Canada - Turkey Business Forum, Speech By Dr. Tuncay Babali, Ambassador Of The Republic Of Turkey,

Ottava Büyükelçiliği 04.06.2014

Distinguished Guests, My colleague Jovica,
Ladies and gentlemen,

It is indeed a great pleasure for me to be here today at Canada-Turkey Business Forum and to have this opportunity to talk about Turkey and also Turkish - Canadian relations, especially the economic and commercial ties.

At the outset, allow me to extend my sincere appreciation to the Board of Trade of Metropolitan Montreal, the World Trade Centre Montreal, along with the Canadian-Turkish Business Council and the Turkish-Canadian Business Council of DEİK for organizing this business forum.

It gives me also a distinct pleasure and a pride to have this business forum for the occasion of İstanbul-Montreal first flight which brought many of you to Canada. I am sure that these direct flights will boost our business relations especially in Montreal and Quebec.

I would like to use this gathering to present some facts about Turkey and offer a framework of analysis which might inspire to think about business opportunities.

Turkey is strategically placed as a unique gateway between important economic and political regions.

With its population over 76 million and having around 50 percent of the workforce of 28 million is under the age of 30, an important asset by itself. Turkey is a dynamic force with a strong and growing economy in its region and beyond.

Turkey’s overall development goal is to become one of the world’s 10 largest economies by 2023, the centennial of the founding of the Turkish Republic.

Turkey has the fastest economic growth rates in Europe. Mean annual growth rate between 2002 and 2012 was 5.2%. Real GDP growth rate in 2011 was 8.5%, making it 2nd biggest growth rate in the world after China. Due to the slowdown of the global economy and the deepening crises in the Eurozone, as well as the Government’s deliberate policies to resist negative effects of fast growth rates, the economic growth in 2012 was %2.2. Gross Domestic Product (GDP) reached $ 820 billion in 2013 up from $ 231 billion in 2002.

Turkish Economy expanded by 4% in 2013. OECD estimates that Turkey will be the fastest growing economy among the OECD countries during 2012-2017 with a median growth rate of % 5.1.

Strict regulatory and supervisory regulations on banks and financial institutions provided a buffer against external shocks. Turkish experience once more demonstrated that political stability and macroeconomic prudence are essential for sustainable growth. Turkish economy proved resilient against the turmoil of global economic downturn. While many EU member countries are afflicted with double-digit unemployment rates, Turkey lowered unemployment ratio to below % 10 in an atmosphere of global economic crisis.

Dear Guests,

Its geographical location coupled with a cost effective, young, well-educated and motivated labor force makes Turkey a very attractive place for foreign investors. The outcome of the Turkey’s investor friendly policies was significant: whereas cumulative FDI in Turkey since 1923 was around 16 Billion USD in 2002, total foreign direct investment in Turkey reached around 137 billion USD at the end of 2013. Currently more than 37.000 companies with international capital are registered in Turkey. The top sectors for investment are; energy, financial services, health, transportation, automotive and parts, food and agriculture and information & communication technologies.

There are 20 free zones and 37 technology development zones (TDZs) in Turkey. All rights, incentives, exemptions, and privileges on most-favored-nation (MFN) basis are available to all foreign companies.

Istanbul, on the other hand, is one of the most attractive cities to international businesses. Many Western firms are basing their operation centers in and near Istanbul to manage their businesses in a wide geography. To give you just quick examples, today Coca-Cola manages 94 country operations from Turkey and Microsoft manages eighty, which is its largest operation outside Seattle. Moreover, Scotiabank Istanbul Office represents countries of Central and Eastern Europe, the Balkans, Israel and former Soviet countries. Turkey is an international hub: at a diameter of 3 hours flight from Istanbul; you can access more than 50 countries, 1,5 billion people, $ 25 trillion GDP, $ 8 trillion trade volume.

Foreign tourists visiting Turkey increased substantially between 2001 and 2013, from 10.4 million to 39 million and tourism revenue reached 32 billion USD. As such, Turkey ranked the 6th most visited country in the world and 4th in Europe. Recently, İstanbul has been named world’s top destination by a tripadvisor poll. 200 thousand Canadian tourists visited Turkey in 2013 up 15% from the previous year. I believe with new direct flights these numbers will only grow in both ways.

Turkish Airlines, a member of Star Alliance like Air Canada, is the fastest growing airline company in Europe, number 1 in terms of number of countries and international airports flown out.

