Made in Turkey April 2014 by İstmag Magazin Grubu

ISSN 1300-2260

www.img.com.tr

April 2014 Year: 11 No: 120

PM Erdogan wins a remarkable electoral victory T

urkish Prime Minister, Recep Tayyip Erdogan has said he will build a “stronger democracy” after his ruling Justice and Development Party set for a decisive local election victory on March 30, 2014. Speaking to a cheering crowd of supporters at his AK Party’s headquarters in the capital, “Let no one grieve today; let every one of the 77 million know that Turkey won today. We will bring a stronger democracy,” Erdogan said. “You stood up for Turkey’s ideals... for politics, for your party and your prime minister,” he noted. Ankara, Erdogan won a “great” electoral victory. The AK Party received 45 percent of the vote, placing it well ahead of the main oppo-

sition Republican People’s Party (CHP), which won 27 percent. The Prime Minister thanked citizens for “reclaiming the struggle for freedom in the new Turkey”. “We will try to stand faithfully for whatever [responsibility] is entrusted upon us,” he told supporters. Erdogan also thanked his supporters in the Middle East, Balkans and Europe, by emphazizing the fact that: “Today, the targets of 2023 won, the resolution process won, the process of national unity and fraternity won. Not even one person among the 77 million lost, because a cadre that is ready

to serve them without any discrimination is in office. They may think differently; they may have voted for different political parties; they may have cursed us. They may have insulted us. Page 3

“Why the Dollar remains the reserve currency” David Barboza, the Shanghai bureau chief of The New York Times has inteviewed Eswar S. Prasad.

Turkish Prime Minister Recep Tayyip Erdogan

No deviation from sustainable economic growth and development A

Turkish Finance Minister Mehmet Şimşek

Moody’s optimistic for Turkey

ONDON – Turkish companies generally have strong liquidity buffers and longterm debt maturity profiles that will help moderate the effects of the lira’s devaluation of their credit ratings, credit rating agency Standard and Poor’s has said. A report from Moody’s also stressed the effect of the lira’s 26 percent devaluation against the US dollar and 31 percent devaluation against the euro in last nine months was negative for Turkish non-financial corporates, adding that they will now face “higher funding costs owing to higher interest rates and servicing costs for US-denominated debt”. Despite pointing out the difficulties companies would face in near term, the report also emphasized their advantages such as “good

liquidity buffers” and “ long-term debt maturity profiles”. “While the depreciation of the Turkish lira and subsequent increases in key domestic interest rates have credit-negative implications, rated Turkish corporates generally have good liquidity buffers, long-term debt maturity profiles and some revenues denominated in foreign currency,” said Martin Kohlhase, the co-author of the report and a Moody’s vice president-senior analyst. The Central Bank of Turkey recently increased its overnight lending rate to 12 percent from 7.75 percent and its weekly repo rate to 10 percent from 4.5 percent, which exposes companies to higher funding costs, especially for nearterm outstanding debts, according to the agency.

NKARA Turkey’s Finance Minister Mehmet Şimşek criticized the international credit rating agencies for being “superficial” in their analyses. The remarks came after some credit rating agencies defined Turkish corporates as the most exposed among emerging markets to a scenario of slowing growth, rising interest rates and a persistently weak local currency. Speaking at a broadcasted interview, Şimşek reiterated that the economy was not as fragile as claimed, particularly with the current account deficit, which was noted as one of the weak spots, would shrink considerably this year, he noted. He pointed out that 80 percent of Turkish firms with foreign exchange debts also had forex revenue with the private sector external debt position extending to mid to long term. Meanwhile, the low interest rate environment of the past 11 years has saved Turkey from paying 442 billion Turkish Liras

of additional cost, Deputy Prime Minister Ali Babacan has said. “We [the ruling Justice and Development Party government] have lowered interest rate spending and we provide services with the resources yielded from this,” Babacan said during a local election rally. “We would have had to pay 442 quadrillion [billion in today’s currency] more, if the interest rate hadn’t declined over the past 11 years and the state would have continued to pay 66-percent interest rates,” he said. The Turkish government has been vocally against high interest rates, which are blamed for hampering economic growth. Prime Minister Recep Tayyip Erdoğan, who is also keen on maintaining sustainable economic growth, has been a vociferous opponent of higher borrowing costs, rallying against what he describes as an “interest rate lobby” of speculators seeking to stifle growth and undermine the economy. Page 4

Babacan: “Operation on 17th Dec. aims to disturb Turkey’s stability”

ighlighting the long-term successful of economic programs was possible with the political stability, Minister Babacan said, “In order to keep the stabile situation in the country involves to be in effort altogether. The

events that we have experienced in the last three months apparently have been an effort that aims the running party, but as of its results we see that the target is the political stability, the target is Turkey’s stability. Page 3

Political optimism keeps Turkish Lira, stocks high

urkish assets were firm due to continuing post-election optimism, as well as positive moods in world markets fuelled by Yellen’s low interest rate remarks. The Turkish Lira continued its strong pace against the U.S. dolar trading for a second day, hovering below the 2.15 level, preserving its gains from investors’ pleasure with local election results that was perceived as a warrant of political stability. The stock market was also bullish, rising above 70,000 points, raising by more than 1 percent compared to March 31’s closure. Stocks in major markets rose after Feder-

al Reserve Chair Janet Yellen reinforced t h e need for “extraordinary” commitment to support the U.S. economy. The Justice and Development (AKP) claimed around 44 percent of the votes in the local elections, soothing escalating concerns from the business world over the course of political stability in the country, which has already received a major blow after corruption claims and social media bans.

n his latest book, “The Dollar Trap: How the U.S. Dollar Tightened Its Grip on Global Finance,” Eswar S. Prasad, the former head of the International Monetary Fund’s China division and now a professor of trade policy at Cornell University, explains how the dollar’s “exorbitant privilege” came into being. Mr. Eswar S. Prasad focused on the dynamics of the exorbitant privilege of the dollar. Excerpts from the interview: I expected the dollar to weaken because the crisis exposed problems in the U.S. financial system. Moreover, the U.S. racked up a lot of government debt and the Fed began flooding the global financial system with dollars. Page 5

Worth $13,7 billion of FDI flows Turkey in 2013

BURSA (IHA) n 2013, $13,7 billion worth of Foreign Direct Investment flowed Turkey that was announced at Uludag Economy Summit. Ilker Avci, Chairman of Turkey’s Prime Ministry Investment Support and Promotion Agency, stating developing countries have begun to take over 50 percent of foreign direct investment, he said; “Developed countries also try to attract with the new tactics. Page 5

Turkey’s trade deficit diminishes by 27 pct

urkey’s foreign trade deficit contracted by over 27 percent in February, as exports were up 6.2 percent year-on-year to $13.15 billion, while imports decreased by 5.9 percent to $18.25 billion, according to official data. February´s foreign trade deficit decreased by 27.2 percent from $7.9 billion to $5.10 billion, the Turkish Statistical Institute’s (TÜİK) data revealed. Calendar adjusted exports increased by 4.5 percent in February and imports decreased 2.9 percent, compared with February 2013. The top destinations for Turkey’s exports were Germany with $1.17 billion, Iraq $1.02 billion, and the United Kingdom $0.72 billion. Meanwhile, the top countries for Turkish imports in January 2014 included Russia, which sent $2.044-billion of goods to Turkey, as well as China with $1.92 billion, Germany with $1.7 billion and the United States with $993 million. January exports were up by 8.6 percent year-onyear to $12.4 billion, while imports rose by 2.6 percent to $19.2 billion. In 2013, annual exports decreased 0.4 percent to $151.9 billion compared to 2012, while imports rose 6.4 percent, reaching $251.7 billion. Last year, the foreign trade deficit increased 18.7 percent to $99.8 billion compared to 2012. Turkey’s trade deficit is expected to recover slightly this year thanks to an expected decline in the gold trade as well as an increase in exports fueled by recovery in the EU.

Made in Turkey Economic Newspaper, April 2014

Letter From The Editor Mehmet Soztutan Editor-in-Chief

Commitment to sustainable growth

ommitment to sound economic policies since 2003 has placed the Turkish economy in a good position to embark on a sustained path of faster growth. Progress has been achieved in reducing inflation and real interest rates, improving public finances, restructuring the financial sector, improving the business environment, and reforming the public sector. Besides, Turkey is the only country that increased exports to the European Union last year among the bloc’s largest trading partners, according to the EU’s statistical authority. Turkish exports to the EU rose 4 percent, reaching 50.2 billion euros, while imports from the union to Turkey soared to 77.7 billion euros, a 3 percent increase, according to a report released on Eurostat’s website. EU countries increased their overall exports to 1.75 trillion euros, good for a 3 percent increase, while overall imports shrank to 683 billion euros, reflecting a 6 percent decline, it said. Turkey remained the EU’s sixth-biggest trading partner in 2013 with a total trade volume of 128 billion euros. Among the EU’s 10 biggest trading partners, the exports of China, Russia and the United States shrank by 4, 4 and 5 percent, respectively. Other EU trading partners such as Switzerland, Norway, Japan, India, South Korea and Brazilrecorded considerable falls in exports to the EU in 2013. Actually, competition appears from all corners of the globe. Customers demand more. To respond, manufacturers in Turkey are reducing costs and increasing responsiveness through outsourcing, sourcing globally and implementing demand-driven strategies such as pull-based inventory management. All these trends cause greater reliance on third parties to manage the manufacturing and delivery of products to customers. Supply chain management no longer involves arm’s length transactions with traditional, serially managed supply chains. Turkey is an attractive location for foreign investment because of its emerging role as a springboard for foreign companies to access the newly emerging markets of the Mideast and Central Asia via entering joint ventures with Turkish partners.

Turkey´s Ares Shipyard to build 17 boats for Qatar

NKARA - Turkey´s Ares Shipyard, located in the country’s coastal Antalya province, is to build 17 high-speed coast guard boats to protect Qatar´s coastlines. The agreement was signed at the fourth Doha International Maritime Defence Exhibition & Conference between the company and Qatar´s Coasts and Borders Security Department. Under the deal, the company’s biggest order for maritime ships, Qatar will buy two 46-metre vessels, 10 33-meter ones and five 23-meter versions. Advanced composite materials are to be used in the vessels’ construction. Kerim Kalafatoglu, Managing Director of Ares Shipyard, said: “Ares is a well-known company in the region. We can say that the contract is the biggest one for the military ships category in the region. - Desire to succeed “Turkey’s Undersecretary for Defense has been helping us show our products in the show. After all these efforts, we have agreed to supply 17 high-speed coast guard boats.” Turkey’s Undersecretary for Defense Murad Bayar said Turkey would increase its defense exports to US$2 billion in the short term and US$25 billion by 2023. “Turkey wants to succeed in exporting its important projects in the defense industry,” Bayar said. Twenty-five Turkish firms have exhibited products at the conference, displaying the results of US$1bn of government in-

Consumer confidence index up in March 2014 Anadolu Agency NKARA - Turkey’s Consumer Confidence Index (CCI) increased by 5 percent in March 2014. The Turkish Statistical Institute (TurkStat) reported a 3.5 point increase to 72.7 points in March, from 69.2 in February. The index shows that optimism is growing in Turkey’s general economy for the next 12 months, with a 6.1 percent increase, and an index rise to 95.9 points in March, from 90.4 points in February. The expectation for the number of unemployed people index was 79.5 in March, an increase of 4.9 percent from February. The financial expectation for household income in the next 12 months is 91.4 points, an increase of 2.9 percent compared to the previous month. The probability of savings index for the next 12 months increased by 9.6 percent in March, compared to the previous month, and rose from 22 in February to 24.1 in March. The Consumer Confidence Indices shows how confident consumers feel about the stability of their incomes, which affects economic decisions and therefore serves as one of the key indicators for the overall shape of the economy. The indices range between 0 and 200 points, with 100 points being a neutral outlook, above that point being optimistic and below being a pessimistic outlook.

vestment in research in the defense sector last year. The event is the Middle East’s key international exhibition for maritime and naval defense equipment. More than 184 companies from 54 countries were at the fair, which was supported by the Qatar Armed Forces and hosted by the country’s navy. - New products Products from several of Turkey’s major defense companies were on display, including: aerospace technology; naval shipbuilding; tracked and wheeled armored vehicles; specialized textiles; armaments and munitions; missiles and rocketry and advanced defense electronics. Turkish companies exhibiting included Aselsan, Havelsan, Roketsan, Timsan, TUBITAK BILGEM, Meteksan, ODTU Teknokent, Gate, Transvaro, Baykar, Milsoft, Bites and Yakupoglu. Turkey’s Undersecretary for Defense Murad Bayar was also scheduled to meet high-ranking officials from several countries. Turkey’s defense industry has gained momentum in recent years, which has seen an expansion of local producers. More local firms have been introducing new products to the market, contributing to Turkey’s goal of relying more on domestic sources than imported products. According to data from the Defense Industry Exporters’ Union (SSI), Turkey’s exports in the defense and aviation industries combined reached US $1.39 billion in 2013.

Letters to the Editor turkey@ihlas.net.tr

Turkish banks Turkish banks would be able to cope with challenges arising from tighter funding conditions that are likely to result from QE tapering. “Despite a somewhat greater reliance on foreign market funding since 2009, and the resulting increase in the Turkish banking system’s vulnerability to potentially volatile wholesale market conditions, Moody’s considers the system’s likely exposure to the effects of QE tapering to be moderate and its liquidity resources to be sufficient.” I think QE tapering would have “a moderately negative impact” on Turkish corporates in light of a number of vulnerabilities stemming from corporates’ dependency on bank funding, mostly with short maturities, in foreign currencies and at floating interest rates. M. Brit/ Geneva

For whom? Responding to current and future economic trends requires a renewed commitment to international cooperation, IMF Managing Director Christine Lagarde said in delivering the 2014 Dimbleby Lecture in London. She pointed to “two broad currents” that would dominate the coming decades—increasing tensions in global interconnections; and increasing tensions in economic sustainability. To address these emerging global tensions, she proposed: -A solution that builds on the past and is fit for the future: a strengthened frame-

work for international cooperation. In short, a new multilateralism for the 21st century. She proposed but for whom?

H. Gibbens/ Paris

Income inequality Income inequality, as skewed income distribution harms the pace and sustainability of growth over the longer term. Fiscal systems can help to reduce inequality through careful design of tax and spending policies. The risk is of a world that is more integrated—economically, financially, and technologically—but more fragmented in terms of power, influence, and decisionmaking. This can lead to more indecision, impasse, and insecurity—and it requires new solutions.

