Following months of heavy fighting against dictator Muammar Gaddafi, NTC fighters gained full control of Libya last month. Turkish construction companies that have the largest share of Turkish investments in Libya had to suspend projects following the national unrest.

Companies have failed to receive payment for projects — estimated at around $1.5 billion — they had completed prior to the uprising.

Economy Minister Zafer Çağlayan and a group of Turkish construction contractors met with Libya’s National Transitional Council (NTC) to discuss the future of payments of around $1.5 billion during a one-day visit on Monday. Observers said the visit had significant importance considering this is the first face-to-face interchange with the NTC on construction project payments following the council’s recent internationally recognized victory over Gaddafi forces. The minister met with Mustafa Abdul Jalil, head of the NTC on Wednesday in Tripoli. Speaking prior to the meeting, Abdul Jalil said they were grateful for Turkey’s support during the conflict and that Turkish companies will have a significant role in rebuilding the country’s civil war-torn towns. “Turkish companies will reconstruct buildings all across Libya, and some of these will be allocated to Libyan residents. This will be a great example of solidarity for future generations,” he explained. “Turkish companies had undertaken great projects in Libya, and they are famous for their quality work,” the NTC head added. Turkey has lent financial support as well as humanitarian assistance to victims of the Libyan conflict. Both Çağlayan and Abdu Jalil were expected to inform reporters about unpaid debts through the end of the day. The problems, however, may not come to an end as security is another issue that remains to be solved in the North African country.

Some Turkish contractors voiced concerns a possible authority gap in the post-Gaddafi Libya could endanger projects, currently underway at a total value of $15 billion. Turkish businesspeople are now hoping the government will also help secure the business rights they enjoyed during Gaddafi’s rule. But the issue that needs to be addressed first is the current unpaid debts. Evaluating the developments to Today’s Zaman on Wednesday, Association of Turkish Building Material Producers (İMSAD) Chairman Hüseyin Bilmaç said they attached utmost importance to healthy cooperation between Turkish advisors, industrialists and contractors in Libya. “This is crucial in maintaining our leadership in the Libyan construction market. … We are expecting the new government to address the safety concerns in the coming months,” he argued.

Speaking in Ankara on Wednesday, Union of Turkish Construction Industry Employers’ Union (İNTES) President Şükrü Koçoğlu said they “have to find an addressee with whom to discuss the future of Turkish projects in the country.”
source: todays zaman

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“Our businessmen demand a special customs permit to take their machinery and equipment to Libya,” the minister said during a press meeting yesterday in Tripoli with his Libyan counterpart.

A business assembly of 200 people accompanied the minister during the one-day visit.

Turkish companies undertook $7.627 billion worth of projects in Libya in 2009 and 2010, according to official data.

Upon Turkish Prime Minister’s order, Turkey will build schools, mosques, police stations, courts and jails in Libya, the minister said.

Turkish contractors will start building these facilities for free once the Libyan authorities finalize determining their needs, he said.

The ministry runs a budget of $50 million to support consultancy practices for Turkish companies worldwide, Çağlayan said, adding that Turkey will pay up to $300,000 per project in Libya within the scope of this fund, calling it a gesture. “Libyan authorities will not pay for it.” he said.

Turkey will work on using this fund mostly in Libya.

Turkey has always been on Libya’s side and this is where the country diverges from other countries eyeing businesses there, according to Çağlayan.

“The countries that colonized Africa are today trying to achieve a role,” he said, without naming specific countries.

These countries are thinking of “how to exploit the resources there” once again, he added.

Abdullah Shamia, the economy minister of the National Transitional Council (NTC) in Tripoli, said Libya had a lot to learn from Turkey’s experiences. Turkey backed Libya during the transition period, Shamia said.

“We have overcome our cash problem due to Turkey’s support,” he said.

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Skyrocketing current trade deficit and a low domestic savings ratio in the growing economy raise concerns about the country’s dependency on import products and booming demand, according to professionals.

The trade deficit was $10.4 billion in September, the biggest gap recorded, compared with $6.7 billion on September last year and $8.2 billion the previous month, according to figures published by Turkey’s Statistical Institute (TÜİK). Measures taken by Turkey’s Central Bank have thus failed to reduce the trade gap in September, an economist told the Hürriyet Daily News.

Turkey might have already experienced the “peak” in its trade deficit by last month, and it might take a few months for the Central Bank’s steps to show their effect on the economy, Erol Katıcıoğlu, a professor at Istanbul Bilgi University, told the Daily News yesterday.

