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Home , Hatay Province

ECONOMİC OUTLOOK of and HATAY

Levent Hakkı YILMAZ İskenderun Chamber of Commerce and Industry Chairman of the Board General Information about Turkey (2016) Capital City Population 79.8 million Workforce (Population) 30.5 million Aged Average 31,4 Area 783.562,38 square kilometers GDP (Gross Domestic Product) 857 billion US Dollars (2016-Current Prices) GDP per capita US $ 10.807 Export Amount 143 billion dollars Import Amount 199 billion dollars Tourism Revenue 22.1 billion dollars Number of Tourists 25.3 million Foreign Direct Investment 12.3 billion dollars Number of Foreign Companies 52.754 Inflation Rate 8.5% (Consumer Price Index - 2016) Main Export Markets Germany (9.8%); England (8.2%); (5.4%); Italy (5.3%); USA (4.6%); (4.2%); BAE (3.8%); Spain (3.5%); (3.5%); Netherlands (2.5%) Main Import Sources China (12.8%); Germany (10.8%); Russia (7.6%); USA (5.5%); Italy (5.1%); France (3.7%); South Korea (3,2%); India (2.9%); Spain (2.9%); England (2.7%) Economic Outlook of Turkey

In recent years, Turkish economy has performed remarkably well with steady growth. Turkey's macroeconomic strategy, consistent financial policies and radical structural reforms have integrated the global economy. This led the country to a leading position in direct foreign investment figures in its region.

The reforms have strengthened the economic structure and financial indicators of the country. In this respect, the Turkish economy grew with an average annual real GDP growth rate of 5.6% between 2003 and 2016. 10 Reasons to Invest in Turkey

1. Successful Economy  A rapidly developing economy; GDP, which was 231 billion $ in 2002, increased more than three times in 2016 to 857 billion $ . Stable economic growth; between 2002 and 2016 the annual average real GDP increased by 5.6%. (TURKSTAT)  It is expected to be one of the fastest growing economies among the OECD member countries in 2017-2020 with an annual real GDP growth rate of 5.4%  The institutionalized economy which attracted foreign direct investment of 145 billion $ in the last 10 years (CBRT),  A dynamic and institutionalized private sector structure with an export volume of 143 billion $ with an increase of 300% over the last 15 years, (TURKSTAT)

2. Population  Population of 79.8 million (2016, TURKSTAT)  The most populous young population compared with the European Union (Eurostat)  Half the population under the age of 31 (2016, TURKSTAT)  Young, dynamic, educated and multicultural population 10 Reasons to Invest in Turkey

3. Qualified and Competitive Labor Force

 More than 30.5 million young, educated and motivated staff (2016, TURKSTAT)  Increased employee productivity  More than 800.000 graduates from over 183 universities (Annually ) (2016, CoHE)  Over 950.000 high school graduates (Half of the vocational high schools and technical high schools)  Yarısı meslek liseleri ve teknik liselerden olmak üzere 950.000’in üzerinde lise mezunu (2016, MNE)

4. An Open Investment Environment for Innovations

 Since 1997 the second largest reformist country among OECD members in terms of restrictions on foreign direct investment (OECD FDI Regulation Restriction Index 1997-2016)  A business-friendly environment that provides corporate setup in an average of 6.5 days (World Bank Doing Business Report 2017)  Competitive investment conditions  A strong industry and service culture  Equal treatment for all investors  In 2016, approximately 52.700 foreign-funded companies (Ministry of Economy)  International arbitration 10 Reasons to Invest in Turkey

5. Developing Infrastructure

 New and improved technical infrastructure in transportation, telecommunication and energy sectors  Highly advanced, low cost sea transportation  Railway advantage to Central and Eastern Europe  Well structured transportation and direct shipping opportunities to the most of European Union countries

6. Central Location

 Effective and optimum cost point to important markets by functioning as a natural bridge between East-West and North-South  Easy access opportunity to 1.6 billion potential customers in Europe, Eurasia, the Middle East and North Africa  Access opportunity to the markets that total GDP value reaches 24 trillion $ 10 Reasons to Invest in Turkey

7. European Energy Corridor

 An important energy terminal and gateway connecting East and West  More than 70% of the world's proven primary energy reserves are located in regions very close to Turkey. Europe, which is one of the biggest energy consumption regions of the world, makes Turkey a key point in energy transfer and an energy terminal in the region.

