YOUR COMPLIMENTARY COPY EXCLUSIVE INTERVIEW Ahmet Davutoğlu, Minister of Foreign Affairs, told The Turkish Perspective how his political strategies worked to reposition Turkey on the international stage

MARCH-APRIL 2011 ISSUE 3 ECONOMY BUSINESS FOREIGN TRADE ANALYSIS

AN EXPANDING SPHERE OF INFLUENCE Each diplomatic experiment by Turkey expands the boundaries of economic relations and increases exports

The Turkish Perspective 01 Contents

05 | Cooperating against 40 EXCLUSIVE INTERVIEW Exchange Rate Risks 06 | A New Road Map for Trade A VISION WITHOUT BORDERS | Turkish Airlines Receives Turkish Minister of Foreign Market Leadership Award Affairs Ahmet Davutoğlu, who 07 | Turkey is on the Right Path is known for his ‘‘zero problems 08 | Raisıng the Bar for 2011 with neighbours’’ policy, is 09 | Turkish IT Practitioners at determined not to be a spectator in CEBIT 2011 international relations

34 COVER TURKEY’S SPHERE OF INFLUENCE EXPANDS A transition in Turkey’s foreign policy is under way, and Turkey wants to understand where the borders of 06 its sphere of activity lie 00

12 PANORAMA 14 BRIEFING THE TURKISH ECONOMY DURING 14 | ANATOLIA: A PLACE OF exporting in the domestic and AND AFTER THE CRISIS HEALING ONCE AGAIN foreign market are encouraging 29 Decoupling on two accounts has With its skilled medical personnel, 22 | UNEARTHING THE POTENTIAL led the Turkish economy into an quality of service, and reasonable Turkey is quickly moving toward entirely different picture vis-à-vis costs, Turkey is the world’s rising star becoming Europe’s production other economies in medical tourism base for organic agriculture, 17 | BSH TO MANUFACTURE IN thanks to diversity and quality of TURKEY INSTEAD OF CHINA its goods Norbert Klein, CEO of BSH Turkey, 24 | THE GREATEST YEAR OF says that they will manufacture ADVANCEMENT IN TURKISH AIRLINES’ small home appliances in Turkey HISTORY instead of China According to Hamdi Topçu, 2011 18 18 | DIGITAL TURKS will be the greatest year of progress As the growth of Turkey’s digital in the history of Turkish Airlines ecosystem gains momentum each 26 | TIME FOR TURKISH day, several fi gures stand out for their CONTRACTORS TO PLAY BALL local and global successes The upcoming sports events taking 20 | OVERCOMING BARRIERS AND place in Russia and Qatar will CROSSING BORDERS bolster the strength of the Turkish The successes of Turkish women construction sector in these 00 involved in entrepreneurship and countries 02 Contents

28 | ECONOMIC RELATIONS TO MANAGEMENT FURTHER DEVELOP PUBLISHER ON BEHALF OF TURKISH EXPORT- ERS ASSEMBLY/ PRESIDENT OF THE TURKISH Vladimir Ivanovsky, the Russian EXPORTERS ASSEMBLY Federation’s Ambassador to MEHMET BÜYÜKEKŞİ Ankara, evaluates Turkish MANAGER IN CHARGE construction companies in Russia MUSTAFA MENTE and the state of Turkish-Russian PUBLICATION BOARD economic relations after the İLKER AYCI, BÜLENT AYMEN, İBRAHİM BURKAY, MUSTAFA ÇIKRIKÇIOĞLU PhD, nuclear power plant project ALİ NEDİM GÜRELİ, AHMET KELEŞ, TEMEL KOTİL PhD, ŞAHİN OKTAY, 29 | CONCRETE GROWTH TAHSİN ÖZTİRYAKİ Due to a host of advantages, Turkey tops the list of countries PUBLICATION MANAGEMENT that cement-producing PRESIDENT 56 OPINION SERKAN ÜNAL companies are investing in. GROUP COORDINATOR 30 | THE FURNITURE INDUSTRY MANAGING 80 COUNTRIES FROM ISTANBUL MEHMET MÜCAHİD DEMİR GE Healthcare, having moved its regional headquarters to COORDINATOR PREPARES TO CONQUER BAHA YILMAZ THE WORLD Istanbul, has seen the fruits of this strategic move within a relatively short time FINANCE COORDINATOR The furniture sector, which set an SELİM KARA exports target of 6 billion dollars EDITORIAL for 2023, is preparing to draw EDITOR IN CHIEF the world’s attention with its leap 49 SERDAR TURAN toward growth EDITOR CEYHAN AKSOY REPORTERS 40 IN DEPTH AHMET USTA, AYŞEGÜL SAKARYA, CİHAN DAĞ, F. EMRE YILMAZ, GAMZE GÖREN, 46 | THE GOAL IS TO BE EURASIA’S MEHMET ERDOĞAN ELGIN, MERVE KARA, MANUFACTURING CENTER NESRİN KOÇASLAN, SİNAN KOPARAN, TOLGAHAN ÖZKAN With the Industry Strategy Document, Turkey can see the ENGLISH EDITOR ALTAN ORHON path toward the goal more clearly DESIGN 52 | TURKEY CHARGES UP GROUP DESIGN DIRECTOR FOR THE FUTURE 66 N. EMRAH YÖRÜK ‘‘Devrim’’ may remain as a DESIGN DIRECTOR 64 | SOLD! 68 AGENDA ÖZKAN ORAL disappointing recollection in The compass of artistic movements DEPUTY DESIGN DIRECTOR the annals of history, but Turkey now points eastward. The Turkish FAIRS, EXHIBITIONS, SUMMITS, AND AHMET ÇELİK possesses great opportunities to MEETINGS IN THE NEXT TWO MONTHS arts market is becoming a focal point PHOTO EDITOR become a brand in electric cars ŞEREF YILMAZ of interest for collectors as well as 70 FIGURES world-famous auction houses CONTRIBUTORS 60 BRANDS 70 | MERGERS & ACQUISITIONS IN 2010 PROF. DR. TANER BERKSOY 66 | THE SECRET HEROES OF THE 60 | THE THREE MUSKETEERS OF PRINTING GRAND BAZAAR 71 |THE EXPORTER TENDENCY PROMAT BASIM YAYIN SAN. VE TİC. A.Ş. FASHION SANAYİ MAH. 1673. SOKAK NO: 34 No matter what anyone says, the SURVEY ESENYURT / BÜYÜKÇEKMECE - İSTANBUL Featured on the catwalk this time Grand Bazaar is still the center of TEL: (0212) 622 63 63 FAX: (0212) 622 63 73 was Istanbul, with three different jewelry. Its crowded, chaotic streets events concerning the production, conceal highly gifted designers... design, and retail stages of ready- to-wear clothing CONTACT [email protected] www.infomagyayincilik.com

Neither text nor photographs from this publication may be reproduced in full or sum- mary without acknowledging the source and without prior permission from the publisher

MARCH-APRIL 2011 ISSUE 3 The Turkish Perspective 03 Editorial MEHMET BÜYÜKEKŞİ PRESIDENT (TIM)

election year. To exit the crisis, Turkey started using new policy devices to FOLLOWING THE protect itself from the negative effects of the monetary expansion that is oc- curring in Western economies. That the practice has been successful will set WAVE OF CHANGE an example to rising markets that wish If a political structure and an administration shaped to protect their economies from fl ows by democracy is formed in the Middle East, Turkey will of hot money. As Turkey’s exporters, have the most to gain we believe that this practice will have a positive effect over the fi scal defi cit, the only problematic area in Turkey’s Dear readers, 49.7 percent, and the rate of those who economy, and will support exports as The Turkish economy passed through believed it would get worse was 19.9 per- well. 2010 very successfully. Though in an en- cent. The greatest reason our companies We are hopeful for 2011. Its fi rst two vironment where the effects of the global believe so strongly in their own sectors months have brought us much hope: crisis still raged on, economic growth and the Turkish economy and maintain over these two months, there has been sped up and continued. We estimate their positive expectations is the stability an improvement in exports of nearly 23 that Turkey’s growth in 2010 Turkey will that has prevailed over Turkey in recent percent. Our exports target for 2011 is exceed 8 percent. years. Thanks to this stability, unlike in 132 billion dollars. Turkey will continue Together with strong economic per- past years, the shadow cast by politics to grow both with strong demand in the formance, rates of unemployment also over the economy is lessening. domestic market and with the rapid rise fell. Around 1,113,000 jobs were created, That Turkey is not in an election in exports. We foresee that the Turkish exceeding the workforce’s demand for economy in spite of the election process economy will preserve its high rate of 853,000, and a net reduction was seen – on the contrary, it continues its strict growth and that growth will be between in unemployment fi gures. Increases fi nancial policies – is another factor 5 to 6 percent in 2011. continued in industrial manufacturing raising Turkey’s credibility. According A number of political developments in and exports. Exports continued to be the to the budget fi gures announced by the Middle East may refl ect negatively driving force of Turkey’s economy, rising the Ministry of Finance, in January, on Turkey’s exports in the short term. to 114 billion dollars in 2010. Turkey’s budget posted a surplus of 4.8 However, we know that life will go on Turkey is entering the year 2011 billion TL. Thus, by this fi gure, Turkey’s after this great wave of change settles. beneath an election atmosphere; but in budget posted a surplus in January for The potential and populations of these spite of this, one does not encounter ef- the second time in the past twenty-one countries are still there. People are born, fects of the election process on economic years, showing how much importance they grow up, get married, work, and expectations. According to our poll of Turkey places on budget discipline. consume. Life somehow goes on. Turkey’s top on one thousand exporting In an environment where the rates of To look at it in the long term, we will companies, 57.9 percent of our compa- many countries’ debts against their na- not be moving away from these markets. nies believe that their sectors will im- tional revenues and their budget defi cits If a political structure that is account- prove in 2011, and 56.7 percent believe are rising, Turkey is exhibiting success- able to the government and possesses an the same about the Turkish economy as ful performance in its budget as well. administration shaped by democracy is a whole. The rate of those who stated Measures taken to control the bal- formed in the region, Turkey will have that the world economy would get better looning of credit and the expansion in the most to gain from it. The direction was 30.4 percent, the rate of those who internal demand have started a new Middle Eastern countries wish to go is stated that it would stay the same was era in the economy, despite it being an the direction Turkey is going. C M Y CM MY CY CMY K

INVESTORS TURKEY INVESTORS

Over 23,000 international companies have already invested in Turkey. How about you?

• A population of 73 million, half of which is under • Access to Europe, Caucasus, Central Asia, the Middle the age of 28.8 East and North Africa • 60% of the population is under the age of 35 • 16th largest economy of the world and the 6th largest • Approximately 450,000 students graduated from around 150 universities and other higher education economy as compared to the EU countries in 2009 institutions in 2009 (IMF-WEO) • Over 25 million young, well-educated and motivated • 15th most attractive FDI destination for 2008-2010 labor force (UNCTAD World Investment Prospects Survey) • Highly competitive investment conditions • A country that offers 100% and more tax deductions • Average annual real GDP growth of 6% between on R&D expenditures 2003 and 2008

03 editor yeni copy3.indd 4 29.10.2010 17:00 05 Content: Cooperating against Exchange Rate Risks P5 A New Road Map for Trade P6 Turkey is on the Right Path P7 Raising the Bar for 2011; Kobe Bryant Enters the Kitchen for Turkish Airlines P8 Turkish IT Practitioners at CEBIT 2011 P9 Turkey at the Center of the Global Media’s Attention P10 Editor: Ceyhan Aksoy

First REGULATIONS, EXPORTS, MEETINGS, PARTNERSHIPS, AVIATION, DEFENSE, MINING, MEDIA...

TIM will engage in joint training activities with TurkDEX in all provinces throughout Turkey where there is demand

exchange rates are highly signifi cant for our exporters. An COOPERATING AGAINST exchange rate system in fl ux forces our ex- porters to be active in EXCHANGE RATE RISKS exchange rates. How- ever, unfortunately, TIM is taking important steps in order to avoid risks of high we are seeing that exchange rates our exporters are not hedging exchange rate risks suffi ciently. The greatest reason for this he Turkish foreign exchange con- TIM President that they fi rstly aim is the lack of knowl- T Exporters As- tract operations among Mehmet Büyükekşi, to inform exporters edge,” says Büyükekşi, sembly (TIM) was exporting companies. who spoke at the on what this service and adds that they moved to act once it TIM will also soon ceremony for the co- is. “As TIM, we are will engage in joint became clear in polls sign an agreement on operation agreement very sensitive to the training activities of exporters that 57 option operations with signed between TIM exchange rate risks with TurkDEX in all percent of companies Eximbank. and TurkDEX, says of our exporters, as provinces throughout use no instruments Turkey where there in hedging foreign is demand. TIM will currency risks. TIM, follow these protocols, TIM President which recently made Mehmet which were made so a forward agreement Büyükekşi, that companies can TurkDEX with Halkbank, has President continue their exports also entered coopera- Işınsu Kestelli, in healthier condi- TurkDEX tion with the Turkish CEO Çetin Ali tions, and will share Dönmez and Derivatives Exchange TIM Deputy changes of the usage (TurkDEX), aiming to Secretary Şahin rates of these opera- Oktay were spread awareness and present at the tions with the public the use of fi xed-term ceremony at times. 06 First

REGULATIONS AVIATION TURKISH A NEW ROAD MAP FOR TRADE AIRLINES The new Commerce Code redefi nes the rules of trade and business, bringing more transparency and increased effi ciency in risk management RECEIVES MARKET board meetings in an electronic environ- LEADERSHIP ment. Thus, millions of individuals will not AWARD have to go to a com- T urkish Airlines has mon location and can been deemed wor- exercise their rights as thy of the “Market shareholders over the Leadership” award by Internet. Air Transport World In addition, accord- (ATW), one of the ing to the code, suits aviation sector’s most caused by legislation important international relating to intellectual publications. The 37th property rights and ATW Airline Industry companies operating Achievement Awards in the fi nance sector ceremony was held at – particularly those the Renaissance Hotel engaged in renting and in Washington, DC, fi nancial renting (fac- the US capital, where toring) – shall be clas- the recipients received sifi ed with commercial their awards. The 2010 suits. The interest rate “Market Leader” award in commerce shall was presented to Turk- HE LAW ON THE ENFORCEMENT and Ap- be determined freely, ish Airlines CEO Temel T plication of the Turkish Commercial Code, while laws regarding Kotil by Cathy Buyck, known simply as the Turkish Commercial Code, legal, capital, and de- the magazine’s senior was accepted in January. The business world had fault interests shall be editor and European waited a long time for the law, which holds great applied. The practice Bureau Chief. In his signifi cance in that it will provide a legal founda- of compound inter- speech at the ceremony, tion suited to modern methods of doing business. est shall be brought Kotil expressed his Among the most important changes that will be to an end. “This code honor at accepting the brought with the new law, which will be come into is one of retouching, award in the name of effect in July 2012, are that the requirement for the not one of dusting off,” Turkish Airlines’ sixteen number of partners in companies to be founded Prof. Ünal Tekinalp believes says Turkish Commer- thousand employees. will be removed, that a single person will be able to the new Commerce Code will cial Code Committee A video presentation open new doors to investors, establish a company, and that board meetings will as well as manufacturers and President Prof. Ünal on the successes that be allowed to take place in a digital environment. consumers Tekinalp, and adds, “It earned Turkish Airlines The new code also paves the way for the over- is a code that restruc- the award was also sight of company balances by independent regula- tures and organizes shown at the ceremony. tory organizations. This rule, which is one of the Turkish commerce The presentation most important requirements of an information and opens the door of explained how Turkish society, also brings transparency with it. The con- new opportunities to Airlines continued to cept of company secrets shall also reach a com- Work on the investors, producers, increase its success pletely new level in this regard, as every company new Commerce and consumers.” The in spite of the global will have a website that will incorporate monthly changes it brings to the fi nancial crisis, giving and tri-monthly fi nancial tables and reports. Code had been regulation of com- examples of the ad-

continuing BY GÜRCAN (BOTTOM) ÖZTÜRK N / PHOTOGRAPH Among the statutes in the new code is the panies, transparency, vances it made. Namık İ AH Ş

far nearly 10 P penalization of raising money from the public by risk management, and Tan, Turkey’s Ambas- İ promising partnership without receiving permis- years and it was boards are especially sador to Washington sion from the Capital Markets Board, as well as revised many signifi cant to the busi- DC, also attended the requiring companies that have gone public to have times ness world. awards ceremony. ILLUSTRATION BY: NEC ILLUSTRATION MARCH-APRIL 2011 ISSUE 3 0608 First

IRON AND STEEL AVIATION RAISING THE BAR Kobe Bryant Enters FOR 2011 The Kitchen For Iron and steel exporters’ target for 2011 is 16 billion dollars Turkish Airlines Turkish Airlines’ brand ambassador Kobe Bryant features in the ad video of the company HE IRON and steel 2010. The sector’s T sector, which ac- target for 2015 is to rise counted for 16 percent to number eight in the of all Turkish exports global ranking. Namık in 2008 with 19.5 Ekinci, President of the billion dollars, shut Istanbul Iron and Steel the books on 2009 Exporters’ Association, with 11 billion dollars. says that production ca- The sector accounted pacity will be increased for approximately 11 to 52 million tons with percent of total exports the new investments in 2010 with 12.3 bil- that have been made, lion dollars. Its target and adds, “With 17 for 2011 is 16 billion million tons of sales, dollars. Turkey, which Turkey occupies the is number ten among position of the world’s ILMING OF AN AD video Kobe in his culinary efforts and the world’s largest fl at seventh largest exporter F featuring Kobe Bryant, who planning menus for fl ights. steel producers, main- in this sector. Our was chosen Turkish Airlines’ Starring Kobe Bryant, Turk- tained its position as sector is regarded as a brand ambassador within the ish Airlines’ brand ambassador Europe’s second largest trustworthy safe harbor scope of the company’s interna- worldwide and especially for the fl at steel producer in due to its quality.” tional brand recognition efforts, US, the video was shot in a studio has been completed in Los of approximately 1,200 square Angeles. Kobe Bryan entered the meters at Southbay Studios in Los kitchen for the fi rst time in his life Angeles. Laurence Dunmore – for Turkish Airlines, displaying who directed international ads for his acting prowess rather than such brands as Adidas, Mercedes, playing basketball in the video. A Hermes, and BMW – directed the life-size model of the plane and video, which was shot with three the new Business Class seats were different sets with the contribu- prepared in England and sent tions of Turkish, American, and to Los Angeles to be used in the British crews. Approximately 215 shoots, which took two days to people took part in the production complete after three months of of the video, whose soundtrack preparations. Turkish Airlines’ was prepared by Massive Music in experienced airborne chef coached Amsterdam, the Netherlands.

A QUICK START Exports increased by 22.67 percent in January 2011 over January 2010. Automotive exported the most out of all sectors in January with a volume of 1.5 billion dollars. Ready-to-Wear Clothing and Apparel was second with 1.3 billion dollars, while Chemical Materials 59.27 45.93 44.96 and Products was one of the sectors showing the most SHIPS AND YACHTS WATER PRODUCTS AND CHEMICAL MATERIALS improvement in its exports performance, coming in at ANIMAL PRODUCTS AND PRODUCTS third place with 1.2 billion dollars.