“Still, the Bank might be pushing the envelope regarding its moves between restrictive and expansionary monetary policies, he added.

More expensive imports

The Turkish Lira’s recent depreciation “might be seen as [a chance] to put the brake on booming consumption and imports in Turkey,” said Katırcıoğlu, adding that imports had not slowed down, although they have become more expensive, with the lira’s depreciation.

The trade gap grew faster than expected by markets, which estimated the deficit to be around $8.5 billion in September, mainly due to a considerable rise in imports, whichtotaled $21 billion in September – $2 billion higher than the markets’ expectation – thus marking an increase of 35 percent compared to the same month last year. Meanwhile, exports accrued in line with expectations at $10.8 billion. The gap for the first nine months of 2011 was $82 billion.

“It is obvious that the annual trade deficit will be way beyond expectations,” said Erdal Sağlam, an Istanbul-based economist.

Demand has not been reduced yet in line with expectations from the economy administration, he said, adding that low saving ratios in a country with strong demand could trigger further problems down the line.

“We expect to see an economic slowdown starting from November thanks to the Central Bank’s new policy that employs the interest rate corridor to increase overall interest rates in the economy,” he said in a statement emailed yesterday.

Domestic savings

Structural problems are still preventing Turkey from forging a sustainable economy, said Erdoğan Alkin, a Daily News columnist. The savings ratio problem still remains a key issue ahead of the country, mainly stemming from income injustice and a failing tax policy, he said. The ratio of domestic saving to gross domestic product in Turkey is currently at record-low levels and is expected to go down to 12 percent by yearend, compared to 12.6 pct it was in 2010.
source: hurriyet daily news

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“Almost one in every five people in Turkey now shops online,” said Soner Canko, general manager of the Interbank Card Center (BKM), speaking at Cardist 2011 International Card and Smart Technologies Exhibition & Summit held in Istanbul. He said Turkey ranked among the biggest markets in Europe regarding online commerce. The number of Internet transactions jumped 37 percent in the first three quarters compared to the same period in 2010, reaching 91.4 million transactions.

Many international finance institutions watched Turkey with interest as the Turkish e-commerce market became promising with high revenue, Canko said.

Turkey’s service sector ranked first regarding spending in online platforms, growing 69 percent compared to the previous period. The total revenue from e-commerce platforms in the service sector reached 2.53 million liras in the first nine months of this year.

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“The renovation of 8 million dwellings over the next 20 years will generate an annual value of 28 billion Turkish Liras for the Turkish economy and the employment of 1 million people,” Tahir Tellioğlu, chairman of the Construction Contractors Federation (TİM-FED), said in a recent interview.
The country’s annual construction capacity is around 400,000 buildings, according to Tellioğlu. “Estimations show there is a total of about 19 million buildings in Turkey, of which 50 to 60 percent are unsoundly built. They must be transformed,” he said, adding that if the construction capacity was doubled, the country would be able to renovate 4 million dwellings per decade.

“Twelve years have passed [since the 1999 Gölcük earthquake] and no building has been renovated. Had we repaired at least 40,000 houses a year, about 500,000 houses would be [soundly restored] today,” Tellioğlu said.

The average cost for the renovation of a building was about 70,000 liras, he said, adding that renovating 400,000 dwellings would generate 28 billion liras yearly.

Meanwhile, Chairman of the Istanbul Developers Association (İNDER) Nazmi Durbakayım said the cost to renovate 5 million 100-square-meter houses would be 425 billion liras. “If [all renovations are] realized within 10 years, this would generate 42.4 billion liras annually, which is about one-third of Turkey’s gross domestic product in 2010.”

The work would also boost suppliers for the construction sector, such as iron and cement, Durbakayım said. “Thus, we can easily forecast that Turkey may become a G-7 country due to the chain reaction in construction,” he said.

Istanbul’s traffic and parking problems could also be solved during the urban renewal in the framework of the old houses’ renovation, according to the chair of Turkey’s Ready-mixed Concrete Association, Ayhan Güleryüz.

Discussions on illegally and unsoundly constructed buildings heated up as Prime Minister Recep Tayyip Erdoğan said recently they would demolish all illegally built and unsound buildings, although this could bear a heavy cost for the ruling Justice and Development Party (AKP’s) popular support.
source: hurriyet daily news

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Speaking at the inauguration of the “Turkish-Iraqi Trade Summit” in Istanbul on Tuesday, Abdul-Razzaq said that Iraq allocated $30 billion for new projects in 2011 and this figure would go higher next year.