8. Low Taxes and Incentives

 Corporate Tax has dropped from 33% to 20%  Entire or partial exemption from the Corporation Tax and support for employers' social security expences. In addition to the tax advantages for the Technology Development Zones, Industrial Zones and Free Zones, possibility of land allocation  The possibilities of the R & D Law  Strategic investments, incentives for large-scale investments and regional investments 10 Reasons to Invest in Turkey

9. Customs Union with the European Union since 1996

 The Customs Union, which has been in force since 1996 with the EU and Free Trade Agreement with 27 countries (Ministry of Economy)  New Free Trade Agreements  Accession negotiations with the EU

10. Great Internal Market

 Between 2002 and 2016, the number of internet subscribers that reached from 0,1 million to 62,2 million (TURKSTAT),  Between 2002 and 2016, the number of mobile phone subscribers increased from 23 million to 75,1 million (TURKSTAT)  Between 2002 and 2016, the number of credit card users reached from 16 million to 58,8 million (ICC)  Between 2002 and 2015, the number of air passengers increased from 33 million to 181 million (TURKSTAT)  The number of foreign tourists reached from 13 million to 25,3 million between 2002 and 2016 (TURKSTAT) General Information about Hatay

Considering the figures taken from official institutions and establishments, Hatay attracts attention with its potential in the Turkish economy.  Hatay’s population is 1.555.165. This value makes Hatay the 13th most populous city in Turkey. According to population density, Hatay is the 7th highest population density of Turkey (TURKSTAT 2016).  Hatay is in the 15th place in the country with 1.2% GNDP (TURKSTAT, 2014)  Hatay is in the 10th place in 2015 with 72.390.000.000 TL commercial volume figures (Technology Entrepreneur Information System ,Ministry of Science, Industry and Technology)  Hatay is in the 20th place in the country with 21.815 workplaces in terms of the number of establishments (Social Security Institution, 2016)  The number of exporters in Hatay is 1.125 and according to this data Hatay ranks 11th in Turkey. (2016)  Hatay ranks 15th in the country in terms of total deposit figures with 12.249.318 TL (Banking Regulation and Supervision Agency, 2016) According to the Revenue Administration of the year 2016, Hatay ranks 8th in terms of tax revenues in Turkey.

2016 (January - December) 2017 (January - July) Rank Provinces Accrual Collection Collection / Accrual Collection Collection / (Tousand TRY) (Tousand TRY) Accrual (Tousand TRY) (Tousand TRY) Accrual 1 250.832.688 204.785.743 81,6 182.255.586 130.650.040 71,7

2 Kocaeli 63.178.365 58.108.807 92 42.312.159 36.562.563 86,4

3 İzmir 61.923.520 52.322.382 84,5 44.362.273 33.566.940 75,7

4 Ankara 68.600.882 52.865.202 77,1 49.634.371 32.745.132 66

5 14.719.160 10.349.125 70,3 11.629.793 6.741.509 58

6 9.501.549 7.742.581 81,5 7.580.682 5.707.238 75,3

7 8.819.358 5.483.974 62,2 7.038.077 3.313.719 47,1

8 Hatay 5.729.502 4.507.472 78,7 5.112.014 3.701.919 72,4

9 6.690.418 3.914.593 58,5 5.505.750 2.577.748 46,8

10 5.518.065 3.519.593 63,8 4.299.404 2.031.479 47,3

Source: T.R. Ministry of Finance, Accounting Department,2017 According to export figures for the year 2016, Hatay maintains its 10th place in the country with exports of 1,743,882,283 USD.

As of 2016, Hatay ranks 7th among the top importing provinces.

Our region has been ranked between 9th and 10th among the top exporting countries, and between 7th and 8th among the top importing countries since 2006.

Hatay Foreign Trade Statistics

Years Export (US Dollar) Import (US Dollar)

2015 1.826.646.449 3.232.424.737

2016 1.744.917.462 2.570.898.961

2017 (January-July) 1.402.500.212 2.186.399.431 According to data provided by the Istanbul Chamber of Industry in the year 2016, Hatay is ranked 10th in the country with 10 enterprises that are among the 500 biggest companies.