MARCH-APRIL 2011 ISSUE 3 The Turkish Perspective 0709

FOREIGN TRADE TECHNOLOGY DEFENSE TOWARD Turkish Informatics EXPORTING 10 BILLION DEFENSE DOLLARS WITH Starts at CEBIT 2011 The largest PORTUGAL Turkish Airlines supports the promotion of Turkey’s agreement on informatics sector to the world armored vehicles is signed with Zafer Çağlayan, the Malaysia Minister of Foreign Trade, pushed the button to increase Turkey’s largest trade with Portugal to exports agreement in 10 billion dollars. On the defense industry February 21, during so far was signed at his visit to Portugal, a ceremony in which Çağlayan said that they Minister of National could raise the current Defense Vecdi Gönül 1 billion dollar trading and Malaysian volume between the Minister of Defense two countries to 10 Ahmed Zahid Hamidi billion dollars within a participated. Un- few years. As Çağlayan der the terms of the expounded on the agreement, FNSS will opportunities available provide support for in Turkey’s economy, the design, develop- he also listed the URKEY WILL PARTICIPATE have been engaged in a close rela- ment, production, and incentives offered to T in CEBIT 2011 with the sta- tionship with Turkish companies logistics of the 8x8 investors. The minister, tus of “Partner Country” due to the and institutions for many years. Armored Wheeled who explained that the efforts of the Istanbul Chamber of The Turkish-German Information Assault Vehicle to institutions tax is 2 Commerce, which aims to promote and Communication Technologies meet the needs of the percent in incentivized Turkey’s informatics sector to the Summit shall also be organized Malaysian Armed regions, also informed world. Turkish Airlines will sup- within the scope of CEBIT, which Forces. The amount investors that the port this promotion as a “Partner Prime Minister Recep Tayyip required by the agree- insurance premiums Airline.” Turkish companies will Erdoğan and German Chancellor ment for the project, of personnel employed appear in fi ve separate halls with Angela Merkel are expected to kick which encompasses are undertaken by the over 4,500 square meters of booth off on March 1, 2011. The leading the development and government and that space at CEBIT 2011, which will companies of Germany and Turkey production of 257 8x8 land incentives are take place March 1-5, 2011, in and governmental organizations Armored Wheeled offered. Hanover, Germany. Those fol- shall share their success stories in Assault Vehicles in 12 lowing the fair draw attention to IT and provide information on different confi gura- the fact that CEBIT’s organizer, regional investment incentives at tions for the Malaysian Deutsche Messe AG, and BITKOM the summit. Armed Forces, is close to 600 million dollars. FNSS Defense Systems GRAIN, LEGUME, AND OIL-BEARING SEED EXPORTS (Million USD) Co. General Manager Nail Kurt said, “We The export of grain and oil-bearing seeds increased by 39.43 percent to 610,038 liras in January 2011 gave these vehicles the 400 Million Dollars name ‘Pars,’ (a type of leopard indigenous 360 to Anatolia) as they represent power in 320 Anatolia. Production of the Pars vehicle 280 family has been pos- JAN FEB MARAPR MAY JUNJULY AUG SEP OCT NOV DEC sible in 4x4, 6x6, and Data:TIM 8x8 confi gurations.” 0610 First

MEDIA in the past decade, says of important economies. John Peet. It can take It held a temporary seat decades to change the on the United Nations TURKEY AT THE CENTER OF THE image of a country. Yet Security Council in Turkey has managed 2009-10. It is knocking the trick in less than on the door of the GLOBAL MEDIA’S ATTENTION one. Ten years ago it BRICs club of emerging Turkey, which stood out among emerging markets with the was a basket-case. Yet giants. Some forecasts eruption of the 2008 crisis and managed to exit the crisis with ten years on Turkey suggest that during the the least harm, has managed to occupy the center of the whole stands transformed. next decade it will grow world’s attention with its performance in 2010 The economy suffered faster than any country badly in the global bar India and China. recession of 2009, Others predict it could he world media Mexico, Indonesia, of FDI (foreign direct but over the previous become the world’s T did not just stand Turkey and South Korea investment) infl ows.” fi ve years it had been tenth-biggest economy by and watch this, to the original four Turkey has other unusually vigorous, and by 2050. of course. According countries to create a assets too. With three it has bounced back so to the Directorate new grouping of growth grey minarets tacked quickly that this year it General of Press and markets. – rather incongruously is likely to grow faster Information, Turkey “It’s just pathetic to – on to the old, faded than those of almost was the subject of a call these four ‘emerging red brick, the Hagia all other European total of 1,263,131 news markets’,” he told the Sophia, once the largest countries. Turkey has items, commentaries, Financial Times. church in the world and largely escaped the and programs in subsequently a mosque, Mediterranean sickness international sources is now a museum, a that has taken hold in The Wall Street Journal including newspapers, landmark draw for Greece, Spain, Portugal wrote that Turkey’s radio, television, Turkey’s tourist industry. and even Italy. It is on industries are devel- international online By 2023, the the verge of acquiring oping in every area newspaper aggregators, centenary of the an investment-grade and that the country’s foreign news agencies, founding of the Turkish credit rating, infl ation is astonishing economic and websites. Republic, the country in single fi gures and the success story is con- The most interesting hopes to have more government has been tinuing. The article, of these was that Jim The analysis than doubled arrivals able to dump the IMF. which was published O’Neill, the economist appearing in British to 63 million, thereby The political situation on the newspaper’s who created the BRIC paper The Guardian becoming one of the has also greatly website, evaluates the concept, added four underlined Turkey’s world’s top fi ve tourist improved. After nearly growth rate of Turkish more countries to the strengths: destinations. Ankara eight years of single- industry, emphasizing group, including Turkey. After BRIC comes has established visa-free party rule by Recep that industrial produc- O’Neill explained the MIST, the acronym travel arrangements with Tayyip Erdogan’s Justice tion increased by 16.9 MIST concept–which Turkey would certainly Jordan, Lebanon, Libya and Development percent in December features Mexico, welcome and Syria, with similar (AK) party, the army 2010 compared to the Indonesia, South Korea, The term MIST has bilateral deals under has been largely same month last year, and Turkey – to the been coined to describe discussion with other tamed. With exquisite and that the increase Financial Times: the next tier of large countries in the Middle timing, Mr. Erdogan in the manufacturing emerging economies East and North Africa. won a referendum on industry was nearly 20 - Mexico, Indonesia, constitutional changes. percent. South Korea and The AK government “These fi gures did not Turkey. Can Turkey live has pushed through just undermine econo- up to the hype? an impressive array of mists’ expectations, Sinan Ülgen heads political and economic they made a complete up Istanbul Economics, reforms. One reward mess of these expecta- “First there were the a thinktank in the was the formal opening tions and predictions,” “BRICs” - now there’s cultural capital. He in October 2005 of wrote the newspaper, “BRIC ‘n’ MIST” Jim says: “Turkey became a negotiations for EU highlighting that the O’Neill, the economist much more attractive membership. increase in Turkey’s in- who coined the term destination for FDI, These changes have dustrial production was BRICs to describe breaking a new record THE ECONOMIST: not gone unnoticed. 50 percent faster than Brazil, Russia, India in 2007 before the Turkey has made Turkey is now a vocal the market expectation and China, is adding global crisis with $22bn astonishing progress member of the G20 club of 11 percent.

MARCH-APRIL 2011 ISSUE 3 The Turkish Perspective 07

LEATHER AVIATION Turkey Is on the NEW DESTINATIONS Right Path Turkish Airlines Turkey is achieving success with its branding and continues to market diversifi cation strategy in the leather sector expand its fl ight network

Turkish Airlines’ schedule for the Valencia, Malaga, and MINING Toulouse fl ights it will soon start has been de- MINING GOES termined. According to the planned fl ights DEEPER program, March 14, The industry 2011 will mark the exhibited high start of fl ights to Shi- performance in raz (Iran) that will oc- cur four times a week. January 2011 Turkish Airlines will make its fi rst fl ight to The export of mining Valencia (Spain) on products showed an March 27; fl ights to increase of 40.46 per- Valencia will also oc- cent in January 2011 HE LEATHER SECTOR, just Russia, but other markets cur four times weekly, over the same period T which achieved the best ex- too.” “Russia is not the only mar- on Tuesdays, Wednes- in 2010. According ports fi gures of its past fi ve years ket for Turkey anymore. Turkey days, Fridays, and to data released by in 2010 with 3.3 billion dollars is a country that has proven Sundays. Additionally, the Turkish Exporters of exports, is taking new steps to itself in leather; we are strong Turkish Airlines will Assembly (TIM) and make this success last. The sector, in terms of design as well as in run three fl ights a the Istanbul Mineral which has focused on diversifying terms of processing,” says Yücel week between Istanbul and Metals Exporters’ its exports market in particular, is Yılmaz, President of the Leather and Malaga (Spain), Association (IMMIB), concentrating on Italy and China Industrialists’ Association, and on Wednesdays, Fri- Turkey’s combined in addition to Russia, its largest continues: “In this regard, the days, and Sundays, to mining exports were market. Turkish Exporters As- Turkish leather industry start on April 27. With around 3.7 billion dol- sembly (TIM) President must be introduced to the existing fl ights to lars, a fi gure that was Mehmet Büyükekşi the world. Europe Barcelona and Madrid, around 2.6 billion dol- says, “We want to and even America Turkish Airlines pas- lars last year. Accord- open up to the must recognize sengers will be able ing to IMMIB’s data, Italy, Russia, Turkish leather.” to reach four destina- there was an increase China, Germany, 25.7 Undoubtedly, it tions within Spain of over 30 percent in and US markets will not be very directly once fl ights to INCREASE IN LEATHER the export of mining in the leather EXPORTS IN JANUARY 2011 hard for Turkish Valencia and Malaga products to European sector. The markets OVER JANUARY 2010 leather to reach commence. Union countries alone. we have set as targets these markets, as The greatest relative in the shoe sector, the Turkish leather increases in min- meanwhile, are Russia, Iraq, industry, which has become a ing products exports Saudi Arabia, Japan, and China.” fashion producer on a global scale among European That the Istanbul Leather Fair, with steps taken in branding, countries were in Lux- the sector’s most important fair, appears to be rid of the dif- embourg with 3,742 takes place in January holds great fi culties it had in procuring raw percent, Denmark signifi cance in this regard. It was materials. The sector has taken a with 1,224 percent, previously organized on different deep breath thanks to incentive and Germany with 416 dates, and this date is the greatest measures applied to the animal percent. indicator of the wish to reach not husbandry industry. www.istshopfest.com

www.facebook.com/istshopfest www.twitter.com/istshopfest www.foursquare.com/istshopfest 12 Panorama Panorama BY PROF.DR. TANER BERKSOY

THE TURKISH ECONOMY DURING AND AFTER THE CRISIS Decoupling on two accounts have led the Turkish economy into an entirely different picture vis-à-vis other economies

OGETHER WITH OTHER mies. All the depressive effects of economies, the Turkish the global crisis were felt in the T economy went through economy as of fall 2008. The an- the global crisis in the 2008-2009 nual rate of growth turned nega- period. In fact, at least in the ini- tive and decreased sharply. In fact, tial phase, Turkish economy was the Turkish economy ranked sec- among the worst affected econo- ond in the fi rst quarter of 2009. ILLUSTRATION BY SEDAT GİRGİN BY SEDAT ILLUSTRATION

MARCH-APRIL 2011 ISSUE 3 The Turkish Perspective 13

Unemployment increased signifi cantly as the natural outcome, all through 2010 in most other countries, public authorities in so that the unemployment rate increased from around 10 per- Turkey moved toward a tighter fi scal policy in the second half cent to a little over 14 percent and stayed there almost through- of the year. Thus, the budget defi cit contracted, the borrow- out the entire crisis. ing requirements of the public sector decreased, and the ratio Policy-making authorities reacted to the ongoing recession of national debt to GNP fi rst stabilized and then decreased in by relaxing both monetary and fi scal policies just to avoid fur- 2010. In fact, the actual budget defi cit by the end of the year was ther deepening the depression. Thus, interest rates decreased signifi cantly below the targeted defi cit set for the year. by a large margin, public expenditures increased, budget Decoupling on these two accounts have led the Turkish defi cits widened, and public borrowing picked up. However, economy into an entirely different picture vis-à-vis other rather ironically, some positive effects of the global crisis also economies in the fi rst quarter of 2011. It seems that one can appeared. Such positive effects were mostly felt in the two classify national economies into two distinct groups by that almost-traditional problems of the Turkish economy. The date. The countries in one of the groups appear to have no economic crisis caused a sharp contraction in the private de- problems with economic stability (infl ation), but do have mand, thereby giving way to a deceleration in annual infl ation. problems in lifting up their economies, therefore suffering Since aggregate demand was reduced all around the world due from relatively low growth rates, making diffi cult for them to to the global recession, both import and export expenditures exit the global crisis properly. Most of the advanced econo- dropped sharply, leading to a signifi cant decrease in mies can be placed in this group. Another group of econo- the external defi cit of the Turkish economy. mies has no problem in economic growth but suffers from

Turkey was among the worst affected economies in the initial phase of global crisis in the 2008-2009 period. In 2009, however, it managed to rank second in the world, standing as a great example of the effects of decoupling

All these indicate that the Turkish economy shared all the increasing infl ationary pressures. Emerging economies in common features of the world crisis in 2008 and 2009. How- Latin America and East Asia are in this group. ever, starting from the fi nal quarter of 2009 it appears that the As one can easily detect, different problems in national Turkish economy somehow decoupled from other economies. economies induce individual countries to pursue different In other words, the performance of the Turkish economy dif- sets of policies. Those who have growth problems without in- fered from others in the exit phase of the crisis. Decoupling fl ationary pressures will obviously continue with expansion- became more accentuated through 2010. ary policies. Countries that exhibit lively growth performance Initially, the Turkish economy started decoupling on two but suffer from some infl ationary pressures will certainly accounts. Firstly, the economy shifted quickly and easily to stop implementing expansionary policies and shift toward a “high growth regime,” particularly decoupling from the tightening measures. advanced economies in this respect. The picture in the Turkish economy In the fi rst three quarters of 2010, the is neither of these two. The economy has annual rates of growth in the Turkish no problem in growth performance and economy far exceeded the performance of 7.8% 41.4% no disturbing infl ationary tendencies for most other economies and in fact ranked the time being. among the top on a global scale. In other words, the Turkish economy Secondly, public accounts in the Turkish Turkey’s growth Estimated ratio of appears to be one of the rare (or perhaps rate in 2010 Turkey’s national economy were wrapped up more quickly debt to GDP in the only) examples in the world as to and with relatively greater ease in the exit 2010 those that have none of the popular eco- phase of the crisis. While the budget and nomic maladies that characterized the Data: IMF Forecasts Data: Undersecretariat of Treasury overall public defi cits remained very high exit phase of the global crisis. 14 Content: Anatolia: A Place of Healing Once Again P14 BSH to Manufacture in Turkey Instead of China P17 Digital Turks P18 Overcoming Barriers and Crosssing Borders P20 Unearthing the Potential P22 The Greatest Year of Advancement in Turkish Airlines’ History P24 Time for Turkish Contractors to Play Ball P26 Concrete Growth P29 The Furniture Industry Prepares to Conquere The World P30 The Real Estate Wizard P32 Editor Ceyhan Aksoy

Briefi ng INVESTMENT, COMPUTING, ENTREPRENEURSHIP, ORGANIC AGRICULTURE, FURNITURE...

According to ‘International Healthcare MEDICAL TOURISM Fees Comparison Report,’ Turkey appears as the most competitive country in the almost all areas of ANATOLIA: A PLACE OF treatments HEALING ONCE AGAIN With its skilled medical personnel, quality of service, and reasonable costs, Turkey is the world’s rising star in medical tourism…

BY CİHAN DAĞ BY AHMET BİLAL ASLAN

N THE 1980S, as readers tions of young girls who were At fi rst, medical tourism solutions for their issues I past their thirties may cured of merciless diseases seems like an odd turn of the every day. According to a recall, people with medical abroad made a permanent phrase, marrying the idea report issued by the Turkish problems would seek out ways mark on the Turkish fi lms of of health with the concept Industrialists’ and Business- to receive treatment abroad. a certain era. But much water of tourism, which is associ- men’s Association (TUSIAD) Those with adequate funds has passed under this bridge. ated with fun and relaxation. Social Affairs Commission would go over to developed Turkey, which has made great However, because of issues Health Group, global health- countries for treatments that progress in quality of service, in access to healthcare, its care spending rose from 4.1 are risky and require expertise, expertise, and technological quality, and its costs, medical trillion dollars in 2008 to 5.4 such as organ transplantations infrastructure, is now among tourism is continually gaining trillion in 2009. The report and cancer treatments. In fact, the world’s rising stars in signifi cance. Thousands of shows that countries allocate endlessly repeated depic- medical tourism. people cross borders to fi nd 2 to 16 percent of their gross

MARCH-APRIL 2011 ISSUE 3 The Turkish Perspective 15

national products, depending medicine, stand in the fi eld THE MOST COMPETITIVE COUNTRY: 7,500 dollars in our country, on how developed they are, to of medical tourism? Turkey is TURKEY exceeds 160 thousand dollars healthcare. Experts esti- among the top ten countries In the early years of its rising in the US. Similar differ- mate that four to six million that have the highest shares prominence in medical tour- ences in pricing are present in people receive medical care in the global medical tourism ism, Turkey was known more other kinds of treatments as outside their own countries market. Taking a closer look for cosmetic treatments such well. For instance, while hair each year due to lower costs. at the milestones of progress as simple surgical operations, transplantation costs a few While transnational medi- in Turkey, the situation in dental treatments, and hair thousand euros in Turkey, it cal spending was 40 billion the fi rst years of the new mil- transplantation than complex is between 4 and 10 thou- dollars in 2007, it is estimated lennium was rather different medical procedures, and was sand euros in Europe. In the that this fi gure is nearing 60 than it is today. At the time, mostly preferred by Turks US, this fi gure is nearly 25 billion dollars today. Accord- Turkey was still licking its living abroad. The rise in thousand euros; in Russia, it ing to Selin Yıldırım Peker, wounds from 1999’s earth- service quality with the pro- is 7,000 euros on average. Vice President of Strategy and quake and was wrestling liferation of private hospitals Another detail that stands Business Development at the with the effects economic and medical facilities and out in the report is the Dünyagöz Hospitals Group, crisis of in 2001; the country fees – though higher than increase in the number of the size of the market will received no more than a few before – that were lower than hospitals. The number of exceed 100 billion dollars in thousand foreign patients in many other countries played hospitals, which totaled 1,276 2015 at the rate it is currently those years. In 2010, Turkey a signifi cant role in this million in 2007, is expected growing. received more than 50 thou- preference. According to the to hit the 1.5 million mark. sand foreign patients, a fi gure International Healthcare Fees However, without meet- THE STARS OF HEALTHCARE: ASIAN expected to approach 100 Comparison Report, Turkey is ing standards of quality, the COUNTRIES thousand in 2015. According the most competitive country increase in the quantity of Approximately 30 countries to data released by RNCOS, in almost all areas of treat- hospitals is not enough on are competing against each an India-based research ments. The report indicates its own. Turkey shines in this other for a larger slice of the company, the medical tourism that the average cost for heart area too. There are 39 hospi- world medical tourism pie. sector in Turkey – which gen- valve replacement surgery, tals in Turkey that are accred- Global medical tourism data erates 1.5 to 2 billion dollars ited by the Joint Commission shows that countries in South of income on average each International (JCI), which is and Southeast Asia and year – is expected to grow by granted in order to establish Latin America are ahead of the 16 percent between 2010 and an international standard of competition. Thailand, which 2013. Selin Yıldırım Peker, quality and service. Consider- received more than a million highlights Turkey’s potential There is nothing ing that just 200 hospitals medical tourists in 2009, has in medical tourism, stating stopping Turkey, in 34 countries possess this the largest share held by one that Turkey can quite feasibly which boosts the allure prestigious accreditation, the country. Thailand is followed raise its market share – still quality of medical services in by India, with 450 thousand only 1 percent – to around 5 of its high-quality Turkey is strikingly high. tourists; Singapore, with 420 percent within fi ve years, and service and expertise In addition to cosmetic and thousand; and Malaysia, with adds, “This means 5 to 10 with low costs, from dental treatments, Turkey is 350 thousand. Experts in billion dollars of additional becoming one of the starting to stand out in treat- the fi eld ascribe the success income for the country’s central countries in ments requiring expertise as of these countries to their economy.” medical tourism well. Such treatments, includ- geographical proximity to the ing cancer, ophthalmological US, where healthcare costs are conditions, heart conditions, extremely high. In the United and organ transplantations, States, even a simple surgi- have higher value added, and cal operation can cost tens of could allow Turkey to take thousands of dollars. With a larger slice of the global their relatively low medi- medical tourism market. cal costs and geographical Meri Bahar, Coordinator proximity to the US, these of Medical Enterprises and countries rush to the aid of Marketing for Bozlu Holding American citizens that wish to and Business Coordinator treat their ailments. of NeoLife Medical Center, highlights a similar point and THE ALLURING POTENTIAL OF says, “Besides simple surgical HEALTHCARE and cosmetic practices, there Where does Turkey, home to should be a focus on high-risk the world’s oldest centers of conditions such as cancer 16 Briefi ng

treatments, organ transplan- There are Acıbadem Health Group and 39 hospitals in Turkey tations, and heart surgery.” that are accredited Dubai-based Abraaj Capital, Turkey could make billions by JCI Medical Park Hospitals of dollars of income using Group and Carlyle, Memo- this model, which could rial and QFIB-Argus Capital, be given the name “value visas more convenient, serious Dünyagöz Hospitals and added medical tourism.” Take increases have been observed Kuwait-based NBG Capital, cancer, for instance, which in the numbers of foreign and Anadolu Hospitals and is considered the plague of patients coming from the US-based Newcon have all our time… According to data countries of the Middle East entered various agreements. released by the World Health and the Balkans.” Meri Bahar Furthermore, news that Organization’s International emphasizes the same regions. Universal Hospital Group, Cancer Research Unit, GLO- Bahar says that the patient which has 18 hospitals under BOCAN, 12.7 million cases of group that travels most often its umbrella including the cancer were reported globally for cancer treatments is seen German, Italian, and Çamlıca in 2008. This fi gure multi- among Middle Eastern, Bal- hospitals, is preparing to plies each year. Technological kan, and Eurasian countries, announce its partnership infrastructure, expertise, and the Netherlands, Luxem- adding “Until defi ciencies in agreement with a foreign costs play a vital role in the bourg, the UK, Sweden, infrastructure and expertise in investment fund has already treatment of conditions with Belgium, and Scandinavian these countries are elimi- leaked to the press. high mortality rates, such as countries supply the highest nated, the need to receive There is nothingstopping cancer. Turkey possesses ad- numbers of foreign patients treatments beyond borders Turkey from becoming a vantages in all three of these to the hospital. Peker, stating will continue.” central country for medical fi elds. A report by Innovus that Turkey has gained the tourism. It possesses all that – one of the pharmaceutical status of an important center FOREIGN FUNDS’ is required for high value sector’s leading research fi rms preferred by patients from LOVE FOR TURKEY added treatments such as – titled “Access of Turkish Pa- countries in the EU, the Mid- Recent developments have organ transplants and heart, tients to Cancer Medications” dle East, and the Balkans over also led to growing inter- eye, or brain surgery, namely compares costs of cancer the past ten years, says, “As a est among foreign funds in technological infrastructure, treatment in 20 countries, result of progress in our rela- Turkey’s medical sector. Rapid skilled medical personnel, including Turkey. According tionships with the countries increases are especially being reasonable costs, quality of to the report, cancer-related that border us and the sign- observed in investments service, and private-public spending has a 6.3 percent ing of agreements that make coming from the Middle East. sector integration. share on average in total healthcare spending in Eu- rope, equivalent to 148 euros TURKEY COULD BECOME A HEALTHCARE NEXUS per capita. In France, which Sector experts state that Turkey’s income from medical tourism may boasts the highest remission reach 10 billion dollars in 2015 rates for treated cases of can- cer, this fi gure is around 205 euros per capita. In the US, the world’s capital of cancer treatment, the same fi gure is around 500 dollars. Finally, in Turkey, it is thought that SELİN PEKER MERİ BAHAR HÜSEYİN BOZKURT per capita spending for Vice President, Dünyagöz Hospitals Business Coordinator, Chairman of the Board, cancer treatment is 25 euros Group Strategy and Business NeoLife Medical Center Medicana Health Group on average. Development Eightfold in four years An ambitious target We see similar potential Neighborhood advantage in ophthalmological treat- Besides simple surgical and Turkey has managed to enter Turkey increased the number of cosmetic practices, there the top ten countries in the ments. “Medical tourism has foreign tourists coming to receive should be a focus on high- world in terms of tourism a share of around 10 percent healthcare from a few thousand in risk conditions such as cancer income, and has started to in our income,” says Dün- the beginning of the 2000s to 40 treatments, organ transplants, take the share it deserves of thousand in 2009. As a result of the yagöz’s Selin Peker, and adds and heart surgery. Medical the global market, which signing of agreements that make tourism, which is estimated to is expressed in hundreds that they treated close to 25 visas more convenient, serious be worth 1 billion dollars today, of billions of dollars, at a thousand foreign patients increases have been observed in would easily reach 8 billion in proportion of close to 1 percent. in 2010. Dünyagöz aims to the numbers of foreign patients 2015. Our target is 5 percent. coming from the countries of the increase this number to 50 Middle East and the Balkans. thousand in 2011. Germany,