As for Canada-Turkey relations, there is a strong political will and a high level political dialogue to further collaboration on both sides. Long time NATO ally Turkey presents excellent opportunities to mutually beneficial cooperation. In this regard, the study of the Standing Senate Committee on Foreign Relations and International Trade titled “Building Bridges: Canada-Turkey Relations and Beyond”, concluded in 2013 and unanimously adopted in February this year has also provided in-depth analysis and valuable suggestions on how to develop relations between the two countries. Moreover, Turkey is identified among “emerging markets with broad Canadian interests” in Global Markets Action Plan of Canada.

Turkey and Canada have achieved a positive momentum in furthering cooperation in economy, trade, energy and mining, education, agriculture, information and communication technologies (ICT), transportation and aerospace.

In this vein, a Joint Economic and Trade Committee (JETCO) to be co-chaired by Economy & International Trade Ministers from both countries will be initiated. The official negotiations for a new generation and comprehensive Free Trade Agreement between Turkey and Canada (of which exploratory talks are successfully completed in September 2013) is also expected to be initiated shortly, following the awaited decision of the Canadian Cabinet. Turkey and Canada are close to the finalizing a “Strategic Framework Document” to be signed between the Foreign Affairs Ministers of both countries. Turkey has only signed such documents with 11 countries so far.

Dear Guests,

I would like particularly to mention some key sectors for cooperation, which will also name today’s main panels.

Energy is a major area that points to Turkey’s contribution to the global energy industry especially as a highly strategic hub. Turkey forms a natural energy bridge between the resource-rich countries of the Caspian basin, Central Asia such as Azerbaijan and Kazakhstan, the Middle East (especially Iraq and offshore gas in Eastern Mediterranean) and the world consumer markets. Turkey is also considered as the most viable route for safe and uninterrupted flow of hydrocarbon resources to the West in its volatile region. Turkey forms a natural energy bridge between the energy consuming world markets, and the energy rich countries of the Middle East, the Caspian region and the Central Asia. It has a strategic role to play in the energy security of Europe by being active on both the North-South and East-West energy corridor (oil and gas) in wide geography that we call Eurasia. Turkey has been taking part in the development and implementation of large-scale energy infrastructure projects in the region.

Education is also another major sector that we are looking for international partners to work with. In Turkey, there are currently 177 universities, including 100 state universities, 67 foundation universities, and 10 military and police academies. Turkey has 26 million young, well-educated professionals and 575 thousand students graduate annually from these 177 universities. 10 Turkish Universities are in top 500.

Around 40.000 foreign students studied in Turkey in the 2012-2013 academic year (increased around 20,000 compared to 2005-2006). In 2015, 100,000 international students have been expected in Turkey.

751,000 students graduate annually from high schools and vocational technical schools. 100.000 Turkish students are currently studying abroad.

Around 8.000 Turkish Students study in Canada from primary school to university. 3.000 Turkish students study annually for 6 months or less in Canada. Canada’s recently announced “International Education Strategy” identifies Turkey among priority markets. The report of the Senate Standing Committee on Foreign Affairs and International Trade highlights the potential in educational cooperation and youth mobility between Turkey and Canada.

Aerospace along with the ICT sector, could be another strong sector for cooperation through the defense industry projects in which Turkey has a significant reputation. There are nice opportunities in these sectors for Canadian firms. Since Turkey aspired to have its regional aircraft and increase its civilian fleet, also having its fighter jet program, both countries can learn more about their expertise which can offer a great potential for business for both sides.

Distinguished guests,

Last but not least, history, culture and location has given Turkey important comparative advantages. Centuries of interaction with different economic, but also political and cultural groups have injected a strong dose of internationalism and self-confidence into Turkish entrepreneur thinking. Turkey is not only European, but also Balkan, Mediterranean, Caucasian, Middle Eastern and Asian at the same time. This has given us unique cross-cultural skills that are critical in a globalized economy. Turkey has proven that a country with an overwhelmingly Muslim population, but sharing the same universal values of democracy, rule of law and respect for human rights can engage in comprehensive integration with the West politically and economically, can be a militarily strong stable member of NATO, aspire to become a member of EU, and be an attractive center for investment for both Western and Eastern businesses. In that sense, Turkey is seen as an island of stability in a volatile but unavoidable region, an actor whose solid and committed partnership and friendship is sought. Its functioning modern democratic system has rendered Turkey a space where businesses can work on universal values by speaking a universal language.

To conclude, I would like thank you all for your contributions to the development of Turkish-Canadian relations, your efforts to promote the interaction and to improve the understanding between our two countries, for the growth of people to people and business to business relations.

Thank you very much.

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