Made in Turkey November/December 2015

ISSN 1300-2260

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November - December 2015

Turkey’s Hacettepe University undertakes domestic electric car production

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Turkey sees ‘very slight decline in tourist numbers’ despite problems

Turkish industrial production rises above estimates P4

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Three prototypes of Turkish domestic cars are ready Minister of Science, Industry and Technology Fikri Işık said three prototypes are ready for Turkey’s first domestic cars. Işık said Turkey will approach domestic car production from a holistic perspective and will produce domestic cars with a local content ratio of at least 90 percent by 2020. | Page 2

Russia aims to push oil prices highernuclear Russia is operating in Syria with a view to push oil prices upwards, an expert said. “Oil prices are determined by financial markets rather than by supply and demand,” explained Volkan Ozdemir...| Page 3

Volkswagen scandal could help Turkish automotive sector

No deviation from economic and political stability

AK Party records a landslide victory in general election

T

urkey’s Justice and Development (AK) Party recorded a landslide victory in the country’s 26th general election by taking 59 deputies back from opposition parties compared to June 7 election.

According to preliminary results compiled by Anadolu Agency, the AK Party secured 317 seats at the 550-seat Grand National Assembly, increasing its vote rate by 8.61 points.

The party regained four deputies from the main opposition Republican People’s Party (CHP), 18 deputies from the Peoples’ Democratic Party (HDP) and 37 deputies from the Nationalist Movement Party (MHP).

With 100 percent of the votes counted, the AK Party leads with 49.48 percent, followed by the CHP with 25.31 percent (134 seats). The MHP

got 11.90 percent (40 seats) while the HDP secured 10.75 percent (59 seats), just above the election threshold requirement of 10 percent.

Dominating the polls in 78 provinces, the AK Party received a major boost in Istanbul, increasing the number of its deputies from 39 to 46 in the province.

The HDP has lost 21 parliamentary seats since the June general election.

Despite having more votes than HDP, the MHP has just won 40 seats, losing nearly half of its deputies compared to June. According to the Supreme Election Council, during the June election the HDP passed the 10 percent threshold for the first time with 13.07 percent of the vote to take 80 seats while the MHP won 16.29 of the vote and also gained 80 seats.

Finance Minister Mehmet Şimşek: Downward revision in growth is a global trend

Volkswagen, on Sept. 22, admitted that 11 million of its diesel cars used an emissions control device that employed software to cheat emissions tests. | Page 5

No problem with Akkuyu nuclear power project

Russia’s Syrian intervention could hurt its economy The Russian economy, already in recession, will deteriorate further because of the military operations in Syria, experts said. Russian warplanes began striking targets inside Syria for the first time. According to the Russian Foreign Ministry...| Page 7

The snap poll had been called following June’s inconclusive general election that saw no party win a majority and coalition talks failed to produce an administration. The election victory of the Justice and Development (AK) Party, which will be able to form a government without a coalition, is good news for foreign investors, experts told the Anadolu Agency. “The end of political uncertainty in Turkey is good news for foreign investors,” Christopher Dembik, an economist with Saxo Banque in Paris, said in an interview.. “We can now expect ongoing coherence in financial policy and hopefully more rapid action on structural reforms.” | Page 3

Turkey’s Energy Minister has refuted recent reports about uncertainties in Turkey’s planned first nuclear power plant project in the southern district of Akkuyu amid rising rows between Turkey and Russia over Syria, saying that there is no problem with the project.

“The project has been undertaken in line with how it had been planned earlier.

There is not any problem between Turkey and Russia about the project. Our ministry has been working in harmony with Akkuyu NGS, the company which was established to build the power plant by Russia’s Rosatom,” said...| Page 4

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urkish Finance Minister Mehmet Simsek said the downward revision of main economic indicators included in the mid-term economic program published for 2016 to 2018 was not unique to Turkey as the International Monetary Fund (IMF)’s recent global economy review published also revised many indicators regarding all developing countries downward. Şimşek said there are negative developments in the region and that Turkey is in the middle of various shocks and crises such as the economic crisis in Europe, the chaos in the Middle East and the Russian invasion of Crimea. “Such crises do not affect Brazil or Mexico in the same way they affect Turkey,” Şimşek said.

The government released the revised version of the mid-term economic program, which was more pessimistic than the original that was announced last year. It includes expectations for major figures like growth, unemployment rates and inflation. While growth for 2015 was expected to be 4 percent, it decreased to 3 percent in the new version.| Page 6

Mehmet Şimşek Turkish Finance Minister

EconomicNewspaper

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November December

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Mehmet Soztutan Editor-in-Chief

2015

Letter From The Editor

“Turkey has the experience and the competitive edge to compete in areas such as battery technologies, software, hardware and electrical motors. Turkey also has a large domestic market. Further, our geographical location and creative labor force can easily compete with the world’s giants if organized properly,”

The Turkish economy sustains its strong position The Turkish economy sustains its strong position on the path of sustainable growth, despite the global imbalances partly originating from The Euro Zone crisis and the fluctuating signals from the Federal Reserve Chair Janet Yellen.

Turkey has so far managed to weather the global storm. However, from the standpoint of exporters, it is hard to keep their competitive positions in the world market full of emerging players. As for business people of Turkey, they have recently shifted their operations to value-added products and brand names. Currently, the manufacturers have their own designs and brands in international markets.

In evaluating the future export potential of the region using cross-country statistics, it is possible to indicate that Turkey has comparative advantage regarding labor productivity, labor cost and the share of capital in the value added, especially with respect to the mature producers in the world. Majority of the manufacturers compete in international markets and set high standards of export figures.

It is evident that competition appears from all corners of the globe, customers demand more.

To respond, manufacturers are reducing costs and increasing responsiveness through outsourcing, sourcing globally and implementing demand-driven strategies such as pull-based inventory management.

Following the shift of the focus on customers, markets, products and competition from the local level to the global level, manufacturers and exporters of Turkey now position themselves globally.

Therefore, Turkey offers significant opportunities for foreign investors with its geographically perfect position to function as a gateway between Europe, Middle East and Central Asia. The opportunities exist not only in the dynamic domestic market, but also throughout the region.

Besides, in order to achieve the targets of ”Turkey 2023”, exporters have a part to play by utilizing its resources and the competitive advantages to the fullest extent.

Letters to the Editor turkey@ihlas.net.tr The EU accession The EU accession process has been a significant anchor for reforms in Turkey, but progress has slowed in recent years. The EU is Turkey’s largest economic partner, accounting for around 40 percent of Turkish trade. Turkey has benefited significantly from deepening integration with the EU through the growing sophistication of both exports and imports and access to financing.

Turkey became a candidate for full EU membership at the Helsinki summit in 1999. Accession negotiations began in October 2005, but progress has slowed in recent years in the face of a number of political obstacles (including relations with Cyprus).

Both sides are making efforts to regain momentum, with a focus on economic cooperation, in particular the modernization of the Customs Union and energy relations.

M.Kris/ Frankfurt

Is IMF right?

I think IMF is right to say that macroeconomic policies should internalize the challenges in developing countries posed by the difficult global economic environment. Specifically, (i) fiscal policy should aim to achieve the announced targets to help rein in financing needs and keep the debt-to-GDP ratio on a downward path; (ii) stronger fiscal performance would be facilitated by continued structural fiscal reforms, including by adopting a more rules-based fiscal framework, implementing stricter control of local government finances, and strengthening tax administration; (iii) monetary policy should continue to aim to bring inflation down to target.