MARCH-APRIL 2011 ISSUE 3 The Turkish Perspective 17

HOME APPLIANCES which has a population of 72 million, meaning a large and dynamic market for the small appliances sector, which has BSH TO MANUFACTURE IN reached a size of 1.5 billion liras. Players in the sector expect rapid growth, around 20-30 percent on average, TURKEY INSTEAD OF CHINA for the sector – which stood Norbert Klein, CEO of BSH Turkey, says they will manufacture strong throughout the crisis small home appliances in Turkey instead of China – in the upcoming term. Besides its market dynam- ics, Turkey also piques the BY CİHAN DAĞ appetites of world giants with its manufacturing infrastruc- dollars in Turkey over the next ture. Its developed human fi ve years, to give us a general resources and the fact that picture of the year 2010, he labor costs are below the responds, “Our domestic sales world average also make Tur- revenues exceeded 1 billion key stand out. Its proximity to liras in the fi rst nine months of Europe and increased trading 2010, while our exports have activity within its region are neared the 750 million mark. the icing on the cake. Our total revenues reached This potential also refl ects 1.72 billion liras. We estimate on investments. BSH Turkey, that this fi gure will hit a total the world’s third largest ap- of 2 billion liras for the whole pliance manufacturer and year.” Klein, who indicates the leading brand in Turkey, that they have been able to made the decision to carry attract new investment to out the manufacture of small Turkey in light of this state of appliances in our country, affairs, says that the company rather than in China. When we will manufacture small home ask for the reason behind this appliances in Turkey instead choice, Norbert Klein, the chief of China. What were the forces executive of the Germany- HUTTING THE BOOKS less trust in Turkey and that that drove the company to this based company, explains that S on the global fi nan- this trust plays a large role in strategic decision? the following two factors are cial crisis that haunted the their investments, BSH Tur- what affect his decisions: “The dreams of the entire world key CEO Norbert Klein says “COST CONTROL” important role played by small with relatively minor injuries that the investments they re- More than half of the popula- appliances in sales and the fast compared to other countries, alized in 2010 will carry their tion of Turkey – which is development of this sector.” Turkey managed to dress its Çerkezköy factory to a brand currently the world’s 16th The effects of the global wounds fully in 2011. Com- new dimension in the years largest economy – is below crisis were felt very strongly in panies that wish to be more ahead. When we ask Klein, the age of thirty. On average, the year 2009, which was like a competitive in an era deemed who said that his company 600 thousand couples get dark tunnel for the vast major- the “New Normal” are speed- will invest 300 million more married each year in Turkey, ity of companies. “Cost control” ing up their investments. One was the most frequently used of these companies is BSH phrase in board meetings dur- Turkey. The Germany-based BSH TURKEY IN FIGURES ing this rough time. Of course, company, which is the largest it’s no secret that creating new company on foreign capital in jobs with cost control in place the Turkish appliances sector, 717.6 55.1 is very diffi cult. Klein, who made record investments in THOUSAND TL MILLION TL says, “In spite of the diffi cult the third quarter of 2010. market conditions in 2009, 1.0 EXPORTS REVENUE INVESTMENTS The company increased its BILLION TL we increased our number of investments by 258 percent employees by 16 percent over DOMESTIC SALES over the same period last year, REVENUE 1.72 the previous year,” states that * 2010 Q3 - In BILLION TL exceeding 55 million liras. consideration they will employ 1,000 more of the fi rst nine TOTAL REVENUE Data : Company Stating that they have end- months of 2010 Reports people in 2011. 18 Briefi ng

COMPUTING opening up to the interna- more of itself in 2010 and tional arena one by one. that 2011 will be a more fruit- The year 2011 holds ful year. strategic signifi cance for The continually growing Digital Turks Turkey, as the previous year potential of Turkey’s digital – 2010 – saw many develop- ecosystem also draws the As the growth of Turkey’s digital ments heralding a signifi cant attention of foreign inves- ecosystem gains momentum each day, leap forward for the digital tors and various investment several fi gures stand out for their local and ecosystem. The number of funds. global successes broadband Internet sub- Meanwhile, we also see that scribers in Turkey exceeded various parties with inter- eight million in 2010, while national investing experi- BY AHMET USTA Internet penetration neared ence have expanded their 50 percent. There were 91.9 organizations in Turkey and ERSONAL COMPUTERS, centuries of history in less million e-commerce transac- are engaged in efforts toward P smartphones, tablets, than ten years. It is unthink- tions made over the Internet, new activities and restructur- the Internet, applications… able that Turkey, as it rapidly representing a capacity of 15 ing. Assessing 2011 on these We have grown accustomed and boldly marches toward billion Turkish Liras. Experts terms, it would not be out of to the rapid changes brought becoming one the global agree that Turkey proved place to predict that many into our daily lives by such economy’s leading players, more Turkish entrepreneurs concepts that set the bearings would stay off this stage. Vari- will be on the receiving end of of technology. These changes ous enterprises established in this attention, being granted are clearly manifested in the Turkey since the end of the angel investor support and importance of the Internet in 90s have achieved important The continually then venture capital before the digital economy, which successes in the past ten years, they move on to become part has grown each day since the and they play signifi cant roles growing potential of the ecosystem of Digital 90s, and the fact that various in Turkey’s technological of Turkey’s digital Turks. It is not possible to innovative enterprises based ecosystem where the “Digital ecosystem also draws cover the entire ecosystem in on this platform started tak- Turks” reside. These projects, the attention of foreign a limited number of pages, ing in higher revenues than which initially began with lo- investors and various but we can take a brief glance

several giant industries with cal solutions and services, are investment funds at those that stand out. GİRGİN BY SEDAT ILLUSTRATION

MARCH-APRIL 2011 ISSUE 3 The Turkish Perspective 19 SİNA AFRA SİNA DR. RIZA BERKAN AYDIN NEVZAT Markafoni CEO Hakia.com Founder Yemeksepeti.com Founder

An e-Commerce Veteran Believing In Semantic Future For Those Who Are Too Hungry Sina Afra served as a member of eBay Rıza Berkan moved to the United States When Nevzat Aydın was in America Germany’s Executive Board and of the after graduating from Hacettepe Univer- for his education, he closely followed board of eBay Europe. Afra, who returned sity’s Physics Engineering Department. Internet and e-commerce enterprises in to Turkey after serving as the manag- He served as an inspector for the govern- Turkey. Aydın thought that these kinds ing director of Afterbuy, took a posi- ment in the nuclear sector for ten years. of enterprises should not be delayed and tion on the board of gittigidiyor.com. Using his experience in artifi cial intel- that action had to be taken right away. In 2008, he became a founding partner ligence, he began working on the Hakia He returned to Turkey and launched in Markafoni.com, the fi rst personal- project, which allows web content to be yemeksepeti.com, which is based on a ized e-commerce website in Turkey. The linked semantically, in 2004. In 2010, unique e-commerce solution without company grew quickly, receiving 11 mil- the code produced by Hakia – which any sort of payment system, in January lion liras investment in 2011; was named has attracted more than 25 million dol- 2001. Yemeksepeti.com, which has one of Europe’s top 100 companies by lars in investments so far – was used for continued its services uninterrupted for TechCrunch; and took fourth place in SENSEnews.com, a site that provides ten years, allows users to place online Google Zeitgeist 2010’s rising searches list insight on changes in stock prices orders from restaurants. Yemeksepeti for Turkey. Markafoni.com, which has ex- by following over 30 thousand news processes more than 30 thousand panded its operations to Australia, South sources. Berkan believes that semantic orders a day, and also serves Northern Korea, Ukraine, and Greece, rapidly ad- technologies are the future of the inter- Cyprus, Russia, and Dubai. vances toward global success with great net, and continues his work in the fi eld at confi dence. an uninterrupted pace. urt Technologies ğ BURAK BÜYÜKDEMİR BURAK BÜYÜKDEMİR EMRE SOKULLU TÜRÜN CEMİL eTohum Founder Grou.ps Founder Yo

All At The Same Garage Private Social Network Solving The Value Problem Burak Büyükdemir was among the Emre Sokullu graduated from For nearly 20 years, Cemil Türün has fi rst to set out to determine a vision Galatasaray High School in 2001, thought hard about how to protect, share, for Turkey in the digital future. He continuing his education at Boğaziçi and ensure trading of digital properties in founded eTohum in 2008 with the aim University’s Chemistry Department. a manner that preserves their economic of uniting technology entrepreneurs Sokullu, who had meanwhile been value. Though he has been active in various with investors and eliminating the deeply involved with computers all fi elds of business based on the internet dearth of information in this fi eld. his life, later interned at Princeton for more than 10 years, he created the eTohum has organized hundreds of University in the US. He worked infrastructure for his actual target over this events that brought successful fi gures in with Dr. Rıza Berkan on the Hakia period and is now busy creating a world Turkey’s digital ecosystem together with project, after which he brought to life a in which real lives can be lived in a virtual prospective entrepreneurs. At the end of website, named Grou.ps, which allows environment with his company, Yoğurt January, eTohum declared its selection individuals and organizations to create Technologies. With Yoğurtistan, one of his of 15 successful projects among over private social networks. Sokullu works most important projects, he believes that a thousand projects developed by ceaselessly to turn Grou.ps, which he has solved the problem of the valuation 2,200 entrepreneurs in 2010, and has has received over 2 million dollars of digital properties. He is not the only one created a 250 thousand liras fund to be in investments thus far, into a social that believes this, as with the investments invested in some of these enterprises. networking platform on a global scale. he received from Golden Horn Ventures, he The company, which offers new continues along his path without slowing entrepreneurs an offi ce in its garage, will down, intent on changing the world. carry on with its efforts to fi nd the Digital Turks of the future. 20 Briefi ng

employment gap between women and men is eliminat- ed, there will be increases in the GNPs of Europe, Japan, and the US of 13, 16, and 9 percent respectively. Today, it is very clear that gender inequality negatively affects economic develop- ment. “The balance of women and men is a factor in achieving success. Having only women or only men leads to reduced productiv- ity. Balance is important; 40 or 60 percent is good ratio in my opinion,” says Meltem Kurtsan, the President of Kurtsan Holding and also a delegate to the general as- sembly of Turkish Exporters’ Assembly. Turkey is among the foremost economies that have given hope to the vision that the gender gap can be closed. Today, as its export- ENTREPRENEURSHIP based economy is recovering rapidly, the entrepreneurial businesswomen of Turkey continue to open new doors. OVERCOMING BARRIERS AND Central Anatolian Wood and Forestry Products Export- ers Union Vice Chairman Zeynep Kürklü, who said, CROSSING BORDERS “Lately, I have observed that The successes of Turkish women involved in entrepreneurship Turkish women are traveling abroad for business more and exporting in the domestic and foreign market are often. I believe this will con- encouraging tinue to increase in the years to come,” is working to turn more companies into export- BY MERVE KARA ers. Meanwhile, Kürklü, a role model for many OMEN HAVE shown Female entrepreneurship has brought along many op- entrepreneurial women in W how successful they has seriously increased in portunities allowing women, Turkey, stands out as the are in management long the past ten years with the who were faced with the only female member of the ago. Those who fi rst come to boom in developing econo- home/career dilemma until Union’s board. According to mind are Güler Sabancı, who mies. Economic progress now, to turn their dreams of the results of McKinsey’s sec- is considered to be among having their own business ond Women Matter study in the world’s most power- into realities. Today, around 2010, which generated quite ful women; Ümran Beba, 40 percent of small to a buzz, companies with more PepsiCo’s President for the mid-size businesses consist female executives on their Asia Pacifi c Region; Serpil Turkey ranks of enterprises belonging to boards exhibit better fi nan- Timuray, CEO of Vodafone second among women. According to data cial performance. The result, Turkey; and Suzan Sabancı released by Goldman Sachs, which shows that companies Dinçer, CEO of Akbank. OECD and BRIC the employment of more need gender diversity just as Now, women are starting to countries with women directly refl ects on they need linguistic, racial, enjoy the pleasure of manag- 12 percent female economies in a positive way. and national diversity, also ing their own businesses. CEO rate They study shows that if the refl ects on general economic

MARCH-APRIL 2011 ISSUE 3 The Turkish Perspective 21

indicators. Of course, the mass. Orientation for women Nowadays, we are witness- inequality between men and who are not entrepreneurs ing that a woman is gaining women has not yet been fully and training for employed infl uence in one of the areas eliminated, but there is now women in subjects with where it is hard to encounter more data than ever showing which they are unfamiliar upper-level female manage- that the gender gap must be are being offered in 200 ment not only in Turkey, but closed. Increased awareness districts across 81 provinces. also in the whole world, un- and improving economic With these efforts, women like textiles: leather. Ruken conditions continue to draw now occupy 15 percent of MELTEM KURTSAN Mızraklı, Board Member more women to the world of the seats of the boards of President of Kurtsan of the Leather Promotion business. young enterprises. Bektaş is Holding and also a delegate Group, represents Turkish According to the World one of Turkey’s largest textile to TIM General Assembly businesswomen in the fi eld. Economic Forum’s 2010 exporters herself, and all of “The balance of women and Mızraklı states that the sec- Corporate Gender Gap her production is for foreign men is a factor in achieving tor, whose exports volume Report, Turkey is number markets. She offers her sup- success. Having only women grew to 3.3 billion dollars two among OECD and port to open the doors that or only men leads to reduced by end of 2010, is extremely productivity. Balance is BRIC countries included in lead abroad to many women important; 40 or 60 percent is male dominated. Even when the study with a 12 percent in the sector, which employs a good ratio in my opinion” abroad, she says, it is diffi cult female CEO rate. Important women in a proportion of to encounter women that are macroeconomic policy steps around 60 percent. partners in leather process- supporting women have Another female leader says that they have diversifi ed ing factories – as she is – and been taken by Turkey in the from the same industry, their markets, even if their are actively involved in the past few years. For instance, Antalya Textile and Raw main markets are Europe executive process. Mızraklı the government is subsidiz- Materials Exporters’ Union and America. As Turkey, is one of the few women who ing new employment of President Azize Kalkavan, which exports more than answer to themselves in the women by businesses for believes that women quickly 40 percent of its produc- sector, as most are involved the support they provide to gain infl uence in many tion valued at 30-35 billion in lower and middle manage- social security for a period of fi elds of work and levels of dollars, approaches the rank ment. She says that women, fi ve years. As women’s level management that they are of fi fth largest ready-to-wear having grown accustomed of education rises, progress is allowed to enter and in which clothing exporter once again, to continuing their business also occurring in social are- they can fi nd career oppor- it must be emphasized that lives alongside tending to nas. Women account for ap- tunities. Three other women the sector is standing on the their homes and children, proximately 30 percent of all sit at the round table of the shoulders of women. are more prone to success in lawyers, professors, and doc- Union aside from Kalkavan, organizational tasks due to tors. In fact, they have even the only female chair of the their abilities to coordinate gained prominence in fi elds 60 exporters’ unions in Tur- many responsibilities simul- of work usually thought to be key. Kalkavan says that they taneously. “Being an exporter male dominated. The stories days when they had to try and being a businessperson of female entrepreneurs countless different ways to requires a special talent. 80THOUSAND who achieve great successes arrange meetings with world Thus, the potential of women in exports, the economy’s brands, were not accepted to NUMBER OF FEMALE who remain idle for reasons ENTREPRENEURS backbone, inspire many prestigious world fairs and IN TURKEY like how support given to women today. “Women are had to draw visitors at alter- female entrepreneurs does attentive and successful in all native fairs, and especially Data: Union of Chambers and Commodity Exchanges not give them opportunities of Turkey -Women Entrepreneurs Commıttee subjects, but they don’t try,” when they regarded their is roused. Incentives systems says Aynur Bektaş, President rivals in Italy as if they were are very important for them of the Union of Chambers untouchable have long been to come forward,” says and Commodity Exchanges over. In spite of this, women Meltem Kurtsan. of Turkey Women Entrepre- involved in exports have a The successes of business- neurs Committee, and con- much harder job nowadays, A study by Goldman women who represent Tur- tinues: “We are witnessing as they must stay up to date Sachs shows that if key in various fi elds abroad that women are accomplish- on dozens of countries, the employment gap also give hope to many ing highly successful tasks hundreds of companies, entrepreneurial women. It when they try once.” Today, and thousands of products. between men and is still possible to speak of there are 80 thousand female Kalkavan, who states that women is eliminated, many barriers in Turkey, just entrepreneurs in Turkey they have even sold goods to the GNPs of Europe, as in the rest of the world. In under the TOBB umbrella, China, their hardy rival that Japan, and the US will spite of this, women’s hopes and great efforts are under has changed the competitive increase by 13, 16, and for the future rise higher and way for the expansion of this balance in the world markets, 9 percent respectively higher each day. 22 Briefi ng

has spread all over the world, the organic sector in Turkey has been exhibiting serious growth. The new generation of medium-to-high income, highly educated, cultured individuals with an awareness of healthy living and ecology now prefer organic products. Debates on genetically modi- fi ed organisms (GMOs) and the use of hormones have had a great effect on the rise of the demand for organic products. Thanks to the markets set up by non-governmental organizations such as the Buğday Association for Supporting Ecological Living and the Ecological Producers Association, organic products are available to wider masses. There are currently over 200 kinds of It has been four years since organic products the fi rst organic market was being grown in the country opened in Feriköy, Istanbul. Today, in addition to several neighborhoods in Istanbul, AGRICULTURE there are organic markets in large cities like Antalya, Bursa, and İzmir too. In fact, even shopping centers have joined UNEARTHING THE POTENTIAL in on this trend; for instan- Turkey is quickly moving toward becoming Europe’s ce, the Kanyon and Profi lo shopping centers now boast production base for organic agriculture, thanks to diversity and organic markets of their own. quality of its goods Furthermore, consumption is affected positively as prices BY AYŞEGÜL SAKARYA for organic products fall with the rapid proliferation of these HEN JOSEPH Wilhelm development of the Turkish to the diversity and quality of markets. W founded the small market. Today, the company the products obtained here.” farm he established with the works with 450-500 cont- Today, other companies are NO CHEMICAL POLLUTION purpose of supplying healthy racted producers all around also starting to discover the According to retail sales products for his family and Turkey, producing ten kinds potential that Rapunzel recog- fi gures, the size of the organic children, he couldn’t have of products. Goods produced nized many years ago. Since market in Turkey is approxi- imagined how far organic ag- in Turkey are exported prima- 2005, with the added effect of mately 25 million liras. It is riculture would get in Turkey. rily to Germany, as well as to the healthy living trend that estimated that it grew by 12 to Around 35 years ago, at a time France, Sweden, England, the 15 percent in 2010. Fresh fruit when nobody in the country US, the Czech Republic, Italy, and vegetable products exhi- knew of organic food, Joseph New Zealand, and certain bited the greatest growth in Wilhelm came from Germany Far Eastern countries. “After the market with a fi gure of 30 and started to obtain organic engaging in production in percent. Processed products products from Turkey. As the countries like Spain and Ro- The size of the organic grew by 10 percent, while ani- signifi cance of organic food mania, we chose to concent- market in Turkey mal products grew by 5 per- became clearer, Wilhelm laid rate on Turkey” says Joseph is approximately cent. “Turkey has the potential the foundations for Rapun- Wilhelm, founder of Rapunzel 25 million liras, to be Europe’s storehouse for zel Organic Agriculture, Organic Agriculture and adds, according to retail organic products,” says Ayhan while also contributing to the “Turkey’s signifi cance is due sales fi gures Sümerli, President of the PHOTOTOGRAPH BY AA MARCH-APRIL 2011 ISSUE 3 The Turkish Perspective 23

