Made in Turkey / Eylul-Ekim15 by Made in

ISSN 1300-2260

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September - October 2015

$11 billion in orders for defense industry

Turkish President Tayyip Erdoğan calls for early elections on November 1

Turkey’s foreign trade deficit narrows in June due to oil plunge Turkey’s foreign trade deficit fell 21.6 percent in June from the same month in 2014 and 16.43 percent in the first half of the year from the same period in 2014, indicating improvement for three months in a row, data from the Turkish Statistical Institute (TÜİK) showed on July 31. | Page 2

Turkey’s current account deficit narrowed in June Turkey’s current account deficit narrowed in June to $3.36 billion from $4.44 billion in May, the Turkish Central Bank said on Aug. 11, helped by a slowdown in the foreign trade deficit...| Page 3

Indonesia’s coordinating minister for the economy has invited Turkish businesses to invest in his country, particularly in the sectors of energy and infrastructure, according to a statement released. | Page 7

Antalya-based Fusion Tour has launched an Islamic cruise business expanding the spectrum of halal tourism, a rising trend in Turkey and its region. | Page 8

Investment manager says Turkey’s economy not fragile

urkey’s economy is not “fragile”, Mark Mobius, executive chairman of the Templeton Emerging Markets Group said. Mobius, in an interview with Anadolu Agency, said there were great opportunities in Turkey for investors. “I don’t agree with the ‘fragile five’ thesis since it simplifies the very complex economic structure of those five countries and in Turkey’s case, it denigrates the very real strengths of the economy,” he said. The “fragile five” concept was

A new wave of growth for Turkish economy underway

Ibrahim Turhan is a professor of economics who has lectured at a number of Turkey’s universities, a former deputy governor of the Turkish central bank, and until recently chairman of Borsa Istanbul. He was elected member of the Turkish parliament for the AK Party, Izmir in June. Commentators like Erdal Saglam of the Hurriyet newspaper have observed that he is likely to replace Ali Babacan as Deputy Prime Minister in charge of the Turkish economy if negotiations for a new government in Turkey are completed successfully. In an interview with Anadolu Agency, he talked about how the government could produce a second wave of growth for the country’s economy.

Turkey’s first halal cruise caters to growing market

Turkey offers challenging investment opportunities

Ibrahim Turhan

Indonesia invites Turkish investment

Turkey’s gold jewelry sector shines in Iran

“Raising the level of productivity, and nurturing exports are key initiatives for the government to produce a second wave of economic growth in Turkey,” Turhan said. “In Turkey, there is ongoing debate on how to treat retirees in terms of state pensions, and on raising the minimum wage. But it might not be necessary to raise the minimum wage. | Page 4

produced by analysts at Morgan Stanley in 2013. It groups Turkey, Mexico, Brazil, Indonesia and South Africa as emerging markets under particular economic pressure. Mark Mobius said Turkey’s economy is “very vibrant, with a well-trained and educated workforce” as well as “excellent managers, capable of entering global markets effectively”. “Therefore we cannot say that it is ‘fragile.’ Mobius also explained how the U.S. Federal Reserve’s projected interest rate increase will affect emerging markets.| Page 3

Mark Mobius, Executive Chairman of the Templeton Emerging Markets Group.

Oil prices to remain low for some time Oil prices should remain lower for a longer period of time to allow market rebalancing, a report by investment bank Goldman Sachs said.

Turkish business circles prepare two giant organizations |Page 5

he search for a new equilibrium resumes,” the report said. “This spring’s rally in prices did prove to be self-defeating.” The price of the global benchmark Brent crude oil had fallen from $115 per barrel in June 2014 to its lowest point in five and a half years in January 2015, falling below $48 per barrel, a 60 percent decrease and the worst slump in oil prices since 2008. | Page 6

Gas storage facility in Turkey to come online by 2019 |Page 7

EconomicNewspaper

September October

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Letter From The Editor

Mehmet Soztutan Editor-in-Chief

Competitive advantages After failure of coalition talks, Turkish President Tayyip Erdogan calls for parliamentary elections expected to take place on Nov 1. What about Turkish economy?

For this reason,Turkey closely monitors developments in global economy and implement policies in line with its medium-term economic program. The Gov“Turkey’s economy is not ernment focuses on policies to fragile, Mark Mobius, Execu- increase private sector’s investtive Chairman of the Templeton ments, direct international inEmerging Markets Group noted. vestments and exports. He said that there were great Competition appears from all opportunities in Turkey for incorners of the globe within this vestors. perspective. “I don’t agree with the ‘fragile To respond, manufacturers five’ thesis since it simplifies the very complex economic struc- are reducing costs and increasture of those five countries and ing responsiveness through outin Turkey’s case, it denigrates the sourcing, sourcing globally and very real strengths of the econ- implementing demand-driven omy,” he added. Mark Mobius strategies. pointed out, “Turkey’s econoNevertheless, it is hard to my is very vibrant, with a wellkeep its competitive position in trained and educated workforce as well as excellent managers, ca- the world market full of emergpable of entering global markets ing players. Thus, manufacturers effectively.” have shifted their operations to value-added products and brand Actually, Turkey is a country names more than ever. Currentoffering significant opportunities for investors with its geographi- ly, many of Turkish manufacturcally perfect position to function ers have their own designs and as a gateway between Europe, brands in international markets. the Middle East and the Central As known, Turkey, being the Asia. The opportunities exist not oldest of our publications, cononly in the dynamic domestic veys the messages of the Turkish market, but also throughout the exporters for years by particiregion. pating in a series of international Turkey’s own emerging po- fairs and exhibitions. tential and its market attracWe wish Turkish business tiveness arise mainly from the sustainable growth and develop- people and their counterparts ment path. lucrative trade.

Letters to the Editor turkey@ihlas.net.tr Inherently rational There is no way to predict the price of stocks and bonds over the next few days or weeks. But it is quite possible to foresee the broad course of these prices over longer periods, such as the next three to five years. These findings, which might seem both surprising and contradictory, were made and analyzed by this year’s Nobel Laureates, Eugene Fama, Lars Peter Hansen and Robert Shiller. The dispute is not merely academic. The deregulation of financial markets beginning in the 1980s was justified by the view that markets are rational and efficient. Complacence about rising home prices in the 2000s similarly reflected the view that prices are inherently rational. G. Kranet/ Paris

Investors panicked It feels a little odd that all investors and traders are waiting for some sort of announcement from the Fed to signify some sort of change in economic policy. It’s more so the norm that the Fed actually starts to act prior to announcing or making it somewhat public.There is the potential that we are already seeing that right now.

Greece has negotiated a eurozone deal for a possible third bailout - but that does not mean its future in the single currency is guaranteed. Short-term financing has been arranged to help Greece get through July and emergency funding has enabled the banks to reopen for the first time since June. But the bailout has been widely criticised and there are many voices still arguing that Greece should leave the eurozone, also known as a “Grexit”.