Iraq is among the 10 countries in the world with most needs for public works. As such, there is a need for investments worth billions of dollars in Iraq.

Iraq presents highly important opportunities for investors, Abdul-Razzaq said. “We can cooperate with Turkish companies in Baghdad in many diverse fields. Turkish companies make quality production at prices lower than those of Europe. We regard Turkish companies closer to us than others. We want to see Turkish companies in infrastructure, tourism and telecommunications fields in Iraq.”

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Philips might consider restarting manufacturing in Turkey due to “tremendous change” in global economic stability in recent years, said Willem Rozenberg, chief executive of Philips Turkey & Caucasus, speaking to the Hürriyet Daily News in an interview on Thursday. Founded in Istanbul in 1930, the company manufactured a wide range of products in Turkey until 2008. Talking about the future plans of the company, Rozenberg said, “The company might return to Turkish with an industrial presence in some form.”
“Turkish President Abdullah Gül emphasized previously about the new balance between East and West, as the West is losing some of it power to the East,” said Rozenberg, noting that Turkey has the vision to understand the change and locate itself in the heart of the evolution. “No one could have known that United States’ credit rating was going to be downgraded a few months ago,” he added.

Talking about the Turkish economy, Rozenberg said the country has turned into “an economically independent country” from a country that was in need of constant support from others such as the International Monetary Fund, or IMF, a few years ago. “Turkey now says that it can solve its own problems,” he said, adding that many investors trust in Turkey more than before. According to him, Turkey has a serious challenge still waiting to be tackled; the income distribution gap and lack of infrastructure in some regions. “Turkey is highly developed on one side and needs a lot of development on the other side,” added Rozenberg.

Rozenberg said the company has currently total market size of $2 billion in home appliances, $1 billion in lighting and $250 million in health care, noting that Philips Turkey aims to reach double-digit growth on a yearly basis. “We aim to exceed Turkey’s gross domestic product growth by two times in each year,” he said, noting that the company targets to reach 15 percent growth in the market.

“We cannot just be successful by bombarding the market with new products, but need locals inside,” Rozenberg said. “We are interested in capitalizing on local opportunities through local partners, joint ventures and acquisitions.”

“Turkey is an important example for other countries in the region,” said Rozenberg, noting that many international investors sees the country as “a hub for penetrating into new markets” such as the Middle East or North Africa. Referring to Turkish construction companies actively running giant projects in Russia, Iraq and Central Asian countries, he said Philips also plans to penetrate into new markets especially in the lighting sector through Turkish construction companies.

The company also plans to grow in home health care equipment. “We are having talks with Turkish officials to bring health service into patients’ homes,” said Rozenberg, adding that the finance of home health care services could be provided through health insurance policies. Monitoring patients at home and giving some services at home through high-tech user-friendly equipment could be much more affordable and efficient for Turkey, said Rozenberg. “Our company aims to take an active role in such a project that Turkish Health Ministry would launch in the future.”
source: Hurriyet daily news

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“Turkey served as the safe haven regarding investments from the Middle East,” said Hussain Alqemzi, Noor’s chief executive officer, speaking to the Hürriyet Daily News yesterday on the sidelines of the Islamic Investment and Finance Forum in Istanbul.
“Certainly we would like to see more stability in the region, which would pave the way of the investment climate,” Alqemzi said, adding that the Noor Islamic Bank has been mandated to arrange and manage more than $1.4 billion Islamic finance capital market deals in Turkey in the last 18 months, making it the most active United Arab Emirate bank in the country.

“Turkey’s economic growth and strength make it an attractive market for Gulf investors,” Alqemzi said.

Turkey contracts

He said the Turkish deals led by Noor have been very well received by the global markets as demonstrated by the participation of over 55 institutions from 15 countries across Europe, Africa, Asia and Middle East.

The latest of the shariah-compliant transactions is a $350 million dual-currency Islamic-structured murabaha syndicated financing facility for Albaraka Türk, a participation bank in Turkey.

“Launched at $150 million, the facility was more than two times oversubscribed to close at $300 million and has in fact become the largest Islamic-structured syndicated financing facility raised by any Turkish financial institution, Alqemzi said.

Noor has an active pipeline of deals for the rest of this year and leading into 2012 regarding Turkey, he said.

“The deals that we are close to concluding will be worth nearly $600 million,” Alqemzi said. “We are setting records, while at the same time pushing the boundaries of existing Islamic banking business in Turkey.”

