‘Turkey should focus on Gulf to deal with credit squeeze in West’
Posted by meb at January 30th, 2008
While global financial fluctuations triggered by the subprime mortgage crisis in the US continue, Turkey’s top fiscal team gathered to discuss how to handle the problem, including a focus on Gulf capital inflow.
Top-level managers of private and public banks along with State Minister and Deputy Prime Minister Nazım Ekren discussed the advantages and disadvantages of the Turkish economy amid the credit squeeze in major markets at Zaman daily’s finance summit Friday.
One of the most highlighted issues during the summit was the soaring liquidity accumulation in oil-rich Gulf countries following the climb in oil prices over the last five years. The economy wizards said Gulf capital would likely flow into Turkey and that Turkey should benefit from this while trying to cope with the global credit crunch. Şekerbank Chairman Hasan Basri Göktan noted that he believed the foreign investments in Turkey would continue. “There will be capital flow from the Gulf. We must not panic. We need to demonstrate to Gulf investors that Turkey is a safe haven for them,” he said.
Kuveyt Türk Vice General Manager Hüseyin Cevdet Yılmaz said the leading banks in England and Germany had established interest free, Shariah-compliant divisions to attract more petrodollars from the Gulf countries. “This is one of the major indicators of the interest in the region,” he said. Akbank Vice General Manager Hayri Çulhacı recalled that there were still sovereign wealth funds that have around $800 billion in capital. “It is obvious they aim to invest in new fields,” he said, adding that it was a great opportunity for Turkey. Çulhacı also underlined that the recent fluctuations show that the fundamentals of the Turkish economy are stronger than they were in the past, as the economy can now recover from those fluctuations with limited losses. Bank Asya Vice General Manager Ünsal Sözbir said every other day they are receiving cooperation offers from investment banks and sovereign wealth funds. “This shows that the confidence in Turkey still persists amidst global uncertainty,” he said.
Yapı Kredi Bank CEO Tayfun Bayazıt said the current account deficit is still one of the key risks for Turkey. He noted that this cannot be reduced easily in a short amount of time. Vakıfbank General Manager Bilal Karaman said the Turkish banking sector had become stronger; however, the regulations must be amended to allow Turkish banks to be more competitive in international markets.
Finansbank Vice General Manager Tunç Erdal stated that the existing banks in Turkey cannot support the exporters due to high transactional costs. However, he said, some large-scale private companies can directly get loans from banks abroad, while relatively smaller companies have to get loans from domestic banks with higher costs.
İşbank General Manager Ersin Özince said Turkey has major economic problems to overcome and that is why Turkey must focus more on the economy and then implement the necessary reforms with resolve. Özince also noted that there is a great capital accumulation abroad belonging to Turks. He said in the past some projects had been implemented to attract this capital and that a new one can be created.
Ekren emphasized that they have two basic goals for the finance sector in Turkey. He said firstly they aim to increase the capability of the Turkish financial sector from the bottom up to meet the global financial products and services demand, and secondly they aim to make İstanbul a regional financial hub and then a global financial hub. “We recognize our potential, and today we learned what we can do and how to make it happen,” he said.
source: Today’s Zaman
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