B.Burns/ Basel

The contagion As known, the specter of contagion from the western financial crisis reached Far East, when credit rating agencies warned that seven banks were heavily reliant on short-term foreign funding which, if recalled, could have produced havoc on the local financial system. Russia’s rapid growth had spawned hundreds of banks, many of which have drawn funding from the international money markets. Several have been forced to seek government bail-outs. India, Brazil and China were not the brittle economies they once were and were not expected to be among the least affected as the world economy slows.

Three prototypes of Turkish domestic cars are ready ANKARA-Minister of Science, Industry and Technology Fikri Işık said three prototypes are ready for Turkey’s first domestic cars. Işık said Turkey will approach domestic car production from a holistic perspective and will produce domestic cars with a local content ratio of at least 90 percent by 2020. Speaking to Anadolu Agency, Işık said there are things yet to be done regarding research and development of the domestic car project. Işık said the project accompanies two major steps. One of them is an automotive excellence center to be established on the Gebze campus of the Scientific and Technological Research Council of Turkey (TÜBİTAK) in 2016 to accumulate knowledge and experience in the industry.

The other is the establishment of an engine excellence center that will help Turkey develop engines used in construction machines, tractors, generators, trucks and forklifts. The project will be finalized and will be put into operation in 2016.

The ministry is focusing on a car model that has an extended range and operates on electricity. The model has a 15 kilowatt-hour battery (kWh), which allows a car to go 100 kilometers at a monthly cost of around TL 60 ($20), and a small generator that runs on fossil fuels and generates electricity when the battery is about to die during long-distance drives. The generator both strengthens the engine and charges the battery. Işık said that this is the world’s preferred model, adding that the model

German tourists top arrivals to Turkey

D.Rinn/ Milano

The other side of the coin “It will be very tempting to have a bit more inflation during this period to mitigate the problems,” says Ken Rogoff, a Harvard professor and former chief economist at the International Monetary Fund. Mr Meyer disagrees. “It comes down to the independence of the central bank,” he says. “This is the most hawkish Fed I have known.”

However, the other side of the coin is different.The large influx of money to U.S. banks and financial institutions, along with low interest rates, made it easier for Americans to get credit.

These developments allowed more families to borrow money for cars, and homes, and college tuition, some for the first time.

They allowed more entrepreneurs to get loans to start new businesses and produce jobs.

G.Nestlee/ Paris

ANKARA - Anadolu Agency-In a tough year for tourism in Turkey, Germans have topped the list of tourists visiting the country in the first eight months of 2015, according to figures from the Culture and Tourism Ministry.

About 3.75 million German tourists visited Turkey during the period, followed by Russian tourists at 2.78 million, and British tourists at 1.8 million.

In the first eight months of last year, there were 3.5 million Russian tourists arriving in Turkey, but numbers have dropped significantly due to the ongoing economic crisis in Russia.

Association of Turkish Travel Agencies (TÜRSAB) Chairman Başaran Ulusoy interpreted the data in an interview with Anadolu Agency. Ulusoy said the devaluation of the Turkish Lira against the euro gave Turkish tourism an important advantage and would help Turkey compete better in the coming period. “We think this trend will continue in the near future.

But we should be careful that Turkey does not start presenting an image as a ‘cheap country,’ while still offering affordable vacations,” he added.

needs either a diesel engine or a gasoline engine, not to drive the car, but to generate electricity for it to run. The minister also said Turkey approaches the production of domestic cars “in a holistic manner” and aims to work on new technologies in the automotive excellence center on the one hand, and to satisfy the needs of both domestic cars and other sectors on the other. When these are all put into operation, we will be producing domestic cars with a local content ratio of at least 90 percent in 2020, he added.

Işık also said that this project will improve energy imports and that while an average vehicle consumes 6 liters per 100 kilometers, this figure is expected to drop to 2 liters. “The contribution of this project to the household budget should be around at least 40 percent according to our calculations,” said Işık. He also underlined that the emissions values will decrease as the consumption decreases and that electric cars will mostly be used for transport within cities and will not consume any fossil fuels.

The first domestic car project will be lead by the Scientific and Technological Research Center of Turkey (TÜBİTAK) and the R&D activities will be supported by the government, as it is “not fair to place such a burden on the private sector.”

However, Işık said that after mass production commences, they are hoping for the private sector to be involved.

Restrictions are likely to be imposed on cars using fossil fuels to be used as taxies, like in London and New York to lower emissions values, announced Işık.

Işık said that the government perceives this project as one of the long-term technology development platforms in Turkey and therefore, with regards to the intellectual property rights of the domestic car, the government would want to receive a certain part of the future revenues. “For us, this is not just about production; it is an important technological platform as automobile technologies trigger many other areas. Therefore, commercialization is crucial for achieving a sustainable technological platform,” said Işık.

On whether the new domestic car can compete with global automobile companies, Işık said since global companies have a large market, they do not allow any sudden changes in the markets, which in return produces a window of opportunity for Turkey. Işık also said that along with being able to compete in the global automobile sector, Turkey also has a competitive edge regarding mechanics. “Turkey has the experience and the competitive edge to compete in areas such as battery technologies, software, hardware and electrical motors. Turkey also has a large domestic market. Further, our geographical location and creative labor force can easily compete with the world’s giants if organized properly,” said Işık.

Tatlısumaklar exports 300 types of chocolates and candies to the world!

Tatlısumaklar Gıda ve İhtiyaç Maddeleri San. Tic. A.Ş. company started its business life in 1960 for retailer market as a local distributor of well known brands in Konya City. With its customer satisfaction policy the company improved its targets by continual growing and enhancement in service facilities to be the leader in distribution and wholesaling area until 1995. During the period of 1995-2000 Tatlısumaklar Gıda ve İhtiyaç Maddeleri San. Tic. A.Ş. became the leader in the distribution of food products with well-known brands with 55 sales staff and 34 vans in the 4500 sqm closed and total 5500 sqm area. The company has 120 personnel altogether to produce, market and sell its over 300 variety of product range.

In the begining of 2000’s Tatlısumaklar company started to produce chocolates and candies in a small factory. The company started to export its products in 2005. The new factory was established in 2012 with a 20,000 sqm total and 15,000 closed area in the Organized Industrial Zone. Now Tatlısumaklar Food Com-

Ahmet Tatlısumak General Manager

pany has been producing over 300 types of products and exporting them to 65 countries on 5 continents notably to America, Canada, Germany, The Netherlands, Sweeden, Balkan Countries and Middle Eastern Countries. Mr. Ahmet Tatlısumak, General Manager of the company explained their operations and principles: “Our policy is with continual improvement in quality and service always producing the most delicious products. Our commitment to quality, hygiene and healthy production made our brand most expected everywhere with their special tastes. We are following the world trends closely and we are utilizing the best technologies and we are using the best materials to produce our competitive products.

EconomicNewspaper

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2015

AK Party records a landslide victory in general election

Russia aims to push oil prices higher

Putting an end to political uncertainty in Turkey, the new Government will lead to an inflow of foreign investment Turkish Finance Minister Mehmet Simsek told the press that political uncertainty had ended with the election result. “This is a great opportunity for us to carry out reforms,” he said. Initial investor reaction could be gauged by the sharp rise of the Turkish lira against the dollar. The lira gained about 3 percent against the U.S. currency just after the election, and on Monday morning was trading at about 2.81 against the dollar.

Borsa Istanbul’s BIST 100 index surged 400 points at the open to 84,000, but fell back to about 83,600 before 10 a.m. local time. “Investors had priced in concerns about a continuing period of instability, expecting no single party to be able to govern after this election,” explained Neil Shearing, chief Emerging Markets economist with Capital Economics, in an interview.

