Made in Turkey May/June 2016 by İstmag Magazin Grubu

Monthly Economic Newspaper

Istanbul named among top future financial centers

Turkey eyes $5 billion from health tourists annually amid tourism woes

Turkey to open trade centers in Tehran, Dubai P5

Decreasing inflation in Turkey raises expectations for interest rate cut

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May - June 2016

P10

P15

Turkey’s industrial production records 6-month peak level

Turkish economy grew 4 pct in 2015, exceeding estimates, data shows The Turkish economy grew a stronger-than-expected 4 percent in 2015, with robust growth at 5.7 percent in the last quarter, mainly due to a rise in consumption and public spending, according to official data released.

Speaking at the Justice and Development Party’s (AK Party) group meeting at the Grand National Assembly of Turkey (TBMM), Turkish Prime Minister Ahmet Davutoğlu said interest rates, exchange rates and inflation would take a downward trend during the next period. Indicating that interest rates as well as inflation’s upward effect would reverse, Davutoğlu added that the March inflation rate communicated a positive message by occurring below market expectations. | Page 8

Ministry initiates employment support to boost Turkish tourism sector

Soylu, along with Culture and Tourism Minister Mahir Ünal and representatives from the tourism sector, attended a meeting organized by the Culture and Tourism Ministry. The Employment Support Package for the Tourism Sector was announced at the meeting. The package has five items, including a Sectoral Employment Support Program, Tourism-Oriented Utility Programs, Facilitating Work Permits for Foreign Workers, Balancing and Skilled Workforce Training. According to Soylu, the suspended three-month social security premiums of 44,753 people will be covered by İŞKUR under the condition of working nine months in 2016. Their qualifications will be improved with personal training courses from employers such as occupational training and language courses. TL 260 million ($91.8 million) of investments has been reserved for the program, which affects 44,753 people, 31,619 from Antalya and 13,134 from Muğla. | Page 11

he GDP per capita however decreased from $10,395 in 2014 to $9,261 in 2015 due to the loss in the Turkish Lira’s value, while this figure increased from 22,732 liras in 2014 to 25,130 liras in 2015 at current prices on the lira basis. Deputy Prime Minister Mehmet Şimşek said the 2015 growth was in line with the government’s medium-term program and made

it the fourth fastest-growing economy among G-20 countries. Domestic demand contributed 4.3 percentage points to growth and net foreign demand made a negative 0.3-point contribution, he said, in a statement. The largest contribution to the 4 percent GDP growth in 2015 came from household expenditures with around 3 percent. The contribution of public spending was 0.76 points, the data showed.

The public sector’s construction and infrastructure spending played a crucial role in GDP growth, according to the data.

against shocks. We expect growth will be around 3 percent this year, below the government’s estimate at 4.5 percent,” he added.

“We also believe that the rising number of Syrian refugees also made a positive contribution to boosting consumption,” said BGC Partners Chief Economist Özgür Altuğ, as quoted by Reuters.

Şimşek has vowed structural reforms to achieve robust and sustainable growth. “This success was achieved despite last year’s two general elections, increasing geopolitical tensions in our region, problems in our trade partners and global market volatilities,” he said. | Page 3

“The figures have confirmed the Turkish economy’s resilience

Turkey becomes one of the top destinations in global Muslim travel market The MasterCard-CrescentRating Global Muslim Travel Index (GMTI) 2016, which covers 130 destinations, saw Turkey take third place on the list of Organization of Islamic Cooperation (OIC) destinations behind Malaysia, which retained its primary position followed by the UAE. In May, Turkey will host the world’s biggest international conference on halal tourism with the Halal Tourism Conference 2016 in Konya, bringing together some of the world’s leading names in the travel industry. This conference is expected to foster halal tourism and further contribute to Turkey’s popularity as a trending travel destination. | Page 4

Turkish Airlines posts record net profit

Turkey’s national flag-carrier, Turkish Airlines, announced a record operating net profit of 2.99 billion Turkish Liras ($1.01 billion) for last year on March 1, with a 65 percent increase from a year earlier. This was the first time the annual profit of the company exceeded $1 billion. The gross real operating profit stood at $895 million, another record for the company. In a statement, the airline said sales revenue increased by 19 percent in liras, reaching 28.75 billion liras ($9.7 billion) at the year-end| Page 12

Turkish hoteliers accelerate promotional activities in new markets We are at Tehran, Iran Beauty & Clean 2016 Page 2

Arab investors to build golf courses in Black Sea region Page 9

Turkey’s automobile production up 4 pct in March Page 13

Turkish hoteliers have sped up promotional activities in new markets in a bid to recover their expected losses in key markets, mainly European and Russian markets.

The Hotel Association of Turkey (TÜROB) said the association recently attended tourism fairs to diversify their markets in places like Latin America, South Africa and Azerbaijan, in a written statement on April 18. TÜROB Board Member and General Coordinator Kasım Zoto, who attended a sector fair in South Africa, said there was a rising attention to halal tourism in Africa, mainly in Nigeria. He noted that Turkish Airlines airplanes flying from Cape Town, Durban and Johannesburg in South Africa to Istanbul were always full, although a majority of these passengers are transit guests. A total of 885,000 tourists from Africa visited Turkey last year and 47,000 were from South Africa, he added. Another potential huge market is Azerbaijan, according to the association. Page 14

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Mehmet Soztutan Editor-in-Chief

Letter From The Editor

Competitive power There is a saying nothing is achieved unless it is dreamt first. Innovation can not be learned but it can be developed to shine, inspiration, motivation, spirit, hope, position thinking, empathy, intuition. Scientists discovered the emotional intelligence, and it is said that one sees best with a heart. Competitiveness is the sine qua non of success anywhere.Yet to become competitive, frims must be able to measure and evaluate their performance. As always, the rule of the game is to know where your competition is and what he is doing. Actually, the world has become a global village and business knows no international boundries. However, the rule of the game is dynamic competitiveness. The concept of competition has been undergoing a permenant change. What has changed? Competition appears from all corners of the globe. Customers demand more. To respond, manufacturers are reducing costs and increasing responsiveness through outsourcing, sourcing globally and implementing demand-driven strategies such as pull-based inventory management. All these trends cause greater reliance on third parties to manage the manufacturing and delivery of products to customers. What are the basic factors determining productivity and competition? In the final analysis, high-tech and know-how have always been instrumental in underlining the rules of the game in the economy. Harnessing these for the benefit of developing countries is a collective challenge. As known, the Turkish exporters are not isolated from these realities. They are fully conscious of the fact that they have to cope with the dynamically changing conditions; and they strive to do so in order to survive in the world markets. We wish them and their trading partners success.

Monthly Economic Newspaper

We are at Tehran, Iran Beauty & Clean 2016

TEHRAN-This month, we are at Tehran, Iran Beauty & Clean 2016 (24-27 April 2016), to convey the messages of Turkish exporters. The major sectors participating in the Fair are: Cleaning and Maintenance, Cosmetics, Perfumery, Hairdressing. The product groups of the Fair include: Detergent and cleanser products, skin and hair care products, perfumes, eau de cologne and spray, hair colors, cellulose and hygienic products, fresheners, insecticides, home hygienic products, bags, shoes and leather care products (polish), raw materials, tools and accessories for hair salons, trade and consult-

Turkish tourism sector thrilled over visa-free travel to Europe Cafe Tour Director Barış Y. Aygün said that the agreement-in-principle between Turkey and the European Union, which would waive visa requirements for Turkish citizens to the Schengen zone, is causing a buzz of excitement in the tourism sector. Turkey and the EU have recently agreed in principle on a solution to the refugee crisis. According the terms of the agreement, visa requirements will be lifted for Turkish citizens traveling to Europe by the end of June 2016. As a French-based firm, Aygün said that Cafe Tour has been operating in Istanbul since 2000, offering the largest number of international destination alternatives in Turkey. “In the case of visa-free travel, the

citizens of the Republic of Turkey can travel to Europe more easily. Firstly, the borders in their minds will be lifted and the visa-free tour alternatives for their holiday itineraries will increase. The fact that visas will be lifted will save travelers from economic and bureaucratic burdens while presenting new options for their holiday plans.” Aygün added. Stressing that visa-free travel will reduce bureaucratic headaches and contribute to tourism revenue in the Schengen zone, Aygün said: “Turkish citizens will be able to visit European cities that they have always wanted to see, whenever they want. This positive scenario will foreseeably bring a 30 percent to 40 percent increase in international tourism demands.”

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May June 2016

ing services, machinery and related industries. Depending on the economic development in Turkey, both production and consumption of the cosmetic and personal care products are also increasing rapidly. The hair care products hold the greatest share in the sector product range, and shampoos account for approximately 59% of hair care products. Other items included in the sector product range are shaving products, depilatories, bath and shower products, soaps, lip and eye make-up materials, deodorants and antiperspirants, perfumes, eau de colognes, skincare and baby care products.

Thanks to its continuously improving R&D and production abilities, Turkish cosmetics sector has being gained a considerable competitive power. Optimal quality and cost alternatives are provided by the sector both for domestic and foreign buyers.

Turkish economy minister urges for major interest rate cut Economy Minister Mustafa Elitaş pointed out that it is time for the Central Bank of the Republic of Turkey (CRBT) to turn the global crisis into an opportunity by radically reducing interest rates to pave the way for business. Elitaş paid a visit to The Hague, the Netherlands to hold a series of official talks. He commented on topical issues during a meeting with journalists. In response to a question regarding his expectations concerning the CRBT’s interest rate policy in the upcoming period, Elitaş said the central bank estimates that inflation will pursue a downward trend by June. Referring to inflation realized at 7.46 percent in March, Elitaş said that it would be for the good of inflation if fruit and vegetable prices fall with the disappearance of seasonal impacts and the decline in raw materials prices. He said: “It is time for the CRBT to get rid of the 2001 syndrome, base interest policy on a real system and make a move to turn the global shrinking

Mustafa Elitaş Economy Minister

into an opportunity.” He further said that the central bank should radically reduce interest rates to pave the way for business so that Turkey can increase its share in global trade volume over its current 1 percent.