T. Garne/Frankfurt

Money Quantitative easing doesn’t actually increase the amount of money in circulation because the Fed purchases bonds on the secondary market. The misconception exists because when the Fed buys bonds from banks, it credits those banks’ accounts at the Fed with reserves that didn’t exist before. In a credit-based monetary system (which is the one we have,) most money is produced by banks by lending it out to consumers. While the Fed is attempting to lower interest rates and encourage consumer lending when it buys bonds, it’s not directly increasing the amount of money in the system.

H. Nert/ Berlin

Turkish banks soar on ‘interest payment’ remarks

STANBUL – Shares in banks processed in Borsa Istanbul rose by about 25 percent last month after Turkey’s central bank announced it may pay banks interest on capital they deposit with it. The bank’s monetary policy committee discussed on 25 March the possibility of making the payments to ensure that banks have the “required reserve ratios” - an adequate volume of liquid assets necessary for the banks to meet any unusually high number of withdrawals, commonly referred to as a “rush”, according to minutes released.

Lufthansa pilots go on strike

ERLIN - Lufthansa pilots have deadlocked much of the air traffic in Germany with the start of a comprehensive three-day strike, which is expected to affect at least 425,000 passengers. At the airports, cancellations were clearly noticeable. In the terminals of many airports including Frankfurt and Munich, there was very little activity because most of the passengers had been informed in time. The pilots union, Vereinigung Cockpit, which represents around 5,400 pilots, is holding the three-day strike over a long-running pay dispute and the preservation of an in-house early retirement agreement along with a 10 percent salary increase demand. This is likely to be the largest strike in Lufthansa’s history and the airline believes it will cost tens of millions of euros just for its Lufthansa, Lufthansa Cargo and the company’s lowcost carrier Germanwings passenger operations. The striking pilots refused offers from the German airline company. The pilots union spokesperson, Markus Wahl, spoke of a “bluff package.”

“On the outside, Lufthansa is willing to talk. But the deals are always the same. For us, Lufthansa is clearly a wolf in sheep’s clothing,” he said. Wahl confirmed that the pilots are due to return to work after the end of the strike. “Should Lufthansa force us to strike again, we will do so,” he said. The airline called on the pilots union to return to the negotiating table and it said that they are considering their legal options, but they have admitted that the damage has already been done. Lufthansa said it is expecting to operate 500 short and medium distance flights and will rebook other customers onto alternative airlines or trains. In Frankfurt, 450 camp beds were set up in the transit area. Snacks and drinks were also available for those who could not travel. In addition to the affected passengers, 23 out of a planned 31 Lufthansa Cargo flights have been cancelled during the strike period. Lufthansa has been trying to cut costs amid tough competition from European budget carriers and the expansion of the state-owned Gulf airlines.

Following the remarks in the meeting, investors rushed to put their money in banking shares processed in Borsa İstanbul, driving their value up by about 25 percent. The banking index, which was 106.746 points at the end of February 2014, recorded a19.3 percent increase in March and extended its gain to 25 percent during first days of April, compared to February’s figures. Shares in Vakıf bank topped the gainers with a rise of 29 percent, followed by Halkbank with 28 percent and Yapı Kredi, Garanti Bankası and Akbank all showing 27 percent increases.

Turkey ‘earns $12 billion’ from Baku pipeline Anadolu Agency urkish Energy Minister Taner Yıldız visits Turkey’s stateowned pipeline company BOTAŞ’s regional directorate in southern province of Adana. AA Photo The Turkish Petroleum Corporation (TPAO) has earned $12 billion from the Baku-Tbilisi-Ceyhan (BTC) crude oil pipeline since 2005, when oil from Baku was first pumped, Turkish Minister of Energy Taner Yıldız has said. During his speech in the southern province of Adana, Yıldız underlined the importance of the BTC pipeline for the region and trade volume for the country. He stated the TPAO has 6.5 percent of the shares in the BTC crude oil pipeline. British Petroleum (BP) and State Oil Company of theAzerbaijan Republic (SOCAR) hold the majority of the shares in the BTC pipeline, with 30 percent and 20 percent respectively. The pipeline has transported more than 1.8 billion barrels of crude oil to date. Nearly 3 percent of the world’s oil trade is flowing along the BTC and Kirkuk-Yumurtalık crude oil pipelines through Turkey. The BTC pipeline has been transporting Azeri oil from the Caspian Sea to the Ceyhan Port of Turkey through the Georgian capital of Tblisi. The oil is then exported to European markets via the Mediterranean Sea.

Made in Turkey Economic Newspaper, April 2014

Turkey’s exports increased by 4.3 percent in March 2014

NKARA - Turkey’s exports increased by 4.3 percent in March compared to the previous year, to $13.14 billion, the Turkish Exporters’ Assembly (TIM) announced. The automobile industry con-

tributed the most to Turkey’s exports with $2.12 billion. The country’s exports were $12.1 billion in February and $12 billion in January 2014. It aims to reach $166.5 billion in exports by the end of 2014.

the 17th consecutive quarter, with growth domestic product expanding by 4.4 percent in last year’s October-December period. Responding to a question about the disputes between Baghdad and Irbil over Kurdish oil exports to Turkey, Yildiz said Turkey was capable of transferring the oil to international markets. “The oil coming from Iraq is below the targeted levels for the last six months,” Yildiz said, adding that, “Iraq should export more oil for the sake of its economy.” About 1.4 million barrels of

In 2013 Turkey’s exports dropped 0.4 percent compared to the previous year, reaching a total of $151.86 billion, while its imports increased $251.6 billion, according to Turkey’s national statistics agency.

Kurdish oil are currently being stored in the Turkish Petroleum Pipeline Corporation’s facility in the south-eastern port of Ceyhan. Turkish and Iraqi Kurdish Regional Government officials signed a deal in November 2013 to enable Kurdish oil to be exported to Ceyhan when no oil is

for articles in their user agreements that are “open to exploitation”. In a statement issued, UFC blamed the three corporations for using illegible and incomprehensible terms of service,

and demanded that 180 articles that are “open to exploitation” be revoked or amended from the agreements. Previously, the group had invited Facebook, Twitter and Google users to start a petition

Continued From Page 1 e have stomached most of them; we have taken many of them to court. The worthless opposition, the status quo, coup attempts and tutelage have lost. Immoral and indecent politics have lost. I am thanking once more my nation. I am thanking those grandmothers who have prayed non-stop for months, even children. I am thanking young people, my sisters and the gentlemen.” The result is likely to set the tone for a busy election schedule for Turkey; the country will choose a new president in August and stage a general election in July next year. Turkey’s markets and assets reacted positively on March 31 after the ruling AK Party´s local election victory. Turkey’s markets and assets looked set to rally on Monday after voters gave a vote of confidence to the ruling Justice and Development (AK) Party led by Prime Minister Recep Tayyip Erdogan in the country´s local elections. The AK Party’s vote percentage in the polls compares well with the more recent general elections in 2011, where it got 49 percent. It won 38 percent in the 2009 local polls -- meaning it has maintained a loyal base of electoral support to retain power for another term at local administration level. The markets have reacted well to the local elections, with Borsa Istanbul’s BIST-100 index opening up and gaining 1.95 percent. The benchmark BIST-100 index increased by 1,347.41 points from its starting point at 70,464.73. The Turkish Lira has also gained against the US dollar, moving to 2.16 Turkish lira to a US dollar from 2.17. Analysts think that the AK Party victory shows that the country will remain stable. The local election victory for the ruling party will help to avoid further political pressure on the economy ahead of presidential elections, they added.

being pumped by Iraq’s central administration. However, Baghdad has been opposed to the oil’s export from Ceyhan, saying it is in violation of Iraq’s constitution as it would bypass the Iraqi national oil company, the State Organization for Marketing of Oil (SOMO).

Google, Twitter, Facebook sued in France ARIS - UFC Que Choisir, a French consumer group, is suing the social networking platforms Facebook, Twitter and search engine Google for “using personal information without permission” and

PM Erdogan wins a remarkable electoral victory

Turkish government ‘confident’ on energy investments he Turkish government has full confidence about the future of energy investments in Turkey following the municipal elections, Turkey’s Energy Minister Taner Yildiz has said. Speaking at a meeting in the capital, Ankara, Yildiz said the energy sector in Turkey should have a bigger growing rate than its average economic growth, in order to achieve higher energy security. His comments came after the Turkish Statistical Institute announced on that Turkey’s economy had continued growing for

in order to force the companies to amend their terms of service. In January, Google was fined 150,000 Euros by CNIL, France’s data protection watchdog, over non-compliance with the data protection act.

Babacan: Operation on 17th Dec. aims to disturb Turkey’s stability Babacan emphasized the need for political stability in order to achieve sustainable economic growth. Continued from Page 1 his is a topic that we must be concerned much. Healthily working of the state mechanism, furthermore implementation of the real law is our sine qua non. We do not permit using law for some aims, traps.” In his speech stating the growth that has passed to positive side in Europe and America has begun to reflect positively to Turkey’s exports in 2014, the economic situation in the world would not look like the Asian crisis in the 1990s, he said the developing countries would become locomotive of growth in the upcoming decade. Highlighting that Uludag Economy Summit was approved by the title of traditional event, Deputy Prime Minister Ali Babacan said, “The summit becomes an event featuring with good results with every passing year. This year’s discussion issue is the global economy along with many countries in a brainstorm atmosphere. This year, I see that the summit’s international dimension has increased more. Turkey has become a country that is followed by the world with intensive interest in terms of many aspects. Turkey is one of G20 countries. Next year, Turkey will assume the term presidency of the G20 beginning from 1st December 2014. As administrative, we have begun to work with the head of G20. So Turkey is emerging being a country not only following global economic developments and deploying itself according to that and is passing to a position to constitute a criterion. This is very important position. Actually we were tracing the development in the world closely. After this, we will trace in the capacity of guiding. There is a different world between last year’s summit and this year’s in the positive meaning. Together with Turkey’s constructive role in the economy across the world the role of Uludag Summit is advancing.”

Pointing out the worst period of the global economic crisis left in the past, Deputy PM Babacan continued: “Last year, we could not voice this, we were not sure. Now many indictors show the crisis has passed. With regard to featuring finance-based this crisis has been very effective. We know that financebased crisis continued deep and longlasting. This crisis has continued long too. Since 2007, the financial crisis has led to troubles in many countries. In the developed countries debt stockpiling multiplied. This happened in America as well. The joblessness rates have risen in the developed economies. Especially, long-term joblessness is a big challenge. According to the indictors, in order to catch pre-crisis situation, over 30 million jobs must be constituted. After negative growth in Europe this year +1 percent growth is expected. One of the most important elements that affect our exports is the domestic market of the countries to which we sell. Even little bit recovery in Europe will lead to our exports to the positive course. Our exports show remarkable increase when observed the first two-three months this year. Japan is implementing a program. In the short term its results would be good, but in the long term we cannot know what happens. In America turning of the monetary policies into normal situation and making up a concrete timetable shows that things are normalizing. In the developing countries negative effects appear. But at the end of normalization FED has made this decision. Regarding decisions of the American Central Bank affect the developing countries negatively, it is not necessary to be upset. In conclusion, these decisions herald recovery. The developing countries cannot be able to perform the performance, which being achieved in the last decade, in the next decade. Nevertheless, we will see more growth rates in the developed

countries. Despite negative news by the international media much more, the developing countries will continue to be the locomotive of the global growth. The banking sector is powerful more in the developing countries when compared to the 1990s. In addition, now their reserves are very powerful. In Turkey, as a country having current account deficit we have taken place in the countries where figures heightened quickly. Our market activity was not only from abroad. Some political activities were experienced. In recent 10 years were the years Turkey has taken significant steps. We have established a public fiscal management system in a serous way. The budget has come to a much disciplined position. We have also been one of the rare countries that being able to apply social security reform. In a country where young population reduces this reform must be balanced very well. Turkey is a country that has achieved the health reform. A controlled cost structure and high satisfaction is a reality that is followed by the entire world. The advanced steps have been taken in the banking reform. We have come to a situation conforming to Basel II. Even our every bank has fitted with Basel III. In order to allow continuity of our banking sector they should grow through control. Since 2009 to date, our debt in proportion to the national income decreased from 45 percent to 35 percent. Our budget deficit was 5.5 percent, last year we accomplished it with 1.1 percent. In last 10 years, growth rate on average is 6 percent. In the last 4 years, employment increased 6 million. The last 4 years were the years when we accelerated the economic reforms. Within last 2 years we enacted Turk Commercial Code, Obligations Code. We have entered a new capital market law into force. We have set up Borsa Istanbul. We have also included establishing of the Finance Courts in the law.

Supreme Board of Judges and Prosecutors (HSYK) has finished its technical studies. The Finance Specialization Court will begin to work. These courts will work in banking, insurance and capital market and other leasing, consuming finance.” Babacan recorded “If we want Istanbul to make an international finance center we must make strong of its law leg. He also said they had renewed the natural disaster insurance adding that the number of insured houses exceeded 6 million units. “We, as the country, have reached the highest rate in the earthquake insurance,” Babacan noted. In terms of per capita income, “We have left behind a few EU countries; this shows the recovery in income distribution in Turkey. In the OECD reports, Turkey is the country of which income distribution is getting recovery,” he added. “We will continue to keep our EU target in front us” Minister Babacan, stating the EU had announced new parameters for its own members, said; “Before there were Maastricht criterions. There were four units. Now much more parameters have been added to those. In order to repair the economic imbalances in its members, the EU has brought a wide targetset and has determined a limit for the current account deficit as 4%. For the

current account surplus there is 6 percent surplus. Imbalances in the EU are big. They try to balance. 4-5 percent of current account deficit is manageable, sustainable for Turkey. The EU also set 4 percent. We should also lower the current account deficit to 4-5 percent in a short time. The public debt is not a problem the net public debt dropped to 15 percent. The all debt is TL currency, in foreign currency we are in plus. We should continue budget discipline. The second important issue is monetary policies. The central bank should produce a monetary policy that aims the current account deficit. The third area is macro cautious measures. Depending on abroad in energy is the most important reason of the current account deficit. We will strengthen hydro, wind, solar resources. We encourage energy efficiency. In industry we aim higher value added production. This is extremely critical area for economic and structural transformation of Turkey. Babacan said allowing the democracy to high standards, being 1st class in the rights and freedoms is very important for the EU process. Minister Babacan concluded, “Letting the state mechanism workable, the most important one is being implemented of law sincerely is our prerequisite. Turkey has taken outstanding steps in this issue in the past 11 years.”