“With a stable government installed, the government can take action to reduce the current account deficit and to stimulate job creation. Investors can now expect the government to take steps to increase economic growth,” Shearing said. “This is a critical transition for the country.” The current account deficit was at about 5 percent of Gross

Domestic Product in October, according to official statistics. Stability had been a key concern for Turkey as credit agency Fitch Ratings pointed out in its note on the Turkish economy. Fitch cited political uncertainty as a key factor in its “BBB-” credit rating for the country, an investment-grade rating but one on the low end for emerging markets.

“If November’s election led to the formation of a stable government, structural reform and growth could benefit,” the note said.Fitch cited successful government control of spending as a key factor in its rating decision. “The government will in fact be better positioned now to continue controls on spending, and on the balance sheet,” Dembik pointed out. “It will also be able to keep its hand on burgeon-

Chinese, US, Japanese companies show interest in Turkey’s 3rd nuclear power plant

ANKARA-Turkish Energy Minister Ali Rıza Alaboyun said plans have been made for Turkey’s third nuclear plant and Chinese, Japanese firms and U.S. companies have shown interest in an exclusive interview with the Anadolu Agency Editors’ Desk on Oct. 14.

“A third nuclear power plant is planned to be built in the northern area of İğneada [Kırklareli province]. We have been in talks with several companies. Chinese companies and U.S.-based Westinghouse have shown interest so far. We signed a memorandum of understanding. Japanese companies are also interested in the project,” he said.

The region in Kırklareli where the plant is planned to be built is famous for its floodplain forests.

Turkey’s first power plant project was undertaken by Russia’s Rosatom in the southern province of Akkuyu and Turkey’s second planned nuclear plant, to be constructed in the northern province of Sinop, was awarded to a Japanese-French consortium in May 2013. Alaboyun also said Turkey has no energy issues with Russiaamid rows over Syria.

Turkish President Recep Tayyip Erdoğan said Turkey is a big consumer of Russia’s natural gas, speaking to journalists en route from Brussels to Tokyo.

“Losing Turkey would be a serious loss for Russia. If needed, Turkey can supply its natural gas from very different places,” he added.

Alaboyun said Erdoğan’s remarks were a response to questions regarding Syria.

“His [Erdoğan’s] answers about finding sources for natural gas and building the nuclear plant were interpreted as if we had problems with Russia. We have no issues with Moscow about energy. This should be known,” Alaboyun said during the interview.

“Russian gas imports constitute 60 percent

of our total gas consumption. We import 14 billion cubic meters [bcm] from Russia via the Western line, and 16 bcm from Blue Stream. More than half of the gas we import is used to produce electricity, while the rest is used for industrial and household use,” he explained.

Alaboyun stressed the gas price discount Turkey is asking for from Russia and negotiations for the construction of the Russian-proposed Turkish Stream gas pipeline project are two different issues, and therefore should be discussed separately.

“We are the second biggest consumer of Russian gas after Germany. Since [Russian gas company] Gazprom sells cheaper gas to Germany, we wanted a price reduction.

We have the right to revise gas prices every three years based on our gas contracts,” he explained.

“Gas price revisions with Moscow and the Turkish Stream pipeline project are different subjects. They should not be mixed together,” he added.

The Turkish energy minister also said that Russia has changed its mind frequently about the Turkish Stream gas pipeline project, and stressed that “Russia has not maintained a decisive attitude about the project.”

“First, Russia wanted to deliver 63 bcm of gas by constructing four pipelines under the Black Sea. Then, Alexei Miller [head of Gazprom] said that Russia decided to halve this to 31.5 bcm and to deliver it over two lines,” he said.

While 15.75 bcm of Russian gas over one line will be carried to Turkey via the Turkish Stream, Alaboyun said, “We have prioritized the project’s Turkish part. However, nothing is clear yet, it depends on Russia. Even the decision period for the TANAP project with Azerbaijan took around three years.”

ing consumer credit.”

“There is no doubt that a stronger government will be able to shape policy in a coherent way,” David Tittensor, Turkish political analyst at Deakin University in Melbourne, told Australian ABC news.

This will reverse the trend of the past months, and offer solid direction, he added. The government had forecast 3 percent growth for the economy in 2015 in its medium-term economic program published on Oct. 12, but economists now think higher growth might be achieved. “The end to political uncertainty could free up investment that had been held back before the election,” Dembik said.

Interest in Turkish lira assets will undoubtedly increase after this election result, agreed Bora Tamer Yilmaz, an economist with Ziraat Securities in Istanbul.

“This will be a huge upside for lira assets that’s a no-brainer,” Yilmaz said. “And, in the long run, Turkey won’t reverse her institutionalization process. Institutions will confirm the investment grade rating and probably further upgrades are in the pipeline on the back of the country’s stellar fiscal stance,” he added.

Borsa Istanbul becomes finance hub for companies ISTANBUL – Borsa Istanbul has become a hub for companies that generated more than $100 billion in profits between 2010 and 2014, its CEO said during the opening speech of the second International Borsa Istanbul Finance and Economics Conference.

Tuncay Dinç said Borsa Istanbul was ranked number two among developing countries’ stock markets, with its trading volume exceeding $3.5 trillion in 2014. The conference, “New Era in Capital Markets,” covers a wide range of issues, such as stock market law regulation. Stressing that Borsa Istanbul had taken steps to help small- and medium-sized enterprises (SME) and new companies obtain financing, Dinç said the stock market had opened “a finance technopark” with Istanbul-based Bogaziçi University. He also said it was important for the economy and society that the finance market improves. Dinc said he deeply cared about SME financing, angel investment, alternative finance management and risk capital, saying SMEs would be more productive and secure if they can access Turkish and developing countries’ funds.

SMEs constitute 95 percent of all companies in Turkey, according to Dinç.

ANKARA-Russia is operating in Syria with a view to push oil prices upwards, an expert said.

“Oil prices are determined by financial markets rather than by supply and demand,” explained Volkan Ozdemir, head of the Institute for Energy Markets and Policies, EPPEN, in an interview with Anadolu Agency.

Russia is aware of this fact, and therefore could be trying to affect these markets in order to produce upward pressure on oil prices, Ozdemir said. Oil and natural gas sales account for nearly 70 percent of Russia’s total export revenues. With each dollar the price of oil drops, the country loses about $2 billion.

The Kremlin shifted 2016 State Duma elections from December to September, Ozdemir said, possibly because Vladimir Putin’s government might be trying to boost its popularity by improving the economy thanks to higher oil prices within the next 10 months.

The oil price has fallen by more

than 40 percent since June 2014, and the Russian economy has shrunk by 3 percent in the first six months of 2015.

Meanwhile the price of crude oil has increased by $6 a barrel since Russia began its operations in Syria.Ozdemir also said Russia seeks to gain ground in Syria, as the region borders on key oil and gas producing countries such as Iran, Iraq and Saudi Arabia.

“Russia could control the region in Syria bordering on the Eastern Mediterranean and gain some kind of control over the oil and gas produced in the region,” he added. According to current estimates, more than 60 percent of the world’s proven oil reserves are located in the Middle East.

Russian warplanes began striking targets inside Syria for the first time. According to the Russian Foreign Ministry, the strikes targeted Daesh munitions depots, vehicles and communications centers.

FDI inflow to Turkey up 36 percent ANKARA- Turkey attracted $11.8 billion of foreign direct investment (FDI) during the first eight months of 2015, an increase of 36 percent compared to the same period for last year according to data released by the Central Bank of the Republic of Turkey.

