ispat_presentation_25.03.2011

REPUBLIC OF TURKEY PRIME MINISTRY

Investment Support and Promotion Agency of Turkey

ISPAT

“Investment Climate in Turkey”

Beautiful

landscape…

Combination of

contemporary and

traditional…

Home of many

successful

people…

What about the

investment

opportunities…

AGENDA

• TURKEY WITH SOME KEY FIGURES

• FDI IN TURKEY

• TOP REASONS TO INVEST IN TURKEY

• THE AGENCY

• WHY TURKEY

Turkey with some

key figures…

17th largest economy in the world and 7th when

compared to the EU Countries in 2009 (IMF)

The largest youth population when compared to the EU countries

46 million credit card

users (2010)

62 million GSM users

(2010)

35 million internet

users (2010)

Turkey is the 5th

largest shipbuilding

(units) country

as well as the

4th largest mega

yacht producer in

the world (2009)

VOLITAN

- Green Dot Award

2008, Miami

- International

Design Award

2007, New York

VOLITAN

Designer Dr. Hakan GÜRSU & Designer Sözüm DOĞAN, TURKEY

Turkey is the 8th largest steel producer in the world and 2nd compared with

the EU countries (worldsteel 2010)

Turkey is the 16th largest automotive producer in the world (OICA 2010)

- Turkish Airlines is one of the fastest growing airlines in Europe

- Fleet Plan for 2009-2023; purchase 105 aircrafts

-The best airline in Southern Europe (Skytrax 2009)

-29.1 million passengers flew by Turkish Airlines in 2010

- 102.7 million airline passengers in Turkey (2010)

- Istanbul Ataturk Airport is the best airport in Southern Europe (Skytrax 2010)

The proportion of the

Turkish female academic

staff is higher than the

European average

Turkey is the 7th most visited holiday destination in the world (2009)

International TouristArrivals

Country2009

(million)

1. France 74.2

2. USA 54.9

3. Spain 52.2

4. China 50.9

5. Italy 43.2

6. UK 28.0

7. Turkey* 27.3

8. Germany 24.2

9. Malaysia 23.6

10. Mexico 21.5

Source: UNWTO ;*Ministry of Culture and Tourism

Out of world’s top 100 best hotels 20 are from Turkey (TUI Holly, 2009)

It’s not only a place

to work, but also a

fascinating place to live.

FDI in Turkey

Source: Central Bank of Republic of Turkey & Treasury

Soaring FDI Inflows

5,66,7

8,8

11,7

15

18,7

21

23,725,5

0

5

10

15

20

25

30

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

‘000 Number of Companies with Foreign Capital

15

94

0

10

20

30

40

50

60

70

80

90

100

1972-2002 (30 years) 2003-2010 (8 years)

FDI Inflows($ billion)

Source: UNCTAD

Turkey is the 15th most attractive FDI destination for 2008-2010

according to the World Investment Prospects Survey

Top reasons

to invest in Turkey

Top reasonsto invest in Turkey

Source: IMF World Economic Outlook, April 2010; *TurkStat

Dynamic, Stable &Attractive Economy GDP Key numbers

Population

International Hub

Structural Reforms

Benchmarking Performance of theTurkish Economy

Billion USD

%

Annual Average RealGDP Growth 2002-2009

Source: OECD Economic Outlook No.86

Let your business blossom in a thriving economy and promising future


The fastest growing economy among the OECD countries


Source: Treasury

EU Defined General Government

Gross Debt Stock (% of GDP)

Stability and High Performancein the Economy

Maastricht Criteria: 60 %


Population

International Hub

Structural Reforms

Source: Treasury



Population

International Hub

Structural Reforms


-24,5

-10,2-9,0

-4,5

-0,6 -0,8 -1,0

-2,2

-6,7

-27,0

-24,0

-21,0

-18,0

-15,0

-12,0

-9,0

-6,0

-3,0

0,0

2001 2002 2003 2004 2005 2006 2007 2008 2009

EU Defined General Government

Budget Balance (% of GDP)

Maastricht Criteria: -3 %

Source: TURKSTAT



Population

International Hub

Structural Reforms


Exports and Tourism Revenues

36,1

47,3

63,2

73,5

85,5

107,3

132

102,2

8,513,2

15,9 18,2 16,918,5

2221,2

0

20

40

60

80

100

120

140

2002 2003 2004 2005 2006 2007 2008 2009

Exports Tourism Revenues

Billion USD


Turkey has the 5th most liberal trade policies in the world (World Trade Indicators 2009)

