevi elected as YASED Chairman• Meeting with Prime Minister Süleyman DEMİREL• Organization of the Foreign Investments WORKSHOP

within the framework of III. İzmir National Economy Congress

• PANEL DISCUSSION on "Patent Draft Bill" in Ankara• PANEL DISCUSSION on "Patent Application" in Ankara• YASED RESEARCH COMPETITION V: "Intellectual

Property Rights in the World and in Turkey"• Publication of YASED - CITIBANK INVESTMENT

GUIDE

1991

• Meeting with President Turgut ÖZAL• RESEARCH COMPETITION IV: "Economic Growth

and Environment Protection"• Konya "Whirling Dervishes" Ceremony Trip• Dr. Abdurrahman Arıman appointed as the Secretary General

1990

• Meeting with President Turgut ÖZAL• YASED's 10th ANNIVERSARY GALA• RESEARCH COMPETITION III: "The Role of Foreign• Investment in the Renewal of Production Tecnology"• Budapest Trip, Afrodisias Trip

1989

• RESEARCH COMPETITION II: "The Role of Foreign

Investment in the Integration with the European Community"

• CONFERENCE on "Privatization" organized together with TABA

• PANEL on "Developments in International Financial Markets and the Turkish Capital Markets"

1988

• ACHIEVEMENT: Elimination of delays in repatriation ofprofits according to YASED Proposal Meeting with PrimeMinister Turgut Özal GAP trip

• YASED joins İKV with observer status.

1987

• Atilla Midillili elected as YASED Chairman• ACHIEVEMENT: Acception of YASED Proposal by the

Treasury on "the credit limits of foreign banks to be calculated periodically on the basis current exchange rate"

• INITIATION of YASED RESEARCH COMPETITIONamong university students

• RESEARCH COMPETITION I: "Prospects for Foreign Investments in the World and in Turkey"

• YASED becomes a member of DEİK.

1986

• SERIES of LECTURES of political party representatives initiated by Prime Minister Turgut ÖZAL

• SEMINAR on "Country Examples on Free Zones"

1985

• SEMINAR on "TURKEY 1985: The Outward Orientation of

the Turkish Economy" (Opening: Prime Minister Turgut ÖZAL)

• SEMINAR on "The Invisible Export Council" organized jointly by TOBB, TÜSİAD and YASED

• SEMINAR III on "Foreign Investment Applications"• ACHIEVEMENT: YASED supported efforts which

resulted in the repeal of a Finance Ministry Communique which called for discriminatory application of investment incentives for foreign partners.

1984

• Work on a new FOREIGN INVESTMENT LAW (no results)

• Meeting with Prime Minister Turgut ÖZAL and other Ministers

• SEMINAR II on "Foreign Investment Applications"• SEMINAR on "New Policy on Foreign Investment"• ACHIEVEMENT: YASED contributed to regulations

broadening the areas in which foreigners can invest.

1983

• SEMINAR on "Foreign Investment Applications in Various Countries"

1980-82

• YASED founded in 1980 by 14 multinational corporations• Erdoğan Karakoyunlu elected as YASED Chairman• A. Semiha Baban appointed as YASED Secretary General

direct investment turkey

Real Estate

greater turkey

treasury of turkey bp

turkish economy

turkish industry

antika chairman yased

minister of state

new investments

cokunkan chairman