Organic Product Producers SUBSIDIES FOR ORGANIC AGRICULTURE and Industrialists Association. The government is increasing the amount of subsidies for He adds, “Turkey’s greatest organic culture year over year advantage in organic agri- culture is that its agricultural Number of Subsidy Per Unit Area Subsidized Subsidy Amount 2 2 areas have not been subject to Farmers (TL/1,000 m ) (1,000 m ) (TL) chemical pollution. Because 2005 1,042 3 43,758 131,275 of this advantage, the lands 2006 1,536 3 117,188 351,565 AHMETHMET HAMHAMDDİ can move over to organic GÜRDOĞAN 2007 1,615 5 130,747 653,733 agriculture in a short time.” A Member of the Board of transitional period is required 2008 5,467 18 368,581 6,634,464 Fresh Fruit and Vegetables for a fi eld to become ready for 2009 4,976 20 351,825 7,036,498 “The proper operation of support mechanisms, organic agriculture. This peri- Total 14,807,535 od is two years long for crops informing producers, and Data : Ministry of Agriculture increasing agricultural areas that can be planted annually, instead of reducing are the such as wheat. For crops that sole measures that will allow can be planted once every few the products to merely be by the companies. Organic our country to reach the place years, the period is three years. organic. The carbon footprint products are exported to it deserves within the organic agriculture sector.” Transitional periods are much is very important as well,” says nearly 40 countries. While longer in many other count- Atilla Ertem, who was general European Union countries ries. Production areas, which manager of Rapunzel – the stand out the most, exports Measures supporting totaled 166 thousand hectares fi rst company to invest in the to Middle Eastern and Far organic agriculture increase in 2008, now encompass 501 organic fi eld in Turkey – for Eastern countries have also alongside plans for growth. thousand hectares. The total ten years, and adds, “Beca- begun with the addition One of these measures is growing area, meanwhile, has use of the damage to nature of different products such reduced-interest agricultural gone up from 109 thousand to caused by producing in Africa as eggs and olive oil to the credit, offering entrepreneurs 325 thousand. “Lands in the and shipping to Europe, con- product range. “Developed who produce organic agricul- transitional stage increased by sumers will not prefer these and developing Far Eastern tural products and necessities six-fold in 2009,” says Ayhan kinds of products. Due to its countries, where healthy the chance to use a fi ve-year Sümerli and adds, “After the proximity to Europe, Turkey’s nutrition and conscious term investment at 60 transitional period, there signifi cance will increase in consumption have become a percent less than the current shall be six times more land the upcoming period.” lifestyle, also hold signifi cant interest rate applied to agri- that will be capable of organic The Aegean Exporters’ potential,” says Ahmet Hamdi cultural credit and a 1.5-year production in 2012.” Unions estimate that exports, Gürdoğan, the Member of the term operating credit. There The richness of the product which were 27 million dollars Turkish Exporters Assembly’s is also direct income support spectrum is also among in 2009 according to offi cial Board of Fresh Fruit Industry. given to producers. While Turkey’s attractive qualities. records, have actually reached It is aimed that exports will producers were given 20 liras There are currently over 200 250 million dollars when fac- reach a market volume of 1 in subsidies per 1,000 square kinds of organic products be- toring in products undeclared billion dollars in 2012. meters in 2009, this fi gure ing grown in the country. Fo- has been set as 25 liras for remost among these products 2010 and 2011. “The proper are fresh fruits and vegetables, THE SECTOR’S STRENGTHS operation of support mecha- cereals, hazelnuts, spices, and • The natural resources and rich biodiversity brought by Turkey’s nisms, informing producers, tea. For example, the egg has geographical location and ecology and increasing agricultural been one of the most popular areas instead of reducing are products in the domestic • Legislation that conforms to EU directives the sole measures that will market recently. “There is no allow our country to reach • High potential in agricultural production, both in terms of product production of highly proces- the place it deserves wit- diversity and human resources sed products such as cookies. hin the organic agriculture There is signifi cant poten- • The presence of unpolluted fi elds and water sources that can easily sector,” says Ahmet Hamdi tial in this area,” says Ayhan be transitioned to organic agriculture Gürdoğan. Thanks to the Sümerli. steps that have been taken Proximity to European • Producers who regard alternatives warmly due to issues occurring in and increasing awareness, markets, which provides an traditional agriculture it seems that Turkey will advantage to many sectors, make quite a name for itself gains even more signifi cance • The government’s exports-oriented development strategy as well in organic agriculture in the as environmentally friendly as serious potential in the domestic market, thanks to a young and upcoming term with growth approaches take center stage. informed population in its exports as well as in its “Now, it is not enough for domestic market. 24 Briefi ng

‘By the end of 2019 we plan to open 10 new destinations a year on average’ ,says Hamdi Topçu

AVIATION the world’s most successful airlines? The Greatest Year of Advancement in We are an airline that prin- cipally works with a focus on the customer. The wishes of our customers are one of the TURKISH AIRLINES’ HISTORY most important factors that According to Hamdi Topçu, Chairman of the Board of Turkish Airlines, determine our strategy. Our passengers want comfort, so 2011 will be the year of advancement in the history of the company we offer comfort; they want healthy and delicious food, BY NESRİN KOÇASLAN BY AHMET BİLAL ASLAN so we serve the best food. Most importantly, they want URKISH AIRLINES HAS some striking results. We reasonable prices, so we offer T exhibited signifi cant saw that Turkish Airlines’ advantageous prices over grown over the past few existing organizational our rivals. Accordingly, we years. What are the dynam- structure was cumbersome eliminate our defi ciencies, ics of this growth? and that the decision process draw passengers from other Just as you said, Turkish took very long. Some inter- airlines in proportions that we Airlines has grown quite vention became inevitable. can satisfy the demands of our signifi cantly in recent years. The government had wanted customers, and increase our However, when we took us to manage Turkish Airli- “There are several market share. To market your over the job, the situation nes as an incorporation. So, companies meeting product on an international was very different. First, we by bringing over our expe- with Turkish Airlines level, it must be brand name, analyzed Turkish Airlines. riences in the private sector, on the matter of high quality, and economically We tried to understand why we started implementing a purchases. However, priced. All three of these qu- operating profi ts did not go series of changes. We made these are just being alities are present at Turkish up with the increase in the some important invest- Airlines. number of passengers. We ments, especially between evaluated right now. investigated world aviation 2004 and 2006. Once we think they Have you observed a rise in and its trends. When we will contribute to us, the interest of countries that compared our fi ndings here What kind of competitive we will start getting wish to do business with Tur- with Turkish Airlines’ exis- strategy is being pursued by involved in a more key in the last few years? ting structure, we obtained Turkish Airlines to be one of serious way” Looking from this angle, there

MARCH-APRIL 2011 ISSUE 3 The Turkish Perspective 25

is a very serious difference bet- tative offi ces. We explained potential passengers pass. Yet te and refl ect Turkish culture, ween 2003-2004 and 2010. our issues and decided that we Istanbul is a very important customs, and traditions. This is because Turkey is now would constantly consult them city… It is a city that con- a model country for develop- on how we could solve these nects to 35 countries, but its How do you assess 2011, both ment. As the economic and issues with them. We arrived share is low. economically and in terms fi nancial structure in Turkey at a common understanding What we try to do is to fi nd of what it has to bring to strengthened while economies on how solutions will be gene- and use this potential. Everyo- exporters? all around the world regres- rated in these areas. Meanw- ne says, “How are you growing I think that this year will sed, the number of countries hile, our Ministry of Interior is in the crisis?” The most be a better year than 2010. regarding Turkey as a model also working on the topic now. important element of growing Actually, the global crisis only country increased. African What is important is that our during the crisis is that we try affected Turkey over demand. countries in particular watch country becomes a transit cen- to use the potential. We never saw the direct Turkey’s development with ter and that businesspersons refl ection of the fi nancial crisis yen, and wish to take it as a who come to our country can Turkish Airlines is a com- going on in the world; it only model in their own countries. sort out their work without pany that exports services… affected our exports. Now, drowning in bureaucracy. It exports comfortable fl ights as the effects of the fi nancial When you fi rst opened these and quality service from Tur- crisis subside, I believe that routes, there was some Prime Minister Recep key to many other countries. Turkey, being unaffected by criticism along the lines of, Tayyip Erdoğan is also mak- What is your assessment the crisis and more dynamic, “Why so much interest in ing bold announcements of Turkish Airlines in this will take a greater share of Africa?” However, we later about the need to diver- context? the world economy in 2011. saw that countries in Europe sify markets and open up to The services we export – using Turkey will be among the and Latin America, and different regions. Are you your words – do not just exist countries more often pre- China most of all, are trying determining your strategies in the context of quality and ferred in 2011. For Turkish to grab a share of the African according to these policies? comfort; as a fl ag carrier, we Airlines, too, 2011 will be the market... Thinking about Turkish represent Turkey in every way greatest year of advancement As you said, the whole world Airlines’ strategies separately in airline travel around the in its history. It has more than is eyeing Africa. All develo- from Turkey’s economy is not world. From our in-fl ight offe- doubled the number of aircraft ped countries are trying to possible. We are a com- rings to the color of our cabin in its fl eet, growing it by 140 grab a share in the African pany that follows economic crews’ outfi ts, we try to promo- percent. The year 2011 will be market. Currently, because policies and wishes to make one of immense growth for of its geographical proximity, use of potential, wherever Turkish Airlines, particularly historic ties, and because it is it appears, in a fashion that on the long-haul routes. We a Muslim country, Turkey has suits the country’s internatio- ‘‘What is important will be fl ying directly from more weight to throw around nal vision. We apply Turkey’s is that our country Istanbul to Los Angeles for in the area. Thus, the people policies to Turkish Airlines in becomes a transit the fi rst time, and this will be of Africa regard us affectio- the same manner. Where- center and Turkish Airlines’ longest route. nately. That our country has ver there is a potential for businesspersons who As preparation for 2012, we lately been a model country passengers, we wish to make are thinking of fl ying to South also continually brings them use of it. When you look at it come to our country America at the end of 2011. closer to us. In the end, when this way, we are located along can sort out their work In our Far Eastern routes, we we look at it geopolitically, a corridor through which without drowning in made our fl ights to Beijing Turkey – particularly Istanbul 66 percent of the world’s bureaucracy’’ and Shanghai direct and daily, – appears as Africa’s distri- and there is quite a bit of bution center. The seventeen demand for these routes. We African countries we currently started fl ights to Vietnam. We fl y to have connections to all started connecting Turkey to the world’s other cities through the world with several long Istanbul. In the years to come, routes. In this area, we have we aim to fl y to more countries problems on certain routes, in Africa. Right now, we are however, and we are trying working in coordination with to resolve them within a the Ministry of Foreign Affairs. short time. Turkish Airlines Our Ministry of Foreign Af- has bought its planes, and in fairs is moving faster than we time, it will be accepting the are in this area. The Minister deliveries of the planes. With of Foreign Affairs visited us in these new planes, too, we shall order to overcome problems have many new routes and regarding visas and represen- fl ight plans. 26 Briefi ng

Turkish construction com- panies are involved in 1,152 projects in Russia

CONSTRUCTION country, thus opening up brand new opportunities for Turkish contractors. “The efforts by our govern- TIME FOR TURKISH ment in improving trade relations with Qatar have yielded successful results. As CONTRACTORS TO PLAY BALL a consequence, I believe that we, the construction fi rms, The upcoming sports events taking place in Russia and Qatar will achieve fruitful results will enhance the strength of the Turkish construction sector in from construction projects to be carried out in Qatar,” says these countries Erdal Eren, President of the Turkish Contractors Associa- BY MEHMET ERDOĞAN ELGİN tion. The planned investment in Qatar for the next fi ve years HE TRADE DELEGATION took on the appearance a is approximately 150 billion Tassembled by the Turkish fi ve-hundred-person incur- dollars distributed among Exporters’ Assembly (TIM) sion with the attendance of 200 projects. The country and the General Secretariat businessmen from Kuwait is expecting an investment of the Uludağ Exporters’ and Qatar. The visitors were of 50 billion dollars aimed Union, and coordinated by right to attend in such large exclusively toward the FIFA the Undersecretariat of the numbers, as this was not World Cup. Prime Ministry for Foreign merely a trade delegation, The doors opened by sports Trade (DTM), in early Janu- but a trade and contracting events to Turkey’s construction ary attracted much atten- delegation program. Since sector and contractors are not tion with its high turnout. 2010, the upcoming Qatar limited to Qatar. There are The visit, which included 2022 FIFA World Cup has two other major opportunities Prime Minister Recep Tayyip amounted in 6.6 billion available to Turkish companies Erdoğan and Foreign Trade dollars in investments for at a closer date and in a much Minister Zafer Çağlayan, projects taking place in the closer area than the FIFA PHOTOTOGRAPH BY AA (BOTTOM) MARCH-APRIL 2011 ISSUE 3 The Turkish Perspective 27

World Cup. Last year, the of Turkey (DEİK). Therefore, completion of a power plant in many Turkish workers that the city of Shatura – a project were employed in the Russian fi rst begun by Lenin in 1920 construction sector who had to address the Soviet Union’s to return to Turkey following energy needs in its formative the global recession could soon years – by Turkish company return to the country. Accord- Gama did more than enough ing to estimates by the Federal to solidify the prestige of Turk- Migration Services of Krasn- ish companies in the Russian odar Federal Subject, which is market, so much so that Turk- where Sochi is located, there ish construction companies will be around 200 thousand are involved in 1,152 projects workers in the city by 2012. around the country, cumula- The 2018 FIFA World Cup, tively worth 29 billion dollars. also to be held in Russia, is Now, as it prepares to host generating a construction both the 2014 Winter Olym- Turkish companies gained The Turkish market even larger than that pics and the 2018 FIFA World the trust of the Russian construction sector of Sochi. Investments in Cup, Russia is about to become government through the high began its foray into the stadiums and other facilities a key nation not just for quality of their work. Vladimir international market planned for 13 cities amount Turkey’s construction sector, Ivanovsky, the Russian Federa- by entering the Libyan to 40 billion dollars. The but for the global sector as well. tion’s Ambassador in Ankara, market in 1972. In the market is set to become even Investments in sports facilities says, “The work done so far 40 years since, Turkish livelier as the Russian govern- and infrastructure necessary by the Turkish companies has companies have come to ment initiates a 14 billion resi- for Russia to host such large placed them among the most occupy the second place dential project that is expected events will create a construc- trustworthy companies in the in the fi eld of contracting to take fi ve years. “We aim tion market worth 48 billion Russian market.” However, the globally, just after China for our trading volume with dollars. Having participated in Russian construction industry Russia to reach 100 billion by the Russian market for many fell into a period of stagnation 2015. Turkey’s greatest trump years, Turkish companies are during the global economic card at this point will be the currently in the most advanta- crisis, resulting in the cancel- construction industry,” says geous position to grab a share lation of several projects and Erdal Eren and adds, “We are of this market. Russia occupies the expulsion of approximately Winter Olympics in 2014. 200 at quite an advantage in the a distinctly signifi cant spot in 20 thousand Turkish workers facilities are set to be built for Russian market for projects the sights of the sector, which from the country. the games at Sochi. Together that will be undertaken in cumulatively does 155 billion Now, however, the situa- with other infrastructural ef- the upcoming term, as we dollars’ worth of business in 81 tion is reversing completely. forts, a total of 8 billion dollars are quite experienced in this countries. The fact that Russia, Turkey’s will be invested in Sochi. “I market. Thus, we shall play a The Turkish construction largest market, is about to host predict that Turkish companies role in important projects that sector began its foray into these vast international sports will receive a 25 to 30 percent will be built in Russia.” the international market by events will allow. Turkish com- share in the construction The Akkuyu nuclear power entering the Libyan market panies to rise to an effectual market in Sochi,” says İzzet plant to be built in Turkey, in 1972. In the 40 years since, position in the nation’s market Ekmekçioğlu, Vice President a joint venture between Turkish companies have once again This huge market of the Turkish-Russian Busi- the two governments, will come to occupy the second will fi rst open up with a mul- ness Council of the Foreign further increase the volume place in the fi eld of contract- titude of projects for the Sochi Economic Relations Board of trade between Turkey ing globally, just after China. and Russia. When Russian Turkish companies fi rst President Vladimir Putin vis- entered the Russian market ited Turkey last year, it was following the 1986 agreement announced that the volume between USSR and Turkey 6.6 of trade between the two BILLION28 DOLLARS that facilitated the exchange BILLION DOLLARS countries would be increased of goods and services in return to 100 billion dollars by for natural gas, and increased The total value of the The cumulative value 2015, showing that Turkish their hold in the country projects conducted by of the work being done construction companies will after the dissolution of the Turkish construction by Turkish construction play an even greater role in Soviet regime. Especially in companies in Russia companies in Qatar the Russian market in the the 2000s, as a key player near future. “The Turkish in the Russian market, the Data: Turkish Contractors Association companies are certainly at an PHOTOTOGRAPH BY AA 28 Briefi ng

advantage with the projects in Russia; however, to make use of this advantage they must mobilize now and work ECONOMIC RELATIONS TO together with us” says Gen- nady I. Varontso, Director of Russian International FURTHER DEVELOP Information Institute. Vladimir Ivanovsky, the Russian Federation’s Ambassador to Ankara, Chinese fi rms will be evaluates Turkish construction companies in Russia and the state of Turkey’s greatest competi- Turkish-Russian economic relations after the nuclear power plant project tors in the Russian market. They are especially expected to test Turkey’s companies Russia will carry out the construction of a with low-cost labor; however, nuclear power plant in Turkey. How will their greatest weakness in the this situation affect Russian-Turkish eco- Russian market is their low nomic relations and the Turkish construc- quality. The prestigious im- tion sector’s market share and activities age of Turkish companies in in Russia? the Russian market and the That the Akkuyu nuclear power plant will importance of these projects be realized according to Russian designs is for Russia create a great one of the most important strategic aspects of opportunity for the Turk- Russian-Turkish cooperation. Bringing the ish construction industry. project to life is to our mutual benefi t. It must Aside from the advantages be mentioned that the construction of the nu- held by Turkish construction Russia’s organization of the World Soc- clear power plant will create many new fi elds companies on the Russian cer Championship and the Sochi Winter of work. The realization of such a large-scale side, there is yet another Games will create a large construction project will stimulate the Turkish economy, opportunity in the nuclear potential in Russia. How do you regard increase budgets at all levels thanks to tax power plant to be built in the Turkish construction sector’s chances income, and create opportunities for the ini- Akkuyu, Mersin. A sum of in this fi eld in Russia? tiation of new economic and social projects 20 billion dollars has been These two major sports events are extremely in your country. invested in the power plant. important for our country, whether in terms I especially want to emphasize that the These costs will be covered by of the development of sports and infrastruc- project envisions that Turkish companies Russia, providing a signifi - ture in Russia, or in terms of drawing for- will participate extensively in the construc- cant infl ux of resources to the eign tourists and promoting our rich culture tion of the power plant; Turkish companies contracting and construction and traditions. Thus, we are pleased to re- may have a share of up to 40 percent. materials sectors in the Turk- ceive the help of our foreign partners toward To this end, contact is being set up with ish market. “We are planning realizing these large projects. In all of Russia, Turkish companies and institutions that for Turkish construction from Kaliningrad Oblast to the Anadyr wish to join the project. As the fi rst step, companies to receive 25 to 30 region, over 150 Turkish construction the Russian Atomstroyeksport company, percent of the 20 billion dol- companies actively continue their activities. which will be the project’s chief contrac- lars that will be used in the In just the past 20 years, more than 800 tor, organized an informational seminar construction of the nuclear facilities have been built by these companies. for Turkish industrialists interested in power plant,” says Aleksander The volume of the agreements that have been the project on December 15 in Istanbul. Lokshin, Vice President of signed, meanwhile, approaches 20 billion Those who attended the seminar had the Rosatom, the Russian State dollars. Turkish contractors are known as opportunity to gain information on the Corporation that will build “experienced and trustworthy partners” in goals, means, plans, and characteristics and run the power plant. Russia, which is a title that they deserve. of the project, and the volume of the work Large sporting events are In this context, the Turkish construc- that will be done during construction. It is very important for the de- tion sector appears to have an undoubtedly clear that the project will have an extremely velopment of the economies high chance to participate in large projects, positive effect on the Turkish construction and promotion of the hosting whether for the preparatory stages of the sector’s market share and activities in countries. Russia and Qatar 2014 Sochi Winter Olympics or the 2018 Russia. Participating in the construction of can fulfi ll these goals as they World Soccer Championship. We await the the nuclear power plant will undoubtedly host these events. Perhaps active participation of Turkish companies in help Turkish companies grow and develop, Turkey can seize an economic the construction of the Olympic and Soccer consequently contributing to the expan- opportunity as great as what Championship facilities once the necessary sion of their activities in external markets, the hosting countries have contracts are awarded. including the Russian market. been given. PHOTOTOGRAPH BY AA MARCH-APRIL 2011 ISSUE 3 The Turkish Perspective 29