Made in Turkey Economic Newspaper, April 2014

New paradigm in economy İletişim Magazin Gazetecilik Sanayi ve Ticaret A.Ş. Adına Sahibi ve Sorumlu Genel Yayın Müdürü (Publisher and Editor in Chief): Mehmet Söztutan (msoztutan@img.com.tr) Editor Ibrahim Kupeli (ikupeli@img.com.tr) Advertising Sales Staff: Talha Elitez, talha.elitez@imgajans.com Adem Sacin, Sedat Karadayı, Recep Arslantaş, Advertising Consultants Emir OCAL ( eocal@img.com.tr ) Correspondents: Anıl Analan (anil.analan@img.com.tr) Correspondents: Tayfun Aydın (tayfun.aydin@img.com.tr) Chief Accountant: Mustafa Aktas (mustafa.aktas@img.com.tr) Subscription: İsmail Özçelik (ismail.ozcelik@img.com.tr) HEAD OFFICE: İhlas Medya Plaza, 29 Ekim Cad. No: 23 34520 Yenibosna - ISTANBUL / TURKEY Tel: (0.212) 454 25 00 Pbx Fax: (0.212) 454 25 98 www.img.com.tr E-mail: img@img.com.tr LIAISON OFFICES: BURSA: Ömer Faruk Görün Buttim D Blok Kat: 4 No: 1267 BURSA Tel: (90.224) 211 4450 , 51 Fax: (90.224) 211 4481 PRINTED BY İhlas Gazetecilik A.Ş., Merkez Mah. 29 Ekim Cad. İhlas plaza No: 11/41 pk: 34197 Yenibosna Bahçelievler ISTANBUL / TURKEY Tel: (0.212) 454 30 00 Fax (0.212) 454 34 83

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qua non in every area of the life. he industrial revolution which was the transforming from the agriIn line with environmental deterioraculture to the industrial process, tion, the organizations both NGOs, civil spread increasingly. society organizations and governments On one hand the transformation has prostruggle to constitute awareness in comvided great opportunities, on the other munities. hand human-beings could not be able to In addition, the new condition urges to consider its side effects to this extent. enact some new legislation, regulations In the past decades, technological inand new sanctions. novations have been used in an unconGreen management also foresees educasciousness way without taking into tion that is a very crucial factor in preventing errors in every area. consideration their possible bad results, The foremost names in the business harms and destructive effects in nature world are working on major green initiaand environment. tives harnessing renewable energy; this Now we comprehend that industrialization process nearly since 2 centuries to differentiates them and enhances the date has been managed poor and wrong. power of their brands in the international The necessary precautions had not been markets. taken, so that human beings are encounGreen issues appeal to employees. Most tering today’s bad results of the poor people want to be part of something good management in economy and this includes being and natural resources. green. Management is one of the Companies that have most important compogood green credentials have higher staff morale, nents in any business or in any activity. see staff turnover and The most of the difficulties, can attract and retain top talent more easily. disasters we as the human The biggest advantage have been facing increasingly stem from poor and for organizations that irresponsible management. address green issues is Today’s conditions involve an improved brand and a holistic approach in mancompany image. Ibrahim Kupeli Green initiatives can agement as well as skillfulikupeli@img.com.tr ness in order to be able to be stimulate innovation. competitive in a business life Some companies have diswhether big or small, national or internacovered new sources of revenue. Finally, new paradigm in the economy tional. management is a green-based manageAs human beings encounter with some ment. difficulties in an increasing rate across Also savings in energy, water and all the world begin to search for the solunatural resources and abstaining from tions. wasting and polluting resources have a So the solution is to require repairing, reremarkable importance for all creatures. organizing and restructuring in the manFurthermore recycling is another imporagement methods, skillfulness, and talent in order to compensate and prevent tance in the green economy. the damages. From now on every investment, every In recent decades a lot of initiative has business involves to be green-based, also been launched for this purpose to allevievery employee ranging top to bottom ate the troubles in the environment. level must feature green skillfulness. Also taking measurements are not sufIn other words green economy means to ficient. avoid from wasting as much as possible. With regard to enormous damage, which Educated staffs also matter to be successstems from the old economic model, urgful in green economy. es to change the model. Otherwise either personnel or manager In recent years new paradigm in ecoand enterprise would not be successnomic model is the green economy, green ful and would not be competitive in the management. national and international markets. So New paradigm in economy involves remedy is to adopt green economy and to adopting the green management as sine fulfill its requirements holistically.

Humor

THOUGHT OF THE MONTH

Always listen to experts! They’ll tell what can’t be done and why. Then do it!

hen 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 faraway state to represent a long-term client accused of robbery. After days of trial, the case was won, the client acquitted and 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 What’s the difference between a psychotic and neurotic?

Well!

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

No deviation from sustainable economic growth and development Turkish economy turned out to be resilient to external shocks once more Continued from Page 1 ccording to Government officials, maintaining the cautious stance in fiscal and financial sector policies is critical to the resilience of our economy against current uncertainties. Strengthening structural reforms that will ensure the sustainability of the fiscal discipline and reduce the savings deficit will support macroeconomic stability in the medium term. Steps taken in this regard will also provide more room for maneuvering the monetary policy and improve social welfare by keeping interest rates of long-term government securities permanently at low levels. In this respect, implementation of the structural reforms required by the Medium Term Program remains to be of utmost importance.

It also be noted that the abundant liquidity environment that is supported by the United States Federal Reserve’s bond purchasing program and investors’ interest in emerging markets after the 2008 global crisis made the low interest rate policy sustainable. However, the analyst and the economy policy shapers of the government have been saying this era has come to an end with the Fed’s announcement of decision to cut its bond-buying that led to a huge emerging market sell-off. After resisting

for months, the Central Bank of Turkey also hiked all of its key interest rates at the end of January. Liza Ermolenko, an economist at London-based Capital Economics, has said Russian investors’ withdrawal from Western banks have begun. Turkey could stand to gain from tension over Crimea if it becomes a new destination for billions of dollars of Russian capital pulled out of the West ahead of possible financial sanctions against Moscow, according to analysts. There is still no certain data showing the amount of Russiancapital that has exited Europe and the United States, Standard Bank Developing Economies Chief Economist Timothy Ash told Anadolu Agency, but added that Turkey could benefit from that movement. The U.S. and European Union imposed personal sanctions on March 17 on Russian and Crimean officials involved in the de facto secession of Crimea from Ukraine. Turkey will bring up the Customs Union deal for negotiation with theEuropean Union by June, Economy Minister Nihat Zeybekçi has announced. The move comes amid Ankara’s mounting frustration with the accord, particularly after Brussels recently kicked off the free trade deal process with Wash-

ington. “By June, we’re going to re-open for negotiation the Customs Union Agreement, to which no sovereign independent state should agree,” Zeybekçi said March 23, speaking with local businessmen in the southern province of Burdur. “I was with economy and trade ministers and delegations of 28 EU member countries. I pressured these men about the Customs Union … We met three times and we’re now going to get together for a fourth time,” he said. Critics of the accord that was agreed in 1996, including Zeybekçi’s predecessor Zafer Çağlayan, say it restricts Turkey’s export competitiveness. This is because the bloc is able to enter into free-trade agreements with other nations that are binding for Ankara, without the Turks having a say. The Transatlantic Trade and Investment Partnership, for which negotiations have started between the United States and the European Union, is the latest such agreement to deal a blow to Turkey, causing the resentment of many local exporters. Free trade deals between the EU and third parties enable other countries’ goods to enter Turkish markets via Europe with zero duties, but the decision to provide the same privileges to Turkey is up to the third party.

Property www.img.com.tr

Turkey Supplement

Why should you invest in Turkey? Turkey, which has succeeded in becoming one of the rare countries that received “investable” rating from international rating agencies

urkey is day by day attaining itself a more significant place in both the global political and economic landscape. One of the prime architects of Turkey’s economic success was undoubtedly the real estate market in the country, which has - been welcoming a great deal of investment for years. Today Turkey, which is the 16th biggest economy in the world, harbors great expectations for the next decade such as becoming one of the world’s top 10 economies and making Istanbul a finance capital. These targets have the construction and real estate sectors in their core and Turkey has already taken giant strides towards them. Turkey, which has succeeded in becoming one of the rare coun-

Aziz TORUN GYODER Chairman

tries that received “investable” rating from international rating agencies in recent years, also manages to maintain stability in the real estate sector. According to the “Emerging Trends in Real Estate 2013” conducted by PwC (PricewaterhouseCoopers) and ULI (Urban Land Institute), Istanbul continues to be one of the most popular destination for future development opportunities in 2013. Therefore, primarily Istanbul and many other Turkish metropolitan cities hold a serious investment potential compared to other European metropolitan cities. What is the most appropriate way of investing in real estate in Turkey, which provides such a significant value for investment? This is the point where we, the Association for Real Estate and Real Estate Investment Companies (GYODER) as the real estate platform of Turkey, enter the scene to guide individual foreign investors and provide a significant source to answer to all of their questions when they want to purchase real estate in Turkey. Page 6

Buying property in Turkey: Guide for foreigners This guide is prepared to help foreigners who wish to buy property in Turkey.

1. Legal Basis: In accordance with the Article 35 of the Land Registry Law No. 2644, amended by Law No. 6302, which entered into force on 18 May 2012, the condition of reciprocity for foreigners who wish to buy property in Turkey is abolished. Information on countries whose citi-

zens can buy property and estate in Turkey can be provided from the Turkish Embassies/Consulates abroad and the General Directorate for Land Registry and Cadastre. Persons with foreign nationality can buy any kind of property (house, business place, land, field) within the legal restrictions.

Persons with foreign nationality who buy property without construction (land, field) have to submit the project which they will construct on the property to the relevant Ministry within2 years. 2. Format of the Contract: According to the Turkish laws and regulations in force, transfer of ownership of a property is only possible with an official deed and registry which is signed at the Land Registry Directorates. It is possible to sign a “sales commitment agreement” before a notary. However, legal ownership to the property do not pass with a “sales commitment agreement” or other kind of sales agreements to be signed before the notary. 3. Legal Restrictions for Foreigners in Buying Property: a) Persons with foreign nationality can buy maximum 30 hectares of property in Turkey in total and can acquire lim-

ited in rem right. b) Foreigners cannot acquire or rent property within military forbidden zones and security zones. c) Persons with foreign nationality can acquire property or limited in rem right in a district/town up to 10 % of the total area of the said district/town. d) Legal restrictions do not apply in setting mortgage for real persons and commercial companies having legal personality which are established in foreign countries. e) The properties are subject to winding up provisions in following cases: (i) if the properties are acquired in violation of laws; ii) if the relevant Ministries and administrations identify that the properties are used in violation of purpose of purchase; iii) if the foreigner does not apply to the relevant Ministry within time in case the property is acquired with a project commitment; iv) if the projects are not materialized within time. Page 2

Turkey’s tourism sector prospers

urkey, as a wellknown tourism destination, continues to present investment opportunities both in the established and newly developing subsectors of the industry. Turkey is currently the 6th most popular tourist destination in the world, attracting more than 30 million tourists each year, and the number continues to rise every year. The Turkish tourism industry’s energetic and continuous growth remains unhindered by the negative effects of the recent global economic crisis, while retaining immense untapped potential. The robustly growing industry is enriched by its wide variety of tourist attractions, such as breathtaking coastlines along the Aegean and Mediter-

ranean seas with long sandy beaches and pristine bays. Adding to Turkey’s natural riches, the country is the birthplace of many ancient civilizations that left their mark in history. The Anatolian Peninsula has a vast number of archeological sites inherited from various empires and diverse cultures, some dating back mil-

lennia. Further contributing to Turkey’s strong socio-economic growth, the Ministry of Tourism and non-governmental actors of the tourism industry are working towards increasing tourism receipts by utilizing the full potential of diverse opportunities in this key industry. The Turkish govern-

ment offers programs and pursues policies that offer reduced utility prices and reduced tax rates, while decisively eliminating any bureaucratic barriers that may hinder sectorial growth. The combined efforts of the government and industry organizations have already enabled the rise of investment in new areas, such as construction of large convention and expo centers which boost convention tourism, particularly in the country’s largest city, Istanbul. With its unique location that bridges Europe and Asia and with over a hundred five-star hotels and state-ofthe-art facilities, the historic metropolis is the ideal destination for large-scale international gatherings, fairs and exhibitions.