2015

Turkey’s ‘first solar public bus’ to hit Istanbul roads ISTANBUL-Turkey’s “first solar-powered public bus” will hit the roads of Istanbul as part of the Turkish city’s initiative to reduce the impact of carbon emission on the environment. The Istanbul Electric Tram and Tunnel Company (IETT), the city’s public bus company, introduced the environment-friendly bus project at a press conference in Istanbul. “Millions of people use public transportation. Thanks to this project, we aim to reduce carbon emission and provide fuel

savings,” Fatmanur Yilmaz, the company’s environmental engineer, said. The company will launch only one bus, but would launch several more. Serving more than 14 million inhabitants, public transport in Istanbul makes up 30 percent of the city’s total daily transportation. The words: “we thought of the future and used solar power in the public transportation” will be inscribed on the sides of the solar-powered bus, which has 15 sun panels fitted on the roof of the vehicles.

While the bus itself will run on gas, the solar panels will support the vehicle’s battery and all electrical systems, including TVs, Wi-Fi and cameras. “The project will raise environment awareness among people,” Yilmaz added. In October 2014, the company also introduced another eco-friendly Botobus, which had an organic rooftop garden.

Turkish President Tayyip Erdoğan calls for early elections on November 1 formation of a government, the President can decide to hold a new election. In the event of a decision to hold new elections under Article 116, the council of ministers is to resign and the president will appoint a prime minister to form a provisional council of ministers.

ANKARA-Turkey will hold new parliamentary elections probably on Nov. 1, said President Tayyip Erdoğan . Following the June 7 general election which resulted in no single-party majority, Prime Minister Ahmet Davutoglu was asked by Erdogan to form a new government on July 9 within a 45-day time frame, which ended. “ I will meet my parliament speaker again and after this talk, we will hopefully bring our country to an early election,” said Erdogan in Istanbul. “Hopefully, Turkey will again hold an election on Nov. 1.” Since July 13, Davutoglu met with both Republican People’s

The caretaker government is to be formed within five days of publication in the Official Gazette of the decision to hold new parliamentary elections.

Party (CHP) leader Kemal Kilicdaroglu and Nationalist Movement Party (MHP) leader Devlet Bahceli for coalition

talks that in the end proved fruitless. According to Turkey’s constitution, when the 45day deadline expires without

“One thing important here is that whoever I assign [...] will form the caretaker government from within or outside the parliament. With this cabinet, we will go to the election. Here is the process,” said Erdogan.

B. Rinddet/ Berlin

Bubbles In the aftermath of the crisis, conversely, the work of Mr. Shiller and other proponents of behavioral economics — the integration of psychology into economic models — has been influential in shaping an intensification of financial regulation. And Federal Reserve officials are now debating whether bubbles can be identified and when they should be popped.

Bubbles are one of the most tangible manifestations of the disagreement between Mr. A. Areng/ Madrit Shiller and Mr. Fama. The housThe threat of Grexit ing crash that began in 2006 is For now, the threat of a Grex- widely regarded as evidence that it is diminished. But it was a prices had climbed to irrational genuine possibility in the hours heights, and Mr. Shiller’s accuracy before the 13 July bailout deal in diagnosing the problem sugwas hammered out. Since then, gests that future bubbles could Greece has successfully negoti- be identified, too. ated the first hurdles put up by its eurozone partners. D. Hare/ Frankfurt

Turkish Central Bank publishes roadmap for policy ANKARA-The Turkish central bank published “A roadmap during the normalization of global monetary policies,” a document detailing measures the bank will take to make its decisions more effective in a volatile international environment. The interest rate corridor, or the band between the higher overnight and marginal rates (currently at 10.25 percent and 10.75 percent respectively) and the lower one week repo rate of 7.50 percent will be made “more symmetric.” The width of the corridor will also be narrowed, the bank said. The flexibility of foreign exchange selling auctions will be increased to reduce exchange rate volatility. The remuneration rate of the dollar-denominated required reserves, reserve options and free reserves held at the central bank will be held close to the upper end of the Fed funds target rate range meaning that a higher interest rate will be paid on dollar reserves belonging to banks. The roadmap was published after the announcement that interest rates would be held at current levels.

Turkey’s foreign trade deficit narrows in June due to oil plunge ANKARA-Turkey’s foreign trade deficit fell 21.6 percent in June from the same month in 2014 and 16.43 percent in the first half of the year from the same period in 2014, indicating improvement for three months in a row, data from the Turkish Statistical Institute (TÜİK) showed on July 31. “In June, exports were down 6.9 percent to $11 billion, and imports dropped 12.5 percent to $18.2 billion year-on-year,” the report said. The foreign trade deficit narrowed to $6.2 billion, an improvement of 21.6 percent from $7.9 billion in June 2014. Turkey’s energy imports contracted by 26.4 percent in June to $3.32 billion and by 24.6 percent to $20.6 billion

were China at $2 billion, Germany at $1.9 billion, Russia at $1.75 billion and Italy at $1 billion.

in the first half of the year compared to the previous year, according to the TÜİK data. Exports to the European Union, Turkey’s largest trading partner, were down 6.6 percent. The main partner for exports was Germany at $1.4 billion. Germany was followed by the United Kingdom at $800 million, Iraq at $690 million and Italy at $600 million. The top providers of Turkey’s imports

Turkey’s exports decreased 8.1 percent in the first half of the year to $73.26 billion from the same period of 2014, due to the negative effects of parities on exports and geopolitical risks in neighboring countries, the Turkish Exporters’ Assembly (TİM) announced on July 1. “A decrease of some 18 percent in the euro-U.S. dollar parity in June from the same month of 2014 led to around a $1.2 billion loss in Turkey’s monthly exports. The loss upon the forex changes reached $6.8 billion in the first half of the year,” said TİM President Mehmet Büyükekşi.

EconomicNewspaper

September October

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2015

Turkey offers challenging investment opportunities LONDON-Turkey’s economy is not “fragile”, Mark Mobius, executive chairman of the Templeton Emerging Markets Group said. Mobius, in an interview with Anadolu Agency, said there were great opportunities in Turkey for investors. ile

“I don’t

Investment manager says Turkey’s economy not fragile

agree with the ‘fragfive’ thesis since it simplifies the very complex economic structure of those five countries and in Turkey’s case, it denigrates the very real strengths of the economy,” he said.

“fragile five” concept was produced by analysts at Morgan Stanley in 2013. It groups Turkey, Mexico, Brazil, Indonesia and South Africa as emerging markets under particular economic pressure.

The

“The perception of risk is rather low since the idea of an interest rate hike has already been discounted by the market. The expectation is that, if a rate hike comes, it will be small. The real risk comes if the interest rate hike is large, and larger than expected. In that case, all markets, including emerging markets, will be impacted. We must remember that the impact of interest rate rises is just one of the variables that impact markets, and it is important to note that, in the past, in many cases, markets actually rose in the face of higher interest rates because of other extenuating circumstances,” Mobius commented.

Mark Mobius, Executive Chairman of the Templeton Emerging Markets Group.

Mark Mobius said Turkey’s economy is “very vibrant, with a well-trained and educated workforce” as well as “excellent managers, capable of entering global markets effectively”. “Therefore we cannot say that it is ‘fragile.’ Mobius also explained how the U.S. Federal Reserve’s projected interest rate increase will affect emerging markets.