quality of its products are seen as important advantages in fulfi lling these expectations. Because of its geographic location, Turkey occupies an ad- vantageous spot with regard to cement exports. Four of the ten countries importing the most ALİ ÖZİNÖNÜ cement in the world (Spain, President of the Cement and Italy, Ukraine, and Egypt) are Soil Products Exporters’ in regions near Turkey. Turkey’s Union proximity to these countries “The countries of West leads to a reduction in transit Africa, where there’s again costs, the most important an increase in the demand expense in the export of cement. for cement, are an important opportunity for the Turkish Thus, companies producing in cement sector. Because of the Turkey have a signifi cant ad- distance in between, we are vantage over their rivals in other able to reach this market more regions. High freight fees invol- cheaply and in a shorter time than others.” ved in sales made by important cement exporters like China to countries in the Mediterranean transport expenses for goods CEMENT and Black Sea basins represent brought to the region through a great advantage for Turkish the Mediterranean also create cement producers. an important opportunity for Concrete Growth Meanwhile, rising demand the Turkish cement sector. Due to a host of advantages, Turkey tops the for cement in countries next to Meanwhile, developments list of countries in which cement-producing Turkey over the past two years in Russia – also right next door has put a smile on the faces of to Turkey – create yet another companies are investing Turkish exporters. Foremost important opportunity for the among these countries are Turkish cement sector. BY MEHMET ERDOĞAN ELGİN Iraq, which is speeding up its Meanwhile, developments rebuilding efforts, and Libya, in Russia – also right next door URKEY’S FIRST CEMENT tives’ expectations for the next which quickly made invest- to Turkey – create yet another T factory was founded period are much higher. Adnan ments in infrastructure after important opportunity for the in Darıca, right next to İğnebekçili, President of the the embargos were lifted, so Turkish cement sector. The Istanbul, in 1922. Now in its Turkish Cement Manufactu- much that cement exports 2014 Sochi Winter Games and hundredth year, especially rers’ Association (TÇMB), says, to the two countries last year the 2018 World Soccer Champi- as its production capacity “We estimate that the cement were around 9 million tons. “I onship make this country a large grew over the past ten years, sector will grow by around 60 expect that these two countries’ market. The ancient, unwieldy the sector has come to be percent over the next ten years.” demand for cement will be at structure of Russia’s cement world’s largest producers The arguments required for these levels,” says Ali Özinönü, sector places Turkey as the most of cement. The story of the the sector to realize this growth President of the Cement and important country supplying Turkish cement sector began are there. In particular, the Soil Products Exporters’ Uni- cement to companies engaged with the establishment of a demand for cement, which on. Increasing infrastructure in construction projects. Önder factory that had the capacity has grown in surrounding investments in West African Tekeli, the Foreign Economic to produce 20 thousand countries and in the domestic countries – Ghana, for instance Relations Board’s (DEİK) tons per annum; today, with market, and that the Turkish – also increase the demand Moscow representative, says, investments by companies cement sector has raised the for cement in the area. Low “Many companies that have ta- domestic and foreign, the ken on construction projects in sector has reached a produc- Russia will procure the building tion capacity of 75 million materials they need – most of tons and an export volume of all, cement – from Turkey,” and 20 million tons. The cement adds, “This situation will create sector closed the past year an advantage for companies in with 4.5 million dollars of 26 4.5 13 terms of costs as well as timing.” revenue, 1 billion of which EXPORTED PROPOR- BILLION DOLLARS INCREASE IN DOMES- As positive developments TION OF CEMENT 2010 SALES OF CE- TIC SALES OVER THE came from exports. PRODUCED MENT INDUSTRY PREVIOUS YEAR emerge for the cement sector However, sector representa- in foreign markets, there are 30 Briefi ng

also developments taking FURNITURE place in the domestic market that will make the sector happy. Last year, immediately The Furniture Industry following the global crisis, a parallel increase in demand for the cement sector was PREPARES TO CONQUER observed alongside enlivened activity in Turkey’s construc- tion sector. The most recent THE WORLD sector report published by the TÇMB shows that cement The furniture sector, which set an exports target of 6 billion consumption, which was 40 dollars for 2023, is preparing to draw the world’s attention million tons in 2009, reached with its leap toward growth 80 million tons in 2011.The demand for cement is set to grown even more, especially BY AYŞEGÜL SAKARYA as construction starts on new hydroelectric power plants, residential projects, and road projects in the period ahead of us. As it enters its second cen- tury, Turkey’s cement sector holds great expectations for the upcoming period. The sector has many opportunities to meet these expectations. Rising demand in the export and domestic markets alike, relative proximity to impor- tant markets compared to other cement exporters, and European Union-quality products will be the most important cards up the sleeves of companies in the sector. The 2014 Sochi Winter ESIGN, BRANDING, and The furniture sector edge over the competition. Games and the 2018 World D quality: the furniture sec- has now focused That Turkey is close to many Soccer Championship make tor, which had been domi- on design, that is markets due to its location is this country a large market. nated by small workshops up believed to be the most one of these. The proximity of The ancient, unwieldy struc- until about fi fteen to twenty producers to potential markets ture of Russia’s cement sector years ago, adopted these three important element for is very important in a sector places Turkey as the most words as a mantra. Now, it competitiveness after where logistical costs are high, important country supplying exports its products to 173 quality such as furniture. “Turkey’s cement to companies engaged countries stretched across fi ve greatest advantages abroad are in construction projects. Önder continents. The volume of price, quality, and accessibility,” Tekeli, the Foreign Economic furniture exports, which was says Bekir Boydak, Member of Relations Board’s (DEİK) 75 million dollars in 1995, the Board of Boydak Holding, Moscow representative, says, exceeded 1.4 billion dollars in Products Exporters’ Union, and adds, “Good service is also “Many companies that have 2010. A 20 percent increase and adds, “The sector, which among the properties that taken on construction projects is expected for 2011. “With utilizes the latest technologi- make the market attractive.” in Russia will procure the 6-7 million cube meters of cal products, has a very sig- Turkey’s strategic signifi cance building materials they need production, we are the second nifi cant production potential.” in foreign markets is also – most of all, cement – from largest producer of MDF In addition to its produc- bolstered by factors such as Turkey,” and adds, “This situ- and fi berboard in Europe, tion capacity and use of the fast delivery, conceptual unity, ation will create an advantage after Germany,” says Abdul- latest technology, the Turkish and design. “However much for companies in terms of costs lah Tever, President of the furniture sector has several our sector may use technology, as well as timing.” Istanbul Forestry and Wooden other properties that give it manual labor is important, PHOTOTOGRAPH BY AA MARCH-APRIL 2011 ISSUE 3 The Turkish Perspective 31 and the sector – which pos- THE FURNITURE INDUSTRY IN FIGURES Turkish furniture. The project sesses a skilled workforce in is a very important oppor- this regard – is carrying out The furniture sector, with 1.4 billion dollars sales in 2010 expects tunity to show the changing progress-oriented efforts,” a 20 percent increase in 2011 and improving face of the says Ramazan Davulcuoğlu, sector.” Promotional events are President of the Association planned in over 20 countries of Turkish Furniture Manu- within the scope of the project, facturers (MOSDER). One 93 30 74 from China to Italy. The of these progress-oriented THOUSAND THOUSAND PERCENT Central Anatolian Forestry and efforts is the “4th National Wooden Products Exporters’ Number of Number of The rate of Furniture Design Competition” people employed companies consumers who Union is carrying out studies organized by the Forestry and in furniture operating in the prefer branded on shipping by rail in order to Wooden Products Exporters’ sector sector products reduce logistical costs in ex- Unions. The competition is ports. “We shall soon take part organized with the intention Data: Nielsen Turkey in the fair in China. Industry, of foretelling how changing the foundation of furniture environments will refl ect on Wooden Products Exporters’ also carrying out efforts to in- in Turkey, has developed a lot furniture and to foster creative Union, while Ahmet Karaman, crease its effectiveness abroad. now. A nice infrastructure has designs that have export poten- President of the Forestry and The Association of Turkish been established. We shall see tial. “New designers are being Wooden Products Exporters’ Furniture Manufacturers the tangible effects of this in raised thanks to the competi- Union, says they are working recently started the Discover the days to come,” says Ahmet tion. The designs are assessed so that the designs do not just Turkish Furniture project in Kahraman. both in amateur and profes- remain on paper. In addition, order to strengthen the sec- Growth in the domestic mar- sional categories. Professional the establishment of design tor’s image abroad. Ramazan ket has picked up just as much designs are favored and bought laboratories for SMBs in pilot Davulcuoğlu says, “Our aim speed as exports. The sector’s by companies. These are very regions is also on the furniture will be to increase our country’s volume in the domestic market important for the sector,” says sector’s current agenda. exports by developing strong increased by 8 percent by the Bülent Aymen, President of the The sector, which sees the global brands, thus strengthen- end of 2010, reaching 8 billion Mediterranean Forestry and future of exports in design, is ing the image and esteem of dollars. MOSDER’s semian- nual study with Nielsen Turkey that profi les furniture consum- DESIGN &INNOVATION ers also provides important Veterans in Turkish furniture sector believes the future of the industry clues as to the market’s growth depends on trendy and innovative designs potential. While the study that was done two years ago showed that consumers buy new furniture every eight and a half years on average, this period has dropped to eight years according to this year’s study. In Turkey, where 600 thousand ABDULLAH TEVER AHMET KAHRAMAN RAMAZAN DAVULCUOĞLU people get married each year on Chairman of the Board of the Central Chairman of the Board of the Central President of the Association average, the fi rst-time buyers’ Anatolian Wood and Forestry Anatolian Wood and Forestry of Turkish Furniture market is naturally very lively Products Exporters’Union Products Exporters’Union Manufacturers (MOSDER) as well. In consideration of all With approximately 6-7 We think that coming up with in- Turkish furniture designers who this positive data, a growth of million square cubes of annual novations increase exports in the closely watch global developments 10 percent is being targeted for production in MDF and furniture sector, which is highly always produce trendy designs. the domestic market in 2011. particleboard production, value-added, will increase com- Design has become the most we are number 2 in Europe, petitiveness in the global markets. effective way to create high value- The sector, which has picked after Germany. There is very We have determined that the fun- added production in addition up signifi cant momentum over signifi cant manufacturing damental idea to direct the great to price and competition, which the last few years in terms of potential in Turkey. Now, as potential embodied by the furni- are among the most important growth, has great goals both furniture producers exhibit their ture sector should be “the develop- parameters of Turkish furniture. own potential by exporting to ment of design.” With this purpose, As the quality and price of in the domestic market and different countries, they see we have been trying to contrib- products become standardized, abroad. With its dynamic struc- the opportunities in the world. ute to the sector by organizing a primary qualities of the product ture, it seems that the sector, Design departments are being “design contest project,”which we such as functionally, durability, which has set an exports target opened at schools. Various have done for the past four years in ergonomics and aesthetics as well of 6 billion dollars for 2023, organizations such as MOSDER order to turn the sector’s greatest as price, quality and design design and MASKO carry out work. diffi culty into an advantage. stand out in crowded. will receive more international mention in the future. 32 Briefi ng

Ömer İsvan, who has also established the “boutique hotel” concept in Turkey, calls the work he does “know-how transfer” and “asset management”

founded his own company in London, he was just 33 years old. İsvan founded Servotel by adopting a vision of being the “know-how” partner of investors, project development fi rms, hotel management companies, and fi nancing organizations, a task in which he succeeded. Today, with nearly 300 projects it runs in 42 coun- tries over four continents, Servotel is a global company in the fi eld of real estate. Furthermore, it sells the know-how it developed over 26 years to clients all around the world. What differentiates Servotel from its rivals is that REAL ESTATE it offers consulting in every subject, from A to Z. How- ever, İsvan calls the work he The Real Estate Wizard does know-how transfer and asset management. Servotel Though he does not have a magic wand, nor a genie in a lamp, Corporation, which is in- the work Ömer İsvan does is so multi-faceted that he truly is a volved in all the stages of real real estate wizard of sorts estate investment projects except for construction and procurement, provides BY GAMZE GÖREN consulting on real estate de- E IS ONE OF those who operation, branding, concept velopment to a range of com- H draw their own paths, creation and branding, and panies that includes Trump those who follow these paths engineering,” is İsvan’s brief Towers, Hilton, Sheraton, relentlessly. He is respon- summary of what his com- Four Seasons, Kanyon AVM, sible for establishing the pany does. İstinyepark AVM, Bodrum “boutique hotel” concept in To understand İsvan, one Kempinski, W Hotel and Turkey. He is the one that must fi rst have a look at his Rixos Hotels. brought the golfi ng resort to story. A decision he made at Whether the matter Turkey. Besides pioneering the age of 15 took him to the ‘Istanbul is number concerns hotels, residences, such endeavors, Ömer İsvan Department of International one its own league or mixed-use developments, brought a new perspective Hospitality and Tourism Servotel has a single purpose to real estate consulting in Management at the Univer- after NewYork, Paris when tackling a project: Turkey. “Offering investors a sity of Surrey in England, and London. And it ensuring “best use.” İsvan cohesive service integrating after which he became hotel wiill stay there for a says they measure the inves- the disciplines of economic general manager for Sheraton long time’says Ömer tor’s risk profi le in the fi rst analysis, marketing and sales, at the age of 26. When he İsvan stage by considering their PHOFOGRAPH BY CEVAHİR BUĞU BY CEVAHİR PHOFOGRAPH MARCH-APRIL 2011 ISSUE 3 The Turkish Perspective 33

sensitivities and looking at only 23 Turkish contractors generates 60 percent of glo- the entirety of their strategy, appeared on the list in 2009, bal tourism, as an important determining the risks that this number rose to 31 in advantage. can be managed within the 2010. “For a place to be qualifi ed project. Here, at this critical The condition of the as a hub, it must be a des- Servotel’s projects include point, is where Servotel steps Trump Towers, Hilton, workforce is not all that is tination and create its own in: minimizing the manage- Sheraton, Four Seasons, improving. Increasing credit demand,” says İsvan, and he Kanyon AVM, İstinyepark able risks. When we ask what AVM, Bodrum Kempinski, opportunities and reforms describes Istanbul in a sense. can be done about unman- W Hotel, Rixos Hotels, and in land production have Due to his occupation, he has Maçka Residences... ageable risks, İsvan replies, cleared the way for foreign- become familiar with many “Whatever the customer’s ers considering investing in cities around the world, request may be, we share Turkey says İsvan, who is of “Istanbul, which possesses the results of the analyses the belief that bureaucracy many dynamics in organi- we carry out in an objective – a common nightmare for zations such as healthcare, fashion. If the land is not many investors – is softer in shopping, and conferences, suitable for the construc- Turkey compared to many may not be included in the tion of residences, we will other countries. In addition, New York/Paris/London explain the need to change he sees the fact that we are league. However, Istanbul the project at hand and also just two hours away from is number one in its own offer alternative projects as Europe, a continent that league right after these cities, needed.” and will stay there for a long As a global company with time” says İsvan. Pointing a broad reach and a lengthy out that branding has be- list of clients, Servotel may come refl exive in urban hotel simultaneously be working management, İsvan says on a situational analysis of that Istanbul is a favorite a resort town in the Czech for brands in this regard. He Republic; offering business ascribes the fact that we are establishment consulting to unrivaled in mass tourism Sheraton in Bahrain; and – Turkey’s fi rst fl ame – to participating in all the stages years of experience. In years involved in developing Sap- without fi nancing, phire, Europe’s second tallest The seasoned manager, and Turkey’s tallest – and who believes that the mass fi rst ecological – skyscraper, tourism that developed es- from concept creation to pecially along the coastlines sales and marketing. İsvan in years where fi nancing was states that the greatest non-existent met – and even advantage to working with exceeded – demand, says, nearly 50 countries, from “Though they don’t work Russia to China, is being able ing to İsvan, who says that through all 12 months, they to follow the latest trends in even suppliers were sourced produce very bright results. the world closely. He adds from abroad up until about From this angle, we are that they have become a ten years ago due to a dearth number one in mass tour- guide of sorts for foreign in- of qualifi ed staff, Turks now ism.” İsvan predicts that the vestors due to their intimate export a serious amount of mass tourism fi eld will move knowledge of the investment know-how in the fi eld of toward vertical differen- process in the market of each construction. He particularly tiation within the next ten country in which they are emphasizes that the glo- years, and his forecasts do present. bal brand value of Turkish not end here. The improv- Servotel Corporation engineers and contractors ing state of the economy and offers its consulting services is high abroad. Engineering the increase in the quality of on the topics of recreation, News Record, a magazine on education seems to confi rm feasibility, valuation, concept the international construc- another of his predictions: creation, design manage- tion sector, proves İsvan right Servotel is a global that Turkey would become ment, project development, with the studies it conducts company that sells the the heart of the region in coordination, sales, and annually to determine the know-how it developed which it engages in the marketing with a highly world’s top 225 international in 26 years to clients transfer of know-how in the professional crew. Accord- contracting fi rms. While all around the world short term. 34 Cover / Turkey’’s Sphere of Infl uence Expands

MARCH-APRIL 2011 ISSUE 3 TheThe TurkishTurkish PerspectivePerspective 35

TURKEY’S SPHERE OF INFLUENCE EXPANDS Turkey’s role on the international stage is shifting from the status of a “peripheral” country in the old world order to a “central” country in the new, and more daring and comprehensive foreign policies are being applied in this context. A transition is under way, and Turkey wants to understand where the borders of its sphere of activity lie. Each diplomatic experiment expands the boundaries of economic relations and increases exports. The foreign policy of Ahmet Davutoğlu, who calls this process ‘‘the fourth restoration,’’ is closely concerned with economic opportunities

BY TOLGAHAN ÖZKAN

HE MODEST headquarters of the Ministry of Foreign Affairs, built on a relatively small lot in Ankara’s neighborhood of Balgat, are getting livelier each day. It may be said that traf- T fi c through the building increased signifi cantly after Ahmet Davutoğlu, the Prime Minis- ter’s foreign policy counsel, was plucked out of his academic career in the fi eld and brought to the seat of the Ministry of Foreign Affairs in May 2009 as a person sourced from outside the Assembly. Davutoğlu’s fi rst action was to prepare the decree to appoint new names to 45 Turkish embassies and present it to the Prime Minister in July 2009. Both the undersecretaries and assistant undersecre- taries consisted of young ambassadors that returned to the headquarters after serving as ambassador just once. Feridun Sinirlioğlu, who was previously an ambassador in Tel Aviv and has been an assist- ant undersecretary in Ankara for the past two years, was being appointed as a new undersecretary, while those such as Namık Tan, Halit Çevik, Selim Yenel, Naci Koru, and Hakkı Akil were named as assistant undersecretaries on returning to Ankara after just one ambassadorship experience apiece. 36 Cover / Turkey’s Sphere of Infl uence Expands

