UK investment in Turkey D

The UK is one of Turkey’s largest investors and Brexit may fuel this further.

uring her January vi sit to the country, Prime Minister May highlighted the continuing importance of co-operation between Britain and Turkey in regional security and bi-lateral trade. Two months later, Turkey’s Minister of Economy Nihat Zeybekci wasted no time in stressing the opportunity for a trade deal between the two countries as soon as possible after Brexit. These were the latest moves in close, deep and longstanding Anglo-turkish commercial relations. There are around 3,000 UK companies with operations in Turkey, according to Dr. Henry Loewendahl, Turkey-based CEO of specialist foreign direct investment (FDI) consultancy WAVTEQ Limited. This amounts to a UK FDI stock currently valued at over GBP12 billion. The UK’S Department for International Trade confirms that British companies currently operating in Turkey include “global companies such as BP, Shell, Vodafone, Unilever, BAE, HSBC, Aviva and Diageo. Several retail giants and high street names such as Harvey Nichols, Kingfisher, Marks and Spencer and Laura Ashley also have extensive operations in Turkey.”

Why Turkey?

"The UK and Turkey have been

strong partners over the last decades,” says Dr. Loewendahl, “Initially this was driven by the need to work together over Cyprus and cope rate for stability of the wider region. More recently it has been driven by economic and cultural ties emanating from a rapid expansion in trade, FDI, education, and tourism linkages between the countries. The UK has been over a period of many years Turkey’s strongest supporter in its bid to join the EU and now that the UK is leaving the EU this leaves Turkey and UK both looking at what their future partnership with the EU will look like. Turkey has had a customs union with the EU for the last 20 years, making Turkey an attractive base for foreign investors to access the EU market and spurring Turkish companies to become internationally competitive; a new EU associate partnership model could be a template for both the UK and Turkey.”

Why UK?

For UK businesses investing in the country, it represents a large domestic market of over 80 million people, 42 per cent of whom are under the age of 24. It aims to become one of the world’s ten largest economies by 2023. Geopolitically it is located at the fulcrum between Europe, Asia, Russia and the Middle East. It is positioned at the gateway for trade with Central Asia, south Cau- casus and the Middle East.

Nonetheless FDI seems to have continued relatively unaffected. “UK companies continue to invest in Turkey,” Dr. Loewendahl adds. “In fact, the UK was the largest source of FDI flows into Turkey in 2016 with around USD1 billion in FDI, around 80 per cent of which came after July.” With the benefits that Turkey offers UK businesses, in terms of both trade and investment, the long history of British involvement in the country looks to be well established for further growth in the future. It has ridden Turkish political and economic crises and incidents over a number of years and though it may have to do so again in future, the two countries remain close commercial and strategic partners.

FOR UK BUSINESSES INVESTING IN THE COUNTRY, IT REPRESENTS A LARGE DOMESTIC MARKET OF OVER 80 MILLION PEOPLE, 42 PER CENT OF WHOM ARE UNDER THE AGE OF 24.