“The dollar pressure will now be reduced since the amount of depreciation of several emerging market currencies has gone too far so that many of the currencies are severely undervalued on the price parity

basis,” Mobius explained. “We must remember also that the U.S. government does not want a dollar that is too strong, since that will harm the U.S. economy. The challenge facing the U.S. Federal’s Reserve is how to raise interest rates in the face of falling interest rates in Europe, Japan and China.”

Oil prices Mobius is not dismayed by the sharp fall in oil prices, a movement that directly affects emerging market exporters like Brazil. “Oil prices are primarily driven by sentiment. If you look at the actual supply and demand trends over the last 20 years, in each year, the actual supply-demand varies no more than 5 percent either way. However the actual market price of oil has had a tremendous range and volatility. We can, therefore, expect oil prices to reach a medium trend-line which will probably be higher than where it is now, but it won’t go dramatically higher. It’s important to note that given the high growth particularly in the two most populous nations in the world, India and China, the demand for oil and oil-products will continue to rise despite the introduction of alternative energy sources which are expected to grow, but not replace oil in a short time period. This is also the case of coal where coal-fired plants continue to be built because in many parts the world it is the most economic form of electric power generation.” Mobius also spoke about the volatile price of gold. “The price of

gold is like oil prices. The supply and demand is fairly steady over the years, but the prices vary greatly because of sentiment at any particular time. Now that the dollar is strong, there is demand to hold dollars rather than gold. But once there is fear of dollar depreciation because of high U.S. government debt and the political factors, we will see gold move up again. The best time to invest in gold is when no one else wants it and it is very unpopular,” he said.

Grexit Mobius said that a ‘Grexit’ (Greece’s exit from the eurozone) would produce a worse crisis than the country’s current debt problem. He explained: “I believe that the debt situation in Greece is not as important as the necessity for Greece to remain in the European Union and to continue using the euro. The euro system provides tremendous economic benefits for people in Europe, and the euro has become a reserve currency of importance. Any crack in the structure caused by the departure Greece would be tragic.”

Russia sanctions Sanctions imposed by the U.S. and Europe on Russia make it impossible for investors to increase their holdings in the country “to any great extent”, Mobius continued. “The way out for Russia is of course to expand its scope of collaboration and trade with India, China, Brazil and other major countries around the world. It’s also important for them to establish an internal legal system where investors feel safe and have confidence that any assets they bring into the country or generate within the country will be safe and secure. This goes not only for foreign investors but for domestic investors as well,” he said.

Turkey’s current account deficit narrowed in June

Turkey’s current account deficit narrowed in June to $3.36 billion from $4.44 billion in May, the Turkish Central Bank said on Aug. 11, helped by a slowdown in the foreign trade deficit and a fall in oil prices, which cut the cost of energy imports. The deficit also narrowed by $812 million in June compared to the same month of 2014. The 12-month gap was announced as $44.7 billion by the Central Bank. “A decrease in the foreign trade deficit by $1.4 million to $4.8 billion in June compared to the same month of 2014 played a role in the decreasing trend in the current

account gap,” the bank said in a note on its website. “The ongoing fall in energy imports is supportive, and the domestic demand growth remains subdued,” Finansbank said in a note to clients. “We maintain our view that the current account balance will narrow at a mild pace in the forthcoming period,” it added. Turkey’s deficit is mainly financed by capital inflows, which have been hit in recent months by continuing uncertainties in the political scene. The ongoing coalition formation talks have been expected to finalize by the markets.

Eurozone economy sluggish in second quarter ANKARA- Economic growth in the eurozone was slower than expected, according to a report from the Statistical Office of the European Union (Eurostat). The euro area economy grew by 0.3 percent in the second quarter, down from 0.4 percent in the first quarter, the report said. Economic growth for the entire EU28 area was at 0.4 percent, the same as in the first quarter. Growth was lower than analyst consensus estimates in both areas. German GDP increased 0.4 percent, up from 0.3 percent in the first quarter. But it was below the analyst consensus forecast of 0.5 percent. German statistical office Destatis said, in

a note published, that exports were holding firm, but the lower value of the euro meant that exports were bringing in less revenue. It is, however, the second quarter of slow growth for Germany. France saw no growth at all in the second quarter. Italy’s GDP was up only 0.1 percent, and the Netherlands also showed a weak 0.2 percent growth. One surprise was Portugal’s strong performance: The country has seen 0.4 percent growth for the past three quarters.The European Central Bank is counting on a recovery in Europe to push up inflation, which is at a record low. The inflation rate in July was at only 0.2 percent, Eurostat reported.

Industrial production up in June

$11 billion in orders for defense industry ANKARA- The Turkish defense industry received $11 billion in orders in 2014, according to a report from the Defense Industry Manufacturers Association (SaSaD). The sector achieved an average annual growth rate of 21 percent for the last 5 years. Many orders were from the Turkish Armed Forces since 2005 in line with Undersecretariat for Defense Industries of Turkey’s growth and development strategies for the sector, Nail Kurt, chairman of the Turkish Defense Industries Exporters’ Association told Anadolu Agency. “The lion’s share in the sector growth come from domestic projects but domestic projects should not be expected to be increased.Thereafter, export and international cooperation projects will determine its future growth,” Kurt said. A major order came for aircraft parts at $6.9 billion. The Turkish defense aviation industry is in-

volved in a number of major international joint design and production programs, such as F-35 Joint Strike Fighter and A400M Large Transport Aircraft. Another major order at $2.6 billion was for a wide range of tracked and wheeled armored vehicles which are configured as personnel carrier, reconnaissance, communication, command & control, ambulances or platforms for various weapons. Industry revenue reached over $5.1 billion in 2014, an increase from $5.07 billion in 2013 and its export capacity was nearly $1.9 billion dollars last year, up from $1.6 billion from the previous year. The defense industry also imported over $1 billion in technology products from abroad. Turkey aims to have defense companies among the top 100 major companies in the world, and to produce at least three global brands in the defense sector. Ankara spent over $1 billion on defense, research and development in 2014, making defense the sector with the largest research and development investment in the country.

ANKARA Turkish industrial production was up sharply in June, as manufacturing and energy output surged, the Turkish Statistical Institute reported on Aug. 7. Industrial production increased 5.5 percent in June, compared with the same month last year, the report said. Production was also up 2.4 percent from May 2015. An Anadolu Agency survey had forecasted a 1.1 percent increase from May. The largest increase was in durable consumer goods with a 13.3 percent jump in June from the previous month. The manufacturing index increased by 6.9 percent, and the electricity, gas, steam and air conditioning supply index increased by 1.4 percent in June 2015, compared with the same month last year. Within manufacturing, the largest increase was in the manufacture of transport equipment by 32.9 percent, followed by the manufacture of computer, electronic and optical products, up 19.8 percent, and the manufacture of machinery and equipment, improving 12.0 percent in June compared with the previous month. “Relatively strong domestic demand this year helped Turkish industries,” commented Bora Tamer Yılmaz, an economist with Ziraat Securities in Istanbul. “Car and domestic appliance sales are surging. That may be related to an increase in consumer purchasing power. The Financial Stability Committee’s measures last year [controls on consumer credit] helped Turkish households to deleverage. Combined with deferred demand, household balance sheets seem to be in a better position, creating additional demand,” Yılmaz noted. Increased exports of intermediate goods to German manufacturers also helped industrial production to move higher.