Davutoğlu made the upper manage- were showing off in European countries; ment of the ministry younger because sources of energy in Caucasus sought he was determined to attempt a great ways to fl ow to the West; Southern restoration in Turkey’s foreign policy. He Cyprus entered the European Union. knew that he could meet resistance at The balance of power had been reestab- every step he would take, that he would lished in the Middle East. Everything be accused of being too adventurous, a had turned upside down. The world dreamer, or of attempting to change the had changed, and this change affected axis of Turkey’s foreign policy. However, everybody. A large political vacuum had because Prime Minister Recep Tayyip formed in the Middle East with the fall Erdoğan – who believes that foreign of Saddam. Iran was increasing its infl u- policy is not to be conducted from ence in the region. behind a desk, but through real life It is in this environment that the actions – backed Davutoğlu strongly, modest Minister of Foreign Affairs, it became easier to respond to critics. Davutoğlu, had it in his mind to be Erdoğan has often repeated that the way the person who would restore Turkish Turkey follows in terms of international foreign policy after nearly half a century. relations is as robust, visionary, and When current President Abdullah Gül tough as can be, opening was Minister of Foreign the doors of global trade Affairs, he had con- to Turkish business. In tributed quite a bit to a wider sense encom- Turkish foreign policy passing the rest of the in terms of counsel; world, the Cold War had this time, however, the ended, the perceptions situation was differ- of threats had changed, THE MINISTER SAYS ent. Now, he was the and security-oriented THE POLITICAL top authority in this the Cold War, and emphasizes the point foreign policies had special ministry and that the most important characteristic been shelved. Turkey, AND ECONOMIC his crew was ready. The of this period was that a policy based on which was positioned as RESTORATION transformation, or the certain principles was followed.“ The the West’s easternmost “Fourth Restoration” in most important of these principles is stronghold 50 years REQUIRES THE Davutoğlu’s own words, following multiple courses. Coopera- ago and restored its ARRANGEMENT OF A was beginning. tion is being aimed not only with the foreign policies accord- Western world, focused on organiza- ing to this, was content NEW FOREIGN POLICY, THE FOURTH RESTORATION tions like NATO and the EU, but with with observing global AND THAT THE NEW Davutoğlu, provid- new regional points of power as well. changes that were taking ing examples from Turkey is moving toward becoming a place – such as economic POLICY IS NOT TO SHIFT the post-Cold War whole with regional countries in a social cooperation agreements EASTWARD, BUT TO situation and the global and economic sense,” says Zengin, and signed between Russia crisis, states that there adds, “Terrifi c opportunities for expan- and Germany, located IMPROVE RELATIONS is a need for a new glo- sion were born in Turkey’s region after on the two poles of the WITH ALL NEIGHBORING bal “restoration,” and the Cold War, and with proper timing, Cold War, and Western COUNTRIES says that Turkey is try- Davutoğlu put the foreign policy over- companies’ bold advance ing to struggle against ture into action.” in the parts of the Cau- INDISCRIMINATELY diffi culties in the Davutoğlu states that the “restora- casus previously covered Middle East, Balkans, tions” in Turkey’s foreign policy actually by the iron curtain – from afar, and and Caucasus, where there are many began with the Tanzimat declaration could not adapt itself to these changes crises, and to prevent the creation of any in the Ottoman period, with a second adequately. Yet the opportunities arising sort of tension in global and regional restoration arriving after the founding of as a result of these developments offered politics. Gürkan Zengin, journalist and the Republic, and a third after the coun- Turkey the chance to rapidly expand its author of the book “Hoca: Türk Dış try shifted over to a pluralist democracy, sphere of regional infl uence. Politikası’nda Davutoğlu Etkisi,” states adopted a free market economy, and The energy companies of Russia, that Davutoğlu realized the change joined NATO after World War II, while which had enacted free market reforms, Turkish foreign policy needed most after indicating that the new restoration PHOTOTOGRAPH BY AA MARCH-APRIL 2011 ISSUE 3 TheThe TurkishTurkish PerspectivePerspective 37

The high economic performance it exhibited in recent years is one of the most important reasons why Turkey was invited to join the G-20. tives for the production of energy in Iran and signed protocols. Turkish companies made purchases in Iran. “Turkey is try- ing to lift the walls of visas and customs between its neighbors and itself, pri- oritizing this in its foreign policy,” says Sedat Laçiner, President of the Interna- tional Strategic Research Organization, a strategic think tank based in Ankara. In an interview he gave to Infomag Magazine six years ago, when he was a foreign policy advisor to the Prime Minister, Davutoğlu had shown alterna- tive markets as a target to the business world, while emphasizing that the trade and investment opportunities presented by these regions had to be utilized. Those who followed this advice now appear to be enjoying the fruits of their exports, which have been rising as of late. “Davutoğlu added a commercial di- mension to foreign policy. Establishing commercial relations between countries became an active policy,” says Mensur Akgün, a foreign policy program advisor for the Turkish Economic and Social needed after the Cold War was not pos- bilateral diplomatic relations. “Economic Studies Foundation (TESEV). sible for many years due to reasons such targets are at the forefront of Turkey’s One of the victories won by the new di- as the economic crises undergone by the foreign policy. When I worked in Foreign plomacy that prioritizes economic targets country and instability. Affairs, there was no such thing in the is in foreign trade, which is undoubtedly job description. Even if there was, it assuming a more balanced structure, as ECONOMY IS ONE OF THE NEW PRINCIPLES wouldn’t be taken seriously,” says Sinan the EU market’s share in Turkey’s total Davutoğlu says the reason one of Ülgen, who was involved in various dip- exports has fallen below 50 percent, in- Turkey’s new foreign policy principles lomatic assignments within the Ministry creasing the economy’s resilience against is called “zero problems with neigh- of Foreign Affairs from 1990 through crises. Five years ago, 60 percent of Tur- bors” is to emphasize the revolutionary 1996 and is currently the President of the key’s total exports were to EU countries. change brought to Turkey’s past policy Center for Economics and Foreign Policy If this picture hadn’t changed, the Euro- of “regarding all neighbors as enemies.” Studies (EDAM). “Helping businessmen pean market, having shrunk considerably Davutoğlu reminds us that Turkey, who came to Turkey was not something in the global crisis, would have caused which desires stability, security, and that was expected of us in those days. Turkish exports to enter a free fall. “With prosperity in its region, has assumed Now, it is one of the main priorities…” the ‘zero problems, unlimited trade’ ap- many mediatory roles in this context proach to foreign trade, we shall continue with its “proactive” policy, geared toward OPPORTUNITIES UNEARTHED our efforts toward reducing market “preventing crises before they happen.” Only 35 agreements were signed in 87 dependencies that weaken our exports Turkey is no longer content to estab- years of relations between Turkey and against external demand factors and suc- lish mutual relationships with a few Greece. Davutoğlu, however, signed 22 cessfully continue policies that will reduce neighboring countries and global actors agreements in just one day on his visit the effects of global risks in the coming such as the US and the European Union. to Greece in May 2010. The major- period too,” says Zafer Çağlayan, Minister Ankara is even choosing to get closer to ity of these agreements had to do with of Foreign Trade, highlighting the “zero regions that can be considered quite new economic relations. Businesspersons laid problems” approach at the center of in terms of foreign policy, such as Africa the foundations of closer relations with Davutoğlu’s new foreign policy. and Latin America. Syria. Similarly, those who established It is certain that there is a new concep- The economy is perhaps the most bridges with Russia and Northern Iraq tual framework at hand that is relatively important of the matters at the heart of were investors. Turkey engaged in initia- more daring than in the past, and a new 38 Cover / Turkey’’s Sphere of Infl uence Expands

foreign policy is being practiced as an ex- TURKEY IS TESTING THE to bite off more than it can chew from tension of this. Turkey is aiming to move Iran’s clash with the West. “Turkey has from its status as a “peripheral” country BOUNDARIES OF DARING more power when compared to the past. to a “central” country and to apply the FOREIGN POLICY. AS THIS However, this power is not as much as it mor e daring and comprehensive foreign thinks it is,” says Barkey. policies that this position requires. In TRANSITION SOLIDIFIES, fact, this change was desired for a long TURKEY WILL START TO “NO SHIFT TOWARD THE EAST” time. “From one perspective, this con- Davutoğlu, on the other hand, fi nds no ceptual framework is not so new. Özal BE REGARDED ON THE coherence to criticisms that priorities in had wanted to make such an advance. INTERNATIONAL STAGE AS foreign policy have disappeared and that Demirel also had a similar approach. an axis shift has occurred. The Minister Additionally, efforts were made toward A STRONG COUNTRY WITH says that the political and economic resto- this end in the İsmail Cem era too,” says A MORE PREDICTABLE PATH ration requires the arrangement of a new Sinan Ülgen, and continues: “The thing foreign policy, stating that this new policy that separates that era from this era is AHEAD OF IT is not to shift eastward, but that Turkey is that the conditions in which we can ap- improving relations with all neighboring ply this policy have now emerged.” countries indiscriminately. He says, “Just as we don’t want isolation or restrictions THE TRY-AND-SEE STRATEGY answering the question, ‘Who am I?’ It on trade and visas in our surroundings, we Ülgen, who summarizes these suit- is creating its own scenarios. It is trying do not want instability, chaos, and confl ict able conditions as the achievement of out its power,” says Sedat Laçiner, and either,” and continues to say, “As a global political and economic stability and the draws attention to the fact that it may power, we do not want the other countries political vacuum that has emerged in have acted in ways exceeding its power of NATO – which we are a member of – to the Middle East, adds, “A ‘try-and-see’ from time to time, and that this is very be in confl ict with other countries, groups strategy is being pursued somewhat, normal in a transition process. of countries, or regions. For this reason, both in concept and in application. By we were very careful on not declaring a experimenting, Turkey is trying to deter- SUCCESSFUL ENOUGH? hostile front at the NATO summit, as we mine where the borders of its sphere of Some may interpret certain fruitless ini- saw enough damage from such polariza- activities in foreign policy lie.” tiatives as weaknesses on Turkey’s part. tion during the Cold War; we do not want The greatest reason the Turkish For instance, Henri Barkey, an expert on a new geopolitical polarization in our Ministry of Foreign Affairs has been Turkey for the Carnegie Endowment for world right now.” putting in overtime for so long could International Peace think tank whose That Turkey, which shaped its foreign be the desire to quickly get past the views were published in an analysis policy for the past 50 years around transition that is taking place. Turkey by international news agency Reuters, security and aligned itself with the wants to show the power of its infl uence is of the opinion that Turkey is trying West to suit this – even establishing its as per its new foreign policy, and it has relations with its neighbors based on not avoided performing many diplo- this – is moving toward close political matic experiments for this either. From THE EU’S SHARE relations founded on economics with the government problem in Lebanon IN EXPORTS SHRINKS Iran, Iraq, Syria, Lebanon, and Russia, to the Israel-Syria negotiations, from Billion Dollars shoving its anxieties over securities off to the nuclear negotiations between the 70 the side, may have created a perception P5+1 Group and Iran to disagreements 60 that it is growing apart from the West. between Azerbaijan and Armenia, it Certain things can be done to change is possible to see Turkey taking on an 50 this perception, according to experts. As intermediary position in nearly all re- a country that makes a greater contribu- 40 gional topics. Thus, it seems natural that tion to the solution of global problems, the number of initiatives by Davutoğlu 30 Turkey can show that it shares Western that did not yield results is just as values in a clearer manner. “Following high as of those that were successful. 20 a more active and constructive policy in Meanwhile, it must not be neglected such areas as climate change, fi nancial 10 that Turkey has adopted a very daring stability, and preventing the spread of conceptual dimension in foreign policy 0 weapons of mass destruction may be 2007 2008 2009 2010 under Davutoğlu’s leadership. “Turkey benefi cial,” says Sinan Ülgen. EU Other Contries Data: Turkstat is regaining its self-confi dence. It is

MARCH-APRIL 2011 ISSUE 3 TheThe TurkishTurkish PerspectivePerspective 39

According to many Western experts, Turkey is a “model country” in the Middle East, having synthesized democracy and Islam in societal life in an environment where dictatorships are being toppled. However, foreign policy experts have certain suspicions about this. Turkey’s 65-year experience with democracy MENSUR AKGÜN SİNAN ÜLGEN GÜRKAN ZENGİN contains great breakdowns, while on the Turkey’s perception in the Middle Turkey is trying to determine the Turkey aims to cooperate with other hand, the broad-scoped revolu- East is changing borders of its sphere of activities new regional points of power tions that took place in the fi rst years of ‘‘Middle Eastern peoples’ per- ‘‘A “try-and-see” strategy ‘‘Cooperation is being the Republic have a share in the creation ception of Turkey has changed. is being followed in both aimed not only with the According to a survey we con- the conceptual and applied Western world, focused on of the infrastructure for the move to de- ducted in 8 Middle Eastern sides. By experimenting, organizations like NATO mocracy too. The picture, which assumed countries, 85 percent of the Turkey is trying to and the European Union, its initial form in the Middle East with people in these countries are determine where the borders but with new regional points World War I, is just starting to change. sympathetic toward Turkey, of its sphere of activities lie. of power as well. Turkey is Davutoğlu’s and the Justice Following a more active and moving toward becoming The revolutions that can change the and Development Party’s un- constructive policy in such a whole with regional societal structure in Middle Eastern states derstanding of foreign policy areas as climate change, countries in a social and were not realized. In Turkey, however, this have greatly contributed to fi nancial stability, may be economic sense.’’ transformation began nearly a century this perception.’’ benefi cial.’’ ago, and still continues. “There are limits to Turkey’s being a model country for Ar- A MODEL COUNTRY The government’s interactions with abs. The change in the region may create Although worries have developed – es- Israel may have increased sympathy for certain opportunities, but there are prices pecially in the Western world – that the Turkey in the eyes of the people of the to be paid,” says Sinan Ülgen. axis of Turkish foreign policy has shifted Middle East. “Middle Eastern peoples’ Turkey is testing the boundaries of dar- toward the East, and mediatory experi- perception of Turkey has changed. Ac- ing foreign policy. As this transition solidi- ments have not yet yielded the desired cording to a survey we conducted in eight fi es, Turkey will start to be regarded on results, Davutoğlu still has little intention Middle Eastern countries, 85 percent of the international stage as a strong country of changing the route he has drawn, as the people in these countries are sympa- with a more predictable path ahead of he is cognizant of the political vacuum thetic toward Turkey,” says Mensur Akgün it. Turkey’s position will also be directly that formed in the Middle East after the of TESEV, adding, “Davutoğlu’s and the tied to its capacity to contribute to the invasion of Iraq. Two candidates stand out Justice and Development Party’s under- solution of global issues for the Western from other countries to fi ll this vacuum: standing of foreign policy have greatly world, too; otherwise, it seems that these Iran and Turkey. contributed to this perception. debates will never end. Davutoğlu, on the other hand, carries on the path he knows best. “With the condition that it fulfi lls ECONOMY-ORIENTED DIPLOMACY its responsibilities, Turkey will gain the Exports to Africa and the Middle East, the new routes of Turkish diplomacy, status of a central country that will enter are tending to increase a more stable international economic situation in which new balances shall be 40 Billion Dollars created,” he said in “Stratejik Derinlik,” the book he wrote years ago. We shall see if 30 Turkey fulfi lls its responsibilities and take 20 its place at the center in the near future, and whether other societies shall succeed 10 in toppling their dictators one by one as they rebel against them presently. If this 0 ideal is to become a reality, the effect of 20072007 the economic foundations to be laid by 20082008 means of diplomacy is certain to be great. 20092009 2010 A Middle East with no visas, customs, and quotas may be Turkey’s greatest sphere of Asia (Other) Middle East South America Africa (Other) North Africa Data:Turkstat activity. 40 In Depth / Exclusive Interview

A VISION WITHOUT BORDERS Known for his “zero problems with neighbors” policy, Turkish Foreign Affairs Minister Ahmet Davutoğlu is determined not to be a spectator in international relations

BY CEYHAN AKSOY BY AHMET BİLAL ARSLAN

he date was just 2001 when he wrote, “For Turkey to unify its historic and geographic depth with rational planning will allow the two-sided T dynamism it carries to turn into potential for progress.” In his book titled “Stratejik Derinlik” (Strategic Depth), Ahmet Davutoğlu characterizes the concept of “geopolitics,” which is claimed to be one of Turkey’s most important trump cards in negotiation, as “magical” too, and says that the borders of its geopolitical position should cease being a concept used with the instinct to guard its borders. Instead, he says, it should start being used to open up to the world, and also as a tool to turn regional effectiveness into global effectiveness. Since May 2009, the wizard of this magical concept has been working for Turkey to use its potential for progress that it derives from its dynamism. Thus, it is no coincidence that strategic planning and dynamic expansion are now replacing the static approaches that dominated Tur- key’s foreign policy for decades. Davutoğlu – who had his opinions taken by For- eign Policy magazine of the US, one of the world’s most prestigious publications, which also named him seventh among those who will shape the future of the world through their activities and characterized him as the brain behind Turkey’s “global reawakening” – told The Turkish Perspective how he brought the “strategic depth” he mentions in his book to the international stage of politics.

MARCH-APRIL 2011 ISSUE 3 The Turkish Perspective 41 42 In Depth / Exclusive Interview

EE HAD AN interview social, cultural, and economic interaction; We have extended our outreach by with you in Infomag cultural harmony; and tolerance taking intensifying relations magazine six years ago. root among all nations, and we will spare in a broader region ranging from Asia to What kind of changes no effort to disseminate these messages, Latin America and Whave we seen the Turkish foreign policy doing whatever we can to ensure a free and from Africa to the Pacifi c approach since? Can you sum up the secure world for all. developments we have witnessed? Our desire for a better world and efforts During the past six years, the Turkish toward this goal are best refl ected in the foreign policy approach remained true initiatives we have undertaken, the fi rst to its basic principles of “peace at home, being the “Alliance of Civilization,” which peace in the world” and “enabling Turkey we are pioneering with a view to mitigat- to take its rightful place in the community ing the differences and giving a chance to of modern nations.” In line with these harmony and tolerance among nations. goals and taking into account the radical Another concrete refl ection of our will transformation and restoration of the to fi nd solutions to matters of common international system, we have been pursu- concern is the recent “Mediation for Peace” ing a proactive foreign policy fashioned initiative, which we believe will contribute around the vision of averting the risks and immensely to global peace. reaping the opportunities of the age, and In conclusion, Turkey today has a contributing to the global efforts in bring- stronger political and economic standing ing security, stability, development, and that is mutually reinforcing and render- progress to every corner of the world. ing us more confi dent and effective in the In this regard, the only change we can international arena. Turkey’s friendship point out in Turkish foreign policy is its and cooperation is being sought by third increasing dynamism and activism geared countries more than ever. As a result of our toward realizing Turkey’s true potential, proactive diplomacy approach and the trust adapting ourselves to the shifting global vested in Turkey in the international arena, balances and steering the global change in increasing numbers of Turkish citizens are the positive direction. holding high-level posts in international or- global geopolitics and circumstances at In addition to our efforts to promote ganizations. We are able to play a crucial role the end of the Cold War. regional cooperation and integration in by helping to generate peace and stability in Following the end of the Cold War, our wider neighborhood, we have extended our region and beyond. Turkey found itself at the epicenter of a new our outreach by intensifying relations in a geopolitical landscape containing many broader region ranging from Asia to Latin We know that Turkey aims to be an risks and opportunities that would have America and from Africa to the Pacifi c, and effective actor both in regional and effects on a global scale. Therefore, we had have become a more active and effective global terms. Where do we stand now, to pursue a more proactive and multifaceted player in regional and international organi- economically and politically, on the way foreign policy with a view to shaping our zations including fi rst and foremost the to achieving this aim? own destiny and that of the wider region UN. As a result, Turkey today has become First of all, being a regional and glo- surrounding us, and to create a belt of an important actor on the international bal actor is not something we wish for stability and welfare in our neighborhood. stage, as evidenced by, among other things, ourselves, but it is a responsibility put on With this vision in mind, we also worked our membership in the G-20, increased our shoulders as a result of the changes in hard to strengthen Turkey through consid- profi le in many regional organizations erable economic and democratic progress, such as the Council of Europe, growing which enhanced our ability and means to assistance to and trade with less developed fulfi ll our responsibilities as a regional and countries, and the strategically important global player. role assumed vis-à-vis energy security. In Equipped with a wide We are also trying to bring together other words, thanks to our active foreign range of assets emanating parties to important regional problems in policy supported by our growing economy, order to help them engage in a meaningful social dynamism, and cultural diversity, from its history, social dialogue and thus resolve their differences today we are able to play an effective role in and cultural ties, and peacefully. The mediatory role played by our region and beyond. Turkey in overcoming the crises in Iraq Our end goal is to maximize coop- growing economic and the Balkans, the progress recorded in eration and its mutual benefi ts with Afghanistan-Pakistan relations as a result all of our neighbors and countries in capabilities, Turkey is in of the trilateral cooperation process led nearby regions. Obviously, our vision is a most suitable position by Turkey, and our role as a facilitator in not limited only to neighboring regions. nuclear talks with Iran are some concrete We are determined to emphasize the to make a difference in refl ections of this policy.

importance of political dialogue; increased global peace efforts Beyond the regional scale and as a BY AHMET BİLAL ARSLANPHOTOGRAPH