Investment Support and Promotion Agency of Turkey (ISPAT) President Arda Ermut said that Turkey maintained its status as a “safe haven” despite the turmoil produced by Syria, ISIS and the upcoming elections. “Having established itself as a safe haven for investors in the region, Turkey’s investment appeal rests on the economic accomplishments of the past 12 years. As we observe from the FDI figures, the turmoil in some of our neighboring countries and upcoming elections did not deter foreign

investors who have confidence in Turkey and its potential. We are optimistic about surpassing last year’s FDI total.” In August alone $1.9 billion was channeled into Turkey, the main recipient sector being chemicals, according to data from the country’s central bank. The top recipient sectors in the January-August period lined up as manufacturing, financial services and energy, with 46 percent of the country’s current account deficit in the given period financed by the FDI inflow.

Arda Ermut ISPAT President

Turkey’s Hacettepe University undertakes domestic electric car production Located in Ankara and ranked among the best universities in the country, Hacettepe University produced Turkey’s first entirely domestically produced electric car. Named “EVT S1,” the vehicle is considered as one of the most suitable models developed in Turkey for mass production. The expected price tag is $50,000.

Developed in the university research and development zone “Teknokent,” EVT S1 was designed and produced by a team of Teknokent engineers and Hacettepe’s Department of Automotive Engineering students. The vehicle has already been presented to Turkey’s President, Recep Tayyip Erdoğan, and its first public introduction is expected to be overseen by Erdoğan himself.

EVT S1’s light and durable body was produced with leaf polymer, carbon fiber and glass fiber, and its energy consumption is quite low due to its special design. The vehicle only consumes 10 kilowatts of energy per hour (kWh) when cruising 100

kilometers at a constant speed of 90 Kilometers per hour. In other words, one-kilometer costs $1.36 with EVT S1, and it can cruise the 450-kilometer distance between Ankara and Istanbul for only TL 18 ($6).

Weighing 1,050 kilograms, EVT S1 can reach a speed of 100 Kilometers per hour in 7.5 seconds with its 141 horsepower engine, and a maximum speed of 180 kilometers per hour to protect its batteries. Its battery has a capacity of 35 kWh and can be charged in 10 hours, or 30 minutes with the accelerated option. This battery allows EVT S1 to travel 300 kilometers with a constant speed of 90 kilometers per

hour. It includes an automatic gearbox and 350 liters of baggage area. Most of EVT S1’s parts were produced at Hacettepe laboratories and Ankara’s İvedik and Ostim industrial zones. After obtaining the necessary permission and documents for mass production, 1,000 units of the EVT S1 are expected to be produced in the first batch. The team is also working on developing a luxury and family model of EVT S1, while the second prototype is expected to be ready within a month and a half.

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Turkey sees ‘very slight decline in tourist numbers’ despite problems

ANKARA -Anadolu Agency- Turkey saw a very slight decrease in tourist numbers despite all the negativities, said interim Culture and Tourism Minister Yalçın Topçu, adding that these losses were not irreversible with government incentives.

“Amid escalating violence in the country, there has only a 0.38 percent decrease in the number of foreign tourists visiting Turkey in the first seven months of the year. This is not irreversible,” he said at his exclusive interview with Anadolu Agency.

The number of foreign people visiting Turkey increased to 5.5 million in July, a 5.1 percent increase from the same month of 2014, according to data released by the Tourism Ministry.

The number of foreign visitors decreased by around 0.4 percent in the first seven months of the year, amid rising geopolitical risks and economic problems in Russia. Topçu said the number of tourists arriving

in the first seven months of the year was 20.3 million, and tourism income was $12.6 billion.

“The government has some incentives and improvements to help reduce these [losses],” he said. He noted that around 4.5 million Russians visited Turkey last year, making Turkey the most popular touristic spot for Russians, but there has been a decrease in the number of Russian tourists visiting Turkey this year, like in many other countries, due to Russia’s economic problems.

The number of Russian tourists visiting Spain decreased by 40.9 percent, Italy by 33 percent and Greece by 51 percent this year, he added.

“Our ministry has made decisions to take several measures to support the sector across 13 countries, including Russia.

In line with these measures, around $6,000 of support was given to 1,500 charter planes each, which flew from Russia to Turkey, last April and May.

Humor

2015

Real estate sales to foreigners to be supported

Turkish Economy Minister Nihat Zeybekci announced that his ministry is working to include real estate sales to foreigners among services for foreign currency earnings. Real estate sales to foreigners are expected to reach around $5 billion this year and $10 billion in 2016. Speaking at a Housing Society (KONUTDER) meeting, Zeybekci underlined that foreign exchange earnings are one of Turkey’s most crucial exports and an important part of this revenue is obtained from property sales. He added that the Ministry of Economy has been focusing on this issue, and while there are inconsistencies with the regulations of the Finance Ministry, they will

Unusual questions What is it that you people do at this company?

Why aren’t you in a more interesting business?

Why do you want references?

I know this is off the subject, but will you marry me?

Unusual statements Once a week, I usually feel hot all over.

I am fascinated by fire.

I never get hungry.

ANKARA-Turkey’s Energy Minister has refuted recent reports about uncertainties in Turkey’s planned first nuclear power plant project in the southern district of Akkuyu amid rising rows between Turkey and Russia over Syria, saying that there is no problem with the project.

ministry has been working in harmony with Akkuyu NGS, the company which was established to build the power plant by Russia’s Rosatom,” said the minister, Ali Rıza Alaboyun, in a written statement Oct. 10.

“An intergovernmental agreement was signed between Turkey “The project has been undertak- and Russia for the project in 2010 en in line with how it had been and the deal was approved by the Turkish parliament. Then the Akplanned earlier. There is not any kuyu NGS was established to run problem between Turkey and the project and a site in Akkuyu Russia about the project. Our was allocated to the company to build the power plant in 2011. The sited was declared a Special SeTHOUGHT OF curity Zone through cabinet decision in THE MONTH a2013,” said the statement.

I would have been more successful if nobody would have snitched on me.

I think I’m going to throw-up.

No matter how badly your last job interview went, it probably wasn’t this bad...

• Said he was so well-qualified [that] if he didn’t get the job, it would prove that the company’s management was incompetent.

• Stretched out on the floor to fill out the job application.

• Wouldn’t get out of the chair until I would hire him. I had to call the police.

• Pulled out a Polaroid camera and snapped a flash picture of me.

Said he collected photos of everyone who interviewed him.

• An applicant came in wearing only one shoe. She explained that the other shoe was stolen off her foot in the bus.

What job am I applying for, anyway?”

“My resume might make it look like I’m a job hopper. But I want

Well

The Economy Minister noted that various problems in the real estate sector were inconsistent tax rates and other indirect taxes.

He further underlined that various tourism sectors, such as health tourism or shopping tourism, should also be deemed as foreign currency earning services, and the regulations should be reevaluated accordingly.

The project has been undertaken in line with how it had been planned earlier. There is not any problem between Turkey and Russia about the project.

you to know that I never left any of those jobs voluntarily.”

“Sorry for yawning. I usually sleep until my soap operas are on.”

“I will definitely work harder for you than I did for my last employer.”

“I don’t think I’m capable of doing this job, but I sure would like the money.”

I demand a salary commiserate with my experience.”

“Instrumental in ruining entire operation for a chain store.”

“Received a plague for Salesperson of the Year.”

“I am loyal to my employer at all costs.... Please feel free to respond to my resume on my office voice mail.”