According to Alqemzi, Turkey currently is the top priority for the bank since Turkey’s interest in Islamic banking is rapidly increasing.

Gulf Cooperation Council (GCC) members Bahrain, Kuwait Oman, Qatar, United Kingdom of Saudi Arabia, United Arab Emirates already reached a total investment of $10 billion in Turkey as of the end of the last year, Alqemzi said.

“Noor is pleased to work with its Turkish partners,” he said, adding that Noor might launch a branch in Turkey.

The total trade volume between Turkey and the six member states of the GCC reached approximately more than $17 billion last year.
source: Hurriyet daily

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The number of unemployed fell by 273,000 to 2.50 million people in the period compared to the same period last year.

Urban unemployment fell by 1.7 points to 11.5 percent, whereas rural unemployment fell by 0.8 points to 4.7 percent.

The number of employed people increased by 1.47 million people to 24.95 million people during the period between June and August compared to the same period last year. Non-agricultural unemployment fell from 13.6 to 11.8 percent whereas labor market participation rate increased from 50 to 51.2 percent in this period compared to the same period last year, according to TÜİK figures.

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The figure announced by the bank yesterday comes after a big campaign of dollar sales that started this week. The Central Bank sold more than $1 billion in total on Oct. 18 in a direct intervention and a daily auction. It sold an additional $750 million of dollars in yesterday’s auction.

The bank has sold $6.45 billion since it started its daily forex auctions on Aug. 5.
Turkey may be forced to raise interest rates “aggressively” like Hungary did in 2008 because the Central Bank cannot sustain its sale of dollar reserves to prop up the lira, according to the European bank Societe Generale.

“Can the Central Bank sustain its intervention policy for a long time? The answer is no,” Benoit Anne, head of emerging-market strategy at Societe Generale in London, wrote in an emailed response to Bloomberg questions.

Overnight lending rate rises

Despite the growing pressure, the bank’s Monetary Policy Committee kept its rate unchanged but raised its overnight lending rate yesterday as it sought to prevent significantly higher inflation hitting the medium-term outlook, in moves that were seen as supporting the lira but hitting bonds.

After a monthly committee meeting, the bank said it widened the interest rate corridor, raising its overnight lending rate to 12.5 percent from 9 percent.

It held its policy rate, the one-week repo rate, unchanged at 5.75 percent, and kept its overnight borrowing rate at 5 percent. Analysts said the changes would make it more expensive to speculate against the lira.

“The decision of the Central Bank shows it will allow interbank rates to settle at a higher level. This will make it more costly to carry short lira positions. The increase of the overnight rates is negative for bonds, but it is positive for the lira,” said Finansbank economist İnan Demir.

The bank raised the interest rate on borrowing facilities provided for primary dealers via repo transactions to 12 from 8 percent. The lending rate for the late liquidity window was raised to 15.5 percent from 12 percent.

“We are still assessing the full impact of this decision, which concretely is monetary tightening, and the possible consequences in terms of future monetary policy mix, but at a first glance, the monetary policy committee resolution seems aimed at deterring short-term local speculators who borrowed on the overnight funds and bought dollars, betting on sustained lira weakness,” said a note by TD Rates and FX Research.

“In this respect, raising the cost of funding could effectively reduce the incentive to shorting the lira against the dollar. At the same time, the bank’s statement contained some innovative elements that suggest more of a long-term drift in their policy stance,” the note said.

The bank said inflation will rise significantly in coming months due to excessive lira depreciation, base effects from unprocessed food prices and hikes in administered prices.

“The committee will not allow these developments to have an adverse impact on medium-term inflation expectations and the inflation outlook,” it said, explaining reasons for hiking the lending rate.

HSBC strategist Fatih Keresteci said the move to widen the interest rate corridor was hawkish.

“The cost of borrowing will increase and those willing to open long speculative positions would have to bear the cost. This is a kind of hidden rate increase. I also think there can be aggressive intervention in the short term,” he said.

The bank’s moves gave a small boost to the lira, which firmed to 1.8580 from 1.8630 beforehand. The currency has lost some 17 percent of its value against the dollar this year.
source: Hurriyet daily news

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The Boston Consulting Group’s Turkey branch and the Foreign Economic Relations Board of Turkey (DEİK) will present today a report on the “Global Advantage of Turkey” at the Turkey Investment Conference in New York, hosted by the American Turkish Society and Goldman Sachs.
Automobiles, textiles, chemicals, steel and food are underlined as export champion industries in the report. It also emphasizes Turkey’s importance technologically and socially, not just the country’s strategic importance.