MARCH-APRIL 2011 ISSUE 3 The Turkish Perspective 43

the-board realization that Turkey is fast becoming a major global power that has the will and the ability to play a pivotal role in shaping the new world order. Just the other day, those who coined the BRIC concept were arguing that Turkey can no longer be depicted as an emerging market and that our means and capabilities represent a growth economy with global outreach. In fact, this is also why Turkey was invited to become a member of G-20, which has quickly moved to the epicenter of global economic diplomacy in face of the fi nancial and economic challenges engulfi ng the whole world. Turkey will now assume the presidency of this group in either 2013 or 2014, and given our suc- cessful growth experience that provides a relevant reference for most of the countries in the world, we are committed to display an active leadership role in the run up to and during our presidency. Likewise, in view of the deepening fault lines between different religions and cultures, Turkey’s own experience and what it stands for becomes more relevant for everyone. The Alliance of Civilizations initiative, for instance, which we have co- responsible member of the international not Turkey. Why do you think Turkey sponsored with Spain, has now become the community that has to deal with a wide cannot get to the position it really de- fl agship of all endeavors to promote dia- range of issues, another principle we pursue serves, especially economically? logue, tolerance, and mutual understand- is seeking complementarity with global First of all, we do not seek any labeling or ing among different religions and cultures. actors. To this end, we are particularly com- credit for what we do in pursuit of our own Indeed, with more than 100 countries and mitted to making better use of international vision and objectives. Our foreign policy is 20 international organizations supporting organizations and utilizing them for effec- shaped by Turkey’s own interests that com- this initiative within the UN, the Alliance tive coordination and concerted action. pel us to try to generate peace and stability project represents the strongest response to in the whole world so as to allow our poten- extremists and radicals. How do you see the refl ections of these tial to be realized. In this regard, whether In summary, Turkey has its own rea- developments on our foreign policy? we are considered to be on par with BRIC sons for what it has been doing in foreign What is the phase difference between our countries or not, we will continue to do policy and economy. And, although this is foreign policy and foreign trade? whatever needed to enhance our economy an ongoing process, we are proud of our We are aware that foreign policy and and use the means and capabilities it creates achievements so far. As I mentioned dur- economic success always go hand in hand for the common good of our own citizens ing my address to our 3rd Annual Am- and complement each other. Economic and the people on earth. bassadors Conference at the beginning of relations between countries can even create In fact, it is somewhat the same mental- this month, Turkey has now evolved into a favorable atmosphere to the solution ity that drives our quest for EU member- a “wise country” whose views, advice, and of political problems, thus enhancing ship. Indeed, we undertake many reforms contributions are increasingly sought by peace and security. Keeping this in mind, within this process, but essentially they are a vast number of actors in the world. We, we have adopted a multi-dimensional, all geared to improve the living standards in turn, reap the benefi ts of this profi le constructive, and forward-looking foreign of our own people above anything else. and our genuine commitment to step up policy based on maximum economic coop- In other words, irrespective of the EU to the plate in both our bilateral relations eration, integration, and interdependence membership perspective, our government and within international forums. with countries not only in our vicinity but would and will continue to take all the nec- also across the globe. essary measures to provide a modern and You have stated that the main goal of prosperous way of life to our citizens. our foreign policy is “zero problems with When it comes to mention a name to re- That said, Turkey’s economic growth and, neighboring countries,” and Turkey place underperforming BRIC countries, political stability – and the increasing soft is going to improve its effi ciency in the like Russia, some other countries such as power they entail – do not go unnoticed by Middle East as a regional power. How do Indonesia are shown as an alternative, the world at large. It is almost an across- you regard the developments seen in this 44 In Depth / Exclusive Interview

manner ever since you have taken your cultural ties, growing economic capa- made security, progress and develop- position in the Ministry? bilities, and – above all – our ability to ment indivisible, all nations in the The new stage of globalization that we understand different dynamics at play in a region – small or big – have important are going through is indeed a unique one. vast area from Europe to Asia, Turkey is in contributions to make with a view to Change has never been this fast, nor has a most suitable position to make a differ- fulfi lling the real potential of our region. interaction been this intense. Amid rising ence in global peace efforts. We are already Indeed, it is no secret that the Middle opportunities and evolving threats, the witnessing many positive outcomes of our East, despite its vast natural and human world has yet to fi nd an order. stance that create new opportunities and resources, is still fraught with many Nevertheless, the right thing to do is contribute to the stability of the region. confl icts and tensions. In addition to clear. We must tackle intertwined challenges This is particularly true for the Middle the Arab-Israeli confl ict which remains in an all-encompassing manner. No one East, where we enjoy unique historical the main source of instability, the lack of has the luxury of being a mere spectator in relations and have been able to activate a genuine and effective cooperation among international relations any more. We must new dynamic of cooperation and dialogue. the countries of the region also plays a be proactive, aiming fi rst at preventing However, there is still much more role in the continuation of this rather rather than solving when it comes to crises. ground to cover, and we are committed to volatile situation.

Working the way from the regional to the ‘‘Our vision is not limited only to the global level is also imperative. neighboring regions. As such, every country must endeavor We are determined to emphasize the to forging solid regional building blocks importance of political dialogue among all that carry the potential of stimulating nations’’ each other and creating a synergy in global peace and stability efforts. And in order And this is precisely why Turkey has to achieve this, we must build an environ- pursuing our objectives as vigorously as been an active supporter and promoter of ment of trust and confi dence as well as ever in the future. With new bilateral and regional cooperation, particularly within develop a sense of ownership of regional regional cooperation mechanisms put in the last fi ve to ten years. We believe that problems, promote dialogue and mutual place, we have already prepared the neces- cooperation based on political dialogue, confi dence, and give everyone a stake in sary ground conducive to further progress. economic interdependence, and cultural cooperating with each other. Given that we also have the political as well understanding is the most effective means In Turkey’s case, this is exactly what as the economic and social means to sup- of minimizing the risk of confl ict and ad- we have been doing for the last decade. port this endeavor, I am confi dent that the vancing peace, security, and prosperity. We have been trying to rid our relations best years of our region have yet to come. To that end, we have initiated several with our neighbors of all problems and new mechanisms with all our neighbors sow the seeds of regional cooperation in Is it possible that the recent close and the countries of the region, among our wider neighborhood. And yes, I name relations between Iran and Turkey can which the High-Level Strategic Coopera- this objective as “zero problems with our reduce the effect of global powers in the tion Councils represent the most effective neighbors”. Maybe it is more of an ideal in Middle East? Can stability be brought to step toward identifying and implementing a real world; but it also clearly lays down the region this way? new avenues of cooperation. our intentions. Our task becomes even There is no doubt that Turkey, Iran, and Likewise, we have also started playing more important and relevant in view of Egypt have always played a prominent a more active role in helping resolve con- the fact that many of the problems affect- role in Middle Eastern politics due to fl icts in the region through peaceful and ing world peace and security are taking reasons historical and otherwise. Today, cooperative means. Turkey’s mediation and place in Turkey’s vicinity. they continue to hold a special place in facilitation efforts in different countries, Equipped with a wide range of assets shaping the region’s destiny. That said, including Iraq, Iran, and Lebanon, are

emanating from our history, social and given the impact of globalization, which prime examples of these endeavors. PHOTOTOGRAPHS BY AA

MARCH-APRIL 2011 ISSUE 3 The Turkish Perspective 45

How do you see the relations with the EU? As a result of these efforts, air transpor- In view of that, Turkey has made civil Accession to the EU is and will remain tation is booming in Turkey in recent years. aviation arrangements with more than our strategic goal. The accession negotia- Istanbul, with its most suitable location 100 countries and is leading and sup- tions, which started in 2005, continue embracing two continents, has become a porting aviation cooperation in our wider toward the goal of membership on the regional hub for civil aviation. This rapid region through participation in initia- basis of the EU’s unanimously taken growth in the sector facilitates and contrib- tives such as the Civil Aviation Project decisions. Achieving further progress in utes a lot to both our domestic and foreign of the Black Sea Economic Cooperation, our accession process is in the interest of economic and trade activities. In Turkey, Transport Corridor Caucus-Europe-Asia all parties. However, despite our tireless the number of domestic and international (TRACECA), African Civil Aviation Com- efforts to make further progress in the passengers was around 30-35 million in mission (AFCAC), D-8, and Turkey-Mid- negotiations, the accession process is fol- 2002. This number has tripled now and dle East Aviation Group (T-MAG). lowing a slow pace due to resistance and surpassed the level of 100 million in 2010. political obstacles by some EU member Likewise, the number of planes that be- The Fourth United Nations Conference states. Nevertheless, we are strongly longed to Turkish civil aviation companies on the Least Developed Countries (LDC) committed to our accession process and was 112 in 2002. This number has also will be hosted by Turkey in Istanbul in reform agenda, which follow an irreversi- tripled and reached to 332 as of the end May 2011. What is the signifi cance of the ble course. By doing so, we aim to provide of 2010. And we are proud that Turkish Conference? our people with the highest norms and companies have some of the youngest and LDCs represent the poorest and the standards in every fi eld of their daily lives. most modern fl eets in Europe. weakest segment of the international As a matter of fact, we have already made Numbers showing cargo and passenger community. They consist of 49 countries; great strides to that end in the last years fi gures point out the net contribution of 33 in Africa, 15 in Asia and the Pacifi c, through comprehensive reforms. the aviation sector to the Turkish economy. and one in Latin America. Extreme The fi gures highlight an increase of 31.7 poverty, the structural weaknesses of Can you comment on the Turkish percent in cargo freight carried by Turkish their economies and the lack of capacities economy and the contributions of air Airlines in 2010 compared to 2009, reach- related to growth, often compounded by travel to it? ing 313,410 tons. Likewise, the number structural handicaps, hamper efforts of Over the past 10 years, Turkey has accom- of passengers carried by Turkish Airlines these countries to improve the quality of plished a great transformation process and reached 29.1 millions, indicating an life of their people. These countries are implemented sweeping structural reforms increase of 16 percent in 2010 compared also characterized by their acute suscep- also in the economic fi eld. Ranking as the to 2009. Other Turkish airline companies tibility to external shocks, natural and 16th largest economy in the world and also realized similar growth in 2010. man made disasters and communicable 6th in Europe, Turkey is now an active Accordingly, Turkish Airlines has been diseases. These challenges and the fact member of the G-20, which represents the broadening its international range for that the conference occurs only once every major economic powers of the world. We some years to meet increasing demand. 10 years make the Fourth United Nations export to almost all countries, and have a Turkish Airlines will be serving 175 Conference on Least Developed Countries trade volume that reached 300 billion dol- destinations throughout the world by the (UNLDC 4) a major event for the whole lars in 2010. We are planning to increase summer of 2011, making it the 9th largest international community. our exports to 500 billion dollars with an airline in terms of range. We have been actively engaged in rais- overall trade volume worth ing awareness and interest in 1 trillion dollars by 2023, the issues related to LDCs among centennial of our Republic. Ahmet Davutoğlu had the international community. shared his foreign policy What makes Turkey unique approach with Infomag As a result of our efforts the in terms of logistical aspects magazine six years ago, UN General Assembly has when he was the chief of trade and foreign direct advisor of the Prime made the decision that Turkey investments is its unique geo- Minister will host the UN LDC 4 May graphical location, serving as a 9-13, 2011 in Istanbul. It is gateway to European, Middle going to be the fi rst time that Eastern, North African and the Conference will be hosted Central Asian markets. In by a developing country and four hours’ fl ight from Istan- an emerging development bul, one can reach more than partner. We feel privileged to 50 countries and one fourth host the Conference. of the world population. Our aim is to ensure a suc- Thanks to our geographical cessful event and a meaningful advantages as well as rich outcome, by which I mean historical and cultural herit- policy recommendations, age, Turkey has become one support measures, and specifi c of the top 10 tourist destina- deliverables that will strength- tions in the world. en LDCs’ capacities. 46 In Depth / Industrial Strategy Document

THE GOALTO BE IS EURASIA’S

MARCH-APRIL 2011 ISSUE 3 The Turkish Perspective 47

MANUFACTURING CENTER

With the Industry Strategy Document, Turkey can see the path toward the goal more clearly

BY SİNAN KOPARAN 48 In Depth / Industrial Strategy Document

HOME APPLIANCES

Adapting the sector to new technologies WHAT IS BEING and developing new areas of application PLANNED FOR THE Development of new materials LEADING SECTORS? Development of products addressing the increasing quality demands of FOOD consumers in domestic and international markets Increasing practices that will create connections between farmers, co-ops, unions, and Tax measures to decrease industrialists, such as contract farming the effects of the global crisis Preventing agricultural businesses from being torn apart or shrunk in unproductive ways due to inheritance law

AUTOMOTIVE Encouraging food companies that fi ght for a place Ensuring technological depth, increasing in the world market to engage in R&D activities value-added manufacturing output Incentives to make high value-added, processed Bringing the laws and rates of taxes on the products of products that have a high chance of sector in compliance with the EU selling abroad

Reassessment of arrangements on Improving transportation project and R&D incentives toward the needs of the sector Development of storage, cold storage, and packaging systems Development of solutions that will clear the sector’s path in areas relating to foreign trade, such as the importation of second-hand vehicles and a common customs tariff Industry Strategy ment’s strategic Document and Ac- goals. Turkey, which tion Plan in order to is currently moving toward these goals, the document, continue the success it has the goal of becoming Europe’s which was prepared jointly by achieved in industry. most important manufactur- representatives of the public HE MARKETS HAD Efforts to revise the Indus- ing center, has covered great and the business world, con- T expected an 11 percent try Strategy Document, which distances. For it to continue tains seventy-two action plans increase of industrial produc- was among the closing criteria along this path, however, it on vertical and sector-specifi c tion in December. But accord- of the “Enterprise and Indus- must speed up its transition policies. Adnan Dalgakıran, ing to data released by the trial Policy” – one of the 35 toward high technology and President of the Central Ana- Turkish Statistical Institute chapters of Turkey’s EU acquis value-added products. “The tolia Exporters’ Union, says, (Turkstat), in December, total – and was published in 2003, vision that has been deter- “We produced an unusual industrial production exhib- were being carried out by mined is the vision that will study with the Ministry of ited a 16.9 percent increase, a the Ministry of Industry and take us to our export targets in Industry, coming not only to surprising result for all. The Commerce since 2007. The the year 2023: to be Europe’s the point of requesting, but Wall Street Journal pointed Strategy Document, which manufacturing base in mid- also to the organizing stage,” out that industrial production was shared with the public to-high technology products,” and continues: “And the bu- accounts for 25 percent of the in the fi rst days of the new says Mehmet Büyükekşi, Pres- reaucracy worked by putting gross national product, and year and was met with the ident of the Turkish Exporters’ itself in our place. Neither said, “This developing market support of exporters and non- Assembly. He adds, “We share did the bureaucracy follow a economy can achieve the governmental organizations, this vision. Of course, we will top down approach, nor did world’s fastest growth rates, was also accepted by the High be a base for both manufac- we follow an approach that and according to many in the Planning Council (YPK). turing and design.” demanded everything.” market, it is a new reason to YPK’s decision was published Among the strategic goals The strategy document grant Turkey a place within in the Offi cial Gazette issued listed in the document are contains detailed road maps the BRIC club, which consists January 27. increasing the economic that have been prepared for of the world’s fastest growing The document, which infl uence of companies that the development of the sectors economies.” Undoubtedly, had long been awaited by are capable of continually that Turkey prioritizes for industry is occupying a larger the business world and was improving themselves, in- exports. The barriers before space in Turkey’s growth announced by Minister of In- creasing the share of medium the sector and escape routes dynamics nowadays. Turkey, dustry and Commerce Nihat and high technology products are laid out in a realistic man- which has set even higher Ergün, especially concentrates within manufacturing and ner. “We have seen this: we sell goals for 2023, the centennial on the use of technology by exports, and transitioning to industrial products. We shall of the Republic, is drawing companies. This focus is also value-added products in low sell industrial products in the a clear road map with the highly noticeable in the docu- technology sectors. Besides future too. We will achieve the

MARCH-APRIL 2011 ISSUE 3 The Turkish Perspective 49

TEXTILES AND READY-TO-WEAR CLOTHING MACHINERY Incentives for shifting labor-intensive activities in the sector from provinces in Increasing design potential western Turkey to those in the east

Development of models to reduce fi nancing costs Establishing Istanbul and İzmir as Creation of a common procurement system centers of design, fashion, and fi nancing for the textile and ready-to-wear Spreading management consulting services and a clothing sector professional approach to management Development of market research and common after- Increasing the skill of the workforce sale services Incentives for investments in Increasing the share held by neighboring countries in modernization and renewal to machinery exports increase R&D and product Development of systems allowing companies to make development capacity sales abroad to be paid in multiple installments without incurring a loss Supporting applied and professional training Development of technological pools to increase and spread sources of R&D “Our industries’ need for IRON AND STEEL imports is taking shape at a higher level. The cause of our Ensuring that the sector, which increasing dependence on is already in an advantageous imports in our industries is position in terms of labor, has a suffi cient advantage in energy strong in not due to our industrialists or and operating expenses exports brings entrepreneurs; it is due to our ‘‘The subject we must exporters much closer to their outdated investment incen- Completion of the National address is how the stra- target for 2023. “Industry tives system.” Restructuring Program tegy can be put into absolutely needed a strategy practice and how its plan such as this too, being THE LABOR DIFFERENCE IN results can be measu- in an environment where COMPETITION red. If we can do these, exporters determine Turkey’s The Industry Strategy Docu- insurance on seeking, apply- we will get results from vision for 2023. This plan is ment, which was published ing, and training for jobs are by the end of 2014,’’ signifi cant enough to serve as at a time where the changes a few of the important steps says TIM President the foundation of the goal for in the world’s structure have in this regard that are listed in 2023. From now on, we have picked up speed, will truly be the document. A national em- Büyükekşi a plan that must be practiced able to meet Turkey’s needs. ployment strategy and action for at least a certain time, and Particularly as the infl uence plan that will encourage the both our expectations and of China and India over the private sector, professional or- highest growth in the export our actions will be within the global economy continues to ganizations, and employers to of industrial products. Our framework of this plan,” says grow, Turkey requires a true provide professional training export strategy is not inde- İsmail Gülle, President of road map in order to stay and consider changing market pendent of the manufacturing the Istanbul Textile and Raw abreast of the competition. conditions from a macro per- strategy. They are two parts Materials Exporters’ Union These countries have the spective will also be prepared that complete each other,” (ITHIB). ability to provide inexpensive as per the document. says Mehmet Büyükekşi, and Of course, this is not a fi rst labor due to the sizes of their The strategy document, continues: “Thus, this is why for Turkey. Turkey has pre- populations, and Turkey needs which is based on highly real- Turkey’s Industry Strategy pared strategy documents in more than just cheap labor in istic foundations, determines Document holds great signifi - the past; however, it had never order to compete. Above all, the steps that must be taken cance for the future of our ex- done so in such a coordinated Turkey required a skilled and by pinpointing the strong and ports.” The strategy document manner. Sometimes, it came educated workforce. There are weak points of Turkish in- contains detailed analyses down on producers while measures in the strategy docu- dustry. Turkey’s strong points especially for industries noted trying to sort out its monetary ment to increase the quality of include its geographic position, for their competitive ability policy and fi nancial sector; workers to this end. Provid- its young workforce, the fact and exports potential, such as sometimes, it caused imbal- ing incentives for companies that its manufacturing meets automotive, machinery, the ances in the competitive arena contributing to professional to international standards and home appliances ancillary while trying to provide incen- training, overcoming the quality, and its entrepreneurial sector, electrical goods and tives. Rıfat Hisarcıklıoğlu, issue of having trainees work capacity. Its weak points are electronics, textiles, food, and President of the Union of outside of their fi elds, educat- listed as the defi ciencies in iron and steel. The existence Chambers and Commodity ing unemployed individuals skilled labor, R&D, technol- of sectors that are especially Exchanges of Turkey, says, that are on unemployment ogy, innovation, and access to 50 In Depth / Industrial Strategy Document

WHAT IS TO BE DONE? • Training and support to spread entrepreneurship in industry shall be given •Founding a company and opening a workplace will become easier •Technical legislation will be made to conform to the EU in order to address the supply and demand of high-quality, trustworthy products •The income tax system will be re-organized •A sector and country diversifi cation strategy will be fi nancing, as well as the inef- The strategy document among the areas most heavily created for exports fective management of natural contains detailed road promoted by the Industry •Supports will be given to resources. Strategy Document. In fact, SMEs in marketing and maps that have been increasing their exports The document lists a series prepared for the deve- in certain areas, SMEs must of measures to increase the be given some priority. Nihat capacity quality of the workforce, lopment of the sectors Ergün, Minister of Industry • Policy development, that Turkey prioritizes coordination, and which is the leading issue, and Commerce, says, “One of implementation capacity and determines strategies for exports the most important bases of relating to foreign direct in other areas that require the Industry Strategy Docu- investments shall be progress. In order to ensure ment is making access to strengthened sustainable increases in fi nancing easier for every- • Innovative ideas and R&D- based, high value-added, exports, the production and one and ensuring balances branded products and marketing processes of inno- on a macro scale. However services shall be supported in vative ideas and R&D-based, there are additional special production and marketing high value-added, branded methods that must be used • Arrangements will be made products and services will for SMEs.” Renewing their so that the private sector can open professional and be supported. The increase technological and organi- technical training schools and of R&D activities carried zational infrastructures is organizations out by the private sector and • Managerial acumen at SMEs public sector to this end will and the skilled workforce receive support, the processes capacity shall be raised of founding companies and • Credit guarantee and venture capital systems will be opening workplaces will be- developed come easier, and the income • A national international tax system will be overhauled. intellectual and industrial Efforts to facilitate the use of property strategy document products based on alternative will be prepared energy sources, the develop- • Technology transfer offi ces will be spread ment of technical infrastruc- • An administrative model to ture, and turning them into draw a framework for local and commercial products shall be central policies on clustering carried out too. shall be created Small and Medium Size Enterprises (SME) are