“It’s best for employers that I not work with people.”

“The company made me a scapegoat, just like my three previous employers.”

“You will want me to be Head Honcho in no time.”

“As indicted, I have over five years of analyzing investments.”

THE ECONOMIST What is your advise?

rized as commodity exports, his ministry would provide all the support it can.

No problem with Akkuyu nuclear power project

Democracy is a device that ensures we shall be governed no better than we deserve.

If you’re looking for a job or looking to hire, you need a smile break.

Here are memorable interview moments: • A job applicant challenged the interviewer to an arm wrestle.

• Candidate announced that her long-term goals were to replace the interviewer.

• Applicant said if he was hired he would demonstrate his loyalty by having the corporate logo tattooed on his forearm.

soon resolve these issues. This year around 20,000 properties are expected to be sold to foreigners.

Zeybekci noted that since the sector brings in foreign currencies to Turkey, it should at least partly benefit from export incentives.

“This can be deemed as an export. It is something that brings in foreign currencies to Turkey. Therefore, this sector should also benefit from certain export incentives. Even though we support promotions, exhibitions and foreign office expenses, such sales should be included in the foreign currency earning services,” said Zeybekci. He added that while such sales cannot be solely catego-

Try not to become a man of success but rather to become a man of value.

A positive environmental assessment report (ÇED) was issued in December 2014, after which the company presented site parameter reports for approval to the Turkish Atomic

Energy Authority (TAEK), it added.

The company and Turkey’s Electricity Trading and Contracting Company (TETAŞ) agreed on basic principles for an electricity purchasing agreement, said the statement. “This was followed by groundbreaking of the required ports and marine structures in April 2015. A prequalification was secured from the energy watchdog [EPDK] in 2015. Work about the nuclear power plant’s construction permits are still in process,” said the statement.

A total of 317 Turkish students have also been sent to Russia for nuclear engineering education so far. The Akkuyu NGS has applied

to take the required construction permits to the TAEK a while ago, but granting these licenses may take 1.5-2 years, according to officials and recent reports.

The company has continued to run its operations, like acquiring turbines.

Akkuyu NGS General Manager Fuad Akhundov said the company has so far invested $3 billion in the project and has secured funding until 2017.

“Our production license has not been granted yet but we will continue our investments because we trust the Turkish economy,” he said at a meeting with a number of journalists.

Turkey, Finland to give new momentum to bilateral relations ISTANBUL-Turkish Economy Minister Nihat Zeybekci has announced that the first meeting of the Joint Economic and Trade Committee (JETCO) mechanism, established in Ankara in February, would take place on Dec. 2, 2015, in Helsinki.

Zeybekci and Finland’s president Sauli Niinisto met in Turkey-Finland CEO Lunch Meeting in Istanbul to boost bilateral trade and investment.“In 2014, Turkey’s exports to Finland were 248 million euros ($330 million) with an increase of 10.5 percent compared to 2013 while our imports from Finland were 855 million euros ($1.1 billion) with a decrease of 8.9 percent compared to 2013,” Zeybekci said.

Zeybekci said that during the first eight months of 2015, Turkey’s trade volume with Finland had reached 799.4 million euros ($891 million).

Zeybecki said that a Turkish-Finnish business and investment forum will be held simultaneously with the first session of the JETCO meeting in Helsinki with a wide participation from private sector representatives from both countries.

Zeybekci pointed out that the 110 Finnish companies were operating in Turkey.

“The foreign direct investment (FDI) inflow of Finland in Turkey is $402 million, whereas the FDI stock of Turkey in Finland is $24 million and the number of Turkish enterprises in Finland is around 400,” he added.

“Under Turkey´s capable chairmanship I am convinced that the G20 Summit in Antalya next month will achieve concrete results,” added Sauli Niinisto.

G20 leaders are to gather in Turkey’s southern province of Antalya for the tenth annual meeting of the heads of states on Nov. 15 and 16.

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2015

5

Volkswagen scandal could help Turkish automotive sector Wishes not sufficient, The scandal at Volkswagen could provide opportunities for Turkish auto components İbrahim Küpeli

ibnahim.kupeli@img.com.tr

but also action

exporters, experts told Anadolu Agency.

ANKARA-Volkswagen, on Sept.

22, admitted that 11 million of its diesel cars used an emissions control device that employed software to cheat emissions tests.

The software switched on during tests, and then turned off when the car was on the road, with vehicles then emitting noxious gases at a 40 percent higher rate than that permitted by law, according to the U.S. Environmental Protection Agency.

“Turkey’s automotive sector could actually benefit,” commented Neil King, an automotive industry analyst with Euromonitor. “As many key European players produce vehicles in Turkey – FIAT, PSA, Renault, Ford, Honda, Toyota and Hyundai, among others – some of this loss for VW could translate into a gain for car production in Turkey, and in turn, for the parts sector,” King said. Turkish automotive exporters could see a similar benefit, he added.

King forecasts that the scandal will cost the VW Group the loss of sales of 300,000 vehicles this year. There will certainly be competition among automotive suppliers to fill opportunities produced by expansion at Volkswagen’s competitors, explained Christopher Dembik, an economist with Saxo Bank.

“Here, the decline in the value of the lira will give Turkish automotive exporters a competitive edge.”

Around 75 percent of automotive production in Turkey is destined for foreign markets. Germany is Turkey’s biggest client, taking $2.1 billion in automotive exports in 2014.

So Turkey is well-positioned to take advantage of these market changes, King said, adding: “Intriguingly, the VW Group does not produce vehicles in Turkey and so any defection from consumers to other carmakers will

The 70th Plenary Meeting of the United Nation (the UN) convened to discuss accumulated humanitarian problems late September.

benefit Turkish automotive suppliers,” he added.

There is, however a danger that the scandal will reflect on all diesel cars, King pointed out.

This could sour consumers on purchasing diesel cars, according to a report by Zacks Equity Research released, that could lead to more stringent regulations on diesel engine emissions. “Surprisingly, this market change could also benefit automotive manufacturers,” Zacks said. “Moreover, deeper focus on the safety of vehicles is already benefiting parts manufacturers, specifically those dealing with automotive safety products.”

The question now is: how will the Turkish automotive sector respond?

Euromonitor’s Neil King says: “Assuming no other OEMs [original equipment manufacturers] are impli-

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cated, I can envisage marketing campaigns which promote low-emissions vehicles and especially diesels but also with a core focus on honesty and trust in their products and emissions/ fuel consumption figures.

“However, we could also see the VW Group lowering prices or introducing incentives (in the form of attractive financing deals and/or higher standard equipment) and that could see other carmakers following suit.

For automotive suppliers, we could, of course, see increased competition for supply contracts coming from those companies especially exposed to VW and/or diesel,” King added.

For Saxo Bank’s Dembik “Turkish producers have the know-how, and the positioning to take advantage of these opportunities.”

Turkey’s foreign trade gap drops 46 pct amid oil plunge ANKARA-Turkey’s foreign trade deficit declined by 46.6 percent to $3.7 billion in September compared to the same month of 2014 due to a dramatic decline in the country’s energy imports and a slowdown in the economy ahead of the elections, according to data released by the Turkish Statistics Agency (TÜİK) on Oct. 30 in cooperation with the Customs and Trade Ministry.

The deficit was announced as $49.02 billion in the first nine months of the year, a 20.2 percent decrease from the same period of last year.