May June 2016

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Recep Arslantaş Project Coordinator

Your packing speaks louder than you! Turkey’s industrial production records 6-month peak level

Turkish economy grew 4 pct in 2015, exceeding estimates, data shows ANKARA-Turkey’s industrial production increased 5.8 percent in February compared to the same month of the previous year, according to Turkish Statistical Institute (TurkStat) data. Thanks to improvements in the mining and manufacturing sectors, the production level reached a sixmonth high. Mining production rose 7.7 percent year-on-year while manufacturing saw a 6.2 percent year-on-year increase. The power and air conditioning supply sectors saw a 2.6 percent rise as well. Regarding the numbers, Science, Industry and Technology Minister Fikri Işık said this high increase in industrial production demonstrates how economic activity persists in the country. Işık added that the performance of the industry signals economic stability and implies strong growth in 2016, as well, like the 5.7-percent growth Turkey experienced in the final quarter of 2015. Stressing that

industrial production started gaining momentum toward the end of 2015 and has continued to increase this year, Işık drew particular attention to the rise in the manufacturing sector, which experienced 6.2 percent growth. According to Işık, this increase will remarkably contribute to Turkey’s economic growth in the first quarter. Işık also said industrial production will be positively affected by the revival of the eurozone’s demand fueled by the European Central Bank’s (ECB) stimulus package, abolition of sanctions imposed on Iran connected to its nuclear program and Turkey seeking alternative markets. Işık added that all these elements will contribute to strengthening exports as well as arouse production and investment appetites. Additionally, seasonally and calendar-adjusted industrial production increased 0.5 percent compared to the previous month. When looking at industry

subsectors, the mining and quarrying index increased 5.5 percent and the manufacturing index increased 0.6 percent while the electricity, gas, steam and air conditioning supply index decreased 1.7 percent in February 2016 compared to the previous month. The largest increase in the manufacturing sector was in computers, electronics and optical products, which increased 7.4 percent, followed by other non-metallic mineral products, up 5.8 percentv , and electrical equipment, up 5.6 percent, in February 2016 compared with the previous month. The largest decreases experienced in manufacturing subsectors was in other transport equipment, down 25.5 percent, followed by coal and refined oil products, down 11.2 percent, and basic pharmaceutical products and pharmaceutical preparations, which fell 3.5 percent, in February 2016 compared with the previous

month. In addition, Finansinvest chief economist Burak Kanlı said, “We closed 2015 with 4 percent growth. This is a very good growth rate. Also, a recovery observed in investments is another positive development.” Economist Bora Tamer Yılmaz at Ziraat Securities said, “We saw the Turkish economy grow by 4 percent in line with the official targets,” adding, “We believe domestic consumption shouldered growth in a year in which geopolitical tension surged and two elections were held. Halk Investment’s economist Banu Kivci Tokalı said positive signals from industrial production also reflected in the growth data. “The fourth quarter of last year became the period in which economic activity came to the fore. Private and public sector consumption, as well as public investments, were base elements in growth,” Tokalı said.

Recently I went to a store on my way to buy a shampoo. Tending to immediate personal care department, I took a shampoo under gaze of a woman who is responsible for the department. However, my eyes were suddenly pounce brand new packages of other brands. I began to touch renovated with magnificent designs and colorful packaged individually labeled shampoo. Running to me, sharp-eyed officials was on my back. I came to myself with a big startled. With the orphan child psychology, bending my neck I would almost say to the officials, “I did not have any bad intention, I was just looking at the shampoos.” Then, my consumer vein was spoiled. I would say the officials, “I’ll pay for this shampoo, give me the pack of the rest as a promotion and let me leave you inside of shampoo.” I did not dare, of course I could not tell. In recent days, the glory of unwanted or unpleasant events in the international political arena, rolling out the currency exchange rate movements especially create some difficulties in the Turkish cosmetics exporters. In these days most of manufacturer firms in all sectors think they need to increase their exports by traveling around the country in order to enlarge their market. I believe our determined, stable and faithful exporters will be successful. While preserving their existing markets, also looking for new markets, our exporters are well equipped and have the ability to survive in international competition. Emphasizing on R & D and innovation, constantly renewing itself in the field of packaging design and increasing brand value, our exporters are stable to show they are permanent in the markets they enter. Being aware of the importance of packaging and design for increasing its brand value, they attach great importance to invest in packing. “You are met with your outfit; you bid farewell with your word” statement is very truthful. If we consider this statement for Turkish cosmetics exporter, that is, “You would make difference with your packaging, and you would be permanent in the memory with quality of your product.” We just remind.

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Turkey becomes one of the top destinations in global Muslim travel market Turkey has turned out to be the third most popular destination in the global Muslim travel market, according to the most comprehensive research yet released on this sector. The study also revealed that in 2015, there were an estimated 117 million Muslim visitor arrivals globally, representing close to 10 percent of the entire travel market. This is forecasted to grow to 168 million visitors by 2020 - equal to 11 percent of the market segment, with a market value projected to exceed $200 billion. Asia and Europe were also revealed as the two leading regions in the world for attracting Muslim visitors, accounting for 87 percent of the entire market. Regarding the outcome of the GMTI, CrescentRating & HalalTrip CEO Fazal Bahardeen said: “The MasterCard-CrescentRating Global Muslim Travel Index 2016 has now become the number one tool for destinations around the world to realign their strategies to reach out to the Muslim consumer. One of the biggest trends we are seeing is non-OIC destinations making a concerted effort to attract Muslim tourists, and they now represent over 63 percent of the destinations covered in the GMTI. For example, Japan and the Philippines have taken some major steps over the last few months to diversify their visitor arrivals, and boost their economy in the process.” Global Products & Solutions for the Asia Pacific Region of MasterCard Group Executive Matthew Driver drew attention to the rapidly growing potential of the Muslim travel market, saying: “Many already successful destinations around the world are looking to diversify their visitor base to maintain tourist growth rates in today’s increasingly competitive travel

market. The fast-growing Muslim travel segment is an opportunity in plain sight, but in order to benefit from it, it is crucial to understand the needs and preferences of Muslim travelers and how to adapt and tailor products and services for them. We believe that the GMTI provides real value to businesses and governments looking to tap into this important market segment.” The GMTI 2016 is the most comprehensive research available on one of the fastest-growing tourism sectors in the world, which represents 10 percent of the entire travel economy. The GMTI looks at in-depth data covering 130 destinations, up from 100 in 2015. This is the first time such thorough insights have been provided on one of the world’s fastest-growing tourism sectors.

The index helps destinations, travel services and investors to track the health and growth of this travel segment, while benchmarking their individual progress in reaching out to this growing market. All 130 destinations in the GMTI were scored against a backdrop of criteria that included suitability as a family holiday destination, the level of services and facilities provided, accommodation options and marketing initiatives as well as visitor arrivals. Turkey had an index score of 73.9, placing it third in the overall combined list. Malaysia scored 81.9, followed by the UAE at 74.7. In comparison, the highest scoring non-OIC destination Singapore scored 68.4, with second place Thailand at 59.5.

Turkey urges for improving trade with Iran Turkish Development Minister says trade volume will be boosted KONYA-A third of trade between Turkey and Iran is conducted in the Turkish lira or the Iranian rial, Turkey’s Development Minister Cevdet Yilmaz said. Trading in local currencies rather than the U.S. dollar benefits the trading nations as it avoids exchange rate losses, reducing trade costs. Speaking at a meeting of the Turkey-Iran Joint Economic Commission in Konya, central Turkey, Yilmaz said: “We made some great progress and would like to add to it in the next period. We continue to make trading easier by adding 30 more products to the protocol we signed .”

Turkey and Iran regularly update their trade agreement with the signing of a fresh protocol to add new products to the items exchanged between the neighbors. Yilmaz added: “Turkey will boost its trade volume with Iran as soon as possible, as export levels in March showed an increase. In 2015, we had a $10 billion trade volume and we will look to increase it to the $30 billion level.” March’s exports to Iran showed a 0.3 percentage point increase. Iranian Communication Minister Mahmoud Vaezi said issues around banking had been resolved.

THOUGHT OF THE MONTH

Humor

“Quality is remembered long after the price is forgotten.” PARADOX The paradox of our time in history is that we have taller buildings, but shorter tempers; wider freeways, but narrower viewpoints; we spend more, but have less; we buy more, but enjoy it less. We have bigger houses and smaller families; more conveniences, but less time; we have more degrees, but less sense; more knowledge, but less judgment; more experts, but fewer solutions; more medicine, but less wellness. We have multiplied our

possessions, but reduced our values. We talk too much, love too seldom, and hate too often. We’ve learned how to make a living, but not a life; we’ve added years to life, not life to years.

We have higher incomes, but lower morals; we’ve become long on quantity, but short on quality. These are the times of tall men, and short character; steep profits, and shallow relationships.

These are the times of world peace, but domestic We’ve been all the way to warfare; more leisure, but the moon and back, but less fun; more kinds of have trouble crossing the food, but less nutrition. street to meet the new These are days of two inneighbor. comes, but more divorce; of fancier houses, but We’ve conquered outer space, but not inner space; broken homes. we’ve cleaned up the air, It is a time when there is but polluted the soul; much in the show window we’ve split the atom, but and nothing in the stocknot our prejudice. room

THE ECONOMIST What is the real problem?

Well!!!

If the only tool you have is a hammer , you tend to see every problem as a nail.