TOKİ- Housing Development Administration

ince the date of establishment of TOKİ, the priorities through the context of the solutions of housing and urbanization problem have been changed. In this framework, new functions were added to the Housing Development Administration Law numbered 2985 due to changes by law (No:4966) on 06/08/2003. These functions are: Page 6

How to buy property in Turkey?

an foreign real persons acquire real estate? Foreign real persons, who are citizens of the countries that have been announced by the Council of Ministers, are entitled to acquire ownership rights in Turkey. Although the list drafted by the Council is not publicly announced, there are nearly 181 countries, the citizens of which are now allowed to acquire properties in Turkey. The Council of Ministers has the right to amend the list from time to time. In any event, the total size of land cannot exceed 30,000 sqm for each person. In addition, foreign real persons are only entitled to acquire real estate up to 10% of the total surface area of the relevant district. In order for a foreigner to officially understand whether or not she/he can acquire a specific real property, the prospective buyer must apply to the relevant land registry office for approval. The acquisition can be performed upon the issuance of the relevant land registry’s approval. Page 5

Turkey grew by 4 percent in 2013

T Global economy turning corner of Great Recession

he global economy is turning the corner of the Great Recession, although overall growth remains too slow and weak, IMF Managing Director Christine Lagarde said. In a speech at the School of Advanced International Studies (SAIS) in Washington ahead of the 2014 IMF-World Bank Spring Meetings, Lagarde added that “a modest and fragile recovery is under way that now needs to change gears toward more rapid and sustainable growth.” Page 8

he Turkish economy grew at an annual rate of 4 percent in 2013, according to official data released on the morning of March 31. The figure is slightly higher than expected due to a surprisingly strong fourth quarter performance when the economy expanded by 4.4 percent, the Turkish Statistical Institute (TÜİK) stated. Gross domestic product (GDP) reached 122.3 billion Turkish Liras over the year, amounting to a 4 percent overall growth rate. “We recorded strong growth despite the negative conjecture. We managed to grow above our 3.6 percent forecast in the medium term program,” Finance Minister Mehmet Şimşek said in a written statement released after announcement of the data. “This performance was achieved despite the increased financial volatility sourced by the Fed’s switch to monetary tightening; global, regional and political tensions; the contraction in our biggest trade partner EU and high-proceeding oil prices,” Şimşek added. Both analysts and top economy officials in the government have been predicting a strong growth near 4 percent, but the real surprise was the firm GDP growth recorded in the fourth quarter. Page 5

Property Turkey 2014

Sertepe asserts in housing sector with ‘Sertepe Concept’

ne of the renowned companies of Bursa province, Sertepe is entering assertively to the housing sector with ‘Sertepe Concept’ project consolidating its business with the family experience in the sector. Setting out with the slogan “In Bursa, without problems” ‘Sertepe Concept’ project has its houses meet with its customers by setting up the primary needs of life nowadays. While new projects are being erected with every

passing day in the housing sector, ‘Sertepe Concept’ appears in front of people in Bursa and for foreign investors promising peaceful and confident life. Acting in automotive, textile and construction areas, Sertepe Companies Group Executive Board Chairman Alper Sertepe said, “Beforehand, we have determined all needs and comfort that will add happiness to life. While managing the works, we have preferred Ata Boulevard as the project location, one of the valuable neighborhoods of the city. We have also taken into consideration the function of the project in the aspect of investors both in the home and abroad. Our project takes 15 minutes to Mudanya district, 35 minutes to Uludag a resort district and 15 minutes to center of the city.” “Humble atmosphere of quality life” Indicating that Turkish people who need projects durable against earthquake, socialization opportunity, security and new construction technology, trusty brand, Sertepe said the buildings, which were traditional and old fashion, had left their place to the modern architecture. In this frame work, today’s architecture which will have the city to breathe, allow contemporary architecture meet with nature and conforming to with the nature, Sertepe said. “Nowadays life conditions have changed much. People prefer to be in the center of city in the social life. Constructing suitable housing projects corresponding to the changing needs are important. In this scope, our project has reached the highest point in terms of quality of life and its every point has been calculated up to its tiniest point and being entered into force by adding identity to the city. Increasing functionality entirely without leaving idle space

bringing life areas into qualified condition, we have offered the project to the admiration of people of Bursa. We also put forward that the standards are changing with the project. In other words, a new

project is happening in the center of Nilifer district. We name this ‘humble atmosphere of quality life’. We will be happy to see those who consider like us among us.”

Buying property in Turkey: Guide for foreigners

Continued from Page 1 4. Application and Procedure: Buyer should be from the country whose citizens can acquire property or limited in rem right in Turkey and meet the necessary conditions. Application: The owner of the property or his/her authorized representative should make a preliminary application to the Land Registry Directorate. (Preliminary applications are made before noon by taking sequence number) If the preliminary application is incomplete, the file will be kept waiting. Necessary Documents: a) Tittle deed of the property or information on village/district, block, building plot, detachment. b) dentification document or passport (Together with its translation). c) “Property Value Statement Document” to be provided from the relevant municipality. d) Compulsory earthquake insurance policy for the buildings (house, office, etc.) e) 1 photo of the seller, 2 photos of the buyer (photos to be taken within last 6 months, 6x4 size) f) (If one of the sides cannot speak Turkish) certified translator and 2 witness. g) (If the power of attorney is prepared

abroad) The original or certified copy of the power of attorney and its approved translation. Information on powers of attorney issued abroad: - Powers of attorney are issued by the Turkish Embassies or Consulates. - If the power of attorney which is issued by a notary of a foreign country is certified according to The Hague Convention dated 5 October 1961 and if it bears “Apostille (Convention de La Haye du Octobre 1961)” in French, there is no need for an additional certification of the said power of attorney by the relevant Turkish Consulate. - If the power of attorney is issued by a notary of a foreign country which is not party to The Hague Convention dated 5 October 1961, the signature of the said notary has to be certified by the relevant authority of the foreign country and then the signature and seal of the said foreign authority have to be certified by the Turkish Consulate in that country. Financial Aspect of the Procedure: a) Both seller and buyer have to pay the tittle deed fee, calculated according to the selling price which cannot be less than the “Property Statement Value” to be issued by the relevant municipality.

(According to the Charges Law No:492, the title deed fee percentage for 2013 is % 2.) b) Circulating capital fee which is determined locally has to be paid. (Maximum 70x2.5 TL for 2013.) c) At the stage when the Land Registry Directorate inquires with the relevant military authorities whether the property is located within a military or special zone, circulating capital fee for the map prepared by the Cadastre Directorate has to be paid. (323 TL for 2013) 5. Other points to be noticed by foreigners who wish to buy a property in Turkey: - The foreigner has to inquire with the Land Registry Directorate if there is any limitation on the property, such as mortgage, arrestment or any obstacle which prevents the sale of the property. - If the application by the foreigner for buying a property is rejected, the act can be appealed to the relevant Regional Office of the Land Registry Directorate. - It is advised that foreigners do not work with persons/companies who/which are not expert or reliable. - Having a residence permit is not a condition for the foreigner who wishes to buy a property in Turkey. Likewise,

buying a property does not grant the foreigner obtain residence permit in Turkey. - If there is a disagreement between the sides on the sale of the property, the case has to be brought before the Turkish courts by referring to judicial authorities. 6. Acquisitions by Foreign Companies: - Acquisition of property by the companies which are registered in Turkey is governed by the Article 35 of the Land Registry Law No 2644. a) Foreign commercial corporations which are established according to the relevant laws of their countries of origin can acquire property and limited in rem rights within the provisions of special laws. These special laws are: - Petroleum Law No. 6326 - Law on Encouragement of Tourism No. 2634 - Law on Industrial Zones No. 4737 b) No restriction is implemented in favor of the said commercial companies in establishing mortgage. c) Other foreign corporations (i.e. foundation, association,…) cannot buy property and acquire limited in rem right. 7. Acquisition of Property by Compa-

nies with Foreig n Capital: The companies with foreign capital, - If the foreign investors hold, individually or collectively, 50 % or more shares of the said company, - If the foreign investors do not hold any share of the said company, but have a right to assign or remove the managers of the said companies on the condition that the said company has a legal personality in Turkey, could buy property in Turkey in accordance with Article 36 of Land Registry Law No. 2644 and the “Decree on Acquisition of Property and Limited in Rem Rights by Companies and Corporations within the Context of Article 36 of Land Registry Law No. 2644”, dated 16.08.2012. The Land Registry General Directorate has published a circular No. 2012/13 (1735) on “acquisition of property and limited in rem rights by companies with foreign capitals”

Property Turkey 2014

Innovative in approach, outstanding in quality..

ParkOne presents “brand-new” villas for you

stanbul- The villas in Istanbul Park One Villas Project in Zekeriyakoy, İstanbul by Mitaş Real Estate In-

vestment Trust Co., have turned out to be one of the most remarkable projects of the sector.

The project, located in a cozy atmosphere of Zekeriyakoy, includes garden dublex, roof dublex and triplex villas. The project will be completed by June 2014. Istanbul ParkOne Villas, with its award winning architectural style, offer diverse range of facilities from swimming pools, tenis courts, Turkish baths, saunas, cafes, restaurants to recreational units for adults and children. Due to its proximity and easy connection to mass transportation centers of İstanbul, its easy access to Hacı Osman Metro Station, ParkOne Villas have become one of the most preferred real estate investments of the region. Besides, the Third Bosphorus Bridge’s connection roads will be passing close by Zekeriyakoy. Around 74 percent of the Project was sold; and remaining are waiting their customers who look for rich landscaped living cupled with silent life.

Turkey, Russia sign tourism action plan

OSCOW - Anadolu Agency Turkey has signed a new tourism agreement with Russia which will see the two countries run joint projects over the next two years. Turkey’s Culture and Tourism Ministry signed a joint action plan with the Russian Federal Agency for Tourism on March 16 to encourage cooperation between 2014 and 2016. Turkish Culture and Tourism Ministry Undersecretary Özgür Özaslan and Russian Federal Agency for Tourism (ROSTURIZM) Chairman Aleksandr Rodkov announced the deal on the sidelines of the “Intourmarket 2014 Moscow: International Trade Fair for Travel and Tourism.” The joint action plan aims to encourage and boost tourist traffic between Turkey and Russia, set up a joint working group, increase travel safety and comfort and further develop cooperation in international organizations. As part of the new plan, a forum will be hosted in

Turkey later this year to gather investors from both countries. According to ROSTURIZM statistics

for 2013, Turkey is the top holiday destination forRussian people. Rodkov said the number of Russian

tourists traveling to Turkey exceeded 4 million in 2013, “a 26 percent increase in one year.”“Likewise, 2013 saw a 28

percent rise when it comes to the number of Turkish tourists, which amounted to over 385,000,” he said.

Turkish aviation exceeds 150 million passengers in 2013

NKARA - Anadolu Agency Turkey’s civil aviation had a record-breaking year as the passenger number jumped to over 150 million in 2013, the country’s transportation minister has announced.

The number of passengers has been posting remarkable rises steadily since the liberalization of the sector in 2003 but the numbers climbed to a record high in 2013 with a 14.6 percent rise from the previous year, Turkish Transportation Minister Lütfi Elvan said. Most of the growth was driven by the domestic passenger traffic across the country that has jumped 17.6 percent

to 76.1 million, Elvan said. “While the number of passengers flying on domestic lines was 8 million in 2002, today the number of domestic passengers exceeds

Tu r key’s population, which is around 76 million,” he stated. “This situation shows people from every section of the country can use airlines.” Elvan also noted the number of international flight passengers approached 73.4 million last year, surging by 11.8 percent from 2012. Istanbul Yeşilköy Airport, which is located on the European side of the city, also kept its top place as the busiest

airport with 17.2 million domestic and 34 million international flight passengers, marking 12 and 14 percent increases, respectively. On the internal flight basis, Istanbul’s second airport located on the Asian side, Sabiha Gökçen ranked second with a 23 percent rise to 11.9 million, while Ankara Esenboğa Airport followed them with

9 million passengers, despite a 22 percent jump on an annual basis.

Property Turkey 2014

Demir Construction participates in the Property Show with 3 different projects. Installing confidence to the housing sector for the last 30 years with prestigious property projects in Turkey, Demir Construction invites foreign investors to safely become landlords in Turkey in luxurious and well-equipped projects situated in the most value-adding region of Istanbul. Demir Romance Project Making life easier with smart home technology, Demir Romance accommodates 776 houses, 60 commercial units and 28 villas submit a total of 7 blocks. The project offers a luxurious and comfortable life with wide spaced areas, swimming pools, a theater, walking and bicycle roads, kids’ rooms for large families, waiting room for students to wait for their shuttles, 24/7 health care service, nursery, tailor, women’s and men’s beauty centers and dry cleaning among other amenities. Making sports convenient, Romance Club boasts outdoor and indoor swimming pools, tennis courts, basketball courts, squash area, dance training center, cinevision, SPA, nutritionist service and fitness center. Ayışığı Valley Homes Project Ayışığı Valley Homes are ready to move-in homes! The project offers 489 houses in different sizes and types from 1+1 to 4+1 apartments. The life has already started in the valley homes where title deeds can be issued rightaway. A life with diverse and wellplanned sports and social spaces, entertainment units, shopping and commercial units await the residents.

“mild” breeze has been blowing in the comfortable property sector with the awakening of the “Arab Spring”, says Hamit Demir and adds that foreign investors were finally allowed to acquire properties in Turkey with the enforcement of the reciprocity law. Demir says, “Numbers of foreign investors who purchase flats for investment or housing purposes from many projects in Turkey have been increasing. This proves how reliable our country is for investment. On the other case Demir Romance, whose construction and sale is ongoing, and Demir Lavida seeking pre-requests, have been attracting huge interest from foreign investors. The location, prestige, price and transportation convenience distinguishes the project.” Demir Construction represents Turkey in the10th Dubai International Property Show (IPS) as the company has donein the previous years, and contributes to the fair with prestigious projects. Demir La Vida Project Sporting a view of Istanbul’s Buyukcekmece Lake and Marmara Sea, boasting fresh air and pleasant views, the project is ideally located. Spanning an area of 42,000 m2, Demir La Vida has 449 flats and 39 commercial areas. La Vida affords a magical atmosphere with the sea and lake views, and appeals to investors with pre-launch advantageous prices of the houses with areas varying between 61 and 500 m2, swimming pools, promenades and wide social areas.

Property Turkey 2014

Turkey grew by 4 percent in 2013 Continued from Page 1 n his remarks, Şimşek stressed that the most important source of that growth was domestic demand. “Domestic demand contributed 6.4 points to growth throughout 2013 and 7.4 points in the last quarter of the year,” he said, noting that the biggest contribution came from private consumption. The government forecast 2013 growth to be 3.6 percent and 2014 growth to be 4 percent in its medium-term program, but both the government and analysts are increasingly worried about this year’s growth. In a separate statement released to evaluate growth figures, Deputy Prime Minister Ali Babacan said this year’s domestic demand growth would be slightly slower than predictions, adding that he was more optimistic that foreign demand would be stronger than it was at the beginning of the year. The factors that pose downward risks to domestic demand, as well as the changing foreign conjecture, have been major sources of concern in conjunction with turbulent politics. The macro-prudential measures taken

by the country’s banking watchdog will lead to a slowdown in consumption, while the tight monetary policy of the Central Bank will take its toll on both consumption and investment, eventually leading to a decline in overall growth, ING Bank Economist Muammer Kömürcüoğlu said in a statement. With the aim of raising the domestic savings rate and reducing the nation’s dependence on foreign

Booming economy; more than tripling its GDP, reaching USD 772 billion in 2011, up from USD 231 billion in 2002 (TurkStat) Stable economic growth with an average annual real GDP growth rate of 5.2 percent over the last 9 years (TurkStat) Promising economy with a bright future as it is expected to become the fastest growing economy among the OECD members during 2011-2017 with an annual average real GDP growth rate of 6.7 percent (OECD Economic Outlook No. 86) 18th largest economy in the world and 7th largest economy compared with the EU in 2011 (GDP at current prices, IMF WEO) Institutionalized economy fueled by USD 110 billion of FDI in the last 9 years and ranked as the 13th most attractive FDI destination in 2012 (A.T. Kearney FDI Confidence Index) A dynamic and mature private sector with USD 135 billion worth of exports and an increase of 275 percent between 2002 and 2011 (TurkStat)

capital to finance consumption, the Banking Regulation and Supervision Agency imposed hikes on loan downpayments and limited installment payments with credit cards in February.

tors, engineers, architects, agencies, technicians, procurement officials from municipal authorities, commercial press, foreign delegates and academics from all around the world.

