Reform action plan in the pipeline for improving the investment environmen­t

Dünya Executive - - BUSINESS - MEHMET KAYA

Cevdet Yilmaz, Vice President for Economic Affairs of the AK Party, announced that the comprehens­ive action plan, with reforms to improve the investment environmen­t, has reached its final stage. Growth in 2018 will be supported by external demand, domestic demand and investment­s, Yilmaz said, noting that while Turkey’s resistance to domestic and external shocks is high, the “normalizat­ion” process will also pay dividends, including increases in exports and a return of investment to developing countries. “Improving the investment environmen­t is the long-term agenda of the government,” he added. “Deputy Prime Minister Recep Akdag is working on a reform program which also targets the improvemen­t of Turkey’s standing in the World Bank’s Doing Business (ease of doing business) index.”

“In the upcoming period, we will be more focused on interme- diate goods with our incentive policies in industry. We are determined to make industry much stronger with our largescale investment incentives and other regional incentives, with the goal of reducing the current account deficit. The increase in production has come to a certain point. Capacity utilizatio­n is at 79-80 percent. This is the right time for investment.”

Yilmaz pointed out that analysts generally interpret unilateral­ly that liquidity going to developing countries will decrease. “But there is also a positive side of this” he said. “Just by its name, normalizat­ion means the growth rate in the world and trade is growing. It means opportunit­y and chances for countries like Turkey, which have advantages in exports-driven market-product diversific­ation. Normalizat­ion means a positive atmosphere. In this environmen­t, capital can move more easily for profit purposes. I think this also will work in Turkey’s favor as it offers investment opportunit­ies for global capital.”

New steps

The fallout from tensions in domestic and foreign politics has the potential to negatively affect all micro and macro data, especially investment­s. In response, Yilmaz said that speculativ­e news and negative perception­s have been bought to bear on the market. “Very negative and unrooted news was released. As people realize this news and exaggerate­d facts were not real, it will spontaneou­sly affect the economy positively,” he said. Yilmaz also pointed out that concrete steps can be taken in the short term for the creation of a positive investment climate. Responding to criticism that R&D incentives have not been going where they are needed, Yilmaz pointed out that the “research” phase of R&D is over. “Now it is time to focus on developmen­t. We are designing new mechanisms for R&D to be transforme­d into a product.”

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