May June 2016

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The best product of the year: Dermokil Dermokil was elected as consumers the best products of the year with the votes and became the owner of consumer innovation award 2016

Turkey to open trade centers in Tehran, Dubai ANKARA-In addition to its praised economic growth in Turkey, the contracting sector has recently broken a new record. As of the end of 2015, nearly 9,000 projects worth more than $322.6 billion have been initiated in 107 countries. Economy Minister Mustafa Elitaş said the projects initiated in the past 12 years are worth nearly $276 billion. Highlighting that the support infrastructure of Turkish trade centers, which will serve as bases for marketing, distribution and logistics, has matured, Elitaş said two trade centers will be opened in Tehran and Dubai. “We compensated for the decrease in Russia-related fruit and vegetable exports by exporting to other countries. Our exports to Russia decreased 80 percent during the 15-day period after to the plane downing crisis in November 2015. The exports began running the usual course as of Dec. 15. Between Nov. 24 and Dec. 31, there was a 54.6 percent decrease in exports,” Elitaş said. “We are currently engaged in compensating projects related to the damages of the exporting companies to the region. While shuttle trade was $3.5 billion and $2.5 billion in 2014 and 2015, respectively, it is estimated to decrease to $1.7 billion this year. While 4.5 million tourists visited Turkey in 2014, this number decreased to 3.6 mil-

lion tourists last year, generating $1.8 billion in tourism revenue. However, a $1 billion decrease is anticipated this year. “Within the framework of European Union and Customs Union agreement, 19,000 tons of meat has to be imported, and 25,000 tons of meat imports in total are obligatory. Moreover, the current account deficit decreased 26.1 percent compared to the previous year to $32.2 billion, which is the lowest amount in the past 6 years,” he added. “Since some sectors might experience difficulties this year due to decreased oil revenues in many countries, our priority is to design special financing packages regarding security deposits and project finance, which are the top difficulties experienced by Turkish firms. Among the top 250 contracting firms in the world, 42 are Turkish firms. We will emphasize branding projects this year in order to promote the Turkish brand. Required support will be provided for the firms that do so as well. Therefore, within the framework of the TURQUALITY brand support program, $369 million was provided for 187 brands of 175 firms,” he said.

Letters to the Editor turkey@ihlas.net.tr Whistle-blowing

ington, DC, when California experiences a recession. Nor, given linguistic and cultural It has historically been very difficult for barriers, can unemployed Greeks move just tax authorities to identify and trace tax eva- as easily across the border to a more prossion through offshore holding structures. perous European state. And Greek banks For many legitimate reasons, offshore juris- and firms lose their creditworthiness alongdictions often promote themselves on the side their government if markets perceive strength of their secrecy and privacy protec- the latter to be insolvent. The German and tions. However, these protections can and French governments, for their part, have had have been abused. Of late, whistleblowers little say over Greece’s budget policies. They have provided a significant new weapon for could not stop the Greek government from the armoury of tax authorities across the borrowing (indirectly) from the European world. However, whistle-blowing is not a re- Central Bank (ECB) as long as credit rating liable source of information on its own and agencies deemed Greek debt creditworthy. so tax authorities around will the world will J.Vermon/ Frankfurt need to continue to look for new ways, such as beneficial ownership registers, to pierce Tax-haven the veil of secrecy roduced through offThe Organisation for Economic Co-opshore structures. eration and Development (OECD) has atE. Gren/Berlin tacked Panama over its tax haven status. Pascal Saint-Amans, head of tax for the OECD, Hiding money from the tax told the BBC: “Panama has refused to comTo try to stop people hiding money from mit to automatic exchange of information.” the tax authorities the European Union in- “They’ve dragged their feet on exchange troduced the European Savings Directive of information on request. They have not (ESD). Basically, banks in EU countries col- signed a multi-national convention, offering lect the tax due on bank accounts held by themselves as the place of the ultimate secitizens of other EU countries. So you can’t crecy, and therefore it’s no surprise that you be an Irish person with a Dutch bank ac- have a concentration of bad business there count and hope the Irish tax authorities today,” he said. won’t find out about it or collect the tax S. Bridge/ Paris owed. The ESD made it much more difficult to hide your money in Europe. It is interShell companies esting because when the ESD was being A shell company has the outward appeardiscussed and introduced there was a sudance of being a legitimate business. But it den increase in people who wanted to open is just an empty shell. It does nothing but bank accounts outside Europe, hence the manage the money in it, while hiding who surge of interest in places like Panama and owns the money. Its management is made the British Virgin Islands. up of lawyers, accountants or even the office cleaner, who do little more than sign docuD.Brussels/Colbert ments and allow their names to appear on Greece the letterhead. When the authorities try to find out who really owns or controls the Greece benefited from a common cur- money in the company, they are told the rency, unified capital markets, and free trade management does, but it is all just a front. with other EU member states. But it does Someone else is just paying them so they not have automatic access to a European can hide their money from the authorities lender of last resort. Its citizens do not re- or in some cases their ex-wives. ceive unemployment checks from Brussels Z. Dengden/London the way that, say, Californians do from Wash-

Dermokil Mask received selected product of Year 2016, Consumer Innovation Award to Nielsen face-to-face survey of 4,155 consumers and market research. Consumers assessed products in the competition in terms of user satisfaction with the survey which started in 1987 in France and practiced in 37 countries around the world. With its effects it shows only after first use, Dermokil Mask managed to show that to be beautiful is possible with clay by being preferred as the most recommended brand by women. A domestic brand with 10 years history, Dermokil combines the natural treatments with clay and received innovation award by gaining greater appreciation of the consumer

The address of reliable packing;

Akın Plastik The most important four rules for us to do business are; being leader, being ınnovative, being reliable and having quality, Our manufacturing philosophy is; manufacturing creative, unique packaging through continuously innovative Technologies. For example, 3 colors transfer Coloring Blow machine was realized by our company first time in Turkey. Then, we also invested on Soft Touch and PET G machine invertments.

We are aware that achieving the best work in this competitive market is possible only by having the right technologies. The artistic viewpoint and technology are combined in our new facility in which we continuously work for a unique vision not by respecting standards but by creating newer standards. Because, we deal with not only manufacturing packaging but we transform your dreams into reality.

Aziz Özay

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May June 2016

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Turkish cosmetics sector has the capacity to be a worldclass manufacturing center The impact of the global slowdown are being felt in the cosmetics industry as well as in all sectors.

Turkey strengthens curb appeal at Cannes real estate exhibition According to an announcement from the Istanbul Chamber of Commerce (İTO), this year Turkey’s involvement and participation in the MIPIM, which is one of the biggest real estate exhibitions in the world that brings together more than 20,000 real estate professionals from 90 countries organized each year in Cannes, France, will be the most comprehensive yet. İTO Chairman İbrahim Çağlar said that this year promoting Turkey and Istanbul will step up a level, explaining that the MIPIM has a strategic importance in promoting Turkey and Istanbul’s real estate sectors around the world. Leading companies from Turkey’s real estate sector and construction industry will attend the exhibition, which will take place from March 15 to March 18. İTO will arrange various activities for the MIPIM exhibition in which projects and cities compete with each other. İTO built a 300,000 square meter Istan-

AMBULANCE

bul Real Estate Promotion tent last year and this year it will introduce and promote Istanbul in a 685 square meter facility - more than double the space reserved for Istanbul last year. Çağlar said that the urban transformation project of Turkish firms and the Turkish government’s planned mega infrastructure projects will be introduced and promoted to foreign investors from 89 different countries. There will be a lot going on at the Istanbul Real Estate Promotion tent this year as well. With the “Star of Housing” team, the tent will be the main center of attention for its location, program and daily activities. The Live Mockup of Istanbul, which was introduced for the first time last year, will also be held at the exhibition this year. The 69-square-meter mockup will present the four seasons of Istanbul. The video mapping presentation of the mockup was completely redesigned and the Live Mockup of Istanbul - the largest model of Istanbul

built to date - will continue to display Istanbul around-the-clock to visitors with sound and visual effects. The leading names in Turkey’s planned urbanization and housing mobilization, the Housing Development Administration of Turkey (TOKİ) and its subsidiary Emlak Konut GYO A.Ş. will also promote their project. In addition to introducing the most prestigious projects in Istanbul at the Istanbul Real Estate Promotion tent, on the first day of the exhibition a reception will be held for foreign investors, which will offer a chance for faceto-face meetings between Turkish firms and foreign investors. On the second day, İTO will organize a panel “Metropolitan cities: Are housing needs and demands related?” Last year, a delegation from Turkey attended the exhibition with 700 people, and this number pushed Turkey up the list when the number of its visitors reached seventh place.

AMBULANCE EQUIPMENT

1 billion 271 million dollars of exports carried out in 2014, it amounted to 1.1 billion dollars in 2015. The countries we export cosmetic most are Iraq, Russia, Iran, Germany, United Kingdom, Azerbaijan-Nakhichevan, Algeria, United Arab Emirates, France and Saudi Arabia last year. The decline in exports is Russia which is one of our largest market with a large share. A loss of 50 million dollars among 175 million dollars are belonging to Russia. This is the source of the decline rather than aircraft attack experienced a recent decline in oil prices deepen the economic crisis in Russia... On the other hand, much of which is still an important market reflected positively on the lifting of the embargo against Iran cosmetic industry. Iran has a market that we are very strong in cosmetic products the Turkish perception is high. Turkish cosmetic industry has a world-class manufacturing center in especially shampoo and soap. As well as in soap we are in the top three in the world for hair care products and wet wipes production. Our diversity and our exports are increasing in makeup product that we call color cosmetics product. Turkish companies continues its attacks in recent years.

Murat Akyuz

Chairman of IKMIB Istanbul Chemicals and Chemical Products Exporters’ Association

They follow closely trends in the cosmetics industry from packaging to perfume, color. Companies follow the trend rather than is taking place right orientation. Branding is very important and at this point as IKMIB, we support all the cosmetic industry for export and branding. Our working continues with our Cosmetic Promotion Group. By 2016, we will organize the exhibition as well as the organization of many countries production & development activities in terms of branding of Turkish cosmetics. We will organize national participation in the world’s most important cosmetics exhibition such as Cosmoprof Italy, Dubai Beautyworld, Cosmobeaut Asia and Cosmoprof Asia. France Cannes, Chile and Colombia are national organizations we will organize trade missions.

