Austrian businessmen say uncertainty is Turkey’s biggest problem: survey
According to a survey conducted by Advantage Austria, the trade office of the Austrian Consulate General in Istanbul, 81 percent of Austrian companies do not find the economic and political measures taken to stabilize Turkey’s economy sufficient. Nonetheless, while 43 percent expect a worse business environment in 2019, a majority appear not to have been affected by bilateral political tensions and plan to “continue investing.”
Austrian companies have invested $11.6 billion in Turkey over 16 years, representing 7.6 percent of the total of $152.9 billion of direct investments coming into the country from 2002 to 2018. With so much invested, the views of the Austrian business community on the Turkish economy are important. The research, conducted with the participation of 127 Austrian business ventures in Turkey in 2018, has been carried out since 2016 in order to gauge the general mood among Austrian businessmen.
In the survey, the results of which were provided to DUNYA Executive, companies were asked to evaluate the general economic climate in the country. 74 percent of companies stated that business worsened over the 12 months from October 2017 to October 2018 while 15 percent said it remained the same and 11 percent said it had improved. Evaluating the next 12 months (October 2018-October 2019), 43 percent said business would worsen, 32 percent said it would improve and 25 percent said it would remain the same. The results show that pessimism has doubled compared to 2017. According to the 2017 results of the same study, 43 percent reported that their business had declined between October 2016 and October 2017 while 22 percent said that it would worsen over the next 12 months.
“Turkey needs predictable policies”
Companies were asked to list the top three issues that require regulation and would make Turkey more attractive for Austrian companies. They listed the predictability of economic policy, political and legal stability. Predictability in economic policies, which came second with 57 votes in the 2017 survey, became the most important issue, garnering 103 votes, or 81 percent, of the total this year.
52 percent of companies responded positively to the question of whether they planned to invest in Turkey this year with those saying “no” representing only 33 percent. Comparatively, however, the positive attitude was also diminished compared to the 2017 survey when 64.34 percent said they planned to invest in Turkey.
The proportion of companies saying their business relationships were negatively affected by the political tensions between Turkey and Austria was only 30.7 percent but those who felt the government had done enough to improve the business environment was only 7.9 percent.
The profile of the companies participating in the study are as follows: 17 percent produce in Turkey, 25 percent in the services sector and 58 percent have sales offices of Austrian products and services in Turkey. Twenty-eight percent of them have over 20 million euros annual turnover while 11 percent have 11 to 20 million euros turnover.