Small foreign investors more interested in Turkey
Posted by meb at July 17th, 2007
That big companies have long invested in Turkey is a known fact. But in recent years there has been a growing number of small and medium-sized enterprises (SMEs) entering Turkey
According to the Turkish Central Bank, the total international direct investment was slightly over $10 billion in the first four months of 2007, and increase of 20 percent on the previous year. In addition the number of foreign companies established within the given period — literally speaking — soared, climbing from 724 to 8,641, most of which were SMEs.
German Joachim Behrendt, chairman of Nexum Boğaziçi, has been running a medium-sized consulting company in İstanbul since 2000. Combining two brands — Nexum Boğaziçi and Nexum Creative — his company offers a wide range of consulting solutions, IT solutions and design implementations. The corporation is unique in Turkey and currently leads the sector by serving some of Turkey’s top 500 companies next to global players such as BoschSiemens and ReWe.
In an exclusive interview with Today’s Zaman, Behrendt explains why Turkey has become more attractive for foreign investors, points out the advantages and difficulties for SMEs in Turkey and explains why a failure in its EU accession bid would not be a worst-case scenario for Turkey.
Asked why he decided to come to Turkey, he says: “Turkey is a threshold country. In economic terms that means you always have to expect everything,” he laughs and goes on, “One year we are experiencing a desperate economic climate with high volatility and fluctuation, and then there is suddenly a period of growth — like now.”
Referring to the positive central bank data, he points out: “The amount of foreign companies in Turkey rose twofold. And this is not ‘hot money’ that will be taken out [of the country] soon. Turkey is really starting to connect itself into the international economic framework. I personally wanted to go into a threshold country because I felt that there is more opportunity to create my own space, which is especially important for SMEs. Sector-specific reasons also played a role in that context, especially in the IT sector; many market niches still remain unused. Even now there are only few agencies willing to offer our kind of service portfolio.” As for Turkey’s advantages, he points to human resources. “For me it was most important to have good access to highly qualified personal. I find here better recruits than in Germany. It depends on the university, but generally there is a high amount of skilled and young, often with an international background.”
Nevertheless, he underlines, there is still much to be done. “There are also disadvantages. You can really lose yourself in the jungle of bureaucracy. The main problem is that those things decided on by the legislature are often not implemented and implicated by the executive.” However the laws themselves are not the biggest problem, he clarifies. The much more important point is — in his opinion — that Turkey should work to improve its tax conditions. The tax base must widen and the rules must be implemented. And second, he reinforces, bureaucratic obstacles, especially to international trade, must disappear.
“If Turkey really wants to become more attractive for foreign investors, it has to guarantee standardized security in this field. And the third disadvantage,” he adds, “is simply that the economic sector’s ethics are often not as high as I would wish. Many of our competitors do not care about work conditions, social contributions, insurance or taxes. That is why they can offer services cheaper. It may sound strange, but just because we — coming from a German background — care about these things and pay our tax honestly, we lose.”
Despite of all these obstacles he strongly recommends Turkey to foreign investors, and in these terms he hopes that the “undifferentiated” perception of Turkey in Europe will end. “In the last few years the amount of foreign investment in Turkey has doubled its size — that shows Turkey is really a country where foreign investors can go, despite its shortcomings. I really hope this country is given the chance to get closer to the European economy. I would like to see more contact and cooperation.” To support this development he was part of the recent founding of the German Turkish Chamber of Commerce (DTHK).
Is the EU Turkey’s only hope? Asked in this context whether he thinks a breakdown of the EU accession process would derail the recent positive developments, he said, “[Accession] is the aim for both sides.” However, he explains that he doesn’t think Turkey will remain interested in the EU if the process is dragged out for too long: “They will not wait always. They don’t have to. If you look, Turkey is the ideal bridge not only to the Near East, but also to the former Soviet states. They can talk with Israel as well as with the Arabs, and they are mentally and geographically closer to China than Europe. So I think it is much more important for Turkey to keep its self-dependent position in this network and establish rational and clever relations with all regions around it than to wait endlessly in front of the EU’s doors.” Finally we wanted to hear his predictions on the upcoming elections: “Well personally I think that the last few years were the best ones that Turkey has had in a long time. Whoever continues on now must continue in this way. I don’t want a government change, rather I want a stronger opposition.”
source: KRISTINA KAMP – Today’s Zaman
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