MOBILE HEALTHCARE VEHICLES

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Growing for the 25th consecutive quarter Turkish economy sustained its growth for the 25th consecutive quarter with 5.7 percent that gained in the last quarter of 2015. Despite strife and wars both in the surrounding countries and neighboring countries, as well as the global economic disruption that has not achieved stability since 2007-2008; Turkish economy achieved a growth rate of 4 percent in 2015. This growth rate performs dynamism of robust Turkish economy. Performing 4 percent growth in 2015 in the negative conditions regarding strife, war and unstable conditions for over 5 years in Iraq and Syria, as well as brutality of DAESH terrorist organization in the region, Turkish economy is signaling its growth potential for the upcoming years. Accordingly, once the strife and wars in neighboring countries end up, the giant potential of the Turkish economy will expose its real power. The economy would be able to display its real performance at that time.

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Turkish Prime Minister Ahmet Davutoğlu:

Decreasing inflation in Turkey raises expectations for interest rate cut ANKARA- Speaking at the Justice and Development Party’s (AK Party) group meeting at the Grand National Assembly of Turkey (TBMM), Turkish Prime Minister Ahmet Davutoğlu said interest rates, exchange rates and inflation would take a downward trend during the next period. Indicating that interest rates as well as inflation’s upward effect would reverse, Davutoğlu added that the March inflation rate communicated a positive message by occurring below market expectations. The annual inflation rate maintaining the 7.46 percent level in March was the lowest rate over the past seven months. Davutoğlu said they would keep fighting to reduce inflation even more. Recalling that the growth rate was 5.7 percent above the expectations in the last quarter of 2015 while the total growth throughout the year reached 4 percent, Davutoğlu stressed that this growth occurred as a part of the election conditions. “Political stability brings economic stability and development in its wake,” Davutoğlu said. Indicating that nearly 700,000 people were employed in 2015 and nearly 6.5 million people were provided with jobs since the 2007-2008 global financial crises, Davutoğlu promised that 2016 would be an advantageous year for Turkey. Led by the unexpected drastic decline in the food sector, Consumer Price Inflation decreased 0.04 percent while annual inflation reduced from 8.78 percent to 7.46 percent in March, according to data released by the Turkish Statistical Institute (TurkStat) Moreover, the Central Bank of the Republic of Turkey (CBRT) published the monthly “Price Developments Report.” According to the report, prices of unprocessed food were the major driver in bringing down inflation in March. The report also drew par-

Ahmet Davutoğlu Prime Minister

ticular attention to red meat, saying the decreasing trend continued in March, while explaining that inflation for the unprocessed food group decreased 8.7 points, falling to 0.22 percent in annual terms. Along with the decreasing trend in the level of unprocessed food prices, the report also addressed the foreign exchange rates on inflation, whose cumulative effects have been decreasing. It added that parallel to this, core inflation decreased on a yearly basis, and the main trend in annual inflation has

been following an ameliorating path. According to analysts, this decline enhanced the possible discount expectations on the high band of the CBRT’s interest rate corridor regardless of who its new governor will be, and the willingness from the political wing regarding the interest discount will be further addressed as well. Thereby, given the favorable conditions accompanying the decreasing trends in annual inflation, experts expect a reasonable decrease in the marginal funding rate.

2 - 4 Haziran 2016

The growth in Turkish economy despite strife and wars in neighboring and surrounding countries, geopolitical risks and general elections held in 2015, growth rate is perceived as a success story.

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Çin Ürünleri Fuarı

According to the analysts, in a conjuncture which geopolitical risks have increased in the region, the growth rate in the Turkish economy is attributed to the domestic consumption especially having sold one million vehicles in 2015.

Çin ürünlerini doğrudan tedarik ettiğimiz Avrasya’nın en önemli ticaret platformu

Also having young population would spur the Turkish economy to mobilize the domestic consumption because of being a key pillar of economy. As for 2016, the economic uplifting in the European market and the European Central Bank’s measurements interpreted as the positive developments for the Turkish economy. Also continuity of low oil prices will push the Turkish economy to the positive direction this year, as well as last year.

Kumaş, Hazır Giyim ve Aksesuarları Elektrikli Ev Aletleri

Another positive development for the Turkish economy is low crude oil prices which play remarkable role to reduce Turkish current account deficit.

Binl erce Ürün

Ev Eşyaları, Züccaciye Hediyelik Eşya

On the other hand, Turkish economy showed the fourth growth performance in G20 countries last year. Also growth of the Turkish economy shows a higher performance than the world economy which is predicted 2.9 percent for last year and as for 2016 the growth rate is foreseen 3.1 percent. The growth for the 25th consecutive quarter is also regarded as an indicator of success in the economy management of the ruling party. In conclusion, once strife and wars in neighboring and surrounding countries finish, growth rate might raise more than this in the upcoming years…

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Döşemelik Kumaş, Ev Tekstili

Sergilenecek

In the framework of these positive developments in terms of economy, expectations for the growth in 2016 would be the same with this year. Performing growth for the 25 consecutive quarters also shows the stability of Turkish economy.

May June 2016

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May June 2016

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Arab investors to build golf courses in Black Sea region

Ordu Mayor Enver Yılmaz ORDU-Drawing a great deal of attention at one of the world’s most prestigious real estate fairs, the MIPIM in Cannes, the Ordu Municipality will now be the site of investments such as golf courses and rehabilitation centers that Arab investors want to make in the flatlands of Ordu. Ordu Governor İrfan Balkanlıoğlu indicated that Arab investors were keen on investing in the city. He explained that they held a meeting with a Saudi investor, and said: “Arab investors were quite impressed with our flatlands. They told us that it was a paradise and asked for a 100-acre field. They want to build golf courses and nursing homes for the elderly on our flatlands, and they foresee a $100 billion investment.” Stressing that they have a flatland of 40 square kilometers that enabled skiing in the winter and golf in

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the summer, Balkanlıoğlu said: “In order to invest in the areas belonging to the Treasury, the qualification needs to change, which we can do, as the Office of the Governor. But, permissions such as purchase and allocation for investors are subject to the Prime Ministry. These changes need to be passed to start the investment. We are expecting a billion-dollar investment.” Participating in the MIPIM fair in March with four projects, Ordu Metropolitan Municipality introduced the Çambaşı Winter Sports and Skiing Center, Melet Park, Chocolate Park and Ünye Port Ordu-Giresun Airport projects. Stressing that they drew great attention from foreign investors at the fair, Ordu Mayor Enver Yılmaz said: “We held some meetings regarding the operation of the skiing facility. Our negotiations with hotel chains are in progress and there are some eager groups from Europe and Gulf.” According to Balkanlıoğlu, the number of visitors to the city has reached nearly 480,000 from 300,000, increasing 41 percent over the past year due to the new airport and promotion activities, and they were expecting nearly 100,000 Arab tourists in the next year. Explaining that five-star hotels would be constructed in the city, Yılmaz said: “Arabs want to stay in houses with their crowded families, which reflects the spirit of the city. We have related projects as well.” Yılmaz said that Trabzon and Ordu’s tourism revenue was TL 1 billion ($350 million) and TL 20 million, respectively. “We do not want to share this cake, but to make it bigger. We aimed to be the new destinations. If Trabzon only attracts tourists from Saudi Arabia, we are working to [get tourists from] all the Arab countries.

Murat Ülker tops Forbes’ Turkey’s richest list Turkish businessman Murat Ülker stood at the top of 100 Richest Turks list according to data released by Forbes magazine. Ülker, who chairs one of the world’s largest food industries under the Ülker brand, was announced to have a net worth of $2.9 billion (TL 8.59 billion), decreasing from $4.4 billion in 2015. Ülker stood 601st in the global ranking, falling from 369th place in 2015. The business magazine said the losses were mainly due to exchange difference and his firms’ losses on the Istanbul Stock Exchange. These reasons were also behind the loss of total wealth among Turkey’s 100 richest, according to the magazine. Hüsnü Özyeğin, Chairman of FIBA Holding which mainly focused on the finance sector with various other ventures, followed Ülker with a net worth of $2.6 billion, down from $2.7 billion in 2015. Ferit Şahenk, chairman of Doğuş Holding which made investments in construction, media and automotive, ranked third with a net worth of $2.4

billion. Rahmi Koç and Semahat Arsel, members of the Koç family that control the country’s largest conglomerate, placed fourth and fifth respectively with net worths of $2.4 and $2.2 billion. A total of 114 people were included in this year’s list, with an average net worth of $821 million, which decreased from $863 million in 2015. The total wealth of the people included in the list was $94.7 billion, down from $100.4 billion in 2015. 31 people from the list are also part of Forbes’ The World’s Billionaires list. 18 new names were included this year. The magazine calculates a person’s fortune through his/her shares in companies and cash money, real estate and artworks. In recent years, Ülker’s company has grown through the acquisitions of international firms. Many Turkish people in the list have investments in the real estate and energy sectors. There are 21 women in the richest person list, with the wealthiest being Arsel from Koç Holding. “This year was very interesting. We

Murat Ülker

see significant decreases, increases and new names. Overall, it was very mixed,” Burçak Güven, Forbes’ Turkey editor-in-chief said. There are also new billionaires on the list. Mustafa Küçük, the shareholder of LC Waikiki, a ready-to-wear clothing firm in Turkey, has a $2.2 billion fortune.

German, Turkish trade volume rises in 2015 The trade volume between Germany and Turkey rose to 36.8 billion euros ($40 billion) last year from 32.6 billion euros in 2014, Germany's Federal Statistical Office (Destatis) announced.