Turkey’s exports declined by 14.2 percent to $11.66 billion in September compared to the same month of 2014. The exports saw a 9.4 percent decline in the first nine months of the year compared to the same period of 2014, being announced at $107.29 billion. The country’s imports dropped by 25.2 percent in September to $15.4 billion compared to the same month of 2014. The imports were announced at $156.32 billion in the first nine months of the year, a 13.1 percent decrease compared to the same period of 2014, according to the TÜİK data.

Also according to the official data, Turkey’s energy bill decreased by 38.6 percent amid the oil plunge in September to $2.9 billion compared to the same month of 2014. The country’s energy imports were announced at $29.39 billion in the first nine months of the year, a decrease of around 30 percent from the same period of 2014.

As compared with the same month of the previous year, exports to the EU-28 decreased by 7.7 percent to $5.5 million in September.

The proportion of exports to EU countries was 47.2 percent in September 2015, while it was 43.9 percent in September 2014. The main partner for exports was Germany, followed by the United Kingdom, Iraq and Italy, according to the official data.

With this new agenda, poverty will be eradicated in its all forms including extreme poverty regarded as the greatest global challenge and an indispensable requirement for sustainable development.

A lot of regions across the world have faced with the challenges of famine, poverty, inequal“We are resolved to free the human race ity, terror, wars, refugee, migration problems.

In addition to these global humanitarian crises, from the tyranny of poverty and to heal and the world population has also faced with envi- secure our planet. We are determined to take the bold and transformative steps which are ronmental problems. urgently needed to shift the world on to a susThese issues were the agenda items of the tainable and resilient path. As we embark on 70th Plenary Meeting of the United Nation this collective journey, we pledge that no one this year. will be left behind,” the United Nation says.

The most of these humanitarian problems Seemingly, this declaration of the UN is full set in 2000 in the leadership of the United Naof goodwill and hopeful for the new sustaination by coming together with world leaders to ble agenda. reduce extreme poverty and setting out a seBut, when we have looked at the pervious ries of time-bound targets by the end of 2015. sustainable agenda which was set in 2000 to Including eight ones with this initiative called remove basic disputes of human beings, we the Millennium Development Goals had aimed see that no remarkable advancement in terms to eradicate the famine, poverty and other huof poverty, hunger, peace items. Even some of manitarian problems goals by 2015. these issues have gone into the worst situaUnfortunately, after 15 years passed the tion. basic problems with which millions of people So, in order to be successful in the new face could not be achieved to date. sustainable agenda the UN should go towards Attention is turning to a new sustainable some radical changes in its own structure, othdevelopment agenda for the next generation erwise the new version of the millennium deto help respond to the global challenges of the velopment goals could not be achieved once 21st century. again.

Thus, the UN has prepared a new plan to end extreme poverty by 2030 and enhancing shared prosperity in every country.

This means that poor peoples across the world would wait for another 15 years to get rid of poverty, famine and other humanitarian problems.

The post-2015 development agenda aims to transform the world.The agenda has an action plan for people, plant and prosperity.The agenda also seeks to strengthen universal peace in large freedom.

Wishes and desires are not sufficient to overcome huge problems of the world. The indispensable criterion is to set the necessary infrastructure to realize these objectives.

Otherwise, another 15-year would be futile and the current humanitarian problems could have gradually grown and turned an unsolved structure.

Furthermore, not only those societies which face lots of humanitarian problems, but also the entire world people might face these basic problems.

6

EconomicNewspaper

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2015

Finance Minister Mehmet Şimşek: Downward revision in growth is a global trend

Turkish Finance Minister Mehmet Simsek said the downward revision of main economic indicators included in the mid-term economic program published for 2016 to 2018 was not unique to Turkey as the International Monetary Fund (IMF)’s recent global economy review published also revised many indicators regarding all developing countries downward.

ANKARA- Şimşek said there are negative developments in the region and that Turkey is in the middle of various shocks and crises such as the economic crisis in Europe, the chaos in the Middle East and the Russian invasion of Crimea. “Such crises do not affect Brazil or Mexico in the same way they affect Turkey,” Şimşek said. The government released the revised version of the mid-term economic program, which was more pessimistic than the original that was announced last year. It includes expectations for major figures like growth, unemployment rates and inflation. While growth for 2015 was expected to be 4 percent, it decreased to 3 percent in the new version.

In 2014 the growth rate was estimated to hit 5 percent in 2016 and 2017, but the revised mid-term economic program predicted that growth would be 4 percent in 2016 and 4.5 percent in 2017. The new version also includes estimated growth for 2018 at 5 percent, according to the government. Şimşek deemed the decrease of commodity prices would benefit Turkey, but as geopolitical tensions, wars and clashes seem to be worsening, such potential cannot be fully utilized.

The Middle East and Russia’s demand for Turkish goods also decreased as they were more deeply affected from such decreases. Şimşek also objected to criticism about Turkey’s Syria policy, the activist stance Turkey has taken and why Turkey accepted so many Syrian refugees. “While people may criticize Turkey’s foreign policies on Syria, we do not have any involvement in the clashes in Yemen or the unstable political developments in Libya. This is a very unstable and unsettled region that is suffering from games played 100 years ago. However, Turkey is determined to become an inspiration with a comprehensive democracy based on rights and freedoms that do not allow any kind of discrimination,” Şimşek said. He added that anyone resorting to vio-

lence in the Middle East has failed. He also criticized the PKK for doing the most damage to their fellow Kurdish citizens even though they claim to represent and fight for the Kurdish community. “Therefore, violence, ethno-nationalism and micro-nationalism end in disaster and have only caused more tears and bloodshed in our region,” Şimşek said. He added that a more tolerant, democratic, liberal and pluralistic order is required immediately. “This is what the AK Party (Justice and Development Party) strives for,” Şimşek said. Şimşek deemed the 3 percent growth rate Turkey achieved - despite the problems surrounding the country - a success and said more than 7 million people, mostly youth, have been recruited since 2007 to help decrease the unemployment rate.

The unemployment rate is currently still lower than the average in the European Union and unemployment is not a problem specific to Turkey, but has now become a global problem. Şimşek also suggested that inflation in Turkey is mostly due to the depreciation of the lira and added that the political unrest that occurred after the June 7 general elections and the uncertainties surrounding the results of the upcoming Nov. 1 elections are also other burdens on the Turkish economy. “In these times when there are regional tensions, global economic problems, wars and clashes, political uncertainty is the biggest risk and threat in Turkey,” Şimşek said and warned that a weak or coalition government would heighten these risks, and therefore what Turkey needs is a strong, single-party government and political stability.

Net effect of AK Party’s pledges to the budget is TL 19.3 billion The minister also announced that the net effect of the Justice and Development Party’s (AK Party) additional campaign pledges for the general elections

to take place on Nov. 1 is around TL 19.3 billion ($6.61 billion). The pledges mostly target increasing employment and investments, supporting craftsmen, decreasing input costs of farmers, ensuring lower inflation rates and supporting production. The AK Party also reserves almost half of this amount for improving the living conditions of the retired.

Further, according to Şimşek, all expenses except for personnel and investment expenses shall not be increased in proportion to the increase in national income but in proportion to inflation rates, therefore a new expenditure discipline. Also, Şimşek said that a new tax would be not levied nor would tax rates be increased.

However, he added that with the new tax reform regulations currently being discussed, some tax privileges and exemptions will be cancelled; yet, as taxes will affect a larger number of tax payers, an increase will be achieved in tax revenues.

Mehmet Şimşek Turkish Finance Minister

EconomicNewspaper

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Current account deficit plunges in August

Turkey to close year with 41 million tourists

ANTALYA - Anadolu Agency-Turkey will reach last year’s tourist numbers of 41 million despite all the negativities in neighboring countries, said the head of the Association of Turkish Travel Agencies (TÜRSAB).