EconomicNewspaper

September October

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2015

A new wave of growth for Turkish economy underway Ibrahim Turhan is a professor of economics who has lectured at a number of Turkey’s universities, a former deputy governor of the Turkish central bank, and until recently chairman of Borsa Istanbul. He was elected member of the Turkish parliament for the AK Party, Izmir in June. Commentators like Erdal Saglam of the Hurriyet newspaper have observed that he is likely to replace Ali Babacan as Deputy Prime Minister in charge of the Turkish economy if negotiations for a new government in Turkey are completed successfully. In an interview with Anadolu Agency, he talked about how the government could produce a second wave of growth for the country’s economy. “Raising the level of productivity, and nurturing exports are key initiatives for the government to produce a second wave of economic growth in Turkey,” Turhan said. “In Turkey, there is ongoing debate on how to treat retirees in terms of state pensions, and on raising the minimum wage. But it might not be necessary to raise the minimum wage. The right way forward would be to increase labor productivity, so that the minimum wage could increase in step with it,” Turhan commented.

Low industrial activity and lower employment at the same time. That will make no one happy,” Turhan said. “We in the government are totally aware of this. I wish that some opposition parties might also understand it,” he added.

Nurturing exports Turkish exports have declined from high levels in 2014. Turhan noted, however, that Turkey’s considerable success in export markets come from high standards, and that this pointed to the way forward. “Turkey has seen considerable export success in the past 12 years, going from totals of about $30 billion to about $150 billion. Yet Turkish exporters have successfully confronted three challenges. “First, the real value of the Turkish lira has appreciated against most currencies. I am not talking about the nominal value. In terms of real value, the lira has gained against currencies in both developed and emerging markets. This makes Turkish exports more expensive in foreign markets.

“As labor productivity increases, companies would naturally be led to hire more workers, and demand would bring higher wages. In this case, even if you don’t increase the minimum wage, wages will rise anyway, as a function of market dynamics,” Turhan explained.

“Then, Turkish exporters offer merchandise with high demand elasticity -- this means that the content of exports is not unique enough to give Turkish exporters market share by itself. Turkish exporters don’t have monopolies on their products. So the only way of beating the market is to be productive, efficient and effective.

“But, if the minimum wage is increased without a higher level of productivity, companies will employ fewer workers. So you will end up with a very bad situation:

“And, the largest market for Turkish exports is the European Union, where standards, norms and regulations are very strict.

“So Turkish exporters have been successful despite all these challenges. They have gained market share even being more expensive, due to the higher-valued lira. And they have offered consumer satisfaction even where standards are very high. “A success story of this type should continue. Turkish exporters must make the transition to high value-added products. And, the way to success, as we always emphasize, is that of making structural reforms in the economy,” he said.

Structural reforms and transition But can structural reforms make the difference. Turhan pointed out that the way to high value-added exports is not rocket science. “It’s not magic, or esoteric knowledge that boosts exports. At the end of the day, producing high value added simply means attaining better technology with more research and development, educating a more qualified human labor force, and producing a more market friendly economic environment. That is what the government has proposed, with its economic action plans.”

Increasing investment is an intrinsic part of these plans. “Of course, within these plans, we need to revisit and revise our promotion scheme for investment. Our investment promotions are currently mainly in the form of tax deductions -- you make an investment, make profit, and from your tax bill and you deduct the expenses for the investment. But this is not sufficient in order to initiate the kind of upgrade that we need. We need to increase the scale and scope of private enterprise. If your

local corporates in terms of size are not big enough, you need to give them a first impetus. “If you plant a tree, you provide water at first so roots can grow deeper and become safe and secure. After that normal climate conditions provide rain, but first you take care of the baby tree. It’s the same when an industry is at its starting stages. The state should take care of it, and once it is secure, the state should leave it to compete in the free market. It’s the same everywhere in the world, in the U.S., Germany, or Japan. It’s not magic or rocket science: We know how to do it, we know the processes, we have the recipe, so we can do it,” Turhan insisted. In fact, Turhan maintained that the structural reforms planned by the government will reshape the Turkish economy. “Again, we know how to do it. The government has mapped out 1,248 action plans starting from energy efficiency, to increasing domestic savings, improving capital markets, transitioning to higher value-added exports,” he said.

Fed interest rate hike What worries Turhan, as a threat to the Turkish economy, is the prospect of higher interest rates in the U.S. Federal Reserve governor Janet Yellen has made it clear that an interest rate hike will come this year. “This is what wakes me up in the night,” Turhan said. “It will affect not just the Turkish economy, not just emerging

Ibrahim Turhan

markets, but the entire global economy.” Turhan compared the current danger with what happened in the U.S. during the Great Depression. “In 1933, during the Great Depression, when the first wave was over, and the U.S. economy started to recover, the Fed tightened the money supply prematurely. So what happened? There was a second wave of depression, one more destructive than the first, and, in my opinion, it was one of main causes of WWII. This tough and challenging economic environment made life unbearable for middle class and the middle class was demolished, cleaned up, so there was no middle class to consolidate values in society, and the gap was filled with extremist ideologies.” Turhan pointed to the success in producing a growing middle class in Turkey. “This is one of the most important elements which will ensure stability and moderation in Turkey, and it is a considerable success for the AK Party government that it has managed to consolidate the middle class.”

THOUGHT OF THE MONTH

Humor

Always listen to experts! They’ll tell what can’t be done and why. Then do it! When the man in the street says: “If it ain’t broke, don’t fix it,” the lawyer writes: “Insofar as manifestations of functional deficiencies are agreed by any and all concerned parties to be imperceivable, and are so stipulated, it is incumbent upon said heretofore mentioned parties to exercise the deferment of otherwise pertinent maintenance procedures.” In the USA, everything that is not prohibited by law is permitted. In Germany, everything that is not permitted by law is prohibited. In Russia, everything is prohibited, even if permitted by law. In France, everything is permitted, even if prohibited by law. In Switzerland, everything that is not prohibited by law is obligatory. A junior partner in a firm was sent to a far-away state to represent a long-term client accused of robbery. After days of trial, the case was won, the client acquitted and

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released. Excited about his success, the attorney telegraphed the firm: “Justice prevailed.” The senior partner replied in haste: “Appeal immediately.”

How many lawyers does it take to change a light bulb? “How many can you afford?” It only takes one to change your bulb...to his. Two. One to change it and one to keep interrupting by standing up and shouting “Objection!” Three. One to do it and two to sue him for malpractice. Three. One to turn the bulb, one to shake him off the ladder, and the third to sue the ladder company. Three. One to sue the power company for insufficiently supplying power, or negligent failure to prevent the surge that made the bulb burn out in the first place, one to sue the electrician who wired the house, and one to sue the bulb manufacturers.