In 2015, Turkey was the 14th-largest destination for German exports, and the 17th-largest importer of goods from Europe’s most powerful economy, according to Destatis. That compares to number 16 for exports and number 18 for imports in 2014. Meanwhile, German exports to Turkey hit 22.4 billion euros in 2015, while imports from Turkey were valued at 14.4 billion euros. Destatis reported that the U.S. was Germany’s biggest trading partner, with 113.9 billion euros in exports and 59.3 billion euros in imports, with a total trade volume of 173.2 billion euros. France took second place with a foreign trade

volume of 170.1 billion euros, followed by the Netherlands with 167.6 billion euros. China was Germany’s top import partner with 91.5 billion euros in imports in 2015, part of a total trade volume of 162.5 billion euros. Germany’s total exports in 2015 were valued at 1.19 trillion euros, and imports came in at 948 billion euros. Turkey’s Economy Ministry earlier announced that in 2015 Turkey’s exports reached $143.9 billion, an 8.6 percent decline from $157.6 billion in 2014, and that imports fell 14.5 percent in 2015 to $207.1 billion from $220.4 billion the previous year.

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Turkish exports reach $20.4 billion in first two months of 2016

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ANKARA-Turkey’s exports have increased slightly in February compared with the same period last year after 14 months of decline, the Exporters’ Assembly of Turkey (TIM) reported. Exports totaled $10.8 billion last month, which is an increase of 3.1 percent year-on-year, while it reached $20.4 billion in the first two months of the year, which is a decline of 16.9 percent compared with the same period last year, according to TIM.

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Turkey’s exports affected negatively amid dramatic fluctuations in euro-dollar parity, it said. “The negative effect of the euro-dollar parity was around $128 million over exports in January,” the assembly said. Turkey’s total exports within the last 12 months stood at $139.7 billion, down by 10.8 percent compared with the same period last year.

The largest volume of exports was made by the country’s automotive industry in the month with almost $2 billion worth of exports, followed by the readymade clothing sector with $1.42 billion and the chemical materials and products sector with $1.14 billion, according to the data released by TIM. Germany, Italy, France, U.K. and Iraq were the largest export markets for Turkey in February. The country’s exports to Italy increased by 15.7 percent, to Germany by 13.1 percent and to France by 12 percent in January compared with the same month in 2015. Turkish exports to Iraq declined by 5.8 percent. The largest increase in the country’s exports among the top 30 markets was seen in Ukraine with an increase of 47 percent, followed by Egypt by 46.7 percent and Greece 40 percent.

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May June 2016

Turkey eyes $5 billion from health tourists annually amid tourism woes Turkish mobile network progresses to 4.5G ISTANBUL-ISTANBUL-Advanced fourth-generation (4G) telecom services - dubbed 4.5G in Turkey - have become operational in the country. The technology was introduced during an official presentation in Istanbul with the participation of Communication Ministry officials and the head of the Information and Communication Technologies Authority (BTK) as well as Turkey’s three mobile operators, Turkcell, Vodafone and Turk Telekom. Head of BTK Omer Fatih Sayan told reporters that Turkey now boasted the world’s highest broadband Internet speed in mobile technology. “4.5G is 10 times faster than third-generation (3G) technology,” Sayan said. According to BTK, 4.5G technology will offer consumers the ability to use new technologies and will provide faster browsing, downloads, and uploads. The total amount of spectrum available will be increased by three times. The rights to the frequencies will last until April 30, 2029. Last year in April, Turkish President Recep Tayyip Erdogan said that Turkey should skip 4G Internet technology and move directly to 5G instead. 5067-IKMIB_KOZMETIK_DUYURU_ILANI.pdf

“We would waste time with 4G technology and should move to 5G in two years, or else Turkey becomes a garbage dump for 4G technology,” Erdogan had said. After Erdogan’s announcement, three mobile operators, Turkcell, Vodafone and Turk Telekom, won the rights to the country’s most advanced 4.5G network after paying more than €3.9 billion ($4.5 billion) in a tender held by BTK last August. According to Sayan, 4.5G is faster and better for user experience and more efficient, with regards to spectrum use, than 4G. He added 4.5G would serve as a bridge to fifth-generation (5G) technology, which is expected to be the next major step in mobile telecommunications. According to ministry figures released in 2015, the number of 3G subscribers has reached 61.1 million in Turkey. The figures show that the number of cell phone subscribers reached 72 million while the number of broadband Internet subscribers had increased to reach over 44 million in the second quarter of 2015 from just six million in 2008. Turkey’s population was 77.7 million in 2014, according to the country’s statistics authority. 1

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ISTANBUL-Turkey has the potential to increase its annual revenue from health tourism to $5 billion over the next two years, with officials looking for ways to boost and diversify the country’s tourism appeal amid a downturn in the sector. “I strongly believe that Turkey’s revenue from this sort of tourism will reach $5 billion over the next couple of years,” Health Ministry undersecretary Erol Afşin told Anadolu Agency. Afşin said annual revenue from health tourism is currently around $1.5 billion officially, but the real figure is estimated to be around $3 billion. The government’s target is to make around $20 billion in revenue annually from the sector by 2023, the 100th anniversary of the establishment of the Republic of Turkey. While just 109,000 medical tourists visited Turkey in 2010, this figure rose to 583,000 by 2014, mainly thanks to a sharp rise in the number of tourists from Libya, Iraq and Germany. With the addition of plastic surgery figures, this figure increased up to 700,000, according to sector representatives. According to Afşin, most health tourists to Turkey come from Iraq, Azerbaijan, Kazakhstan, Georgia, Greece, Uzbekistan and Bosnia Herzegovina as well as other European countries. Turkey is a particularly popular destination for organ transplants, hair transplants, heart surgery

Turkey expecting visa-free travel in EU by June

and plastic surgery operations. “The number of health tourists has been increasing rapidly as Turkey offers quite a high quality of health services and technologies at affordable costs … A regular operation costs around 70 percent lower in Turkey than it does in Europe,” Afşin added. The most popular spots for foreign patients are Istanbul and the Mediterranean resort of Antalya, according to sector representatives. The remaining tourists tend to prefer the capital Ankara, the Aegean city

AMSTERDAM-Turkish nationals can expect vise-free travel to the EU by June, the country’s EU Minister Volkan Bozkir said. “We expect that the decision for the citizens of the Republic of Turkey to enter the Schengen zone without visa requirement will be taken before the end of June,” he said following a meeting with Dutch Foreign Minister Bert Koenders. The Netherlands currently holds the EU presidency. Bozkir said the EU Commission would release a report on

of İzmir and the northwestern province of Bursa, which is especially popular among Arabic tourists. Despite uncertainty in Turkey’s tourism sector over terrorist attacks and bilateral political strains between Ankara and Moscow, all hotels in Antalya could be filled with visitors if the health sector’s full potential is fulfilled, Afşin said. He stressed that non-governmental organizations, companies and the public sector need to work together in order to realize this target. He also noted that health tourists on average spend around four times more than ordinary tourists.

early May on the visa agreement. “We expect that the commission report will be positive and they will express opinion for removing the visa,” he said at a news conference in Amsterdam. “All the developments are advancing in this direction. “Following that, the topic will be presented before term president the Netherlands. It is the Netherlands that will organize the council’s decision. We talked about this. Then it will go

to parliament and the decision… will be finalized.” He said the necessary legislation would be finalized by the end of April. A decision to open Chapter 33 on financial and budgetary provisions would also be taken soon to speed up Turkey’s EU accession. Under an EU-Turkey deal to ease the refugee crisis facing Europe, EU leaders agreed to cut visa requirements for Turkish citizens and accelerate Turkey’s EU membership bid.

Turkey’s first submarine trips aim to revive tourism

CMY

Guests from around the world could soon be speeding through the Mediterranean Sea at 130 feet below the waves in ‘Nemo’, a Finnish-built craft, renovated in Spain. The chairman of the company behind the ambitious $4-million scheme, IHS Travel and Touristfly, spoke recently to Anadolu Agency: “We wanted to bring a new and different alternative to the sector and then this project came to our minds,” says Yunus Emre Yavuzyigit. “I believe it will revive the tourism industry. We are very hopeful of the project,” he adds. The guided underwater tours could start in April from the coastal city of Alanya. The exciting project comes as Turkey witnesses a decline in the number of foreign visitors from Russia and Europe in 2015. According to a data released by Turkish Tourism Ministry last month, foreign tourist arrivals dropped around 1.61 percent compared to the same period of 2014. Antalya was one of Russian visitors’ most popular destinations until Turkey downed a Russian warplane on the Syria border on Nov. 24 last year. After the subsequent diplomatic row, tourist arrivals have dropped significantly. Ac-

cording to the ministry’s figures, numbers of Russian tourists coming to Turkey have fallen by 47 percent in December 2015, compared to the same period of the last year. Last month’s terror attack which killed 11 German tourists in Istanbul’s Sultanahmet district has also caused concerns for the industry. However, a quick recovery is expected with the support of alternative touristic activities like the bold ‘Nemo’ venture. The 90-minute tour aims to attract both local people and international tourists. “I believe these tours will make a significant contribution to Turkish tourism,” says Erhan Gurcam, captain of the submarine. “I am very excited to be part of this unique project,” he adds. “As a retired military submarine captain, it will surely be a different experience for me.” The underwater adventures will continue throughout 11 months of the year and the company plans to enlarge the underwater tours over the coming years. “We plan to buy more submarines to start tours in the Aegean Sea and the Marmara Sea as well in 2017,” Yavuzyigit adds. It seems it will bring a new lease of life to Turkey’s tourism industry.

May June 2016

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Ministry initiates employment support Turkey to focus on long-term goals with 11th Development Plan to boost Turkish tourism sector Labor and Social Security Minister Suleyman Soylu announced that the insurance premium and payments of 44,753 people working in the tourism sector in Antalya and Mugla would be covered by Turkey's employment agency ISKUR.