500 Big Company Sales From Special Rank Company Titles Affiliated Chamber / Public Production Rank (Net) (TRY) 2016 2015 İskenderun Chamber of Commerce 10 9 İskenderun Demir ve Çelik A.Ş. 9 6.496.505.034 and Industry İskenderun Chamber of Commerce 22 21 Tosçelik Profil ve Sac Endüstrisi A.Ş. 20 3.593.820.225 and Industry MMK Metalurji San. Tic. ve Liman Dörtyol Chamber of Commerce and 58 59 53 1.584.171.380 İşletmeciliği A.Ş. Industry Dörtyol Chamber of Commerce and 68 223 Koç Metalurji A.Ş. 62 1.322.398.929 Industry Erzin Chamber of Commerce and 107 225 Egemer Elektrik Üretim A.Ş. 100 919.546.752 Industry İlhan Demir Çelik ve Boru Profil Dörtyol Chamber of Commerce and 223 202 214 529.419.848 Endüstrisi A.Ş. Industry İskenderun Chamber of Commerce 248 210 TosyalıDemirÇelikSanayi A.Ş. 239 477.235.870 and Industry Dörtyol Chamber of Commerce and 435 - Baştuğ ÇelikSanayi A.Ş. 425 274.691.626 Industry Dörtyol Chamber of Commerce and 484 - CorbusÇelik San. ve Tic. A.Ş. 473 248.140.551 Industry Tufan Endüstri Demir Çelik San. ve Dörtyol Chamber of Commerce and 485 - 474 248.058.880 Tic. A.Ş. Industry Hatay is the lowest 13th province in labour force partipication in Turkey (TURKSTAT, 2013) . According to unemployment figures, our province is in 11th place. According to the regional labour force statistics for the year 2016, TR63 Region (Hatay, Kahramanmaraş, ) has unemployment rate above the average of Turkey.

Regional Unemployment Rates (%)

2011 2016 Hatay, Kahramanmaraş, Osmaniye 12 14.4 Turkey 9.8 10.9 Gap 2.2 3.5

Hatay, Kahramanmaraş, Osmaniye (TR63 Region) Years 15+ Age Unemloyment Rate (%)

2015 16.4 2016 14.4 According to the information given by the General Directorate of Immigration of the Ministry of Interior as of 17.08.2017; There are 403,438 in Hatay province under temporary protection. According to the distribution of the Syrians, Hatay is the 3rd place after Istanbul and Şanlıurfa. Hatay is in second place after with 25.94% in terms of population ratio.

Distribution of Syrian Foreigners by Temporary Protection (As of 17.08.2017)

Percentage of comparison Ranks Provinces Registered Population with provincial population 1 İSTANBUL 501.929 14.804.116 3,39% 2 ŞANLIURFA 439.826 1.940.627 22,66% 3 HATAY 403.438 1.555.165 25,94% 4 339.697 1.974.244 17,21% 7 KİLİS 127.576 130.825 97,52%  According to GNP figures for 2014, per capita income in Hatay province is 7637 dollars and it is ranked 55th in Turkey. In the period between 2011 and 2014, when the started, the per capita income in Hatay province fell from 51st place to 55th place in Turkey.

 Osmaniye maintained its 56th place in this period, and Kahramanmaraş dropped from 57th to 58th place.

 According to TURKSTAT export figures, Hatay province exports (from 654,914,000 USD to 2,050,554,653 USD) increased by 213% between 2004 and 2011, but decreased by 14,9% in 2016 due to the Syrian crisis.