“Despite the negativities in Ukraine, Syria, Iraq, Lebanon and others, Turkey will reach 2014’s figures in tourism,” said TÜRSAB head Başaran Ulusoy.

Local tourists are opting for Greece and Greek islands, the Mediterranean resort of Antalya and the Central Anatolian spot of Cappadocia this year, Ulusoy added.

ANKARA-Turkey’s current account deficit narrowed to minus 163 million in August, down from minus $3.15 billion in July, the Central Bank of the Republic of Turkey reported.

It was the first time Turkey has registered a near-zero monthly current account deficit since 2009.

It was a decrease of over $2 billion from July, the report said. The 12-month rolling current account deficit was minus $43 million. In 2014, Turkey’s current account deficit was $45.84 billion.

“None of this should be a surprise,” commented Bora Tamer Yilmaz, an economist with Ziraat Securities, who had forecast a zero deficit for the month of August.

“Declining commodity and energy prices, as well as an improved import-to-export ratio all contributed to the narrowed deficit.”

The deficit in goods item narrowed to $3.6 million, down by $2.6 million from August of the

previous year. The deficit in services indicated a net surplus of $3.9 million, narrowing by $583 million compared to the same month in the previous year.

He noted that the sector had been growing continuously for the last five years.

“Around 40,000 new beds are added in the sector every year. This requires around 1 million incoming tourists,” Ulusoy said. “Turkey has succeeded in not seeing dramatic losses in tourist numbers despite several problems in neighboring countries and will close the year with around 41 million in tourist numbers. There has,

however, been a decline in hotel occupancy rates of around 5-10 percent this year, but this is mainly caused by additional new beds that have recently become available. We should therefore shelve our new investments on beds for a while to make the existing capacity full.”

But investment income indicated a net outflow of $497 million, decreasing by $72 million in comparison with August 2014.

“The improvement in current account shall not be limited to the month of August. We expect further improvements in coming years on the back of the central bank’s macro-prudential policies,” Yilmaz added. The central bank’s macro-prudential policies are controls on business and consumer credit.

The devaluation of the Turkish lira with respect to the dollar and the euro has reduced imports purchases by consumers, Yilmaz noted.

Analysts expect the current account deficit to shrink to 5 percent of GDP this year, down from 5.8 percent at the end of 2014.

Turkish industrial production rises above estimates

ANKARA-Industrial production in Turkey exceeded estimates in August, driven largely by a sharp increase in durable goods production, according to data from the Turkish Statistical Institute (TÜİK) released on Oct. 8.

Industrial production – a measure of output in the manufacturing, utilities and mining sectors – increased 2.9 percent in August from the previous month, and 7.2 percent from the same period of the previous year, according to TÜİK data.

The increase came after a 1.5 percent drop in industrial production in July, but analysts attributed that fall in part to the holiday season.

“We did not expect such strong data,” economist Bora Tamer Yılmaz at Ziraat Securities told Anadolu Agency. “Our industrial production is closely linked to production in Germany. We believe that domestic demand in the third quarter eased down. For example, automotive sales declined. But, in contrast, export and manufacturing remained strong, and manufacturers are working through their current inventory. This suggests a positive projection for production in the coming quarter,” he said, as quoted by Anadolu Agency.

Industry Minister Fikri Işık said the figure could enable the government to revise its

7

year-end growth estimates.

“Unless a serious drop in economic activity is seen in September data, we could achieve growth of around 3 percent in the third quarter despite several uncertainties. Our existing estimate was lower actually.

Industrial production data will enable us to revise some estimates up,” he said during a live interview on broadcaster NTV. On the other hand, the increasing trend may be temporary due to the continuance in uncertainties in the country, which have slowed the economic activity down.

“Our industrial production estimates for September are still very low due to the long Eid holiday. In this vein, we continue to estimate that the GDP growth, which was 3.1 percent in the first half of the year, has slowed down in the third quarter and the economy will most probably close the year with 2.6 percent of growth. Our 2016 GDP growth estimate is 3.2 percent,” said Halk Investment in a note. The largest increase was seen in durable consumer goods, such as appliances, home and office furnishings, which were up 11.6 percent from July.

However, transport equipment production dropped 12.7 percent from the previous month, according to the data

Russia’s Syrian intervention could hurt its economy The Russian economy, already in recession, will deteriorate further because of the military operations in Syria, experts said. Russian warplanes began striking targets inside Syria for the first time. According to the Russian Foreign Ministry, the strikes targeted Daesh munitions depots, vehicles and communications centers.

ANKARA-“The West will certainly not give up its sanctions against Russia because of this adventurism,” Anders Aslund, a senior fellow at the Atlantic Council, told Anadolu Agency. A war in Syria with modern arms is likely to be quite expensive for Russia, Aslund pointed out. Russia’s GDP is forecast to fall by at least 4 percent this year, he added. Aslund said that Russians do not want to fight in the Middle East, as there is no clear way for the conflict to end.

“Putin’s new Syria policy looks dangerous and may be outright destabilizing for Russia,” the expert said.

Legislative elections will be held in Russia on September 18, 2016 and the current recession could lead to an undesired result in the elections for the Russian government.

Another expert, Anthony Skinner, director at the global risk analytics company Maplecroft, said that, because of domestic economic pressures, Russia will struggle to expand its military campaign in Syria. “It is conceivable that Moscow wants to leverage its increased traction in Syria during potential future negotiations over the western

sanctions regime which, along with the low price of oil, has taken a heavy toll on the Russian economy,” he added.

Skinner also underlined that Russia’s increased involvement in Syria also strengthens the Russian - Iranian axis in the country. “Russia may be looking to reap the benefits of this partnership by being rewarded new business contracts in Iran when sanctions against the Islamic Republic are lifted,” he said. Russia and Iran both support Syria’s current president, Bashar al-Assad, and therefore have agreed to an information-sharing alliance on the conflict.

Six world powers — the U.S., Germany, France, U.K., Russia and China — and Iran had reached a landmark deal in July to limit Iran’s nuclear ability for more than a decade, in return for the lifting of international energy and financial sanctions.

Russia and Eurasia expert John Lough, of the British think tank Chatham House, said Russia’s relations with Saudi Arabia seemed to be warming slightly but have now suffered a major setback. “This doesn’t augur well for achieving an agreement with

OPEC on reducing supply to global markets. The damage to relations with Turkey is very serious. It is very hard to see gas cooperation with Turkey making any progress in these conditions,” he said.

Due to falling oil prices, which declined around 60 percent since mid-2014, the economies of Russia and OPEC countries have suffered, since a high portion of their revenue is based on oil exports. Moscow has recently been in talks with OPEC’s most influential member, Saudi Arabia, and the cartel’s secretary-general in July to discuss global oil market and the possibility of jointly supporting global oil prices.

More than $151 billion in capital flowed out of the Russian economy in 2014, according to the country’s central bank, while the bank has predicted another $120 billion in capital flight in 2015. International sanctions, imposed after Russia’s intervention in Ukraine, have also denied some of Russia’s most prominent companies and banks access to Western financial markets.

Operators make first payments for 4.5G technologies in Turkey ANKARA- A total of 2 billion euros has been paid to the Treasury by the telecommunication companies which won a tender for the launch of advanced 4.5G technologies in Turkey.

Vodafone offered $918 million euros. While one of the companies made the first payment in cash, the other two preferred to make their payments in installments, although all of them paid value-added taxes.