Cevdet Yılmaz Development Minister

ANKARA-Development Minister Cevdet Yılmaz announced that the Development Ministry has initiated a project to establish a long-term vision for the future of Turkey, which will extend into the 2030s. With these preliminary preparations, the 11th Development Plan, slated to be issued in 2017, will have a longterm, long-range vision; however, no final decision has been made regarding the actual timeline as officials are uncertain regarding the scope as it applies to 2030 or 2035. Yılmaz also presented the 2016 budget before the Parliament’s Planning and Budget Commission along with the relative authorities and institutions. Yılmaz said the main duty of the ministry is to identify all natural, human and economic resources and opportunities for the country, and act as a consultant to the government when determining the economic, social and cultural policies to be implemented as well as their related targets. A new approach, titled the 25th Preferential Transformation Program, was adopted for the 10th Development Plan of 2014-2018, which included a total of 248 actions. Yılmaz said the program will continue to be effectively implemented this year as well. “Regarding the implementation of the actions included in the action plan, steps to increase investments and exports, closing the current account deficit, improving the level and competitive power of employment and productivity as well as strengthening public

accounting will be prioritized along with expediting the legal regulations to enable these actions,” Yılmaz said. Furthermore, Yılmaz said preparations for the 2016 Economic Reform Program are ongoing, and the program will also be submitted to the Planning Commission for approval once it is completed. Some of the targets for this year include decreasing the current account deficit to $28.6 billion and reaching the target ratios of 0.6 percent to 3.9 percent of the current account deficit to gross national product (GNP), according to the recent findings. The domestic savings rate was 15 percent in 2014 - the highest since 2008 - and Yılmaz stressed that once the final data are obtained, savings will possibly increase 0.6 percent to 15.6 percent in 2015. Yılmaz said thanks to the economic and social policies applied, income inequality in Turkey has reduced since Turkey has become one of the few countries that can simultaneously have good economic performance while improving income distribution. He also highlighted that TL 1.6 billion ($541.3 million) was granted to universities in 2016, and according to the Public Investment Program, public resources increased to TL 1.9 billion in 2014 and to TL 2.5 billion in 2016, up from TL 114.3 million in 2002.

Markets welcome appointment of new Turkish central bank governor positively Markets reacted positively to the appointment of Murat Çetinkaya as the new governor of the Central Bank of the Republic of Turkey (CBRT), with the compound interest rate of the two-year benchmark bond hitting 9.57 percent the lowest level in 11 months. The interest rate on the two-year benchmark bond was being traded at 9.97 percent . Also, the 10-year benchmark bond rate saw its lowest level with 9.65 percent. Analysts attributed these decreases to the elimination of uncertainty, which led to increased demand for assets denominated in Turkish lira, also backed by the positive atmosphere in the global markets. The CBRT’s interest rate policy has been criticized by some officials, including President Recep Tayyip Erdoğan. Keeping interest rates high was the main critique since it is seen as a block to investment. The relationship between interest and inflation is also being discussed by economists, since despite the high rates, the CBRT was unable to

hit its target inflation level several times. The new governor’s rate policy will be followed closely by the markets. Speaking at a meeting in Ankara, Economy Minister Mustafa Elitaş said Çetinkaya’s appointment as an experienced name in the field was welcomed very positively by domestic markets. As the monetary policymaker, the CBRT’s new governor was an issue of concern, and domestic markets’ positive perception of Çetinkaya is expected to enhance confidence in the CBRT. Prime Minister Ahmet Davutoğlu asked the government to appoint Çetinkaya, who was formerly the CBRT vice governor. Deputy Prime Minister Numan Kurtulmuş announced that Çetinkaya received the Cabinet’s approval at the meeting held on April 11. The term of current CBRT Governor Erdem Başçı will end on April 19, after which he will be appointed as Turkey’s ambassador to the Organisation for Economic Co-operation and Development (OECD).

Explaining that tourists visiting Turkey would be directed by employing foreign-language speakers to the Antalya, Alanya, Trabzon, Dalaman, Milas-Bodrum, Adnan Menderes, Atatürk and Esenboğa airports as well as museums and archaeological sites connected to the Culture and Tourism Ministry, Soylu said that as part of the program, TL 544,000 of investments has been reserved for 200,000 people who will be trained for six months and later employed. Stressing that work permits of foreigners will be facilitated in the package, Soylu said that by decreasing the minimum wage for foreign workers from three times the minimum wage to one minimum wage level, the wages that employers would pay foreign workers and the amount of premiums that they pay to the Social Security Institution (SGK) would be reduced by one-third. Therefore, in the situation where at least 10 Turkish citizens have to work for foreign workers to be employed in jobs requiring mastery and expertise, the condition of employing five Turkish citizens for each foreign worker will be lifted. This support program covers tourism and travel agencies, certificated holiday villages, tourism-animation organization firms and privately owned entertainment venues. Soylu said that balancing would be implemented in order to increase the service quality by preventing seasonal work and employing full-time, experienced and qualified personnel. By increasing the balancing period to four months, and later up to six months, with collective labor agreements, the summer months with too much work

Süleyman Soylu Labor and Social Security Minister

and winter months with no work will be balanced. Prefacing that training skilled workers is also in the package, Soylu said that the qualified workforce required for the tourism sector would be trained through occupational training courses and on-the-job training programs. Indicating that last year 3,156 people were given on-the-job training, Soylu said that they plan for 15,000 people to be trained the same way this year. Political tensions after Turkey shot down a Russian warplane that violated its airspace near the Syrian border in November have resulted in Russian economic sanctions on Turkey. Moscow has discouraged its citizens from visiting Turkey, a popular destination for Russians due to its warm beaches. Turkey received approximately 4.5 million Russian tourists in 2015, with 75 percent spending holidays in Antalya, a top summer vacation destination.

Ünal said that the government has been trying to establish new support solutions for the problems experienced since Nov. 24. According to Ünal, Turkey has no problem in terms of recognition, and they will continue managing the process better by giving weight to lobbying activities and public relations. Regarding his previous statement about supporting local tourism to boost the sector and the latest situation about the issue, Ünal said: “Currently, we have a public-oriented project in terms of offering advantageous opportunities for domestic tourism to civil servants. However, this project has not been initiated yet, we will discuss it with the sector.” When asked about the decrease in the number of tourists compared to the previous year, Ünal said that it was misleading to give a certain rate now, and the 2016 number could be shared after the season starts.

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Inflation in Turkey under government’s Turkish Airlines posts record net profit year-end target of 7.5 percent The annual rate of inflation in Turkey fell to 7.46 percent in March due to a sharp drop in food prices, according to official data released by the Turkish Statistical Institute (TurkStat). So far in 2016, inflation has been following a path close to the 7.5-percent target set for this year by the government’s Medium-Term Economic Program (MEP). Monthly inflation dropped 0.04 percent in March from the previous month, as February’s rate stood at 8.78 percent.

ion of Chambers and Commodity Exchanges of Turkey’s (TOBB) University of Economics and Technology said low energy prices continued to favorably affect inflation in Turkey. “Energy prices will lower again and this will help Turkey to lower inflation, which is the country’s biggest problem,” he said. “In the coming months, it seems that inflation will get lower and lower. Next month, we will see lower inflation numbers because of base effects. This would lead to further interest rate cuts,” he added.

The health sector saw the highest monthly increase for March, with a 1.84 percent rise, while the highest annual increase was the 12.79 percent recorded for the price of alcohol and tobacco products. Regarding the progression of annual inflation, Development Minister Cevdet Yılmaz expressed that it is realistic to hit the target determined by the MEP, which aims at a 7.5 percent change in the overall price level for 2016. Yılmaz added that with stability of the TL / dollar exchange rate, oil prices fluctuating around $40 per barrel and the realizing of the estimates that food prices will see an annual increase of about 9 percent, all these will contribute to reaching the year-end target.

Cevdet Yılmaz Development Minister

Experts said the decrease would give the Central Bank of the Republic of Turkey (CBRT) more leeway in making cuts to interest rates. Atılım Murat, an associate professor at Un-

ALB Securities analyst Enver Erkan identified food prices and foreign currency levels as two crucial factors in the economy. “But we see that core inflation remains way too high, compared to the headline because of the depreciation of the Turkish lira compared to last year,” he said. “So, it means that other factors continue to affect inflation upwards. With the sharp decline in headline inflation, the [CBRT] may be encouraged to cut interest rates but the high core inflation level may limit the interest rate cut. The main risk is the additional depreciation of the lira but if food prices continue to get better and currency levels stay stable, inflation expectations might be revised downwards to 7.5 [percent] to 8 [percent] levels,” he added. Concerning the fight against inflation, the Central Bank of the Republic of Turkey (CRBT) pledged to continue to do its share in reducing inflation, as the fight against inflation requires “a collective effort.”

Deputy Prime Minister in charge of the economy Mehmet Şimşek described the fall in the annual rate as “positive” but warned that core inflation, which includes energy prices, still stood at around 9.5 percent.

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ANKARA –Anadolu Agency Turkey’s national flag-carrier, Turkish Airlines, announced a record operating net profit of 2.99 billion Turkish Liras ($1.01 billion) for last year on March 1, with a 65 percent increase from a year earlier. This was the first time the annual profit of the company exceeded $1 billion. The gross real operating profit stood at $895 million, another record for the company. In a statement, the airline said sales revenue increased by 19 percent in liras, reaching 28.75 billion liras ($9.7 billion) at the year-end. The number of destinations served by the flag carrier rose from 264 to 284 in the last quarter of 2014, including 49 domestic and 235 international destinations in 113 countries, the company said.

The airline’s capacity also increased by 13.6 percent in 2015, with the airline serving 61.2 million passengers over the year on 453,000 flights and an occupancy capacity of 78 percent. Capacity is essentially calculated by multiplying the available seats by kilometers. The margin

Gazprom reduces gas export to Turkish companies without official explanation

of its earnings before interest, taxes, depreciation and amortization (EBITDA) increased 24.5 percent to $2.6 billion. “First of all, we finished 2015, a difficult year for Turkey and the world, extremely positive,” Chairman İlker Aycı said. “Despite the strong competitive environment among the world’s leading players, political and economic instability in the region and severe operating conditions such as currency fluctuations, the airline has maintained its position among the most profitable airlines in 2015,” he added. The company now employs some 47,000 people. With 33 new planes bought last year and five more this year, the fleet of Turkish Airlines contains 219 narrow body planes, 75 wide body planes and 10 cargo planes. More than 70 percent of the company’s sales are to foreign countries, making it Turkey’s largest exporter, earning $7 billion last year. Turkish Airlines reported in November of last year a ninemonth 2015 consolidated net profit at $877 million, 21 percent up from $685 million in the same period in 2014.