 When Hatay export figures were analyzed according to countries between 2010-2015, exports from Hatay to increased by 97% to 232 million USD. Syria has become the country with the highest number of exports of Hatay. The vast majority of this figure comes from the aid provided and is realized through foreign institutions or Syrian citizens. Regional İncentive Classification

1. Region 2. Region 3. Region 4. Region 5. Region 6. Region

Ankara Adana Balıkesir Adıyaman Ağrı

Antalya Aydın

Bursa Batman

Eskişehir Çanakkale Gaziantep Bartın Çankırı Bingöl

İstanbul Karabük Çorum

İzmir Düzce Diyarbakır

Kocaeli Elazığ Gümüşhane Hakkari

Muğla Mersin K.Maraş Iğdır

Kırklareli Hatay Kilis

Konya Niğde

Sakarya Uşak Kırıkkale Muş

Tekirdağ Kırşehir Osmaniye

Yalova Kütahya Sinop Şanlıurfa

Malatya Şırnak

Nevşehir Van

Rize

Sivas

8 province 13 province 12 province 17 province 16 province 15 province Hatay Investment and Promotion Advantages

5. Region Organized HATAY Incentive Elements 5. Region Industrial Zone (6. ( 4. Region) Region) VAT Exemption Yes Yes Yes Customs Tax Exemption Yes Yes Yes Tax Discount Investment Contribution 30 40 50 Rate (%) Tax Discount Rate(%) 70 80 90 Insurance Premium Employer Incident 6 years 7 years 10 years Support (Support Period) Investment Location Yes Yes Yes Allocation TRY: 4 point TRY: 5 point TRY: 7 point Interest Support Foreign currency: 1 point Foreign currency: 2 point Foreign currency: 2 point Max. 600.000 TRY Max. 700.000 TRY Max. 900.000 TRY Trade volume between Turkey and the Netherlands is in a trend of continuous increase with both increases in exports and imports. In 2002, the trade volume between the two countries rose from $ 2.4 billion to $ 7.2 billion in 2011, tripling. In 2013, with the increase in exports and the decrease in imports, Turkey has given a foreign trade surplus of 177 million dollars against the Netherlands, but in 2014 Turkey again gave foreign trade deficit against Netherlands. In the years 2015 and 2016, foreign trade between two countries,Turkey has given more surplus.

Foreign Trade Between Turkey and Netherlands (Million US Dollar)

Export Import Export Import Foreign trade Years Export Portion Import Portion Change % Change % volume % %

2010 2.461,4 15,9 2,16 3.156,0 24,1 1,70 5.617,4 2011 3.243,1 31,8 2,40 4.005,0 26,9 1,66 7.248,0 2012 3.244,4 0,0 2,13 3.660,6 -8,6 1,55 6.905,0 2013 3.538,0 9,1 2,33 3.363,6 -8,1 1,34 6.901,6 2014 3.458,7 -2,2 2,19 3.564,4 6,0 1,47 7.023,1 2015 3.154,9 -8,8 2,19 2.914,4 -18,2 1,41 6.069,2 2016 3.589,6 13,8 2,52 3.014,7 3,4 1,52 6.604,2 2016 (1-6) 1.847.335 22,0 2,58 1.511.026 -2,6 1,52 3.358.362 2017 (1-6) 1.755.586 -5,0 2,27 1.637.066 8,3 1,51 3.392.652 Main Products in Turkey's Export to Holland (Thousand US Dollars)

2015-2016 2016 Rank Products 2014 2015 2016 Change % Portion %

Total 3.458.689 3.154.943 3.589.553 13,8 100,0

Motor vehicles for goods 1 130.388 173.369 346.584 99,9 9,7 transport

Cars, station wagons, 2 176.786 153.446 211.911 38,1 5,9 racing cars

T-shirts, jackets, other 3 186.460 153.712 142.405 -7,4 4,0 underwear (knitted) Oils obtained from 4 petroleum oils and 84.203 71.544 132.554 85,3 3,7 bitumen minerals Suits for women / girls, 5 173.728 136.690 119.017 -12,9 3,3 suits, jackets etc. Major Products Imported from the Netherlands by the Netherlands (Thousand US Dollars)

2015-2016 2016 Rank Products 2014 2015 2016 Change % Proportion %

Total 3.517.164 2.914.731 3.000.195 2,9 100,0

Iron and steel waste and 1 564.159 298.647 544.459 82,3 18,1 scrapers, their bullies Polyacetals, other 2 polyethers, epoxide- 232.895 201.157 168.240 -16,4 5,6 alkyd resins, etc. (first)

Oils obtained from 3 138.996 48.827 152.414 212,2 5,1 bituminous minerals

4 Traktors 197.752 226.532 134.912 -40,4 4,5

Food preparations not 5 99.026 96.575 93.685 -3,0 3,1 elsewhere specified