Fifty four. Eight to argue, one to get a continuance, one to object, one to demur, two to research precedents, one to dictate a letter, one to stipulate, five to turn in their time cards, one to depose, one to write interrogatories, two to settle, one to order a secretary to change the bulb, and twenty-eight to bill for professional services.

How many lawyers does it take to screw in a light bulb? None, lawyers only screw us. You Might Be a Lawyer if... • you are charging someone for reading these jokes. • you believe that a forty words’ sentence is a short one. • you have a daughter named Sue and a son named Bill. • you can look at a contract and instantly tell whether it’s verbal or written. • your other car is a BMW. • when you look in a mirror, you see a lawyer.

THE ECONOMIST Profesör What’s the difference between a psychotic and neurotic?

OK..

A neurotic knows two and two are four -- but he hates it.

EconomicNewspaper

September October

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2015

İbrahim Küpeli ibnahim.kupeli@img.com.tr

Economic power is shifting from west to east. A noteworthy shift is being happened in the global economic power over the last decade from west to east, from developed economies to emerging economies.

Turkish business circles prepare two giant organizations ‘Discover Events’ will bring together thousands of firms and Civil Society Organizations concurrently at Helal Expo Fair on 22-25 October 2015 in Istanbul. The organization will bring together top level officials with fair, congress, symposium, workshops and councils. Being realized under patronize and participation of Turkish President Recep Tayyip Erdogan, the organization will also bring together business circles from both home and abroad with support of Turkish Prime Minister Office. We conducted an interview with Yunus Ete, Chairman of the Board of Discover Events about issue.

What is growth of Halal certificated product in the world?

The current rate of the halal product is now 10% of the required size. But despite many barriers, the process and works for awareness are continuing. Today, the known market volume of halal products accounts for US$850 billion, as for the total halal market is some US$2 trillion. In Turkey, 30 percent of the total food exports include halal certificated

product. As food exports grow 10%, the halal product exports increases 70% every year. In Turkey approaching $15 billion on average, the halal food market grows 100% with every passing year.

How do you see this market in a near future?

This year, it is expected the domestic market to reach $30 billion in the world with 2 billion Muslim-population. In the next 10-year, the share of halal certificated products in the food exports foreseen to reach by 70 percent. Many of Muslim countries’ food market contain poor products of which international trade is not made. Also lots of produces are poorly packaged; due to unstable supply and unsustainable branding the products are not demanded. Halal product means high in quality, hygienic, reliable, and having universal standards in terms of packaging and labeling. GIMDES, with which we are cooperating at Helalexpo Fair,

Publisher: ISTMAG Matbaacılık Gazetecilik İç ve Dış Ticaret Ltd. Şti. Adına sahibi Sorumlu Genel Yayın Müdürü

an association continues to advance in halal food certification for 5 years.

Why do you hold this fair?

As much as being halal, also raising consumer consciousness in terms of consuming healthily products, we hold the 6th edition of Helal Expo Fair with support of GIMDES.

Who will join the fair?

The firms which are certified by GIMDES and as for abroad the firms accredited by the World Halal Council will join the fair. The brands from many sectors having halal certification ranging from food to cosmetics, medical to cleaning and hygienic supplies will participate in the fair.

Would you like to add something?

The firms having halal certification can set connections in the scope of their expectations, and can make their marketing and promotion works actively by joining the 6th Helal Expo Fair.

Turkey plays “key role” in Iraqi Kurdish oil

H. Ferruh Işık Managing Editor: Mehmet Söztutan (mehmet.soztutan@img.com.tr) Editors: Prof. Dr. Ismail Kaya Assoc. Prof. Mehmet Ali Özbudun Ibrahim Kupeli Advertising Sales Staff: Talha Elitez (talha.elitez@imgajans.com) Advertising Consultants: Emir Ocal (emir.ocal@img.com.tr) Artdirector: İsmail Gürbüz (ismail.gurbuz@img.com.tr) Graphic Design: Tolga Cakmakli (tolga.cakmakli@img.com.tr) Correspondent: Enes Karadayi (enes.karadayi@img.com.tr) Chief Accountant: Mustafa Aktas (mustafa.aktas@img.com.tr) Subscription: Ismail Özçelik (ismail.ozcelik@img.com.tr) HEAD OFFICE: Güneşli Evren Mah. Bahar Cad. Polat İş Merkezi B Blok No:3 34197 ISTANBUL/TURKEY Tel:+90. 212 604 50 50 Fax: +90. 212 604 50 51 www.img.com.tr - img@img.com.tr LIAISON OFFICES BURSA: Ömer Faruk Görün Buttim D Blok Kat: 4 No: 1267 BURSA / TURKEY Tel : (90.224) 211 4450 - 51 Fax: (90.224) 211 4481 KONYA: Metin Demir H. Ulusahin Is Mrkz. C Blok No: 603-604-605 KONYA / TURKEY Tel : (90.332) 238 10 71 Fax: (90.332) 238 01 74

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ANKARA -Turkey played a key role in transferring Kurdish Regional Government (KRG) oil to the international market, Turkey’s Energy Minister said. Speaking to reporters from the Iraqi Kurdish region in Ankara, Taner Yildiz said: “The oil transfer couldn’t be materialized if Turkey was not in it because the central government in Baghdad did not allow it.” Talking about relations between the KRG, the central Iraqi government and Turkey, Yildiz said that “we have important relations, agreements, contracts with them”. Yildiz spoke about the Iraq-Turkey Pipeline (ITP), which carried oil for 40 years from Iraq to international markets via Turkey: “I hope it will work for more than 140 years, and the income belongs to our Iraqi brothers. “The income of oil is shared 17 percent for the KRG and 83 percent for other parts of Iraq according to Iraq’s law and we do not change, we do not interfere,” added Yildiz. At the moment, both the KRG and the central government in Baghdad are importing refined oil from Turkey via the Kirkuk-Ceyhan oil pipeline. There are a total of 58 oil wells in the Kurdish region of northern Iraq -- 28 in Sulaymaniyah and 30 in Erbil and Duhok -- while a total of 25 foreign oil companies are operating in the region, the largest being Anglo-Turkish outfit, Genel Energy. In July, crude oil exports from Iraq to Turkey’s southern province of Ceyhan, where oil is stored and shipped to international markets, totaled 16 million barrels. The Kirkuk-Ceyhan oil pipeline has a capacity of 1.6 million barrels per day. The pipeline is critical for northern Iraqi oil exports. Talking about the natural gas price which Turkey will buy at from Iraq in 2017, Yildiz said that Turkey will not buy at half price; however, he added, it is normal to pay less as a neighboring country. The expected amount of natural gas is four billion cubic meters. The volume may increase by two billion cubic meters every year, and will eventually reach 10 billion cubic meters.