As the largest event for the construction industry in the region, all the key players will be present – the ideal audience for you to demonstrate your company’s latest achievements.

2. POPULATION A population of 75 million (2011, TurkStat) Largest youth population compared with the EU (Eurostat) Half the population under the age 29.7 (TurkStat) Young, dynamic, well-educated and multi-cultural population 3. QUALIFIED AND COMPETITIVE LABOR FORCE Over 26 million young, well-educated and motivated professionals (TurkStat) Increasing labor productivity The longest working hours, and the lowest sick day leaves per employee in Europe with 52.9 hours worked per week (2011, Eurostat) and annual average of 4.6 sick days per employee (2008, Mercer) Approximately 500,000 students graduate annually from over 170 universities (2011, Student Selection and Placement Center-OSYM) More than 700,000 high school graduates with around half from vocational and technical high schools (2011, Ministry of National Education) 4. LIBERAL AND REFORMIST INVESTMENT CLIMATE The second biggest reformer among OECD countries in terms of its restrictions on FDI since 1997 (OECD FDI Regulatory Restrictiveness Index 1997-2010) Business-friendly environment with average of 6 days to set up a company, while the average in OECD members is more than 12 days Highly competitive investment conditions Strong industrial and service culture Equal treatment for all investors Around 30,000 companies with international capital International arbitration Guarantee of transfers 5. INFRASTRUCTURE

How to buy property in Turkey? Continued From Page 1 s there a different procedure applicable for property acquisitions performed by foreigners? Aside from the procedure mentioned above, there are no differences between foreign real persons or Turkish citizens regarding an acquisition of property. Is there a different tax treatment for property transactions in Turkey between Turkish taxpayers and foreigners? In principle there is no difference between Turkish residents and non-residents for property acquisitions for taxation purposes. Foreigners are subject to the same rules with the Turkish citizens/residents. Types of purchase agreements • Purchase/Sale Agreement (Direct Acquisition) According to Turkish law, the sale of a property can only be completed before the relevant land registry with the attendance of both the seller and purchaser. In order to transfer the ownership, the parties must execute a standard transfer deed prepared by the relevant land registry. Acquisition of the property can be accomplished through purchase directly from the existing landlords. Real estate agents, if involved, charge a commission for their involvement in the purchase as mentioned under our response to previous question. • Promise to Sell Agreement Prior to the sale of property, the seller and purchaser may enter into a preliminary “Promise to Sell Agreement.” This is the only preliminary agreement that can be validly executed between the parties and, in order to be binding, it should be prepared by and signed before a notary public. In order to qualify for protection against

TURKEY OFFERS INVESTMENT OPPORTUNITIES 1. SUCCESSFUL ECONOMY

Construction industry once again at ANKOMAK nkomak, 20th International Construction Machinery, Building Elements & Construction Technologies Exhibition organized by EUF International Trade Fairs Inc., will be held on 21-25 May 2014 at TÜYAP/İstanbul. Turkish constuction industry ranks 2nd after China in contractorship abroad. Due to its excellent geoghraphical location between Europe and Asia and thanks to close cultural, historical, political and economic ties with Middle East, CIS countries and North Africa, Turkish companies has a great portion in the region. ANKOMAK takes place every two years on 70.000 sqm with over 250 participating companies and over 25.000 visitors. According to officials of the Fair: Taking a stand at Ankomak 2014 will enable you to show that your company is a major player in the market. Your stand will encourage visitors to make further enquiries and enable you to demonstrate your products in front of a large number of qualified buyers including: planning officials, experts, small and medium sized contrac-

third party claims, the Promise to Sell Agreement should be registered with the land registry. In the event of non-registration of the Promise to Sell Agreement, any subsequent purchase of the property by a third party acting in good faith will be valid. What are the payment options available? The purchase price of the property may be made cash, via wire transfer or blocked checked. Should the acquisition of the property be done in person? Either the purchasing party (i.e. foreign real person) or his/ her legal representatives can conduct transactions regarding the acquisition of property. If acquisition transactions are carried out by way of a power of attorney, such power of attorney must be drafted and regulated by a notary public, and must also be signed before the notary public, who, under Turkish Law, has the power to control and certify that the authorization to act on behalf of such person is being duly granted. The power of attorney that is to be used for the acquisition of property must include the full name and address of the legal representative(s), as well as all of the authorities granted to the legal representatives for the acquisition of the property. If the power of attorney is drafted and executed abroad, it should be notarized and apostilled. In order to be binding, the translation of such power of attorney must be notarized in Turkey. Are there any rules regulating the right and obligations of the parties living in the sameproperty? (Condominium Law-Management Plan) A management plan is an agreement between condominium owners that regulates

the management of the main structure and common areas. All condominium owners and their successors are bound by the provisions of the management plan. The purpose of the management plan is to determine rights and obligations of the parties to each other, who live in the same property, and to provide rules on the management of the property concerning the purpose and method of use and the other issues related to management, such as operations, auditing, maintenance, and repair work, and to ensure the establishment and continuity of a peaceful, healthy, safe and proper working system of the property in accordance with the rules of Condominium Ownership Law. The provisions of the management plan are valid to the extent they are in compliance with the provisions of the Condominium Ownership Law. Accordingly, condominium owners cannot add provisions into the management plan that alter or substitute the mandatory provisions of the Condominium Ownership Law. The board of condominium owners (the “Board”) is responsible for the management of the common areas. The condominium owners are the natural members of the Board, and are entitled to participate in the management of the entire building in accordance with the provisions of the Condominium Ownership Law. The Board may outsource management power to professional management companies. In addition, each person has also rights and obligations to the other persons living in the same property arising from Condominium Ownership Law and Civil Law. Source: “How to buy property in Turkey?”, GYODER, September 2013.

New and highly developed technological infrastructure in transportation, telecommunications and energy Well-developed and low-cost sea transport facilities Railway transport advantage to Central and Eastern Europe Well-established transportation routes and direct delivery mechanism to most of the EU countries 6. CENTRALLY LOCATED A natural bridge between both East-West and North-South axes, thus paving the way for an efficient and cost effective outlet to major markets Easy access to 1.5 billion customers in Europe, Eurasia, the Middle East and North Africa Access to multiple markets worth USD 25 trillion of GDP 7. ENERGY CORRIDOR AND TERMINAL OF EUROPE An important energy terminal and corridor in Europe connecting the East and West More than 70 percent of energy resources are located in the south and the east of Turkey, while the largest energy consumer, Europe, is located west of Turkey. LOW TAXES & INCENTIVES Corporate Income Tax reduced from 33 percent to 20 percent Individual Income Tax varies from 15 percent to 35 percent Tax benefits and incentives in Technology Development Zones, Industrial Zones and Free Zones could include total or partial exemption from Corporate Income Tax, a grant on employer’s social security share, as well as land allocation. R&D and Innovation Support Law Incentives for strategic investment to decrease imports, for large-scale investments, as well as for regional investments 9. CUSTOMS UNION WITH THE EU SINCE 1996 Customs Union with the EU since 1996, and Free Trade Agreements (FTA) with 22 countries (19 in force, 3 pending ratification) More FTAs underway Accession negotiations with the EU 10. LARGE DOMESTIC MARKET 50 million internet users in 2011, up from 4 million in 2002 65 million mobile phone subscribers in 2011, up from 23 million in 2002 51 million credit card users in 2011, up from 16 million in 2002 118 million airline passengers in 2011, up from 33 million in 2002 31.5 million international tourist arrivals in 2011, up from 13 million in 2002

Property Turkey 2014

A new approach to confront the housing challenge...

TOKİ- Housing Development Administration In order to solve the housing problem and to increase housing production at national level, the Housing Development Administration Fund Continued From Page 1 stablishing companies related with housing sector or participating in those that have already been established (by the law on 05/05/2004, numbered 5162). • Granting individual and mass housing credits; granting credits for projects intended for improvement of rural architecture, transformation of squatter areas, preservation and restoration of historical and regional architecture; and making interest subsidies for all such credits, where deemed necessary. • Developing projects both in Turkey and abroad directly or through the agency its participations; carrying out or appointing others to carry out applications for housing, infrastructure and social facilities. • Implementing or appointing others to implement profit-oriented projects to ensure sources to the benefit of the Administration. • Building, promoting and supporting construction of housing units as well as social facilities and infrastructures in locations where disasters take place, if

considered necessary. In parallel, under the Law No:5162, dated 05/05/2004 which amends the Housing Development Law; • TOKİ is authorized to realize all kinds and scales of development plans, to have made all these type of plans and to alter these plans in areas determined as the mass housing settlement regions. • TOKİ is authorized to expropriate all the annexes and buildings on or inside the lands and areas owned by real and legal entities, within the framework of its duties under Law. • TOKİ is authorized to develop renovation of squatter areas for eliminating or regaining via rehabilitation to make construction implementations and to perform financial regulations. Also, in this framework, TOKİ is authorized to determine the construction prices under the realized construction costs, considering the income status of squatter areas regions’ residents, current construction costs, natural disasters and current economic status of the provinces in which implementation is made. After November 2002, TOKİ is affiliated with the Ministry of Public Works and Settlement. Then, in accordance with its founding Law, TOKİ is affiliated with the Prime Ministry under the Presidency’s approval dated 15/01/2004. Thus, with the latest legal regulations, crediting and supporting the projects towards preserving the historical construct and rural architecture are added to TOKİ’s previously existing duty of renovation of squatter areas, which is one of the origins of modern urbanization. Again, due to the targets defined with the Government’s Emergency Action Plan within the context of adequate housing production and planned urbanization, there had been some re-organizational changes in the duties of the public institutions. In this framework, all the duties and the authority of the Urban Land Office have been transferred to TOKİ, with the Law no: 5273, dated 14/12/2004. Based on this legal arrangement, 64.5 million m2 of

land has been passed on TOKİ’s immovable portfolio. This Law will integrate the process of land development and housing production and will facilitate to provide efficiency in the aforementioned housing and urbanization implementations. Hence, as reflected in its mandate, Housing Development Administration (TOKİ) is the single responsible public body within the housing sector in Turkey. It has provided housing loans to approximately 1,2 million housing units by the end of 2004. Among this number, housing cooperatives have the biggest share. 84% of the housing units that were given credit have been produced by housing cooperatives and housing contractors. In addition to the loans given to cooperatives, municipalities are also supported by TOKİ loans - facilitating new housing projects on lands they own for the provision of low-cost owner-occupied housing. MISSION TOKİ offers hope to millions of Turkish citizens who would not otherwise have an opportunity to own their home, or live in a neighborhood with modern schools, business areas, hospitals, mosques and libraries. STRATEGY Working hard to assist those who migth otherwise be denied, TOKİ’s long range strategic plan is to produce low and medium income social housing, facilities and infrastructure. TOKİ will also revitalize blighted neighborhoods, restore and reconstruct buildings of historic importance and produce the infrastructure for rural areas and provide housing, infrastructure and social facilities for the victims of disasters. VISION Facing a critical shortage of 2.5 million units over the next five years, TOKİ is seeking to build between

five and ten percent of Turkey’s housing needs. To fulfill this mission, the Administration has produced financial subsidiaries and affiliates so that housing credit and interest subvention are avaible. TOKİ’s vision for the future strives to: - Produce a model framework for quality low-cost housing, - Prevent real estate speculation that migth use lowquality materials in the construction of low-margin housing, - Produce housing for regions in Turkey where the private sector is not active, - Offer low and middle income groups the opportunity to finance their own homes, - Offer rural housing opportunities that decrease the pressure on the migration to urban areas, - Collaborate with local municipalities to produce urban renewal projects and - Produce financial opportunities to finance social housing projects such as innovative income-sharing projects with the private sector. The extra reneuve generated from these for-profit projects is essential for the financing of TOKİ’s future social housing projects. Filling the gap between short-term capital outlay for construciton and longterm receivables from mortgages, this program generates crucial capital for low and middle-income housing projects. Unitilizing a growing portfolio of inflation-adjusted long-term receivables, TOKİ is producing a solid foundation of revenue that will extend well into the future.

Why should you invest in Turkey? Continued from Page 1 e have worked and strived to prepare contents to provide you all clues that will facilitate the process and to guide you through your real estate investment process from A to Z. This booklet, which will provide you even the most intricate details of the process of acquiring real estate in Turkey, aims to serve as a reference guide to cover all fundamental issues that need to be taken into consideration from choosing the most appropriate real estate investment, to evaluating and selling them at their value. We hope that it will help you to find the right real estate investment in our country and you will be satisfied with its return.

Construction industry of Turkey prospers more than ever

alk Real Estate Investment Trust (GYO) General Manager Kazım Şimşek says real estate and construction sector keeps its place in the biggest sectors in Turkish Economy with existing growth potential. Kazım Şimşek pointed out that real estate and construction sector kept its place in 2013 like in the past years as leading sector of Turkish economy. In this sense, Şimşek stated, when look to the current investment decisions and their sizes; sector will continue to support economy and investments recovery value is high at right locations’ for investors. “Even though it is not possible to keep the interest always alive, it is important to develop projects those have possible to be demanded with technical features and locations. Sector will grow by reasons like population increase, current demographic structure, migrations and foreigners’ demands. Growth will maintain the investments in the field of infrastructure, office and housing. The Turkish construction and contracting industry is one of the leading industries in HYPERLINK “http:// en.wikipedia.org/wiki/Turkey” \o “Turkey” Turkey. A total of 33 Turkish construction/contracting companies were selected for the Top International Contractors List prepared by the HYPERLINK “http://en.wikipedia.org/ wiki/Engineering_News-Record” \o “Engineering News-Record” Engineering News-Record in 2009; which made

the Turkish construction/contracting industry the world’s 2nd largest in that year, ranking behind China. Actually, Turkey has one of the largest construction industries in the world. The GDP of construction sector is over 6% and more than 1.5 million people are currently employed by this sector. When the direct and indirect impacts on other sectors are taken into account, the share of the construction sector in the Turkish economy reaches 30% and the employment rate reaches %10. The growth trend in construction industry has reached 11.2% by the end of 2011. This sector is one of the main driving force in the economic uplift of the country. One of the most important projects for Turkey is the construction of the high speed railway line which will connect the capital city with the largest population center of Istanbul and serve for more than 17 million people. The Turkish Contractors Association (TCA) has currently 139 members from Turkeys main contracting companies: 90% of the members of TCA is composed of engineers and architects. These highly qualified professionals are responsible for the realization of 70% of domestic construction works and 80% of over 4200 projects undertaken in 69 countries. 31 Turkish contracting companies were ranked among “The World’s Top 225 International Contractors” announced by the leading international industry

magazine “ENR- Engineering News Record” in 2011. Up until the end of 2011, Turkish contractors have undertaken almost 6500 projects in 94 countries, with a total value of some 206 billion USD. The first country Turkish contractors exported their services to was Libya. In 2011, Turkish contractors have un-

dertaken new projects totaling 19.3 billion USD: with a share of 17.7%, Russian Federation has been the leading market for Turkish contractors, followed by Turkmenistan (17.0%), Iraq (9.8%) and Kazakhstan (8.9%). Turkey is also among the world’s top 12 producers of building materials such as cement, glass, steel and ceramic tiles.