The companies have also taken their authorization certifications - dubbed IMT-Advanced certificates - after making their first payment in line with the contract in a ceremony with the attendance of Turkish President Recep Tayyip Erdoğan. Turkey’s three existing mobile operators, Turkcell, Vodafone and Avea, won the rights to the country’s advanced 4G network, dubbed 4.5G in Turkey, due to be established for a sum of more than 3.9 billion euros in the Aug. 26 tender held by the Information and Communication Technologies Authority (BTK).

“The upgrade of the mobile telecommunications network to 4.5G technologies is expected to earn over $5 billion, contributing to our goal of becoming a technology producing country as well as an advanced consumer society,” said Erdoğan during his keynote speech.

In the tender, Turkcell offered around 1.9 billion euros for eight packages and Avea offered 1.1 billion euros for five packages, while

Transport, Maritime and Communications Minister Feridun Bilgin said a new era has begun for Turkey’s information technologies with the delivery of the IMT-Advanced authorizations. While the number of mobile phone subscribers had been

around 14.7 million in Turkey previously, this figure rose to 73 million as of this September, he said, adding the number of broadband internet subscribers increased to 47 million this year from around 20,000 in 2003.

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Turkey 16th in global automobile production

ANKARA - Turkey ranked 16th in global automobile production, according to a report from the International Organization of Motor Vehicle Manufacturers (OICA) released on Oct. 26. Turkey manufactured 667,592 cars in the half-year period, an increase of 18.4 percent from 2014.

Global vehicle production rose 0.5 percent in the first six months of 2015, compared to the previous year. World auto production reached 45.6 million cars from January to June of this year, up from 45.4 million in 2014.

China again topped the list of the 20 biggest automobile producing countries with about 12 million motor vehicles. The world’s second-largest economy manufactured more than one out of every four motor vehicles worldwide, an increase of 2.6 percent compared with the same period of last year.

It was followed by the U.S., with about 6 million, and Japan, with about 4.5 million vehicles. Italy increased its auto production by 43 percent, producing over half a million cars this year. Turkey’s neighbor Iran increased its motor vehicle production by 14 percent in the same period.

2015

US Fed unlikely to raise rates in 2015, says Nobel winner WASHINGTON-Joseph Stiglitz, the Nobel Prize-winning economist, said the Federal Reserve was unlikely to raise interest rates in 2015 in order to support the U.S. economy.

Fed officials have long said the timing of the first rate increase would be dependent on incoming economic data. But the recent trove of data on consumer spending, inflation and jobs has virtually eliminated the chances of the Fed’s move in the year.

Joseph Stiglitz

either.”Global economy is not flirting with a new recession”Stiglitz noted the global economy was not flirting with a new recession. “In terms of the global economy what matters is the slowdown in the purchase of natural resources and China plays a big role in that. The effect, especially on South American countries and also on other commodity exporters, is significant. But we wanted that. Because we wanted them to change the structure of their He added that Fed officials had made the economy. However, I do not think the global right decision in not raising rates. “They will economy is in a recession or nearing one. It is keep looking at the upcoming data, said the growing but below its normal growth trend.”

2001 winner of the Nobel in economic sciencHe added that emerging market econoes who has written extensively about inequalmies, such as Turkey, had to adapt the new ity. realities of global economy. “Each of them is “But I do not think they’ll have enough going to have to do it according to their own data by the October meeting. Right now it circumstances. There is no ‘all sizes fit one’ does not look like they can start in December type of solution,” he warned.

On the question regarding whether the Fed will make a move this year, Stiglitz told Anadolu Agency: “I hope not and I do not think it seems likely.” “Because the U.S. economy is slowing down. Because the natural resource prices are declining and that will be a contraction in the economy. Because the recovery is anemic,” he said.

G-20 finance ministers endorse reforms to tax system for curbing tax avoidance

LIMA-G-20 finance ministers endorsed the final package of measures for a comprehensive, coherent and co-ordinated reform of the international tax rules during a meeting on Oct. 8, in Lima, according to a written statement Organization for Economic Co-operation and Development OECD).

During a meeting chaired by Turkish Deputy Prime Minister Cevdet Yılmaz, the G-20 finance ministers expressed strong support for the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project, which provides governments with solutions for closing the gaps in existing international rules that allow corporate profits to « disappear » or be artificially shifted to low/no tax environments, where little or no economic activity takes place. They renewed a commitment for rapid, widespread and consistent implementation of the BEPS measures and reiterated the need for the OECD to prepare an inclusive monitoring framework by early-2016 in which all countries will participate on an equal footing.

Ministers agreed to forward the BEPS measures for discussion and action by G-20 heads of state during their summit on Nov. 15-16 in the Turkish province of Antalya.

“Base erosion and profit shifting is sapping our economies of the resources needed to jump-start growth, tackle the effects of the

global economic crisis and produce better opportunities for all,” said OECD Secretary-General Angel Gurría. “The G-20 has recognized that BEPS is also eroding the trust of citizens in the fairness of tax systems worldwide, which is why we were called on to prepare the most fundamental changes to international tax rules in almost a century. Our challenge going forward is to implement the measures in this plan, rendering BEPS-inspired tax planning structures ineffective and creating a better environment for businesses and citizens alike,” Gurría said.

Undertaken at the request of the G-20 Leaders, the work to address BEPS is based on the 2013 G-20/ OECD BEPS Action Plan, which identified 15 actions to put an end to international tax avoidance. The plan was structured around three fundamental pillars: introducing coherence in the domestic rules that affect cross-border activities; reinforcing substance requirements in the existing international standards, to ensure alignment of taxation with the location of economic activity and value production; and improving transparency, as well as certainty for businesses and governments.

Revenue losses from BEPS are conservatively estimated at $100-240 billion annually, or anywhere from 4-10 percent of global corporate income tax (CIT) revenues, according to the statement.

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World Bank raises growth forecast for Turkey

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: 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

ANKARA-The World Bank has raised its growth forecast for Turkey after a surprising surge in investment supported unexpected growth in the second quarter of 2015. The bank is now forecasting 3.2 percent GDP growth this year, according to its report on Turkey released. Turkey’s growth forecast for 2015 was 0.2 percentage points higher than in the previous forecast in July.

The Turkish government’s most recent growth forecast for 2015 was 3 percent, as stated in the Medium-term Economic Program. The report said that the faster GDP growth in the second quarter of the year leads to revising up growth forecast to 3.2 percent for 2015. The World Bank has said it would stick to its 3.5 percent growth forecast for 2016 and 2017.

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

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after the election,” the report said. The bank warned that economic activity is expected to decelerate in the second half of 2015 against the backdrop of continued political uncertainty.

The bank predicted that inflation will be at 7.5 percent by the end of the year, up from 7 percent in the previous forecast due to rising food prices and the devaluation of the Turkish lira. The bank also warned about political stability and structural reforms.

“Turkey`s current account deficit remains high and is unlikely to fall below 5.5 percent without significant structural reforms, given the current external environment. Meanwhile, net financial inflows to Turkey dropped since May 2013, and normalization of global monetary policies will make the competition for foreign funds fiercer “Private and public consumpamong developing countries with tion continued to lose momenhigher costs. “There is an urgent tum as expected but, private need for political stability and investment unexpectedly surged to return to implementing the and became the main driver of structural reform agenda to regrowth- an indication that the private sector front-loaded invest- store investor confidence, address vulnerabilities and lift growth.” ment spending before the June Turkey is holding a snap election election or realized previously postponed investment, anticipat- on November 1 after coalition talks failed. ing elimination of uncertainties