Customs Union with the EU

Free Trade Agreements with 20 countries:

1. Albania 11. Norway

2. Bosnia & Herzegovina 12. Palestine

3. Croatia 13. Switzerland

4. Egypt 14. Syria

5. Georgia 15. Tunisia

6. Iceland 16. Montenegro

7. Israel 17. Serbia

8. Lichtenstein 18. Chile

9. Macedonia 19. Lebonan*

10. Morocco 20. Jordan

Source: Undersecretariat of Foreign Trade, * In ratification process

Source: TURKSTAT



Population

International Hub

Structural Reforms


Annual Inflation

* As of February 2011

Source: UN and TURKSTAT, 2010

Potential of the Turkish Economy- Young Population -


Population Pyramid

Half of population in Turkey is under age 29

5 4 3 2 1 0 1 2 3 4 5

0-4

5-9

10-14

15-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65-69

70-74

75-79

80-84

85-89

90+

Female Male

%

Age Group TURKEY

5 4 3 2 1 0 1 2 3 4 5

0-4

5-9

10-14

15-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65-69

70-74

75-79

80-84

85-89

90+

Female Male

%

Age Group EUROPE

Dynamic, Stable &Attractive Economy

Population Age Labor Force GDP

International Hub

Structural Reforms

Source: IMD World Competitiveness Yearbook 2009, IMD WCY Executive Opinion Survey based on an index from 0 to 10




International Hub

Structural Reforms

Availability of the Skilled Labor Force

Source: TURKSTAT

Productive and Cost-effective Labor Force


Productivity and Unit Wages Index in Industry

(Per Worker; 2005=100)

Unit Wage Index



International Hub

Structural Reforms


Source: Economist Intelligence Unit (EIU), February 2010; Efficiency of labor measured in terms of output per worker (real GDP per person employed).

Labour Productivity Growth (%)

Annual Average (2002 – 2009)




International Hub

Structural Reforms


Labor Cost Per Hour ($US)

2009




International Hub

Structural Reforms

Source: EIU, February 2010; Average cost of labor per hour (pay and non-pay costs).


Source: *MERCER - Pan-European Employer Health Benefits Issues Survey 2008**EUROSTAT 2009

Days

Annual average number of sick days per

employee in Europe (2008) *

Hours



International Hub

Structural Reforms


Hours worked per week of full-time employment

Annual average (2009)**

Source: TURKSTAT

Potential of the Turkish Economy



International Hub

Structural Reforms


GDP Per Capita – Nominal (USD)

3.492

4.559

5.764

7.0217.583

9.234

10.440

8.590

0

2.000

4.000

6.000

8.000

10.000

12.000

2002 2003 2004 2005 2006 2007 2008 2009


Source: IMF World Economic Outlook April 2010


Population

International Hub Access to Multiple Markets

Energy Corridor

Structural Reforms

Access to Multiple MarketsTotal 1,5 Billion People $ 22 Trillion GDP

EUROPE

GDP – $ 18.3 TrillionPopulation – 660 million

RUSSIAN FEDERATION

GDP – $ 1,2 TrillionPopulation - 142 million

MIDDLE EAST AND NORTH AFRICA

GDP – $ 2,4 Trillion Population – 602 million

CENTRAL ASIA & CAUCASUS

GDP – $ 230 billion Population – 80 million

Turkey As An Energy Corridor And Terminal



Population

International Hub Access to Multiple

Markets Energy corridor

Structural Reforms

Existing Natural Gas Pipelines

Existing Oil Pipelines

Natural Gas Pipelines under Construction

Natural Gas Pipelines Underway

Proposed Natural Gas Pipelines

Oil Pipelines under Construction


Population

International Hub

Structural Reforms


Public Sector Reform

Financial Sector Reform

Social Security Reform

Tax Reform

Enhancing Private Sector’s Role in the Economy

Opening the Key Markets to Competition, and Regulation by Independent Agencies

Improving the Investment Environment

Accelerated Privatization

New R&D and Innovation Support Law

Key Elements of StructuralReform Agenda

Structural Reforms

NewFDI Law &

Other Legislation

Employment

of Expatriates

International

Arbitration

Protection

Against

Expropriation

Corporate

Income

Tax %20

National

Treatment

Freedom

to invest

Guarantee

of Transfers

Access

to Real Estate


Population

International Hub

Structural Reforms



INVESTMENT INCENTIVES IN TURKEY

1. General Incentive System

2. Large Scale Investments

3. Region and Sector-Based Incentive System

4. Employment Scheme

5. Research and Development Supports

6. State Incentives for Export


The Incentives Granted According To The Region, Sector and

The Scale of The Investment:

• Reduced Corporate Tax: between 2-10%

• Social Security Premium Contribution for Employers up to 7 years

• Interest Support

• Land allocation for investments

Zone 1

Zone 2

Zone 3

Zone 4

The Agency

The Agency

Attached to the Prime Ministry and reports directly to the Prime Minister

Private sector approach

Multi-lingual, professional and dedicated project directors

ONE STOP SHOP

2 offices (Ankara – Istanbul)

Result oriented

The EU Negotiation Progress Report shows that the establishment of the Agency is a proof for improvement of the investment climate in Turkey

The Agency

The Agency

International representatives network worldwide and strategic partners in Turkey (Embassies, Consulates, Commercial Attaches, NGO’s etc)

The International Network

15 representatives 21 countries

WORLD BANK’s GLOBAL INVESTMENT PROMOTION BENCHMARKING REPORT2009

Among 181 National Investment Promotion Agencies,

INVESTMENT SUPPORT and PROMOTION AGENCY of TURKEY ranked as;

15th in the World in terms of General Performance Assessment

5th in the World and 2nd in Europe in terms of Inquiry Handling

The Agency

The Agency

for all potential investors!

nTURKEY

Some International Investorsin ICT & Electronics

Some International Investorsin FMCG & Retail

Some International Investorsin Different Sectors

Why Turkey?

Enjoy your potential in Turkey

According to the projection by Goldman Sachs,

Turkey will be the 9th largest economy in the world and the 3rd largest economy in Europe by 2050.

1.China2.U.S.A.3.India4.Brasil5.Russia6.Indonesia7.Mexico8.U.K.9.Turkey10.Japan

Source: Goldman Sachs, 2009

Why Turkey?

Why Turkey?

Increasing Confidence in the Turkish Economy

Source: Respective rating agencies

Turkey’s Sovereign Credit RatingsS&P Moody’s Fitch JCR

ScaleJanurary

2010February

2010Scale

December 2009

January 2010

ScaleDecember

2009January

2010Scale

January 2010

February 2010

A A2 A

AAA+

AAA

AAA-

A- A3 A-

A+

A

A-

BBB+ Baa1 BBB+ BBB+

BBB Baa2 BBB BBB

BBB- Baa3 BBB- BBB-

BB+ Ba1 BB+ Turkey BB+

BB Turkey Ba2 Turkey BB BB Turkey

BB- Turkey Ba3 Turkey BB- Turkey BB- Turkey

B+ B1 B+ B+

B B2 B BB- B3 B- B-

CCC+ Caa1 CCC+ CCC

CCC Caa2 CCC CC

CCC- Caa3 CCC- C

SD Ca DDD D

D

Source: TEDAŞ, OSD, GAP Authority, Ministry of Transportation, BDDK, Interpro Media

The Most Promising Sectors

Automotive ; Target to produce over 2 mio vehicles within 5 years

Energy ; The total amount of investment needed to meet the energy demand in

Turkey until 2023 is $ 130 billion

Real Estate ; Istanbul is the first-ranked development market in 2009 (Emerging

Trends in Real Estate Europe 2009 Report - PWC & ULI)

Agriculture ; Concerning Southeastern Anatolia Project, $ 26.7 billion investment

is required until 2012

Transportation; Highway capacity planned to be trippled up until 2023 with 12

different project

Finance ; In 2009, the net profit of the banking sector has increased by 50%

comparing with 2008. The real growth rate of the financial sector of Turkey was

8.5% in 2009 despite the global financial crisis.

ICT & IT ; IT Market growth rate exceeds 220 % within the last decade and

reaches to $28,1 billion turnover.

Why Turkey?

THANK YOU FOR YOUR ATTENTION

ispat_presentation_25.03.2011

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