Alpaslan Korkmaz

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INVESTMENT CLIMATE IN TURKEY 5th WORLD CHAMBERS CONGRESS - ISTANBUL July 2nd, 2007 Alpaslan KORKMAZ PRESIDENT REPUBLIC OF TURKEY PRIME MINISTRY Investment Support and Promotion Agency of Turkey

Global FDI: 

Global FDI 1/3 of the flowing fund globally received by emerging markets like Turkey 1/3 of the total FDI flow generated from the finance, telecommunications, petroleum and natural gas investments 80% of the FDI created by M&A’s generated by privatization activities

Agenda: 

GENERAL ECONOMIC OUTLOOK INVESTMENT CLIMATE POLICY ACTIONS FDI FIGURES & MEASURES OF STRONG PERFORMANCE THE AGENCY Agenda

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ECONOMIC OUTLOOK

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GNP Growth (YoY) Stability and High Performance in the Economy Contribution of Private Investment to Growth Private Investment GDP Growth % %

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Stability and High Performance in the Economy Index % Annual Inflation and Expectations Productivity Index in Total Manufacturing Industry

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Stability and High Performance in the Economy Exports and Tourism Revenues Public Sector Net Debt Stock (% of GNP) Exports Tourism Revenues Billion USD %

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Population-Age Groups Pyramid GDP Per Capita (PPP) % US$ Potentials of the Turkish Economy

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GDP (2006) Billion Euro Real GDP Growth 2003-2006 Average % Benchmarking Performance of the Turkish Economy

Access to diversified markets: 

Access to diversified markets EUROPE GDP Population 14,801 billion USD 657 million RUSSIAN FEDERATION GDP Population 766 billion USD 145 million CENTRAL ASIAN AND CAUCASIAN COUNTRIES GDP Population 113 billion USD 75 million MIDDLE EAST AND NORTH AFRICA GDP Population 1,258 billion USD 311 million

TURKEY AS AN ENERGY CORRIDOR: 

TURKEY AS AN ENERGY CORRIDOR

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INVESTMENT CLIMATE

Main Principles of FDI Regime in Turkey: 

No Approval Requirement No Minimum Capital Requirement National Treatment Guarantee to Transfer Proceeds Key Expatriate Personnel Protection Against Expropriation Access to Real Estate International Dispute Settlement Main Principles of FDI Regime in Turkey Legal Framework for Foreign Direct Investment

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General Investment Encouragement Program Incentives for Low-Income Regions Incentives for the SMEs Supports in Technology Development Zones Research and Development Supports by TUBİTAK Investment Incentive Schemes

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POLICY ACTIONS FOR A BETTER INVESTMENT CLIMATE

Strong Track Record of Structural Reforms: 

Strong Track Record of Structural Reforms Key Elements of Structural Reform Agenda: Public Sector Reform Financial Sector Reform Social Security Reform Tax Reform Enhancing Private Sector’s Role in the Economy Opening the Key Markets to Competition, and Regulation by Independent Agencies Improving the Investment Environment Accelerated Privatization

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FDI FIGURES & MEASURES OF STRONG PERFORMANCE

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Strengthening Upward Trend in FDI Inflows FDI Inflows Number of Companies with International Capital (Cumulative) billion US$ thousands 19,8

AT Kearney International Direct Investment Confidence Index: 

AT Kearney International Direct Investment Confidence Index

Global Competitiveness Index 2006 and 2005 Comparisons: 

Global Competitiveness Index 2006 and 2005 Comparisons Positive Negative Source : IMD

2006 UNCTAD World Investment Report: 

2006 UNCTAD World Investment Report Ranking Billion USD

To Sustain Our Performance ...: 

Predictability Maintained political and macro-economic stability Strict implementation of economic program policies Increased integration of liberal-open economy with the world Reform Programme for Improving Investment Environment Constant review and improvement of investment environment Rationalization of regulatory procedures in line with the EU practice Harmonization with EU Acquis & Adoption of European Standards Pro-Active Investment Promotion Strategy New Investment Support and Promotion Agency Investment Portal of Turkey : www.investinturkey.gov.tr Best quality investor services (efficient one stop shop approach) To Sustain Our Performance ...

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THE AGENCY Investment Support and Promotion Agency of Turkey

General Objective: 

General Objective Promote worldwide the great economical potential of Turkey (Greenfield investments, privatizations, infrastructure investments BOT & PPP, etc...) Support the investors in all their administrative processes (before, during, after) with a 100% SERVICE attitude

The Agency is...: 

The Agency is... Attached to Prime Ministry and reports directly to Prime Minister In charge of attracting FDI by promoting Turkey’s dynamic economic environment In charge of supporting settlement of the investors in Turkey and the follow up (after sales service) Result oriented

The Agency has...: 

The Agency has... Private sector mind with State support 2 offices (Ankara – Istanbul) International representatives network worldwide and strategical partners in Turkey (public & private) Multilingual, professional and dedicated project leaders with one stop shop approach

TURKEY IS A TREASURE: 

TURKEY IS A TREASURE

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S A M P L E P R O J E C T S

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Public Private Partnership Opportunities In order to modernize and expand the net of railways to the key regional centers, PPP opportunities will be introduced as BOT concepts: - High Speed Railway Stations’ Construction Projects  - High Speed Main Line Projects... ANKARA-İSTANBUL 533 KM 3 BILLION $ (3 HOURS) ANKARA-KONYA 212 KM 0,5 BILLION $ (1 HOUR 15 MIN.) ANKARA-SİVAS 471 KM 1.8 BILLION $ (2 HOURS) ANKARA-İZMİR 606 KM 2 BILLION $ (3 HOURS 20 MIN.) BURSA-OSMANELİ 106 KM 0,3 BILLION $ (30 MIN.) ANKARA-KAYSERİ 175 KM 0,5 BILLION $ (5 HOURS)

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Advantages in Investing A Large and Rapidly Growing Market Proximity to Middle East Market Gate of Europe to Middle East and Asia Qualified Agricultural Production Potential of Tourism Transportation State Assistance South-Eastern Anatolia Project Total Budget for Complete Investment 32 Billion $ Investments already done 20 Billion $ Investments forseen 12 Billion $ GAP REGION

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LOCATION IN TURKEY ●40 km to Istanbul City Center ●30 km to Sarıyer ●60 km to Atatürk Airport ●Highway and Maritime Lines to Istanbul City Center

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Existing Settlements Area Size: 9000 ha Existing settlements: 500 ha

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TOURISM ACTIVITIES WHICH CAN BE DEVELOPED Entertainment and Congress Centers Hotels and Holiday Villages Yacht Marines Water Sports Centers Golf Resorts Arboretum Natural parks Residences

Turkey in summary:: 

Turkey in summary: “Booming” country (200 bio to 400 bio GDP) 75 mio population Young, dynamic, well educated, multi-cultural Consumer base & motivated work force Centrally located (Europe, Central Asia, M-E) Energy corridor and terminal of Europe Strong political willingness (reforms, stability) Clearly EU oriented Strong industrial & services culture …and:

In One Word:: 

In One Word: The TURnKEY Agency for all potential investors!

POWER ON YOUR BUSINESS: 

POWER ON YOUR BUSINESS

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REPUBLIC OF TURKEY PRIME MINISTRY Investment Support and Promotion Agency of Turkey THANK YOU FOR YOUR ATTENTION www.investinturkey.gov.tr The Rising Star