The US dominated the world’s economy for all of the 20th century and in the 21st century up until now. Now it is commented that China is on the verge of taking over the economic power. The professional services firm PricewaterhouseCoopers (PwC) has produced a series of megatrends reports that analyze high-level trends predicted to shape the global economic landscape in the decades ahead. GDP at PPPs is regarded a better indicator of average living standards or volumes of outputs or inputs, because it corrects for price differences across countries at different levels of development,” according to the report. “In general, price levels are significantly lower in emerging economies so looking at GDP at PPPs narrows the income gap with the advanced economies compared to using market exchange rates. However, GDP at market exchange rates (MERs) is regarded as a better measure of the relative size of the economies from a business perspective. PwC’s report also foresees the world economy would grow slightly more than 3% per year from 2014 to 2050. Meanwhile, emerging economies Mexico and Indonesia might be larger than the UK and France by 2030 according to measur-

ing GDP in PPP terms. Nigeria and Vietnam are also expected to be the fastest-growing large economies through 2050. If we look at the evaluations about economy in China, Chinese economy has achieved impressive GDP growth based on economic reforms and greater integration into the world trading and financial system since the late 1970s. Despite falling to its lowest level since 2009, Chinese economy is going to jump into first rank. Another emerging market of the world, India is predicted to be the second-largest economy in the world by 2050 (in PPP terms, that is, and third when measuring GDP via MERs). The US economy is going to be second economic power by 2030 and third one by 2050 accordingly. Late August, Chinese stocks have plunged after worries over China’s slowing growth and triggered slowdown in the stocks across the world especially in the developed countries. Prior to plunging stocks, the central bank devalued the currency, the yuan - this raised fresh concerns that China’s economy could be in worse shape than previously thought. Showing from time to time fluctuation particularly recent years because of the global economic crisis, the Chinese economy is assessed as bigger than America on a purchasing power parity basis. “While growth was 7.4% in 2014, the slowest expansion for 24 years, and could drop below 7% in 2015, with America yet to stage a convincing recovery China is now the world’s growth locomotive.” Despite Chinese and Indian economies maintain their growth seemingly this economic growth does not reflect to the living standard in the same rate!

EconomicNewspaper

September October

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2015

Oil prices to remain low for some time

Oil prices should remain lower for a longer period of time to allow market rebalancing, a report by investment bank Goldman Sachs said. ANKARA - “The search for a new equilibrium resumes,” the report said. “This spring’s rally in prices did prove to be self-defeating.” The price of the global benchmark Brent crude oil had fallen from $115 per barrel in June 2014 to its lowest point in five and a half years in January 2015, falling below $48 per barrel, a 60 percent decrease and the worst slump in oil prices since 2008. However, oil prices recovered 42 percent after January, jumping above $60 per barrel the next month, and reaching almost $70 per barrel in May, according to official figures. At the beginning of July, the Brent price fell once again below $60 per barrel, and continued to decline. On Aug. 3rd, it fell below $50 per barrel, thus erasing the five-month gains and returning the market to where it was in January. Traders are no longer confident of a quick price rebound, the report said, so the rebalancing of supply and demand will likely prove to be difficult. “This is all in line with our lowerfor-longer view. The risks remain substantially skewed to the downside,” the report said. Forward oil prices, commodities, currencies and energy equities have now all retracted to levels not seen since 2005, erasing a decade of gains, the report pointed out. “This produces a

very different economic environment.” “The industry simply had not seen enough pain to produce the real financial stress that would produce change,” the report said. Goldman estimates that the industry has added some 170 million barrels of oil to storage tanks since January, while 50 million barrels remain in floating storage. “We estimate that current oversupply is two million barrels a day versus 1.8 million barrels per day in the first half of 2015,” it added.

Falling demand Meanwhile, global demand is not as high as a decade ago, especially with Asian and European economies struggling with slowdown and recession. The economic slowdown in China produces expectations in the market that the biggest energy consumer in the world will reduce its demand for crude oil. “The largest demand growth ever observed was in 2004, when China and the emerging markets kicked off the previous decade’s commodity boom with demand at 3.15 million barrels a day,” the report said. “The boom has been brought to a halt. These countries are facing large macro imbalances and debt. Not only has emerging market growth slowed,

but any benefits from lower prices are mostly behind us now.”

No quick recovery Goldman forecasts supply and demand will find a balance between now and sometime in 2016, but warned that this does not mean a sharp rebound in prices will occur quickly. “Global supply is driven in large part by a surge in low-cost production from Saudi Arabia, Iraq and Russia. In addition, low-cost OPEC producers are likely to expand capacity now that they have pushed output to near max utilization,” the report said. “At the same time, Iran has the potential to add 200,000 to 400,000 of production in 2016 and, with significant investment, far greater low-cost volumes in 2017 and beyond. Iran, like other OPEC countries, needs the revenue through volume,” the report said. Goldman said that energy markets need to be rebalanced through consolidation and capital restructuring, but explained that this takes time to achieve. However, the report did not forecast how low the price of Brent crude should fall for market rebalancing to take place, but said it maintains its near-term target for the American benchmark West Texas Intermediate of $45 per barrel.

Turkey’s gold jewelry sector shines in Iran

Turkey’s total exports to Iran amounted to $1.9 billion in the first half of the year, marking a 30.4 percent surge when compared to the same period last year. Gold jewelry exports had the greatest impact in this surge, with Turkey exporting $453 million worth of gold jewelry to the country between January and June. This figure was $1.8 million in the same period last year, where gold jewelry constituted 24 percent of Turkey’s overall exports to Iran. Over the last 10 years, there has been a dramatic increase in gold jewelry exports. According to data compiled by Anadolu Agency (AA) from Turkish Statistical Institute (TurkStat) figures, exports were around $1.3 million in 2005 and remained below $1 million until 2012. Gold jewelry exports totaled $11.8 million in 2012, $17.7 million in 2013 and then experienced a massive swell to $818.5 million by the end of 2014. Commenting on the upsurge in gold jewelry exports to Iran, Jewelry Exporters’

Association President Ayhan Güner said as the country did not allow gold imports until the end of last year, Iranian customers had preferred to buy gold from Dubai. “After we invited Iranian customers to jewelry fairs in Istanbul, they saw that Turkey is the heart of jewelry production and opened collection centers here,” Güner said, adding that this had a positive impact on export figures.  Güner underscored that Iran is an important market for Turkey and that Turkey has the potential to sell more gold jewelry to that country if trade is liberalized. Because of existing embargoes and sanctions, Iran can currently only import gold via licensed importers. Jewelry is one of the exports items with the highest added-value, and Turkey’s exports to Iran in this category equal to Turkey’s exports to some six or seven countries. With Turkish exports to Iran, the country can make up for its export losses in other countries, he added.

EconomicNewspaper

September October

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2015

Auto sales jump 38 percent in July ANKARA-Combined sales of cars and light commercial vehicles grew by 38 percent in July 2015 from a year earlier, the Automotive Distributors Association said. Car sales numbered 64,218, and light commercial vehicles were at 19,618, an increase of more than 47 percent. Total Turkish sales were at 83,836 in July, according to the report from the

Cruise tourist traffic on rise in Turkey

association. Combined sales of automobiles and light commercial vehicles were at 59,907 in July last year. Turkish vehicle sales have been on the rise since the start of the year, with combined sales in the first seven months of the year up 49 percent to 516,386 from 346,768 in same period of last year.