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ANKARA - AA -Russia’s Gazprom has unilaterally decided to hike the price of gas sold to Turkish private companies and reduced export volumes without an official explanation, a private Turkish importer said on March 1. Enerco said the gas flow started to be reduced on Feb. 24 without any official explanation, and stressed that this reduction is against the law. “All importer companies, including us, agreed to revise the gas price with Gazprom Export in April 2015. Through this move, the contract price was cut. This was a permanent, not a temporary, revision. So no parties have the right to change or cancel this without approval from the other party. Gazprom Export asked for a price revision at the end of last year. Our contract allows such demands, but these demands must be negotiated, agreed reciprocally, or taken to arbitration as a last resort. Our talks started in a positive mode,” the company noted, adding that there is no unpaid debt owed by the company to Gazprom Export.

20-23 October2016

ISTANBUL EXPO CENTER - TURKEY

“THIS FAIR IS ORGANIZED WİTH THE AUDIT OF TOBB (THE UNION OF CHAMBERS AND COMMODITY EXCHANGES OF TURKEY) IN ACCORDANCE WITH THE LAW NO.5174”

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“There is no unclear element here as the contract is clear. According to the contract, no party can change the contract price unilaterally. We feel deep sorrow about such moves,” it also stated. Gazprom reduced gas supplies to Turkey in February. Sources then said the Turkish private sector and Gazprom were in talks over the future of a 10.25 percent price discount, but the Russian side recently canceled this discount unilaterally. Gazprom Export said on Feb. 25 it is continuing negotiations with gas consumers in Turkey and aims to maintain stable contractual relations, according to TASS News Agency.

Artdirector: İsmail Gürbüz (ismail.gurbuz@img.com.tr) Graphic Design: Tolga Cakmakli (tolga.cakmakli@img.com.tr) Correspondent: Enes Karadayi (enes.karadayi@img.com.tr) Chief Accountant: Mustafa Aktas (mustafa.aktas@img.com.tr) Subscription: Ismail Özçelik (ismail.ozcelik@img.com.tr) HEAD OFFICE: Güneşli Evren Mah. Bahar Cad. Polat İş Merkezi B Blok No:3 34197 ISTANBUL/TURKEY Tel: +90. 212 604 51 00 Fax: +90. 212 604 51 35 www.img.com.tr - img@img.com.tr LIAISON OFFICES BURSA: Ömer Faruk Görün Buttim A Blok Kat: 4 No: 4029 BURSA / TURKEY Tel : (90.224) 211 4450 - 51 Fax: (90.224) 211 4481 KONYA: Metin Demir H. Ulusahin Is Mrkz. C Blok No: 603-604-605 KONYA / TURKEY Tel : (90.332) 238 10 71 Fax: (90.332) 238 01 74 PRINTED BY: İhlas Gazetecilik A.Ş. Merkez Mah. 29 Ekim Cad. İhlas Plaza No: 11/41 PK: 34197 Yenibosna - Bahçelievler ISTANBUL / TURKEY Tel: (90 212) 454 30 00 Fax (90 212) 454 34 83

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Turkey’s automobile production up 4 pct in March

Turkey’s exports see slight increase in March ISTANBUL-Turkey’s exports increased by 2.6 percent in March to $11.5 billion compared to the same month of the previous year, according to provisional data from the Exporters’ Assembly of Turkey (TİM). The country’s exports declined by 9.8 percent to $33.4 billion in the first three months of the year compared to the same period of 2015, showed data released by the association on April 1. The 12-month exports also dropped to $140.3 billion with a 9.2 percent of decrease. Exports increased slightly in February compared to the same month last year, after 14 straight months of decline. TİM President Mehmet Büyükekşi said some slight increase in exports in the last two consecutive months have cheered exporters up, adding that the new markets will be key for a future hike in the country’s exports. According to the TİM statement, some positive contribution from the parity was seen in March for the first time for a long time. The exports saw around $117 million of contribution from the parity effect, it added.

Sharp rise in exports to the Netherlands, Iran The largest amount of exports was made to Germany, Britain, Iraq, Italy and the United States in March, according to TİM data. While Turkey’s exports to Italy increased by 15.4 percent, to Germany by 12.4 percent and to Britain by 4.8 percent, exports decreased to Iraq and the U.S. by 12.8 percent and 0.3 percent, respectively. In March, the biggest increase was in Dutch exports, placing the Netherlands among the top 30 markets, with an increase of approximately 54 percent compared to the same month of 2015. Iran followed the Netherlands with a 44.2 percent increase in the post-sanction era, according to the TİM data. The automotive sector again was the top exporter, with over $2 billion in exports in March, followed by the readymade wear and confection sector and the chemicals sector. The biggest rise in exports was posted by the boat and yacht sector, with around 70 percent of increase in exports in March compared to the same month of 2015, followed by the jewelry sector and the defense sector.

Fed chair dismisses claims US economy is a bubble

Turkish auto production rose 4 percent year-on-year in March, the Automotive Industrialists’ Association (OSD) said in a statement.

Mehmet Büyükekşi TİM President

The OSD said the country’s automobile producers manufactured nearly 128,000 vehicles – including automobiles, light commercial vehicles, and tractors – in March, an increase of 4 percent compare with 123,119 vehicles in March 2015.

The association data shows that the sector’s exports rose 10 percent to 98,800 in the month compared to the same month last year. Auto production in the first three months of the year was also up 3 percent to 346,000. The OSD said that production this January-March was the highest since 2006. The export value in the first three month of 2016 was $5.65 billion, a rise of 6 percent compared to the same period last year.

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NEW YORK-Federal Reserve Chair Janet Yellen said that she does not believe the U.S. economy is a bubble. Speaking at an event at the private residence center for graduate students at International House of New York, Yellen responded to her critics, both in the financial realms and the political -- such as the Republican presidential frontrunner Donald Trump -- who recently claimed that the economy could face another major recession. “This is an economy on a solid course. I would not describe it as a bubble economy,” she said. Yellen stressed that the job market has improved greatly since the 2008 financial crisis, and the unemployment rate has been brought down to 5 percent, but noted that the labor market still has room to improve. The Chair also defended the Fed’s decision to raise interest rates last December, the first in almost a decade. “I don’t think December was a mistake. The economy has continued to progress after that,” she said, and added that a gradual path of rate increases would be appropriate.” Yellen was joined by three of her predecessors -- Ben Bernanke, Alan Greenspan and Paul Volcker -- in New York. The event was a first in history as they met

to discuss the U.S.’ economic outlook. For the domestic economy, Bernanke said global financial weakness poses a risk for the U.S., but noted that any recession is fairly unlikely. Bernanke, who served as the Fed Chair between 2006-2014, said the Fed could use quantitative easing or other tools if the economy faces a recession. However, Greenspan said that a recession is not the real problem, and warned against another major issue that the economy is facing -- low productivity. “Unless we come to terms with the issue of productivity, then we have no major advance in the future,” said the Fed’s 13th chair who served between 1987 and 2006 under four different U.S. presidents. Greenspan also emphasized that slow growth in productivity is holding down the economy’s growth rate. Meanwhile, Volcker reminded that there were recessions before the Fed, and “downturns are not something to get overly concerned about.” The Fed’s chair from 1979 to 1987 said he also watched his successors with “great awe” facing recessions and economic hardships. The Fed was established in 1913 and with the four chairs combined services of 73 years; their contributions have spanned over one-third of the Fed’s history.

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Turkey calls on EU to release 3 billioneuro fund for Syrian refugees ANKARA-Foreign Minister Mevlüt Çavuşoğlu has voiced Ankara’s unease over the European Union’s delay in releasing the 3 billion-euro refugee fund, calling on the 28-member bloc to be “more pragmatic” and overcome red tape. “There are difficulties in attaining the 3 billion euros that the EU has promised for the Syrian refugees . The EU has long supported many projects in member countries and membership candidate countries, so the funds are there,” Çavuşoğlu said , speaking at a joint press conference with visiting Polish Foreign Minister Witold

Waszczykowski. “Projects for the use of the money have to be drafted and preparing these plans takes up to two years. What will happen to the living standards of these people in the meantime? There is a need to be pragmatic,” he added, after being asked about the implementation of the landmark March 18 refugee deal between Ankara and Brussels. “There is breakdown only concerning this part [the 3 billion euros],” Çavuşoğlu said, stressing that Turkey is “doing its part.” Under the deal, Turkey agreed to take back all

Bank of China enters Turkish market Warsaw supports Ankara’s bid for a liberal EU visa policy for its citizens if the country fulfills all technical criteria, Polish Foreign Minister Witold Waszczykowski said. Addressing a joint press conference with his Turkish counterpart Mevlut Cavusoglu in Ankara, Waszczykowski said: “We do not want to apply visa regime for Turkish citizens at a time when we are asking for lifting of visa restrictions for Polish people.” Cavusoglu said Polish citizens require visas even while entering Turkey at its airports or border gates, “but we want the remove these visas as soon as possible”. He thanked Poland not only for supporting its bid for relaxation in visa restrictions, but also “for supporting Turkey’s EU membership process”. He said he was confident that after Turkey fulfilled its obligations, the EU will lift its visa regime by the end of June this year. “Our citizens deserve that,” Cavusoglu said, adding: “Our citizens are not asylum seekers. Even our citizens living in Europe want to return to Turkey.”

migrants arriving in the Greek islands, in an effort to relieve the pressure on the European Union that has seen one million irregular migrant arrivals since early 2015. In return, the EU promised to resettle one Syrian refugee for every Syrian taken back by Turkey, to grant visa-free travel to Turks within the border-free Schengen Zone, and to reassess Turkey’s stalled EU membership bid. In February, EU countries approved a fund of 3 billion euros for Turkey to improve living conditions for refugees in exchange for Ankara ensuring that fewer of them migrate on to Europe.