GYODER MISSION The mission of GYODER is to provide leadership in the Turkish Real Estate Industry by means of assembling all segments of the industry under the same roof. VISION The vision of GYODER is to be one of the world’s leading sectoral institutions by employing the knowledge and experience developed since the day it’s founded. OBJECTIVES • Generating solutions for the development and stepping up the institutionalisation of the real estate industry in Turkey, • Being the window of the Turkish real estate industry to the world, representing the country in international platforms, and ensuring the coordination needed to gear up in global markets, • Developing standards regarding the subjects of sub-segments of the industry, • Playing an active role in developing regulations regarding the industry, • Contributing to urbanisation in generating elements of modern and civilised cities, • Developing cooperative environments with local and international private and public institutions, trade and industry chambers, organised markets, trade associations, foundations, associations and unions, • Improving the information exchange and ensuring coordination within the industry, • Generating the data system and the advanced data repository that the industry needs, updating it, and sharing it with the indusrty.

Property Turkey 2014

Dijitalemlak serves in Bursa and its region for 11 years

ijitalemlak serves in Bursa and its region for 11 years in the issues of buying – selling and development for many domestic and foreign investors. “We are at your service with our professional team in the issue of supplying Plot, Land, House and Business Offices. • The services and solutions we offer aim to allow our customers to reach their targets very quickly and easy, to increase their efficiency, growth and make up more value-added. We also listen to customers, change and renew according to their needs and expectations.

• As position the province of Bursa is located just at the center of three big cities of Turkey in the Marmara Region. It is fourth big city following Istanbul, Ankara and Izmir. • Bursa has a unique richness in the aspect of nature. It takes about 20 minutes to Uludag and Marmara Sea (the district of Mudanya), 1,5 hours to Istanbul. • With regard to its stance, Bursa has been in the first choice of foreigners due to growing quickly in the sectors of tourism, industry, housing estate in recent years. • Bursa contributes greatly to swiftly

growing Turkey’s economy with the number of 25 Industrial Zones primarily including automotive, textile and food. • Having nearly 3 million of population, Bursa is expected to have 6-7 million of population in the upcoming 1015 years. Paralleling this growth the city has urged foreign investors turned their eyes to Bursa. We are also indifferent to the interest in Bursa, developing our system and portfolio according to the demands from the investors, we respond to their needs in the quickest and truest way. • Dijitalemlak Services: Commercial

Property, Commercial Property & Offices, Industry & Logistic, House, Hotels & Hotel Lands, Industry and Warehousing Facility, Commercial Land, Industry and Warehousing Lands, Sales and Rental Offices, Properties for Sales and Rental, Lands for Sales, Industrial and Warehousing Facility for Sales, Factory for Rental and Sales, Logistic Facility for Rental and sales… Lands, Plots and Housing Estate Lands in terms of investment, zoned lands for villas; Tourism zoned lands, representing the related side in negotiations, Marketing/Renting, Looking for Developed Estate.

Property Turkey 2014

Keyshead International addresses every customer

elling real-estate to foreigners primarily British, Irish for 12 years, evaluating this process, Keyshead International is going to participate in the fairs abroad by visiting its customers personally. Together with rising foreign currency in Turkey, the foreigners urge to convert their savings to property. Keyshead International also evaluating this process by going to the fairs abroad to visit the investors personally. In December 2013, achieving good sales at the fair held in Kuwait where Turkish construction firms showed off, the firm has turned its route to the fair that is being held in Dubai in early April. Stating that the sales to foreigners contributed greatly to the construction sector, as well as the Turkish economy,

Keyshead International Real Estate Executive Board Chairman Toygar Ozguler said when the domestic market setback the foreign market was continuing to purchase. Highlighting foreigners did not obsess to the situations such as elections, Ozguler said, “Foreigners continues purchasing as long as the conditions being suitable

for them. Turkish market is a favorite market and they would like to be here. We also do our best; we act the sales services as true and regularly.” Reminding that the fluctuation in the foreign currency had affected positive the sales in terms of foreigners, Ozguler continued, “Those who sell TL-Based gain 30 percent advantage compared to

the foreign currency. The foreigners who follow up the developments in Turkey pay less foreign currency. They are pleased being valuable their moneys. Also the constructors who sell via foreign currencies have made their hands powerful. They also invest their gains in construction and the sector.” After being established in the district of Didim-Altınkum, increased the business quickly by opening offices in Newcastle, London-England and Dublin-Ireland, Keyshead International sold to citizens of these countries and Arabic people. After the European market constricted they had turned their route to the Gulf countries, Ozguler said, “We have been selling real-estate to the Arabic people since last year to date. We have achieved selling the number of some 1500 houses

and summer homes. In addition we have accomplished 12 boutique projects and sold in the Aegean region.” Recalling that when foreigners looked for different features during purchasing, Ozguler said for example while British people look for sun, the Arabic people wish cool atmosphere, they like the district of Taksim much in Istanbul. Highlighting participation in the fairs had importance for themselves, Ozguler marked they follow up the fairs closely. He added that they had found their expectations at the fairs. “We will debut 7-8 projects in Bursa, Trabzon, Kusadasi and Bodrum in addition to 2 -3 projects in Istanbul. We will offer different qualified projects to meet the needs of visitors at the fair,” Ozguler recorded.

Vadistanbul brings future of Istanbul nowadays

aving entered into force with the foremost names of the construction sector by setting up partnership with Artaş Group, Aydınlı Group and Kelesoglu Construction, Vadistanbul has launched its “Bulvar” stage. With the launching held at Ciragan Palace, Vadistanbul Bulvar has been offered for sales with a warm interest of the investors both from the home

and abroad. Taking place in the biggest property projects of Turkey, the second stage of Vadistanbul, which comprised of offices, restaurants, hotel, shopping street and shopping center, was introduced with a ceremony. Speaking on behalf of Artas, Aydinli, Kelesoglu Joint Venture, Suleyman Cetinsaya, Chairman of the Board of Artas, said; “Vadistanbul is a project that symbolizes the Turkish construction sector’s achievement across the world in the real meaning. In “Bulvar” stage of our

project that we launched in December 2012, we will also make a lot of breakthrough in Turkey with Bulvar project. Modern office block, shopping street and center and hotel have been developed as an integrated way. Vadistanbul Bulvar with its equipment has a structure beyond a mixed project concept. We let our Vadistanbul project enter into force with an investment worth TL2 bil-

lion. The investment cost of Bulvar stage of our project which will allow Istanbul in the district of Ayazaga to win a new life center costing TL1 billion. The project is a project would have the number of 35 thousand people in daytime. We have been seeing an intensive interest since the launching day to date. The important part of this is the foreign investors. We get demands from the firms that act in the international area for Vadistanbul Bulvar. The investment potential is a crucial factor. From now on

our consumers have gained 25 percent prime in our first stage of which construction activity is continuing. I can say that this will raise more following deliveries.” The project attracts the world brands to Istanbul Bringing together the giants of the construction sector the Bulvar stage of Vadistanbul carries the future of Istanbul to these days with around the clock living con-

cept. Bringing the world brands to Istanbul along with its shopping center, offices and hotel, Vadistanbul Bulvar is positioned as the biggest office complex of Turkey. The project also emerges to front plan as a single mixed project in the horizontal level with its whole life functions. While the house blocks, offices, shopping areas and hotel integrated each other, they also constitute a distinctive value. Following delivery with a circulation in the number of

35 thousand people, Vadistanbul attracts attentions thanks to these features. Having offered to sales with regard to the intensive interest of the investors from both the home and abroad, lots of brands are planning to move their center to Turkey. Having located on a land belonging to Evyap Holding, the project will change the entire face of the region and will let the city to win a new

living center. In the scope of the project Turkey’s first metro will pass through Vadistanbul and linked to the metro network

of the city with the investment of Artas Group, Aydinli Group and Kelesoglu Construction. Having projected at a place which is one within the other with nature, Vadistanbul gets a unique value with the Sadabad brook that bearing the clean waters of the Istanbul strait and flowing along with the project. Vadistanbul was designed by Iki Design, Turkey’s award winning architectural office and SOM Architecture. One of the most important projects of Istanbul in the world stage, Vadistanbul is entering into force with a giant investment cost TL2 billion apart from land cost. Vadistanbul constitutes three different legs. Vadistanbul Bulvar will become a life center to offer transportation opportunity to every direction linking to TEM highway, Metro and third bridge, closing to Ataturk Airport and the third airport. The offices of Bulvar project has been offered for sales with the prices per sq meter beginning with $3400. The sales and marketing of Vadistanbul Bulvar is managed by Jones Lang LaSalle (JLL) which gets lots of demand of the investors abroad. As for the houses of the project, the first leg will be delivered in July, being offered to sales with prices beginning TL507,000. The flats were designed as 1+1, 2+1, 3+1, 4+1 and 5+1 duplex that respond to every kind of needs.

Turkey’s tourism sector prospers Continued From Page 1 limination of almost all bureaucratic procedures for admittance of foreign patients to receive treatment in Turkish hospitals contributed to the steady growth of the health tourism sector. Furthermore the redesigning of environmental protection policies has fostered development in newly discovered eco-tourism opportunities. Turkey is the 6th most popular tourist destination in the world with an ever-increasing number of visitors. From 2007 to 2012, the number of international tourist arrivals increased 37 percent, reaching more than 31.5 million foreign visitors. The Turkish tourism industry has grown above the global average in recent years and the direct contribution of the industry to the GDP reached USD 30 billion in 2012. The tourism sector targets 60

million tourist arrivals and revenues of USD 80 billion by 2023. Istanbul Yeşilköy Airport had more than 45 million visitors

has more than 50 different airways flying from/to more than 75 destinations. Antalya Airport is ranked the 21st busiest airport in the world by

held in 2012. (International Congress and Convention Association - ICCA) In terms of geothermal tourism potential, Turkey is

in 2012, of which 29 million were passengers on international flights. 25 million passengers flew to Antalya Airport in 2012; 20 million of these passengers were passengers on international flights. Antalya Airport

number of international passengers. In 2012, the number of airline passengers in Turkey exceeded 130 million. Istanbul is the 8th most popular convention destination with 128 congresses and conventions

among the top seven countries in the world and ranks 2nd in Europe with its 1,300 thermal springs. Bed availability in thermal vacation resorts has reached 35,000. Turkey has 7,200 km of coastline and offers beautiful

beaches; has 355 blue flagbeaches and ranks 4thamong 38 countries. There are also 19 blue flag-marinas in Turkey. Turkey is an emerging destination for golf tourism, with 15 operation licensed golf tourism facilities. Most golf courses in Turkey use Bermuda grass, which is perfect for a Mediterranean climate and can be used for more than a decade..The World Heritage List is a list of global sites of cultural and natural heritage considered to be of outstanding value to humanity. UNESCO, which aims to ensure international cooperation in protecting the values that form the common heritage of humanity, takes into consideration unique values with respect to cultural and natural criteria. Turkey has 11 properties inscribed in the UNESCO World Heritage List, and 41 nominated properties are in the tentative list.

Global economy turning corner of Great Recession Continued From Page 1 agarde pointed to a few broad trends in the global economy, noting that economic activity in the advanced economies, such as United States, euro area, and Japan, is picking up, but at varying speeds. Growth rates in emerging market countries, while slowing, are among the highest in the world, she said, especially in emerging Asia—a continuing “bright spot” in the global economy. Likewise, growth in subSaharan Africa continues at a strong pace. Conditions are more challenging in the Arab countries in transition, Lagarde reported, where growth remains held back by a difficult social and political situation. Short-term roadblocks Lagarde cautioned that there are short-term roadblocks on the path to stronger and more durable growth. Old obstacles include finishing the financial sector reform agenda; continuing high debt levels in many countries; and stubbornly high unemployment. New roadblocks include • The emerging risk of “low-flation”—a potentially prolonged period of low inflation that can suppress demand and output—and suppress growth and jobs. • Risk of heightened market volatility associated with the tapering of quantitative easing in the advanced economies, and with a generally less benign external financial climate. Geopolitical tensions could cloud the global economic outlook. The situation in Ukraine is one which, if not appropriately managed, could have broader spillover implications. Lagarde said the costs of continued sluggish growth are high: modest income gains and gradual reductions in unemployment. “The risk is that without sufficient policy ambition, the world could fall into a medium-term low growth trap.” Cruising speed for growth The objective is to reach cruising speed for mediumterm growth, Lagarde declared. With space for supportive macroeconomic policy narrowing in many countries, the role of structural reforms as a policy lever will increase. Areas of emphasis include: • Higher, well-prioritized investment to increase potential output and to produce jobs. • Inclusive labor market reforms that can go a long way in boosting potential growth. • Reforms to product and services sectors that can break down vested interests, boost competition, and unleash huge growth and employment potential. Strengthening international cooperation “At a time when the world is still recovering from the Great Recession—and at a time when geopolitical tensions are increasing—how can we strengthen the international cooperation that is essential to address these challenges?” Lagarde asked. Lagarde noted that the major countries of the Group of Twenty leading industrial and emerging market economies had recognized, at their meeting in Australia in February, that —with the right policy actions by countries and the right cooperation across countries—more than 2 percent could be added to global growth over the next five years. “This would place the global economy on a substantially different trajectory from today,” she said.