Gas storage facility in Turkey to come online by 2019

Household spending rose in 2014, TurkStat ANKARA-Turkish households spent slightly more on living expenses in 2014 than in 2013, the Turkish Statistical Institute reported. The monthly average consumption expenditure per household for Turkey was 2,848 Turkish liras ($1,022.9) in 2014, up from 2,572 Turkish liras ($923.8) in 2013, the report said.

The gas storage facility under Lake Tuz in Central Anatolia will become fully operational by 2019, according to sources from the Energy Ministry. Some 65 percent of the construction activities have already been completed and the first part of the project, which is composed of six storage units, will be opened by 2017, according to officials. In the framework of the project, all expropriation works, fresh water supply and discharging pipeline construction and electricity transmission lines mounting have already been completed. Three pumping stations and five water deposits were also built, the ministry officials said. The project will be composed of 12 wells with the capacity of 1 billion cubic meters (bcm) of gas storage, and the drilling activities are being made for the last well. The capacity of the facility is planned to be increased in the

coming years. The drilling of the first of the project’s 12 wells began in 2012. From each well, a total of 40 million cubic meters of gas can be pumped into the country’s gas network on a daily basis. The project was financed through an international loan agreement at $325,000, which was inked between the World Bank and Turkey’s gas grid BOTAŞ in 2006, and an additional financing loan deal at $400,000, which was signed in 2014. Germany has the largest gas storage capacity in Europe, followed by Britain, Italy, the Netherlands, Ukraine and France. According to data from the Gas Infrastructure of Europe (GIE), around 25 bcm of gas storage capacity will come online in the next decade across Europe. Some 4 percent of this new capacity will be supplied through the Lake Tuz facility.

Households spent most on housing and rent last year, accounting for 24.8 percent of total living expenses. The share of expenditures on food and non-alcoholic beverages was 19.7 percent, healthcare accounted for 2.1 percent and the share of educational services was 2.4 percent on average. The share of furniture and household appliances rose to 6.8 percent in 2014, from 6.6 percent in the previous year.

Turkish Airlines announced a net profit of 1.35 billion Turkish liras ($476 million) despite rising fuel costs and the fall in the value of the lira. “In the first six months of 2015, a period with severe fuel price and currency fluctuations, Turkish Airlinesgrew its net profit by sixfold compared to the same period of 2014,” Turkey’s flag carrier said in a statement. Sales revenue increased by 9.2 percent com-

JAKARTA- Indonesia’s coordinating minister for the economy has invited Turkish businesses to invest in his country, particularly in the sectors of energy and infrastructure, according to a statement released.

It said that he had highlighted Indonesia’s need for development in energy and infrastructure, and said his country needs to invest in 10 million kilowatts of electricity to meet demand. The return on investments in geothermal energy would be quick and profitability higher given the geographical location of the country, Djalil said. The statement added that had called for “Regional Common Commissions” be established to boost and encourage investments between the two countries. The comments follow a three-day trip to Jakarta by

a Turkish contingent led by President Recep Tayyip Erdogan, during which Erdogan said he wanted Turkey to join Indonesia as a member of the Association of Southeast Asian Nations (ASEAN). “The Asia Pacific region is increasingly important in the world economy, and we want to boost cooperation. We also would like to be a member of the ASEAN,” he said. He invited President Joko Widodo to the Nov. 15-16 G20 Leaders Summit in Turkey, and highlighted the importance of MIKTA, (Mexico, Indonesia, South Korea, Turkey, and Australia) and continuing negotiations. “Turkish and Indonesian businessmen should visit each other’s countries to discuss investment opportunities, as

Transportation expenditures cost households more in 2014, up to 17.8 percent from 17.4 percent in 2013. Hotel and restaurant expenditures were up to 6 percent in 2014, from 5.9 percent in the previous year. Food and education cost lower-income households more than it did for the more affluent. While the food expenditures of households in the first income quintile was 12.4 percent of total expenditures, the same ratio was 28.4 percent for the fifth quintile. Educational services expenditures of households in the first income quintile was 2.2 percent of total expenses, but they accounted for 64.7 percent of the total for households in the fifth quintile.

Turkish Airlines profit despite fuel, currency worries

Indonesia invites Turkish investment

he countries met in Jakarta for a business forum, Turkey’s foreign economic relations board said that Sofyan Djalil had used the occasion to underline that with a population of 250 million and as the largest economic actor in Southeast Asia Indonesia is a market waiting to be discovered.

well as go together to third countries,” Erdogan said. 400 businessmen from the two countries participated in a the forum, during which the statement said that Turkey’s minister for economics, Nihat Zeybekci, had said that economic relations between the two were yet to show their potential. He added that to reach a common goal of being one of the world’s top 10 economies by 2020, trade partnerships and investment activities needed to be increased with a focus on trading goods with added value to balance exports and imports. According to Turkey’s ministry of economics, exports from Turkey to Indonesia totaled $288 million in 2014, while $2 billion in goods travelled in the other direction.

pared to the first half 2014, reaching 12.3 billion Turkish lira ($4.3 billion), the company added, and made an operating profit of 524 million Turkish lira ($185 million). The airline increased capacity by more than 10 percent in the first half of the year, with 28.5 million customers taking 212,000 flights. Another highlight of the year was the carrier selection as best airline in Europe.

ANTALYA - AA- Cruise tourist traffic to Turkey increased by 20 percent in the first half of the year from the same period in 2014, according to data compiled from the database of the Touristic Hoteliers’ Association of the Mediterranean (AKTOB). The number of cruise tourists visiting the country rose to 647,984 in the first six months of the year from 538,409 in the same period of the previous year, according to the AKTOB data. Cruise tourist traffic increased by 51 percent in Istanbul in the first half of 2015 year-on-year to 2014, hosting around 216,800 cruise tourists between January and June this year. The number of cruise tourists visiting the Aegean resort of Kuşadası rose to 194,348 in the mentioned period, representing a roughly 14 percent increase compared to the same months of 2014. The number of cruise tourists visiting the Aegean province of İzmir, however, decreased by 10.7 percent to 76,636 in the first half of the year compared to the same period of 2014. The same decreasing trend was also seen in the Mediterranean resort of Antalya, as the number of visitors to the southern hotspot dropped by 13.3 percent to 56,268 in the first six months of 2015 year-on-year. Meanwhile, a total of 1.79 million cruise tourists visited Turkey in 2014, representing a 20 percent decrease from the previous year, according to data from the Transportation Ministry. The Istanbul Port, one of the country’s biggest cruise ports, welcomed 518,000 tourists last year, a 25 percent decline from the figures in 2013.

EconomicNewspaper

September October

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2015

Moody’s: Strong dollar Subway line project to Istanbul’s puts brakes on growth third airport launched ANKARA-The stronger dollar will put brakes on global growth, credit agency Moody’s warned in a note released. “Both the expectation and the realization of higher U.S. interest rates should send the dollar exchange rate up to new cycle highs. “The ongoing appreciation of the dollar exchange rate stems from the U.S.’s relatively better growth outlook vis-a-vis the rest of the world. The dollar was recently up by 81 percent against Brazil’s real, 46 percent versus Japan’s yen, 31 percent versus Canada’s dollar, 28 percent against Mexico’s peso, 22 percent against the euro, and 21 percent versus India’s rupee.