Akben noted that other than the application process, to start operations in Turkey, the Bank of China will have to spend plenty of time finding locations and establishing IT technologies, implying that a specific start date for operations cannot be determined now. As China’s most internationalized and diversified bank, the Bank of China provides a comprehensive range of financial services to its mainland as well as 41 countries and regions. The bank’s core business is commercial banking, including corporate banking, personal banking and

Turkey’s budget deficit at $2.4 billion in March ANKARA-Government ran a 6.6 billion-Turkish Lira ($2.4 billion) budget deficit in March, Turkish Finance Minister Naci Ağbal said April 15. The deficit was 200 million liras lower compared to the 6.8 billion-lira deficit recorded in March last year, he said. Government revenue in March stood at 46.8 billion liras – an 11.4 percent increase year-on-year. Budget expenditure totaled 40.3 billion liras, up 22.3 percent from a year earlier. “The budget performance in the first three months clearly indicates the government’s determination to maintain fiscal discipline,” Ağbal said. The central government budget showed a surplus of 46 million liras in the first three months of the year.

According to the Ministry, the Turkish government’s budget revenue reached 131.7 billion liras in the first three months of the year, a 16.4 percent increase compared with the same period last year. Tax revenue also increased by 12.7 percent within the period to 108.5 billion liras. Budget expenditures between January and March rose to 131.7 billion liras, marking an 11 percent increase year-on-year. Interest expenses stood at 16.5 billion liras in the period, a decrease of 9 percent. In 2016, the Finance Ministry estimated that budget expenses for the fiscal year would reach 570.5 billion liras, while budget income would reach 540.8 billion liras, resulting in a budget deficit of 29.7 billion liras.

Turkish hoteliers accelerate promotional activities in new markets ISTANBUL-Turkish hoteliers have sped up promotional activities in new markets in a bid to recover their expected losses in key markets, mainly European and Russian markets.

planes flying from Cape Town, Durban and Johannesburg in South Africa to Istanbul were always full, although a majority of these passengers are transit guests.

A total of 885,000 tourists from Africa visited Turkey last year and 47,000 were from South Africa, he added. Another potential huge market is Azerbaijan, according to the association.

TÜROB Board Member and General Coordinator Kasım Zoto, who attended a sector fair in South Africa, said there was a rising attention to halal tourism in Africa, mainly in Nigeria. He noted that Turkish Airlines air-

Bank of China enters Turkish market

The Bank of China, which has been planning to enter Turkey for a year, is reported to have completed the necessary legal application process to be authorized to operate in Turkey. Turkey’s Banking Regulation and Supervision Agency (BRSA) Chair Mehmet Ali Akben confirmed that the bank had submitted all the required documents and complied with the application procedures. Akben reported that the necessary written negotiations have been ongoing with Chinese authorities and that upon the completion of negotiations, the licensing work would start.

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May June 2016

financial market services. Also, after the Bank of China Limited was incorporated in 2004, the bank was listed on the Hong Kong Stock Exchange and the Shanghai Stock Exchange in June and July 2006, respectively, becoming the first Chinese commercial bank to launch an A-Share and H-Share initial public offering and achieve a dual listing in both markets. In 2014, the Bank of China was again designated as a Global Systemically Important Bank, becoming the sole financial institution from emerging economies to be designated as a Global Systemically Important Bank for four consecutive years, according to information retrieved from the Bank’s official website.  There are currently two Chinese groups that are highly interested in the Turkish banking sector -- the Bank of China and the Commercial Bank of China Limited (ICBC). The ICBC took over a majority stake in Tekstilbank from Turkish GSD Holdings to become the first Chinese bank to operate in Turkey. Last April, GSD Holding signed a contract to sell its entire 75.5 percent stake in Tekstilbank to ICBC, one of the four largest Chinese banks, for TL 669 million ($234.7 million).

TÜROB Board Member and Secretary General Uygar Koçaş recently attended the AITF Fair in Baku. “Azerbaijan has many commonalities with us both culturally and linguistically. Turkey has been the most visited destination for Azeri people. We have,

however, seen rising economic problems in the country for the last two years, pushing them to limit their travel plans. We should also say that the recent terror attacks in Turkey have negatively affected foreigners’ travel plans to Turkey,” he said. “Turkey is still a popular destination. It is of great importance to keep making promotional campaigns, especially for Istanbul, Cappadocia and other hot touristic destinations, in Azerbaijan,” he said, adding that Turkey hosted a total of 602,000 Azeri tourists. Representatives from the association also attended the WTM

Latin America Tourism Fair. They noted that Turkish TV series have been very popular in the region, especially in Argentina, making a positive contribution boosting visits to Turkey. While the number of Brazilian tourists visiting Turkey decreased by 6 percent to 85,000 last year compared to the previous year, the number of Argentinian tourists visiting Turkey increased by 86 percent to 83,000, they added.

May June 2016

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Turkey’s Central Bank cuts overnight lending rate Istanbul named among top ANKARA-Under new leadership, the Turkish Central Bank cut its overnight lending rate by 50 base points, following a 25-base point cut last month, while leaving other key rates on hold. The one-week repo rate, which is the rate at which banks borrow from the Central Bank for oneweek terms, was kept at 7.5 percent, the bank announced, in the first such move under its new governor, Murat Cetinkaya. The overnight lending rate, which is the rate at which banks borrow from the Central Bank overnight, was cut 50 base points to 10 percent. The overnight borrowing rate, however, under which banks lend or deposit money to the Central Bank, remained unchanged at 7.25 percent. “Recently, inflation showed a marked decline, mainly due to unprocessed food prices. This decline is expected to continue in the short run. However, improvement in the underlying core inflation trend remains limited, necessitating the maintenance of a tight liquidity

stance,” the statement said. The annual rate of inflation in Turkey fell to 7.46 percent in March from 8.78 in February due to a sharp drop in food prices, according to Turkish Statistical Institute data. However, the bank cautioned, “Future monetary policy decisions will be conditional on the inflation outlook. Taking into account inflation expectations, pricing behavior, and the course of other factors affecting inflation, the tight monetary policy stance will be maintained.” Interest rates have been a topic of heated controversy between the government and the Central Bank since early 2014, when then-Prime Minister Recep Tayyip Erdogan, currently president, criticized the bank for keeping interest rates high.

But under the helm of Governor Erdem Basci, who officially ended his five-year term, the CB refused to cut rates as fast as Erdogan and many government officials wanted, repeatedly linking further rate cuts to improvement in the inflation outlook.

ISTANBUL- Istanbul has been named one of the world’s top future financial centers along with Singapore, Shanghai, Dubai and others in a fresh report. The Istanbul Financial Center project should however be improved further in line with successful rising examples, such as Dubai, according to experts.

Government officials as well as Erdogan saw the high rates as a factor holding back economic growth, which needs to be over 4 percent in order to address rising unemployment.

Turkish banks targeted by hackers once more BURSA - Ziraat Bank CEO Hüseyin Aydın said foreign hackers recently launched a number of cyber-attacks against Turkish banks by producing e-mail traffic. Such attacks were made against the entire banking system, not only against Ziraat, noted Aydın, who is also the president of the Banks’ Association of Turkey. “We have some resistance points against such attacks, but these walls can be bypassed from time to time. As you know, we never face a serious obstacle that obstructs our activities, but we are sometimes shaken. There are a number of local and global authorities which test the banks’ capabilities in fighting against cyber-attacks, such as the banking watchdog of Turkey, which is the BDDK [Banking Regulation and Supervision Agency], the Fed in the U.S. or Bafin in Germany,” he said at a meeting with journalists

on March 26 in the northwestern province of Bursa for the Uludağ Economy Summit. “If all banks in Turkey continue their operations, this shows they have all passed such tests with success,” Aydın added. Aydın also refuted reports which claimed some banking transactions were audited in the bank’s New York branch upon concerns about the violation of money laundering or compliance regulations. He said the New York branch of the Fed found out that the data processing systems of Ziraat’s New York branch did not comply with customer information standards so the authority asked for the renewal of the system after a series of reviews back in 2009. He added that such reviews are made across the globe. “Our branch signed a deal on a pledge to renew the system. We needed to make it by 2013, but we failed. We sent our friends back to

future financial centers

discuss the issue again. We then said, ‘We made such a promise, but we failed. We have few customers. Please, monitor our system again. We’ll renew it immediately at this time.’ The Fed New York accepted our offer and initiated fresh reviews in 2015. We have not received any document that showed our operations do not comply with international norms,” said Aydın. He said the existing technologic deficiencies were handled. “Ziraat Bank operates in all parts of the world in accordance with the international standards as a leading Turkish brand. Some reports which suggested that Ziraat Bank did something that it actually didn’t have negatively affected our brand value,” he added. Aydın noted their New York branch mainly focused on corporate banking.

Cushman & Wakefield has ranked London, New York, Hong Kong, Singapore and Tokyo as today’s top financial centers in a new report titled “Banking & Finance Sector: Structural change continues.” “In the next few years banks and financial institutions, which are at the center of a cultural revolution, will produce interesting connections between physical and digital channels; this is not only fuelling the need for portfolio reviews but also the renovation of outdated work environments and branches through the incorporation of new technologies… Subsequently we are still likely to see the geography of banking continue to be redefined,”

said the report. In this vein, some other centers will likely become new financial hubs, such as Dubai, Casablanca and Istanbul, according to the report. Cushman & Wakefield Managing Partner Tuğra Gönden said Turkey should take the Dubai model as an example in a bid to become a future financial center. “In the Dubai Financial Center, companies are exempted from income tax, can take visas for their foreign workers easily and launch business in an easier way. Besides, the center also has independent arbitration courts, which are key for financial business. The Istanbul Financial Center can easily raise its competitiveness if it makes all these opportunities for financial investors,” he noted. Meanwhile, Borsa Istanbul CEO Tuncay Dinç said Istanbul should be further integrated into world markets and one of the areas where Borsa Istanbul will be leading the world is in interest-free finance.