Future Prospects and Challenges of the Turkish Economy
Undoubtedly, despite all the important achievements of Turkey at all levels, there are many difficulties and challenges in the Turkish economy, causing many questions for the investors about its possibility to grow. The following is a set of problems and a pointing to a set of solutions:
The first problem :
It is that imports are much larger than exports in Turkey.
Turkey has reduced the value of its large trade deficit to a value acceptable to the customs of the countries, while seeking a great deal of self-reliance and increase and diversify production and support exporters. However, a significant qualitative shift that will contribute to the reduction of foreign petroleum derivatives can be achieved by three important measures:
-Beginning oil exploration in Turkey by 2023, which marks the year of completion of the Lausanne Agreement, which deprived the Turkish state of its right to explore for oil for 100 years, knowing that Turkish territorial waters are expected to be floating on a sea of oil.
-Beginning the commercial investment of the Bosphorus Strait linking the Black Sea and the Sea of Marmara by the end of the Lausanne Agreement, which also deprived Turkey of its right to collect fees from passing ships for 100 years.
-Turkey has signed contracts with Russia, China and Japan for the construction of three nuclear power plants, two of which will be in service in 2023.These nuclear power plants are located near the southern Turkish city of Mersin and near the Black Sea coast in Sinop. In the north, and in the Thrace region northwest of Istanbul.
The second problem:
questioning Turkey’s ability to maintain its political and economic stability and sustainable growth and its resilience in the face of political crises and US sanctions:
The comment on this problem is that stability and progress can be expected to continue for the following reasons:
-Turkey originally settled its strategic orientation with its old membership in NATO in 1952, and merged with the European economy through the customs union agreement with the European Union in 1996, conducting long and serious negotiations to join the European Union, therefore, any differences and independence of the decision does not mean in any way Turkey from the European system or isolation. Despite the handover of the American priest who was held in Turkey to the US authorities and the improvement of the Turkish-American relations relatively, some analysts do not pay much attention to the economic pressures that can be exerted by the United States of America, as the figures show that the volume of trade with the US accounted for only 5.2 percent of the total Turkey’s foreign trade in 2017 has not increased in the last two years.
-The independence of the Turkish decision provided a good deal of flexibility in dealing with the problems in cooperation with China, Russia and African countries, with the tendency to link the Turkish lira to gold or a basket of currencies, and to support the idea of self-sufficiency as possible, and the implementation of the decision to establish the Turkish Space Agency in December 2018 and the statements that followed are evidence of the trend towards self-sufficiency in several areas, most notably the military exceptional vigilance by the security forces to prevent any breaches that may disturb stability and affect tourism and investment.
-The Turkish people stressed the support of stability and the consolidation of democracy in them, and the position of the Turkish people rejecting various segments and party affiliations to the recent military coup attempt is a great proof of the depth of the values of democracy and insistence not to go back.
-Mega projects are being held to celebrate 2023, and the best witness of this new Istanbul airport, which will contribute to increasing investment projects in Turkey and increase employment, because it will be at the completion of all stages of construction “the largest airport in the world, and because it will turn Istanbul into a hub for flights Travel to many destinations without having to go through Europe’s airports, as recently confirmed by former German President Christian Wolf. In early 2018, another giant project was completed, the new Istanbul Canal project linking Kucukcekmece Lake in the south and the Black Sea in the north. One of the most important and unique projects is the Istanbul Grand Tunnel, which consists of three floors, two of which will be dedicated to vehicles and another floor for trains and metro, and part of it is planned to cross under the sea floor in the Bosphorus Strait, putting an end to the traffic congestion, reducing a lot of time.
-Continuing to support the foreign investors through the insistence of the Turkish presidency by reducing the interest rate, and providing all facilities to investors, and according to the index of regulatory barriers to foreign direct investment of the Organization for Economic Co-operation and Development, Turkey is the second largest climate exposed to reforms among the OECD countries in terms of Restrictions on FDI from 1997 to 2017.
-Turkish society is a young society with skilled, trained and relatively cheap labor, in addition to Over 800,000 students graduate annually from more than 183 Turkish universities.
-Arabs living in Turkey offer added value to the Turkish economy, especially Iraqis who rank first in the sales of Turkish real estate among Arabs, stressing the importance of the important role of the Syrians in an article by the well-known writer Yassin Aktay, Syrian refugees in Turkey. They receive aid, they work energetically and make significant contributions to the Turkish economy. During 2014, 4,500 Syrian businessmen invested in the Turkish market with a value of 1.22 billion TL. In 2015, the Syrians came second after the Germans on the list of the most foreign investors in Turkey. The Syrian investments in Turkey this year amount to 3, 5 billion dollars pumped by six thousand Syrian companies. There is no doubt that the contribution of Syrians, Arabs and other foreigners to the Turkish economy will double in the coming period thanks to a very favorable investment environment, which Turkey seeks to improve for foreigners.
-According to the International Fitch Ratings Agency, the Turkish economy is expected to grow over the next five years at 4.8 % per year. The average annual growth rate in the G20 is not more than 3.8 %, According to the IMF’s Global Economic Prospects report, real GDP growth is projected as follows:
-Despite the burden of rising inflation on the Turkish economy, the increase in prices has not been significant for a significant group of goods and services in Turkey, and perhaps the real estate sector was one of the most negatively affected by this inflation. As demand for real estate increased According to the Turkish Statistical Center data, the value of properties sold to foreigners in the first quarter of 2019 increased by 82 percent from the same period in 2018. The first quarter of this year reached 13,338 properties, while it reached 7,314 properties In 2018 alone, this increase in demand is explained by the relative stability of real estate prices in light of the fall in the Turkish lira exchange rate against the dollar as buyers and investors were able to buy more properties in terms of number or value in the same amount that was previously allocated to them for the purchase.
-In the past 15 years, Turkey has been on the path of progress and development, with qualitative leaps that have made it among the 20 most advanced countries in the world. Equal opportunities and justice, encouraging investment environments for domestic and foreign investment, and a network of economic, cultural and social relations with different countries of the world. There is no doubt that Turkey’s path of progress is not without obstacles, but all the possibilities are available to overcome them.
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