2012 to the 3.3 percent of the threeyears-ended March 2015. “An even stronger dollar portends a further deceleration by profits, if not an outright annual contraction.” The effects of the stronger dollar are already being felt by U.S. companies. “[In the U.S.] close to 87 percent of the S&P 500 companies that have released second-quarter results showed year-to-year setbacks of minus 4.9 percent for sales and minus 1.7 percent for operating profits.

“But, around the globe, the strong dollar will put pressure on manufacturing, retailing and wholesalers,” the report said. “Else“Moreover, according to the where, the annual decline by the same serial comparison, the dollar sum of the sales of manufacturers, recently was higher by 19% versus a retailers, and wholesalers deepened broad basket of foreign currencies from minus 1.2 percent in the first and up by 25% in terms of major quarter to a likely minus 2.0 perforeign currencies,” the note said. cent in the second quarter. The stronger dollar is expected “After excluding sales of identito put pressure on commodities fiable energy products, the yearly prices, and on manufacturers. growth of core business sales ebbed “Continued dollar exchange rate from 3.8 percent in the first quarter appreciation risks worsening the to 2.1 percent in the second quarplight of countries and companies ter.” having meaningful direct exposure to industrial commodities,” Moody’s warned that this trend Moody’s warned. “The moving will hurt overall employment. Unyearlong average of profits from less sales accelerate convincingly, current production has already businesses are likely to spend more slowed from the 14.9 percent of cautiously. This could lead to a rise the three-years that ended March in unemployment, the note said.

ISTANBUL-A project to construct a subway line connecting Istanbul’s third airport to the city center has been launched, said Transportation Minister Feridun Bilgin. A tender for the project’s testing and preparation stage has started, with the aim of completion in one year’s time, Bilgin said. The tender was made July 27 and after a year of project testing and other processes, the construction’s main tender will be made in mid-2016, said the minister. “The new subway line will enable people to reach the third airport from several points in the city center faster,” Bilgin noted, as quoted by Anadolu Agency.

The subway line, starting from Gayrettepe, will be 33 kilometer-long and will take 26 minutes from one end to the other. Gayrettepe, where the existing subway, Metrobus and bus lines currently meet, will be the main transfer point for both the Asian and European sides, Bilgin said. The trip from Istanbul’s touristic İstiklal Street to the new airport will take 42 minutes and 70 minutes from the Kadıköy district on the Asian side, he added. The new airport is being constructed at the road junctions of Arnavutköy, Göktürk and Çatalca, north of Istanbul’s European side, between the Black Sea regions of Yeniköy and Akpınar. There is currently no

sea or subway transportation to the site from the city center. Phase A of the construction’s first stage has plans to be finished in the first quarter of 2018 to serve 90 million passengers. At this time, two landing fields and one terminal will be opened. Sixteen months after the phase’s completion, the company will need to open the third landing field. After its completion, the new airport will serve a total of 150 million passengers and over 150 airline companies, while employing 100,000 people.

Turkey’s first halal cruise caters to growing market Antalya-based Fusion Tour has launched an Islamic cruise business expanding the spectrum of halal tourism, a rising trend in Turkey and its region.

TECHNICAL SPECIFICATIONS Model No Input Power max Vacumm Rated Voltage Air Flow Water Suction Capacity Pump Power Pump Pressure Extra Basin Volume Waste Basin Volume Container Dust Capacity Dust Bag Capacity IP Code Gross Weight Size

: 114H : 1300 W : 1950 mmH2O : 220-230 V AC, 50/60 Hz : 200 m3/h : 1,5 L/S : 26 W : 2,5 bar :7L : 8,5 L :5L :5L : IPX4 : 13,5 kg : 410x510x593 mm

On their September voyage to neighboring Greece, there will be no alcohol, no pork-related products and no gambling. Everything on board will be in accordance with Islamic religious values, including segregated sports centers, single-sex spa facilities, separate Turkish baths and masjids or small prayer rooms. The number of halal hotels and tour agents has been increasing over the last 15 years. However, there had not been a halal sea cruise until Fusion Tour organized this special voyage, copying a lucrative format which has seen kosher-friendly and Catholic cruises internationally. Turkey’s first Muslim-friendly cruise themed “On the track of the Ottomans” - will leave a port in Turkey’s Aegean province of İzmir on Sept. 27 and take its passengers to the Greek islands of Rhodes and Crete as well as the port city of Piraeus by Oct. 2.

: 114R : 1300 W : 1950 mmH2O : 220-230 V AC, 50/60 Hz : 200 m3/h : 1,5 L/S : 26 W : 2,5 bar : 3,5 L :6L :5L :5L : IPX4 : 11,5 kg : 385x485x485 mm

“It will not be just a cruise which does not have alcohol or pork-related products. It will be a cultural and historical tour which promises an atmosphere of social networking,” said Fusion Tour general manager Kemal Günay.

TECHNICAL SPECIFICATIONS Model No Input Power max Vacumm Rated Voltage Air Flow Dust Bag Capacity IP Code Gross Weight Size

: 114L : 1300 W : 1950 mmH2O : 220-230 V AC, 50/60 Hz : 200 m3/h :5L : IPX4 : 8,5 kg : 390x418x440 mm

BOSB, Mermerciler Sanayi Sitesi 7.Cd. No:12, 34524 Beylikduzu, Istanbul/TURKEY Phone: (0212) 875 35 62 pbx - Fax: (0212) 875 36 64 www.iea.com.tr

Tour project manager Gökmen Aydınalp claimed organizers have thought of everything. “We don’t even have a painting on a wall of the ship which is against Islamic values,” he said. “Although the tour has been just announced, interest is quite high right now because there is a huge demand for this concept,” Aydınalp added. Passengers who booked a spot on the cruise are glad to be part of what they describe as

a “much-awaited” concept. “I believe it will be an atmosphere where I and my family will feel comfortable,” said 46-year-old Hamit Kutuk, a banker, who will be one of the passengers. “To be able to eat halal foods, being together with people who share the same Islamic sensibilities with you and being away from alcohol on this kind of cruise are important for us,” he added. Organizers have seen huge potential in a market of over two billion Muslims worldwide, and are planning to host varied tour packages to include the Adriatic Sea, Italy, Malta, Budapest, Belgrade and Vienna in the upcoming months. Their target will not only be Turks but also Muslims globally. According to the Turkish Statistical Institute, around three million Arab tourists came to Turkey in 2014. This number was two million in 2013.There are over 50 hotels that offer conservative service across the country. Antalya, Istanbul, İzmir, Aydın, Muğla and the capital Ankara are the major provinces which host such hotels, according to the Mediterranean Touristic Hotels Association (AKTOB). “The number of these hotels was around 25 before 2007. Within five years, the number of this kind of hotel doubled,” said Erol Karabulut, AKTOB’s research and development supervisor. “We expect this interest will continue,” he added. The Global Muslim Travel Index 2015 released by Mastercard and Singapore-based Crescent Rating estimated the size of the global halal tourism market at $145 billion in 2014.