EFFECTING REAL CHANGE
From diplomacy and finance to energy and transportation, key players in Turkey’s most important sectors have their eye on preparing the country for the future.
urkey’s success story stems from its leaders’ vision to steer the economy toward sustainable growth and financial stability. Despite the challenging circumstances in the last few years, regulatory and corporate strategies have been implemented to put the economy back on track, ensuring a healthier and more predictable investment environment across all sectors. Turkey continues to build and nurture political and economic ties, making a substantial contribution to regional and global stability through diplomacy. Its commercial aviation industry, which has grown by leaps and bounds in recent years, is set to gain greater momentum when Istanbul Airport, which opened in 2019, reaches full capacity. Mining, which produces vital raw material inputs for the industrial sector, also looks set to grow in the coming years, not least because. Looking toward the centennial of the Turkish Republic in 2023, the country has never been more ready to take the next step and acquire a leading role on the global stage.
T
Mevlüt Çavuşoğlu
MINISTER OF FOREIGN AFFAIRS
DUE TO THE SLOWDOWN IN THE ECONOMY,
the banking sector saw slow growth in 2019. Total assets annually grew by 15% in nominal terms as of June 2019 and reached TRY4.2 trillion; however, in dollar terms, total assets fell by 9%. The ratio of loans to GDP was around 64% in mid-2019, while the loan-to-deposits ratio was 57%. TRY loan stock remained almost the same compared to June 2018, while FX loan stock increased by 23%—a 3% decline in USD terms. Commercial loans grew by 11% and individual loans by 1%. Commercial loans accounted for 78% of total loans, while loans to consumers took 22% of the total. SMEs’ share of total loans was 25%. Inflation started to decline in the second half of 2019 and is expected to level off around 12% in December, below the target. A slowdown in domestic demand and a rather stable trend in TRY value pulled inflation down and had positive impact on expectations. According to the government program, inflation targets are 8.5% in 2020 and 6% in 2021. Demand for the TRY increased in 2Q2019 due primarily to the reverse currency substitution of residents. This caused the TRY to reach 5.8 against a USD/EUR basket in nominal terms, a considerable appreciation from 6.6 in April.
output of the mining sector in Turkey for a number of reasons—beyond just GDP growth. Mining activity in Turkey produces vital raw material inputs for the industrial sector, and its expansion will reduce our dependence on imports. Turkey imported around USD27 billion in mining products in 2018 and exported around USD6-7 billion. Much of that USD20-billion trade deficit is from gold imports, which amounted to USD8.5 billion in 2018. We have a significant amount of imports when we look at other products such as copper, iron ore, and similar products. Contrary to what these figures might indicate, Turkey has significant mining resources—there are about 90 kinds of mining products around the world, and 70 of them exist in our country. Mining is a time- and cost-intensive activity. Investments in the sector are long-term commitments and therefore we need to be patient in this sector. The sector’s expansion is also limited by environmental and location constraints. In some cases, the Ministry of Agriculture or the General Directorate of Forestry have to be consulted, and we engage in studies about the environmental and economic impact of initiating a project. There are protections in place to ensure that citizen land rights and forested lands are respected.
IT IS IMPORTANT TO INCREASE THE
satisfy the needs of not just Istanbul and Turkey also the greater region. This project will also raise Istanbul to its deserved position in the international airline market. Istanbul Airport will also make the country a major center and a bridge among nations. We will be able to see the effects of this project in 2020, and this is really exciting for us. Furthermore, because of its geopolitical and geostrategic location, Turkey needs to be a strong maritime country. Today, 84% of global trade is being done via sea transportation. We are currently in the top 20 in terms of maritime transportation and shipbuilding. Turkey’s overall maritime trade fleet is 29 million DWT. Our national shipbuilding industry been successful in commercial shipbuilding and maintenance, in nationally designed and 100% domestically built warships, and is one of the top three industries globally for yacht building. Students are being trained in our maritime universities and other maritime schools to lead us in this industry. Ports are one of the most important parts of the logistics chain in maritime transport. Our investments are all long-term investments rather than one-year investments. When we look at the past 17 years, the point reached today is the greatest evidence that dreams can turn into reality.
THE NEW ISTANBUL AIRPORT WILL