Made in Turkey Economic Newspaper, April 2014

“Why the Dollar remains the reserve currency”

Istanbul offers free public Wi-Fi

David Barboza, the Shanghai bureau chief of The New York Times has inteviewed Eswar S. Prasad. Continued from Page 1 he more dollars there are out there, the less value they should have. But the exact opposite happened. The dollar, if anything, gained slightly in value. Contrary to all expectations, the U.S. dollar’s position as the world’s dominant reserve currency has been strengthened by the crisis. The world became even more dependent on the dollar than it had been before the crisis. What made the dollar attractive? It’s simple: there are no good alternatives to the dollar. Any time you think of the dollar losing its dominance, you have to ask yourself: if not the dollar, then what? And there’s no good answer. Emerging markets need foreign exchange reserves to protect themselves from volatile capital flows. And private investors and financial institutions want safe and liquid assets – assets expected to at least hold their principal value and that are easy to trade. These are typically government bonds. But the supply of safe assets in the world has shrunk. The euro zone doesn’t look quite as safe anymore. Japan and Switzerland don’t want money flowing into their markets, as that would drive up the value of their currencies and hurt their exports. So that leaves the United States as the

main provider of safe financial assets in the form of U.S. Treasury securities. What are the implications of this so-called “Dollar Trap”? The dollar’s prominence is a mixed blessing for the U.S. A strong dollar and low interest rates mean the U.S. gets cheap goods from the rest of the world and cheap financing. But a strong dollar hurts U.S. exports and job growth. A more fundamental problem is that this reduces U.S. fiscal discipline. Any other country would have to pay a higher price for racking up big deficits. Emerging market economies find it frustrating that they have t o buy U.S. Treasury securities to protect t hem s el ve s from capital flow volatility that is in part due to U.S. fiscal and monetary policies! They are trying to diversify into other currencies and other assets such as gold and real estate. But the reality is that there

are no other financial markets that give them both safety and liquidity to the extent the U.S. can. We know the euro has not challenged the dollar as a reserve currency. What about the prospects for China’s currency, the renminbi, becoming a global reserve currency? If China moves ahead with fi-

nanc i a l market reforms and liberalizes capital flows so foreign investors can acquire RMB-denominated assets, China’s renminbi could become a major reserve currency. But that wouldn’t be enough to make the renminbi a safe haven currency

that would challenge the dollar. For that to happen, China would have to undertake significant reforms to its political, institutional and legal frameworks. That is needed for foreign investors to invest with confidence in China’s markets, for safety rather than just high yield. The dollar is being bolstered by purchases made by the central banks of emerging market economies – economies where the average resident has one-sixth, oneseventh or one-eighth the financial resources as those living in advanced economies. Why are relatively poor countries financing the debts of wealthier countries, like the U.S.? Emerging markets such as Brazil and India could use money more effectively domestically rather then buying U.S. bonds. But they want to protect themselves with large stockpiles of reserves. A second motive is to keep their currency from appreciating, which would hurt their exports. That’s why net flows are going uphill, as they say, from poor to rich countries. This began to happen after the Asian Financial Crisis of 1997-98. Memories of that and other painful crises that beset emerging market economies in the 1980s and 1990s are seared into the minds of their policy makers. So emerging markets are eager to increase

their “self-insurance” against economic disasters by stockpiling reserves, even knowing the yields of U.S. government bonds are low and the dollar could depreciate over time, eroding the value of their holdings. This is a signal of how much the rest of the world is willing to pay for protection. Isn’t there a better way to manage exchange rates? There are costs to managing or manipulating exchange rates. It’s expensive to sterilize as governments have to pay high interest rates on bonds they issue to soak up money they print to cheapen their currencies. And currency intervention creates all sorts of other problems. You end up distorting the financial system and subsidizing exports. What’s needed is a better mix of domestic policies in both advanced and emerging market economies, with less reliance on monetary policy to do all the heavy lifting. We also need international governance reforms that give emerging markets more voting power at institutions like the I.M.F., which is seen as beholden to its advanced economy shareholders and less responsive to the needs of emerging markets. Domestic and international reforms are necessary for a freer, marketoriented exchange rate system to work well.

Worth $13,7 billion of FDI flows Turkey in 2013 Turkey’s Prime Ministry Investment Support and Promotion Agency Chairman Ilker Avci: “New investors are coming from Japan and Middle East to Turkey in 2014”

Continued from Page 1 he trend before 2011, generally over 50 percent of money came from the developed countries. The new developments have brought new trends. The competition is carriedout mercilessly. It is necessary to protect Turkey’s political and economic stability. The confidence level for law should be high. Also transparency and doing business indexes, indexes that gauge investment should continue to rise. As long as recovery in the investment condition and reforms, stability, growth of the private sector continue the foreign investments will continue as well. Turkey has a high potential. In 2013, the foreign investor potential would reach by $13,7 billion. In December we got $2 billion, in January $1,3 billion. The investors look at the issue with 15-20year perspective. They see Turkey deserve to investment.” Stating that reforms were a longlasting process, Avci said: “Trends, outlook of companies are changing. As the country you are obliged to change the investment condition. Immediately, after the elections better results will come by taking into consideration the needs of investments. TPC develops the investments. In nuclear the investments have come. We must close the gap in energy. Foreign direct investments are the highest quality item in financing of current account deficit. If we do not keep stability, if we do not protect balance

in the sector in terms of economics of scale, if we keep up with the EU standards and quality, the investors continue to come. We have achieved the quality in banking and finance sector, we have gotten good investments. Japanese come to Turkey as the outstanding investors. America and England have stopped some, but the Asian capital has begun to raise its amount. Last year, while share of the EU was 52 percent, the share of Asia is raising. Asia was in 18 percent, but it is increasing. While the capital from Japan was $1,5 billion in the past 10 years, last year we got investments worth $0.5 billion. The number of 200 Japanese companies is active in Turkey. But new 200 Japanese companies are researching in Turkey for project and market. In the upcoming years the new investors will come to Turkey. The Chinese investors aim to the European market easily by investing in Turkey. The Korean, Singaporean investors together with Malaysians have begun to position in Turkey. I invite more investors to invest in Turkey having powerful sectors. The thing that affects the investors is the dynamism of Turkey, maintaining its reform packets. We sustain our marking work company by company. Last year, we assumed the investment agency chairmanship to which over 130 countries are members. Currently our agency manages the chairmanship of the international organization.”

Indicating the new investments are needed in order to accomplish exports target of $500 billion set for 2023, Mehmet Buyukeksi, Chairman of Turkish Exporters’ Association (TIM), said; “We should boost our current $152 billion of exports to 3 fold. In this case, it would be difficult to achieve the target. There is a big competition in the world to bring foreign investor. Even the USA, which attracts the biggest investment of the world, carries out different ways to get foreign investment. In order to be first in this issue it provides different advantages. We need investments which will rise value-added and technology in Turkey. In new period, we should make positive discrimination for industry. We should make positive discrimination for exports. The antidote of our current account deficit which is soft spot of ours is to achieve value-added exports. What we will do is license agreements. We have the youngest population with 18 percent. Istanbul is targeted to make a finance center. With the contribution of Turkish National Carrier we try to be a crucial line. At the end of the year it will be the Airway Company with the most flights to Africa. Worth $40 billion of $152 billion of the total exports are service exports. If we tell our advantages in a good way, Turkey shelters very big potentials. In order to reach targets for 2023 we should increase our works directed towards R & D, innovation and brand.”

Eduardo Eguren, CEO of Burganbank, pointing out that there was a very big interest in Turkey from the Gulf region, and said; “There are production bases in Turkey. When we look at current account deficit, we address solution of the current account surplus in the Middle East. The second economy region in central and Northern Africa is Turkey, first the EU and then Turkey. In the foreign direct investments we, as the bank, have gotten very good results. Turkey is an important block for the Middle East and Northern Africa.” David Antonius Yang, Director of PSA International European Mediterranean America Regions, said; “Your country was passing a very excitement privatization process. It became attractive to us. Companies do not investment with regard to macroeconomic events. Also demographic features are important. We looked at Gross Domestic Production. These are the important factors for us. The population under 30-year old and going towards industry made Turkey attractive for us. Why we chosen Mersin? This region was newly developing. When we evaluate as container, there are 600 thousand container capacities. The port investments are long term investments. They need our technical and managing information. There were some risks, but we have come to Mersin. The good partnership is important. I thank Akfen regarding its good partnership.”

STANBUL - Istanbul Metropolitan Municipality has launched free Wi-Fi in popular public squares around the city. The municipality announced that, starting with public squares, services will be broadened to cover wider parts of the city. Users can access the free public internet service in key squares such as Taksim, Sultanahmet, Eminonu, Mecidiyekoy. After getting a password through their mobile phones, users can login to use the public Wi-Fi service, according to the announcement. The service is put into service following Turkey’s 30 March local elections as this service was promised during campaign time. Istanbul Municipality has also started to rollout Wi-Fi services on its buses.

Normalization happens about twitter in a short time: Turkcell

IRFAN ALTIKARDES – OSMAN AKIN URSA (IHA) – Participating in Uludag Economy Summit, the CEO of Turkcell Sureyya Ciliv, about the announcement of Twitter said twitter can be entered via SMS, and continued, “In my opinion, the statement they announced due to they have been in a difficult position to find a solution. We are obliged to act according to the laws in Turkey. The court sentenced to shutdown it. We believe that normalization would happen in a short time.” Over the question after the election twitter would be opened, Ciliv said, “I hope it will be opened earlier.” “We do not comment this kind of question related with shutting down of Twitter. We give a great importance to internet. We have installed the mobile and fiber infrastructure to function in the quickest way. We are obliged to obey to the laws in Turkey.” Stating that Turkcell was a company which acts in 9 countries with 72 million customers, over the question ‘Wouldn’t forbiddance in communication and technology affect you?’ Ciliv said, “Turkey is a country having a huge potential. Our 35 million subscribers are in Turkey. These prohibitions are not liked by anybody. We believe this would be overcome in a short time.” As for the question, is there question from abroad to you for example; ‘What happens in Turkey?’ Ciliv, CEO of Turkcell, said; “Turkey has recorded great developments. But this is a reality that Turkey’s per capita income was $3 thousand. Now per capita income has exceeded $10 thousand. But there is also much work to be made. In this case, media has a very important role. It must act as unitive, tranquillizer. We must love our every people from the heart. Let us look at the companies in the world there are team work, knowledge, innovation use. We have a young population. As long as our people reach information more, become innovative. There is a tremendous equality of opportunity via internet. If everybody develops economy by making his or her own works better, if we open our companies’ front, if we bring Turkey into the best country condition, we will be successful easier.” At the end of the last year, despite restriction set for the installments for the smart cell phone, sales of the phones had increased, Ciliv said, “But in January-February 2014 the sales of smart phones became higher than last December. In other words, any stagnation was not experienced. The internet usage in smart phone and GSM will rise.”

Made in Turkey Economic Newspaper, April 2014

“I follow my children”

“Too big to fail!”

Speaking at Uludag Economy Summit, Mehmet T. Nane, CEO of CarrefourSA, said in order to follow the new developments he was following his children IRFAN ALTIKARDES–OSMAN AKIN

URSA (IHA) – The CEO of CarrefourSA Mehmet T. Name said that he was copying his children in order to follow the new developments. Participating in the session at the Uludag Summit entitled ‘Digital company: How to be managed tomorrow’s company’ CarrefourSA CEO Mehmet T. Nane said, “What we make is to allow customers to please. As for what customer wants, it is a wide concept. Customers say, ‘I would like to come to your store to shop. ‘If necessary I would like to shop via internet’. For this reason digitalization is very important. The world is advancing in a very quick way. I copy my children very well. I learn what I do not know from them. In order to benefit their ideas we invited a group of children to our company. We asked them, ‘What kind of electronic market do you want?’ After this we have established a com-

pany to compete with amazon. Our this company grew 20 million in first year, last year growing 6 fold reached turnover of TL120 millions.” “90 % of SMEs in Turkey do not know informatics technologies” Recording that the companies began to see technology as sine qua non, Tamer Ozmen, General Manager of Microsoft for Turkey, stating they have seen four trends in the world one of them is cloud, and said; “Cloud is very crucial. The second one is mobility; there are 19 million of cell phones in Turkey. The third one is a big data issue. Analyzing this data is very important. As for the fourth one is to use the social media. We ask these four questions to those who want to work together with us. If companies have not adapted in this issue, they would lose their companies in an unforeseeable condition. 90% of SMEs do not knows informatics technology in Turkey.

Bank Group to better meet the evolving needs of clients, including a $100 billion increase in the lending capacity of the Bank’s lending arm for middle-income

Continued From Page 8 anks grew bigger The IMF said the issue of too-important-to-fail has intensified in the wake of the financial crisis for two main reasons: • The turmoil that followed the failure of Lehman Brothers in September 2008 forced governments to intervene massively to maintain confidence in the banking sector, and prevent a collapse of the whole financial system. This left little uncertainty about the willingness of governments to support big banks in distress. • Banks have continued to grow bigger, and there are fewer banks in operation. As a result, estimated implicit subsidies to big banks rose significantly in 2009 in all countries. In response, policymakers have launched ambitious plans for financial reforms. They required banks to hold more capital to use in case of losses, and strengthened the supervision of global systemically important banks to reduce the probability and cost of failure. They are working on improving domestic and crossborder resolution frameworks for large and complex financial institutions. In some countries, governments are adopting structural measures to limit certain bank activities. The IMF analysis suggests that these efforts contributed to a decrease in subsidy values in the recent period. Banks’ balance sheet repair, encouraged by supervisors and regulators, also played a role in the implicit subsidies’ decline. Policymakers should strengthen reforms Policymakers have not implemented all policy measures, and they should pursue those under way, the IMF said. Completely excluding the possibility of government support for big banks may be neither credible nor always socially desirable. Further efforts should aim to reduce the probability of distress in big banks. For instance policymakers can enhance capital requirements, and possibly recoup taxpayers’ costs from those banks through a financial stability tax. This could be based on banks’ liabilities, as is the case in several European countries. Structural measures to restrict the size and scope of banks can entail efficiency costs if they reduce economies of scale and scope, or increase bank profits with no benefit to the economy as a whole. The IMF said such policies could be useful in managing risks that are difficult to measure, such as risks of rare but fatal financial events, and address through other tools such as capital and liquidity requirements.

If we solve this in a real way, Turkey will enjoy a bounce.” “Countries invest in technology will come to a very distinctive point” Stating that when he came to Turkey 4 years ago the SME portfolio was not very wide, Ozmen said, “In Turkey we chose 13 provinces. We visited the companies employing over 250 people one by one. We asked, ‘why your turnover is good but your profitable is low?’ some of them put a wall in front of us. As for some, they said that they would

like to grow. In our analysis, we see that the companies which use technology their profitability has developed. While we work with these, we negotiated with those companies both their profits and turnovers are high. We saw that they did business with a few markets. We asked, ‘do you consider to increase your market number?’ we worked with them profit issue. The most important thing to be solved is technology. Brazil invests in technology 6 fold higher than Turkey, 4 fold

than Russia. The countries that overcome this I think they would come to very distinctive places.” Borusan Holding CEO Agah Ugur stating they had passed from control mode to support mode in relation with company, he said their basic responsibility was to assign the best team atop of the company. Founder and CEO of MUBI Efe Cakarel said that technology has been improving in an incredible way and should keep up with this trend.