Turkey’s dynamic population creates an extensive labor pool, the report said, noting that Turkey had the largest working age population – between 15 and 64 – in the European Union and Central and Eastern European countries.

The report also underlines Turkey’s privatization plans for state-run energy generation plants and distribution firms, banks, highways and bridges, ports as well as the country’s sole landline provider, Türk Telekom, and the national lottery company Milli Piyango.

“Explaining ourselves properly is more than important nowadays,” DEİK Secretary General Bahri Can Çalıcıoğlu said.
source: Hurriyet daily news

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Russia’s Rosatom State Nuclear Energy Corporation is equally concerned with the outcome of this debate because it was awarded a $20 billion deal last year to construct a nuclear power plant in the southern Turkish province of Mersin’s Akkuyu district. A recent invitation extended to Turkish reporters to visit the Kalinin nuclear power plant that Rosatom officials say utilizes the same technology planned for the Akkuyu power plant is an effort to tame the growing distrust towards nuclear energy in Turkey.

Safest of all
Addressing reporters during that visit, Mihail Kanishev – the chief engineer at Kalinin – said the Akkuyu nuclear power plant will be the safest of its kind, the Cihan news agency reported on Sunday. What he proposed for the planned nuclear power plant in southern Turkey is “a four-layer Matryoshka doll safety system” used in Kalinin. “In case of an accident, heat absorption, natural circulation and cooling automatically start. These safety systems do not require human intervention to start working,” he was quoted as saying by the agency. For him, the Akkuyu nuclear power plant will pose a risk neither to the surrounding inhabitants nor the environment even in case of a magnitude 9 earthquake as happened in northeast Japan last month or even if a plane crashes into the yet-to-be constructed power plant. “The innermost doll is the reactor itself. What constitutes the second doll is the reinforced concrete surface of the reactor. The third doll is the safely cooling system. The water that circulates inside the reactor does not have any contact with the outside world, and neither does the water in the second cooling layer. Only the third cooling circuit uses water supplied externally. In that way, any possible radiation from an accident can only leak from the third layer. The outermost and fourth doll is a safety measure against any possibility of having the reactor badly damaged. Even if the nuclear fuel remains waterless and starts to melt down, the grid we placed at the bottom of the reactor catches this fuel. And because this grid is cooled down with a separate system, we make sure that no blast happens,” he explained.

Rosatom started building the Kalinin nuclear power plant, which is about 200 kilometers northwest of Moscow, in 1974. Its third reactors became operational in 2004, and a fourth reactor is currently under construction. According to Rosatom officials, the planned nuclear power plant in Akkuyu and the one in Kalinin are very similar in terms of electricity production technology and safety systems. The only major difference according to Kanishev, is that Kalinin has 1,000 MW reactors, but the Akkuyu nuclear power plant will have 1,200 MW ones.

Rosatom plans to start construction in Akkuyu in 2013 and have its four planned reactors operational by 2021. Once completed, it is expected to employ 20,000 people. Turkey is presently heavily dependent on foreign energy supplies but aspiring to become self-dependent by 2023, the centennial of the Republic of Turkey. To that end, the AK Party government is planning to have three nuclear plants operational by the 100th anniversary of the republic, while also intensifying oil and natural gas exploration efforts across the country. The growing environmentalist sentiment seems not to have impacted the stance of the government, which says it will never approve any project environmentally hazardous while pursuing the country’s macro interests. According to government officials, people’s environmentalist feelings are used by certain groups who are not happy with the country’s centennial aspirations.
No to Chernobyl, Yes to Akkuyu

As the latest sign of Turkey’s commitment to its nuclear energy program, which the government says is also environment-friendly, Energy and Natural Resources Minister Taner Yıldız said on Monday that he supports protests organized against old-fashioned nuclear power plants that continue producing energy around the world; however, the planned nuclear power plant in Akkuyu should be supported because it poses no risk to the environment at all.

Noting that Greenpeace members often carrying banners reading “No to Chernobyl” during their demonstrations [in Turkey], Yıldız said the same banner should read “No to Chernobyl, Yes to Akkuyu.” “First generation nuclear power plants that are over 40-years old should be closed. But third generation power plants such as the one we plan to build in Akkuyu are necessary. I think Greenpeace will agree,” he said, speaking at a signing ceremony between the state-owned Turkish Pipeline Corporation (BOTAŞ) and the Swiss energy company EGL Group on the transportation and marketing of oil and natural gas.
source: todays zaman

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