World Bank President sees $100 Billion increase in lending ability to end poverty ASHINGTONWorld Bank Group President Jim Yong Kim announced a series of measures aimed at strengthening the World

countries over the next decade, new innovations in financial management, and a boost in the institution’s ability to provide private sector support. This fol-

lows the record $52 billion replenishment of IDA, the World Bank’s fund for the poorest, in December 2013. Speaking at the Council on Foreign Relations (CFR) in Washington in advance of the World Bank/IMF Spring Meetings, Kim outlined how the Bank is positioning itself to better achieve its goals of ending extreme poverty by

2030 and boosting shared prosperity for the lowest 40 percent in developing countries. “We now have the capacity to nearly double our annual lending to middle-income countries from $15 billion to $26 to $28 billion a year. This means that the World Bank’s lending capacity will increase by $100 billion to roughly $300 billion over the next ten years,” said Kim.

Interest rates to increase but modestly as global economy normalizes Continued From Page 8 ince the early 1980s, interest rates, or yields, on assets of all maturities have declined worldwide, well beyond the decline in inflation expectations. This means that real interest rates—the rates paid by borrowers corrected for expected inflation—have declined. Ten-year real interest rates across countries fell from an average of 5.5 percent in the 1980s to 3.5 percent in the 1990s, 2 percent over 2001–08, and 0.33 percent between 2008 and 2012.

Natural stone exports up by 15 percent

urkey’s natural stone exports boosted 15 percent to $326,8 million in the first two months this year. Last year in the same period the natural stone exports were $283,6 million. In this period, unprocessed marble exports increased 10 percent to $137,6 million, according to data compiled from Istanbul Mineral Exporters Association (IMIMB). The processed marble exports became $130,8 million, processed travertine exports $46,1 million; other products exports were $3,4 million and unprocessed granite was $2,3 million. The sector exported mostly to China with 36 percent increase to $118,6 million over the same period previous year. This country followed by the USA with $51,9 million, Saudi Arabia with $19,4 million, Iraq with 19,4 million, France with $9,1 million respectively.

“Pistachio-nuts business become vital”

istachio nuts business has become a critical sector within last decade, Ilhan Eralp, Chairman of Gaziantep Pistachio nuts Association,

said. Eralp noted that they had come together under the association roof to solve the problems and provide development of the sector last year. Reminding that Antep Pistachio nuts had become a product being used in every area, he highlighted that the pistachio nuts sector has turned into a serious sector. Eralp also stressed that they would work to prevent unjust competition, adding they would also struggle to let the sector to come the deserved place. Pointing out that they would allow the sector to function by tackling the problems of production, warehousing and true marketing, Eralp continued; “Our primarily target is to manage the works to overcome unregistered issue. The product will be taken under registration after the enrollment in the commodity exchange, so we would see how much product we have. Turkey is a significant pistachio nut producer. We rank third in production and first in consumption across the world.” In his speech, Eyup Bartik, Chairman of Gaziantep Chamber of Commerce, said they had applied to European Union to get the regional geographic indication of pistachio nuts.

Carpet exports rise by 8.5 percent

urkish carpet sector exports boosted 8.5 percent to worth $355,5 million in the first two months over the same period last year. Last year, while carpet exports were $327,5 million in January-February 2014, this year the exports increased 8.5 percent to $355,5 million this year, according to the data from Istanbul Textile and Clothing Exports’ Associations (ITKIB). Machine made carpets accounted for $341,6 million, as for handmade carpet, the exports were $13,9 million worth. Majority of the carpet exports shipped to Saud Arabia with $57,8 million. The USA followed this country with $35,6 million of exports, Libya $26,7 million, Germany with $26,7 million, Iraq with $13,7 million.

Made in Turkey Economic Newspaper, April 2014

IMF launches new tool to assess public debt

he IMF has just released to the general public its new toolkit for assessing public debt sustainability in countries that have access to international capital markets. The tool improves upon the IMF’s previous method of evaluating how much public debt emerging market and advanced economies can safely carry. The new approach takes a more holistic view, assessing the level and trajectory of debt, government financing needs, and

vulnerabilities in the debt structure. The IMF has been working to overhaul its framework for public debt sustainability analysis in market access countries (MAC DSA) over the past two years as the issue of public debt has become increasingly prominent. The global financial crisis and more recent developments have exposed not only significant debt vulnerabilities—particularly in advanced economies, where such concerns had been min-

imal—but also gaps in the analytical capacity to assess and foresee such risks. The new DSA for market access countries aims to close those gaps by scrutinizing debt sustainability from several different perspectives. More comprehensive risk assessment The revamped DSA pushes the analytical frontier by introducing new tools for comprehensive risk assessment. In addition to evaluating debt trajectories, as was previously done, the new

framework also assesses the solvency and liquidity risks stemming from high levels of public debt, gross financing requirements, and a country’s debt profile. For example, it compares the public debt, financing needs, and liquidity indicators to early warning benchmarks intended to flag potential vulnerabilities at an early stage. Clarity and transparency are key features of the new DSA framework. DSA results are displayed in standardized charts and tables, which facil-

itate cross-country comparison. A heat map objectively summarizes the analytical results, with red, yellow, and green cells indicating high, moderate, and low risks respectively. Standard output chart packages are available at this The final assessment of debt vulnerabilities is expected to reflect the countryspecific context—therefore, where relevant, DSA results provide country-specific details and discuss factors that may amplify or mitigate certain risks.

“As Bursa grows, Turkey grows” BTSO Chairman Burkay: “Now local power is determinative in the global competition”

URSA (IHA) – Bursa Chamber of Commerce and Industry (BTSO) Executive Board Chairman Ibrahim Burkay said, “From now on, in the global competition the local power is determinative beyond general power.” In his speech at the opening of third edition of Uludag Economy Summit, reminding that ranking as 27th economy of the world in 2000, Turkey’s economy raised up to 16th in 2012, Burkay said, “Also per capita income was ranked at 62nd in 2000 in the past 12 years per capita income raised by 61st despite running swift compared to the previous period. The table in front of us shows that the rivals have also run quickly.”

Telling that Republic of Turkey has set for being 10th biggest economy of the world by the centenary anniversary, Burkay continued, “As for achieving the better, we must renew our production approach and habits. The way in order to grow our country involves increasing the number of our enterprises, continuing to be the attraction center and growing our companies.” BTSO Chairman Burkay said the precondition to get competition power and superiority to rivals was to direct towards the production featuring high valued added and advanced technology. Transition to innovation economy as the country, he stressed there was a need of culture revo-

lution. Burkay continued, “On the other side, the power of local places and cities enter into circuit in the development strategies. Bursa is one of the most important local powers with its own potential and deep experiences gained to date. As the city that achieved exports per capita more in Turkey, we are also a city that has the international competition more. For this reason, we state our faith with the motto ‘If Bursa grows, Turkey grows”. Chairman Burkay said that they had set 16 macro projects in order to let Bursa to be one of national development locomotives. Among the said projects the rail systems, space-aviation and defense industry clus-

BTSO Chairman Ibrahim Burkay (right) with Bursa Governor Munir Karaloglu

tering are the high technological production vehicles. Pointing out Bursa had export target worth $75 billion for 2023, Burkay recorded Global Fairs’ Agency which has been entered

into force by BTSO and Commercial Safari Projects between the chambers and stock exchanges directed towards achieving export targets by integrating SMEs to the world.

Environmentally friendly facilities double

he number of environmentally-friendly accommodation facility has doubled in 2014 over the last year. While 19 facilities had “Green Key” which is eco-label for tourism facilities that pay attention to water and energy saving the number has reached by 34 this year. Erol Gungor, General Manager of Turkey’s Environment Training Foundation (TURCEV) in his statement said, “The initiatives with “Green Key” program is awarded directed towards the environment protection, and aimed to prevent the climate change and contribute to the sustainable tourism.” Stating the program is carried out in 44 countries Gungor said, “At the end of assessments the number of 34 accommodation facilities in various places across Turkey have deserved to get “Green Key”. The program which has been entered into force by Foundation for Environment Education (FEE) has been spread in Europe since 2002, he said. “Lowering cost along with environment protection, reducing consumption the economic management, business management contribution to strengthening tourism by taking wider responsibility, along with promotion of awarded establishments and green key label, marketing strategy, increasing consciousness of business owner, staff, customers and education for sustainable development,” Gungor said. Highlighting the brands of countries with green key label have raised in tourism, Gungor recorded that from now on tourists look for especially water and energy savings, protecting the environment, attracting attention of guests to the environment, room temperatures, waste recycling, environmentally-friendly cleaning products in kitchen and laundry houses. Gungor reminded the Ministry and Culture & Tourism and Ministry of Environment and Urban Planning convened together with the representatives of other public and private sector to evaluate the facilities that applied to get “Green Key Label”, the award given for one year, every year it is renewed. A facility which respects to the environment gains approval and support from tourists.

Made in Turkey Economic Newspaper, April 2014

Lagarde warns of global low growth risk

ASHINGTON A top official of the International Money Fund urged international cooperation against an economic downturn warning of the risk of low growth rate for global economies in the coming years. Christine Lagarde, the managing director of the IMF, who spoke at a conference at John Hopkins University, explained that the modest recovery from the economic crisis was still too weak to draw comfort. “Unless countries come together to

take the right kind of policy measures, we could be facing years of slow and sub-par growth - well below the solid, sustainable growth that is needed to produce enough jobs and improve living standards into the future,” Lagarde said. She defined three obstacles that need to be addressed in order to support growth; prolonged low-inflation risk in advanced economies which can suppress demand and output and stifle growth and jobs, heightened market volatility associated with the

tapering of quantitative easing in the U.S which limits the flow of cheap dollars to countries with weaker economies, and the rise of geopolitical tensions such as Crimea and Syria which supress the free flow of capitals between countries. “Recovery is taking hold but is too slow and it faces several obstacles along the road. Bold policy steps can overcome these obstacles and take the global economy to the next level of more rapid and sustainable growth,” she said.

S&P: Turkish banks can withstand moderate volatility

urkish banks are now better placed overall to withstand expected asset quality pressures given their adequate provision and capital buffers, according to U.S.based credit rating agency Standard & Poor’s (S&P). “We consider that Turkish banks are now better placed overall to withstand some moderate volatility in their operating environment, having strengthened their foundations since the unprecedented political and financial crisis in 2001,” said S&P’s report entitled, “Political and funding risks cloud prospects for Turkish banks in 2014.”

However, S&P believe that domestic political tensions, upcoming elections, and the federal reserve’s ongoing tapering of its bond-buying are increasing uncertainties for Turkish banks. S&P forecasts that Turkish banks will

pay a higher premium for their foreign borrowings in 2014. “In addition, we believe that interest margins will come under further pressure, notably in the first half of 2014, following the central bank’s sharp interest rate hike in January in a bid to stabilize the lira’s slide against hard currencies,” the agency said. On January 28, the Central Bank more than doubled its borrowing rate from 3.5 percent to 8 percent, and raised the lending rate from 7.75 percent to 12 percent. The agency said that there are two main risks for the Turkish banking sector.

“We continue to see two main risks, the indirect credit risks stemming from the larger open foreign exchange positions of the Turkish private sector and Turkish banks’ increased reliance on foreign debt, in particular shortterm debt. While the first factor can result in a higher cost of risk (that is, net new loan provisions to total loans) for rated Turkish banks, the latter could potentially limit the availability of foreign funding through 2014 and make it more expensive.” The report also said that higher interest rates, higher credit losses, and the slowdown in lending will eat into Turkish banks’ earnings in 2014.

Interest rates to increase but modestly as global economy normalizes

eal interest rates are expected to increase modestly with the normalization of global economic conditions, reversing the decline into negative numbers after the financial crisis, predicts a new study by the IMF’s Research Department. Continued low real interest rates—the rate paid by borrowers minus the expected rate of inflation—will ease the burden of debt for borrowers but can

also tie the hands of policymakers. A low real interest rate environment also enhances the chances that in the future the nominal policy rate may hit the lower bound (that is, zero), thereby losing a key monetary policy tool: lowering interest rates to stimulate growth. Because there is a risk that advanced economies will encounter continued very low growth, this limitation may materialize. Any increase

in current real interest rates is expected to be modest because the main factors contributing to the decline in real rates are unlikely to be reversed: • Saving: emerging market economies’ saving rate increased significantly between 2000 and 2007, driving down interest rates. This increase is expected to be only partly reversed. • Portfolios: since the financial crisis, demand for safe assets has in-

creased—bonds over the increasingly risky stocks and other equity. This was also driven by reserve accumulation in emerging market economies. Unless there is a major unexpected change in policy, this trend is likely to continue. • Investment: the decline in investment rates in advanced economies as a result of the global financial crisis is likely to persist. Page 6

“Too big to fail!” Big banks benefit from Government subsidies

eforms since the global financial crisis have reduced, but not eliminated the implicit government subsidy afforded to banks considered “too important to fail” because their failure would threaten the stability of the financial system. In its latest analysis for the Global Financial Stability Report, the IMF shows that big banks still benefit from implicit public subsidies produced by the expectation that the government will support them if they are in financial trouble. In 2012, the implicit subsidy given to global systemically important banks represented up to $70 billion in the United States, and up to $300 billion in the euro area, depending on the estimates. Government support to banks during the crisis has taken different forms, from loan guarantees to direct injection of public funds into banks. The expectation of that support allows banks to borrow at cheaper rates than they would if the possibility of that support didn’t exist. Those lower funding costs represent an implicit public subsidy to large banks. Subsidy encourages risk-taking This implicit subsidy distorts competition among banks, can favor excessive risktaking, and may ultimately entail large costs for taxpayers. While policymakers may need to rescue big banks in distress to safeguard financial stability, such rescues are costly to governments and taxpayers. Moreover, the expectation of government support reduces the incentives of creditors to monitor the behavior of big banks, thereby encouraging excessive leverage and risk-taking. Recent financial reforms and progress in banks’ balance sheet repair have contained the too-important-to-fail issue, albeit with unequal results across countries. The analysis found that particularly large subsidies persist in the euro area, and to a smaller extent in Japan and the United Kingdom. Page 6