MARCH-APRIL 2011 ISSUE 3 The Turkish Perspective 51

very important for SMEs the business world made a to continue their increases signifi cant contribution to in productivity. Of course, it. Prepared jointly by the it is not easy for SMEs to private and public sector, the access sources of fi nancing document will prevent the for all these investments to reappearance of certain issues be made. According to data that came up in the past. published by Turkstat, SMEs Many projects in the past account for 99.9 percent of all had not been as productive as enterprises, provide 80 per- desired due to disagreements cent of all employment, and among ministries, creating an are responsible for 58.48 per- effect that discouraged both cent of value added deposits. the business world and the In spite of this, SMEs receive public sector. One can speak only a 26 percent share of all of a much more coordinated credit. and compatible process with High rates of equity capital the published Industry Strat- The document lists a non-governmental organiza- use in investment fi nancing egy Document and Action series of measures to tions, and local authorities. in Turkey also point to this. Plan 2011-2014. The idea increase the quality of Mehmet Büyükekşi says, However, with the global of competition is especially the workforce, which is “There are the development crisis, signifi cant reductions emphasized in the document, the leading issue, and plans that used to be made in companies’ profi ts have indicating that the ninth determines strategies once every fi ve years, the last made investments based on strategy document points in other areas that of which was the ninth seven- equity capital more diffi cult. to a new era. Ümit Boyner, require progress year plan. Right now, there is In this sense, the further Chairman of the Board of the three-year medium-term development of systems such the Turkish Industrialists program, a very important as venture capital, startup and Businessmen Associa- road map. There are docu- capital, and credit guarantee tion (TUSIAD), character- ments prepared in the area systems for companies plan- izes the announced strategy of science and technology. ning investments is also on document as a positive step Companies and public organi- the agenda. Nurettin Özgenç, that moves away from the zations have both been great President of the Small to incentives-heavy industrial at creating perfect texts and Medium Size Enterprises As- policies of the past whose determining goals,” and adds, sociation (KOBİDER), says, contributions were unclear “The subject we must address “For Turkey’s export to reach and toward the establishment is how the strategy can be put targeted fi gures, reforma- of a competitive order. into practice, how it can be tive decisions must be taken Each of the actions to followed and how its results and applied for industry and be brought to life within can be measured. If we can do SMEs. In this context, we be- the strategy outlined in these, we will get results from lieve that the Strategy Docu- the document shall be the our industry strategy by the ment will offer a solution to responsibility of a ministry or end of 2014.” the structural problems of an organization such as the Turkey aims to be one of the SMEs and shall better refl ect National Productivity Center world’s ten largest economies, the good qualities and oppor- or the Scientifi c and Tech- raise its GNP to 500 billion tunities we presently have on nological Research Council dollars, and increase per our competitive ability. of Turkey (TUBITAK). capita income to 25 thousand Meanwhile, the provi- TUBITAK will especially be dollars by 2023. The Industry sion of an online identity active in the preparation of a Strategy Document can be number to all companies, plan to implement policies on regarded as an important step SMEs most of all, and fol- technology and innovation, toward achieving these goals. lowing all developments geared toward companies’ The document, with a much on companies through the technological development more applicable and accepted e-government system are also goals. TUBITAK will be structure when compared to among the Industry Strat- supported by the Ministry previous road maps, seems egy Document’s goals. The of Industry and Commerce, like it will lead to results. The Strategy Document departs the State Planning Organiza- only important matter at this from previous documents tion (DPT), related public stage is for all organizations in several different ways, the organizations, development to move toward the goal in a most important being that agencies, the private sector, coordinated fashion. PHOTOTOGRAPH BY AA (BOTTOM) 52 In Depth / Automotıve Industry

TURKEY CHARGES UP ‘‘Devrim’’ may remain as a disappointing FOR THE recollection in the annals of history, FUTURE but Turkey possesses great opportunities to to be a brand in electric cars

BY EMRE YILMAZ

HE MOVE toward Gürses, who was the country’s The engineers who were there reasons offered as to why the industrialization president at the time. When that day regarded this effort as fi rst vehicle didn’t work, which T gained impetus at the the engineers came together, a way to challenge the Turkish have become urban legends by end of the 1950s, the automo- they were read Gürses’s top- people’s poor fortunes, and now… The idea of domestic tive sector building up in par- secret, sealed orders: “I want started production efforts with automobile production in ticular. Turkey, realizing the you to produce an automobile limited means, managing to Turkey remained in limbo for future promised by the sector, that is entirely domestically- produce three automobiles in 50 years. Today, the automo- rolled up its sleeves to create made, both in terms of its time for the parades on Octo- tive sector has overcome the “Devrim” (Revolution), its design and in terms of materi- ber 29. However, things didn’t technical diffi culties, but it own vehicle, and invitations als, to be presented for the ad- turn out as they were expected still expects much to be done were sent to 23 engineers in miration of our people at this to, and the “Devrim” didn’t by offi cials. These expectations 1961 at the behest of Cemal year’s Republic Day parades.” start up. There are various are shaped by contemporary

MARCH-APRIL 2011 ISSUE 3 The Turkish Perspective 53

necessities. The global auto- will enter mass production in Fiat Doblo, which bears the for transitioning to electric motive industry is working 2011 and 2012. Meanwhile, title of “the fi rst electric vehicle cars. The United Kingdom to be more sensitive toward the SynergEthic, which has whose R&D was carried out has set a target to reduce its the environment nowadays. come to the attention of in Turkey,” and the electric total carbon emissions by In particular, factors such as entrepreneur Alphan Manas, version of the Ford Transit 26 percent by 2020, and global warming and the rapid is a vehicle created by the Connect that is produced in 80 percent by 2050. Orhan depletion of fossil fuels are marriage of a motorcycle and Gölcük are a couple of exam- Sabuncu also mentions that placing many countries that a compact automobile. It also ples of electric vehicles being Turkey absolutely must adapt manufacture automobiles possesses several important produced in Turkey. to the transformation that is under legislative pressure. patents and technologies, a Uludağ Automotive Indus- under way in EU countries, In addition to these factors, matter of some importance for try Exporters’ Union President which receive 70 percent of its agreements that these coun- Turkey. The purchase of the Orhan Sabuncu believes that exports. tries are party to, such as the majority stake in SynergEthic it is important for the future According to Alphan Kyoto Protocol and decrees S.A. was fi nalized in October of the sector for other core in- Manas, who believes that Tur- toward lowering emissions, 2010, after the establishment dustry fi rms to take steps that key lost the chance for brand have made environmentally of a consortium consisting of have already been taken by the development based on inter- friendly vehicles an attrac- Brightwell Holding (owned by aforementioned companies nal combustion engines, the tive and necessary option. An Manas), Orhan Holding, and and for ancillary industries country can become a brand article published by Deloitte, B Plas. The vehicle’s design to transform themselves in in electric cars, and it would be titled “Charging Ahead: was renewed by David Wilkie line with these developments. benefi cial to purchase a brand Battery Electric Vehicles and of Bertone, and the prototype According to the fi gures from abroad to do so. Manas the Transformation of an will be exhibited at the Geneva announced by Sabuncu, the summarizes his thoughts Industry,” shines a light on the Motor Show in March 2011. future of automotive is in with the words, “To do this, future of electric vehicles, pre- The company now aims to set hybrid and especially electric the government and Turkish dicting that approximately 13 its direction according to the vehicles. Important steps are Industrialists’ and Business- million electric vehicles will be reactions it will receive. The being taken in EU countries men’s Association (TUSIAD) on roads worldwide by 2020. should create a joint “Turkish- The electric vehicles that Made Automobile” group. are talked about most often This group would then search around the world are now on for brands and technolo- Turkey’s agenda as well. gies abroad. Besides this, the government and those among BRANDS AND THEIR INVESTMENTS the members of TUSIAD Furthermore, Turkey is not who wish to be a part of this destined to stay on the side- group are to create a fund. The lines in this arena; it has the government will provide 50 potential to be a big player. percent of the contribution to Renault, which just completed this fund, and TUSIAD mem- its 40th year of manufacturing bers will provide the other 50 in Turkey, will start producing percent.” its fi rst electric automobile – the Fluence Z.E. – at its Bursa ELIMINATING CHARGING ANXIETY factory this year, boosting the Nissan Automotive signifi cance of Turkey’s role. Vice President İlkim Renault CEO Carlos Ghosn Sancaktaroğlu is also among indicated that the company those who exhibit a positive will start to produce electric approach to the development automobiles in Turkey this 13 4 1,600 of electric cars in Turkey. MILLION MILLION year, highlighting Turkey’s KILOMETERS Sancaktaroğlu, who believes potential and his belief in the It is estimated that Germany is aiming According to that the automotive sec- strategy with words, “Electric approximately for 1 million electric studies under way tor is one of Turkey’s most vehicles will account for 10 thirteen million vehicles in 2020, in Japan, batteries important playing cards, electric vehicles will while China aims will be much more percent of our sales in 2020. be driven globally for 4 million. powerful in 2030, explains that the automo- Turkey will be our manufac- in 2020 The US predicts allowing electric tive sector is globally moving turing base for this segment.” that there will be vehicles to go 1,600 toward alternative sources İbrahim Aybar, CEO of 1 million hybrid kilometers on a of energy at full speed, and Renault Mais, points out that vehicles on its roads single charge says he believes that Turkey is in 2015 four different kinds of Re- progressing toward becoming nault-branded electric vehicles Data: Deloitte an important and strategic PHOTOTOGRAPH BY AA 54 In Depth / Automotive Industry

base in future years. Turkey It is estimated that of support provided in EU special lanes, parking spots, is starting to witness some the market share of countries once again.” and cost reductions are on the serious moves in terms of electric vehicles alone Legal arrangements are agenda in countries with ad- manufacturing. However, will reach 10 percent just as critical to electric vanced automotive industries, popularizing these vehicles is vehicles as investments in in addition to the infra- just as important as manu- in Eastern European infrastructure. The steps structure work and electric facturing them. Accomplish- countries by 2020 that Turkey will also take charging stations required by ing this is possible through to encourage the use of electric vehicles. These regula- infrastructure works. Steps to electric cars and become a tions, when put into effect, will address the need for charg- manufacturing base for these speed up the use and prolifera- ing stations are awaited with cars are being awaited with tion of electric vehicles. great curiosity. The construc- great curiosity. Legislative Orhan Sabuncu also tion of electrical charging sta- arrangements on electric touches on how domestic bat- tions and the establishment cars are very important in tery production is essential for of special lanes and parking this regard. The announce- electric vehicles to be manu- spaces are essential to the ments made by Nihat Ergün, factured in Turkey on a wide infrastructure that these 2011 too, so Turkey can take Minister of Industry and scale, and says, “We know that vehicles will require. Steps are its rightful place within this Commerce, promise hope in İnci Akü is working in this now being taken in Turkey as revolutionary transforma- this area. Ergün states that area, while Tofaş and Arçelik well, pioneered by Istanbul: tion.” For Turkey, which has they have completed the code are working to produce electric the city’s fi rst charging station earned the privilege of being relating to new applications engines. They have also signed was set up in parking lot for one of the leading countries of technology, such as the an agreement to engage in the Istanbul Metropolitan in manufacturing, to become manufacturing and serial manufacturing in a 50 percent Municipality City Hall’s pool. an important market too, maintenance of electric and partnership with Xellerion, Charging stations for electric I would like to underline hybrid vehicles. Nihat Ergün an American company that vehicles will initially be built the importance of the kind says that incentives such as manufactures nickel-zinc bat- for testing and promotional purposes as part of a protocol signed by İstanbul Enerji A.Ş. – a partner of the municipal- ity – and Renault. Renault Mais CEO İbrahim Aybar says that the technology is now a reality, and explains that 100 agree- ments have been signed so ALİ HAYDAR BOZKURT İBRAHİM AYBAR İLKİM SANCAKTAROĞLU far by public institutions, CEO, Toyota Türkiye CEO, Renault Mais Vice President, Nissan Automotive governments, and private establishments around the We believe that we need a The Oyak Renault Automobile It is unthinkable that Turkey strong domestic market Factories assumed a very sig- would be excluded from world with the purpose of for the development of the nifi cant and pioneering role in developments. For this granting wide masses access automotive sector – Turkey’s the realization of the Renault reason, we believe that the to electric vehicles as of 2011. locomotive – and for more Group’s mass production targets automotive sector will increase The agreements signed by the investments to be made on the for electric automobiles with the its investments in vehicles basis of new technologies. A production of the Fluence Z.E. using fuels from alternative metropolitan municipalities strong domestic market will Mass production of the electric sources of energy even more in of Istanbul and Ankara in also be a point of attraction for edition of the Fluence, will begin the times to come. New fi elds 2010 were also within this new technology investments. in summer 2011. As is known, of employment will be opened, framework. According to We support positive steps to the Renault-Nissan Alliance whether by infrastructural the information provided by be taken by the government aims for leadership in trans- works or by contractors to toward supporting electric portation with zero emissions emerge through new investors. Aybar, in Istanbul, there are and other environmentally in practice. The Renault brand So long as topics like R&D currently charging cent- friendly technologies and is the sole pioneering company efforts, manufacturing and ers at Carrefour Erenköy, in bringing to life a system that will begin the mass produc- ancillary industry structuring, Saraçhane, and in Bostancı. in which environmentally tion of four different types of and technical ground services conscious technologies and vehicles with electric engines in are implemented with serious Istanbul Enerji A.Ş. con- automobiles that do not 2011 and 2012. Renault stands investments in a planned tinues its intense efforts to pollute the environment much by its prediction that 10 percent fashion, they will yield increase the number and can be used with a lesser tax of the motor vehicles to be pro- successful results. spread of its charging cent- burden. duced in 2020 will be electric. ers. Aybar says, “Efforts with This technological evolution, which has come over the world public institutions and the in waves, is now a reality. government shall continue in

MARCH-APRIL 2011 ISSUE 3 The Turkish Perspective 55

teries. Through such foreign consumed petroleum-based İnci Akü is working prepared by all involved parties partnerships, efforts regarding fuels would exceed 300 mil- on domestic battery with ministerial coordina- battery production can be sped lion dollars on the petroleum production, while tion, that environmentally up even more.” alone. Furthermore, the cost Tofaş and Arçelik are friendly vehicles (Euro 5, Euro Regulatory efforts and of the healthcare and clean- 6, hybrid, electric, etc.) and – Turkey’s potential in the fi eld ing that is incurred by the working to produce particularly in the light of the of electric cars are sending environmental pollution and electric engines latest global trends – R&D positive messages. Local and negative effects on human efforts toward electric vehicles foreign enterprises that have health that thirty thousand and their production, use, and been undertaken hint that vehicles burning petroleum- infrastructural works must be electric vehicles will enter our based fuels has been calculated supported by public policy… lives even earlier than they for Paris at 8,492 euros per Orhan Sabuncu states that are expected. İbrahim Aybar, vehicle. Unfortunately, the ve- Germany aims to have one CEO of Renault Mais, predicts hicles driving within our cities million electric vehicles on that 30 thousand vehicles pollute the environment much its roads by 2020, and fi ve with electric engines will be more, as most of them use million by 2030. Ireland aims sold in Turkey in the fi ve years outdated technologies. In spite ently suggest is applied for fi ve for electric vehicles to com- through 2011 and 2015, and of this, even if we use the same years.” prise 10 percent of its entire adds, “Calculations show that cost, a total cost of 560 million pool of vehicles by 2020. It if ÖTV (Special Consump- liras emerges for 30 thousand SUPPORT COMING SOON is estimated that the market tion Tax) and MTV (Motor vehicles in our own money. The Minister of Industry and share of electric vehicles alone Vehicle Tax) are not collected When we add up the exchange Commerce also points out will reach 10 percent in Eastern in this period, the tax loss will expenditures and this cost, you in the “Automotive Industry European countries by 2020. be around 340 million liras. can clearly see how much of a Strategy Document” presented According to Sabuncu, it is Yet the currency that these savings we could make with to the Economic Coordination especially important for core vehicles would use if they the tax exemption we insist- Council (EKK), which was and ancillary industry fi rms in Turkey to recognize and plan for this transformation. Sabuncu believes that the evaluation of the Automotive Sector Strategy Document at the EKK and the subsequent decision to present it to the High Planning Council is an encouraging development. ORHAN SABUNCU ALİ BİLALOĞLU ALPHAN MANAS The automotive sector in President, Uludağ Automotive CEO, Doğuş Automotive Chairman, Brightwell Holdings Turkey stands out with the Industry Exporters’ Union jobs it creates and its exports “The necessity of supporting the Turkey has missed the chance for fi gures. Undoubtedly, the Currently, the market share of use of environmentally friendly a branding process based on the vehicles running on renewable vehicles and infrastructure internal combustion engine. electric vehicles to be produced energy is very low. However, this works through public policies I believe that it can become a in the country will contribute proportion is expected to increase is also underlined in the brand in electric automobiles. positively to the sector. rapidly in the years to come. For It would be benefi cial to buy a instance, Germany has a target to ‘Automotive Industry Strategy The fact that Turkey has Document,’ which is still a work brand from abroad for this. have one million electrical vehicles To do this, the government and started to prioritize the crea- by 2020, and fi ve million by 2030. in progress. Additionally, as tion of policies to derive the it is in many other countries, TUSIAD should create a joint It is estimated that the market “Turkish-Made Automobile” we know that infrastructural most benefi t from the global share held solely by electric vehicles group. This group would works and the construction structural transformations in Eastern European countries then search for brands and of charging stations needed that have taken place in the will reach 10 percent by 2020. technologies abroad. Besides this, If we look at the matter from the by electric vehicles and the government and those among world automotive industry perspective of our country, fi rstly, it incentives to those who will the members of TUSIAD who also points to the importance is important for core and ancillary use these vehicles such as wish to be a part of this group are given to the sector. While industry fi rms to be aware of this special lanes, parking spots, to create a fund. The government Turkey’s failed revolution, the transformation and make their and cost reductions are also will provide 50 percent of the plans accordingly. However, it on the agenda in Turkey. With contribution to this fund, and “Devrim,” may remain as a is at least as important for the the completion of all of these TUSIAD members will provide disappointing recollection in government to provide R&D and infrastructural works, we the other 50 percent. In three the annals of history, the steps investment support in this area, predict that electric vehicles years, the government would sell undertake infrastructural works, it has taken in the fi eld of will spread at expected levels 20 percent of its shares to the electric vehicles shall prevent and prepare technical legislature in terms of the use of more other partners, and 30 percent of and safety standards. sustainable resources.” them to the public. such a disappointment from occurring again. 56 Opinion / John Dineen & Karim Karti

MARCH-APRIL 2011 ISSUE 3 The Turkish Perspective 57

MANAGING 80 COUNTRIES FROM

ISTANBUL GE Healthcare, which moved its regional headquarters to Istanbul, has seen the fruits of this strategic move within a relatively short time

BY MERVE KARA BY ŞEREF YILMAZ

ENERAL ELEC- its weight behind this strategic spending in Europe is rising in G TRIC (GE) Healthcare, step by appointing Karim Karti, a stable fashion each year. The headquartered in England, who had previously served as transformation in healthcare offers end-to-end products upper-level management for GE began in 2003 and will continue and solutions in the area of in other regions, the President through 2013. It can be said to health and is one of the largest and CEO of the region. Thus, be the primary dynamic behind divisions of General Electric the Turkish offi ce gained a direct this growth: since it started, with a size of 17 billion dollars. connection to GE Healthcare’s the Turkish healthcare system Three years ago, with the efforts headquarters in England, as well has been restructuring itself in of the Prime Ministry Invest- as a broader area of operations. every area, from its hospitals ment Support and Promotion Now, it seems that the com- to pharmaceutical production Agency (ISPAT), the company pany’s giant investment in the facilities. GE Healthcare CEO carried its regional headquar- health sector, one of Turkey’s John Dineen believes that ters for the Middle East, Africa, fastest-growing industries, will Turkey, which became one of the Turkey, Central Asia, and the provide it with signifi cant com- company’s most important cent- Commonwealth of Independ- petitive superiority in the long ers due to its aforementioned ent Countries to Istanbul, and term, especially as there are seri- properties and potential for has already started to reap ous opportunities appearing in improvement, will continue to the rewards of this move. The Turkey’s health sector, where the be a dynamic market in the long company has achieved swift transformation that was begun term as well. Regional President growth in the region, which has in 2003 is still ongoing. and CEO Karim Karti, for his high development potential, at Healthcare, one of the sectors part, says that their aims are to a rate of 20 to 30 percent per to receive the greatest share of strengthen GE’s commitment to year. It is intensifying its invest- Turkey’s budget together with offering world-class healthcare ments with the same speed. education, is also one of the sec- solutions and to determine new GE Healthcare recently made tors in which the most growth areas where they can make a the Middle East, Africa, Turkey, is expected. The Association of difference, stating his belief that and Russia region – which were Research-Based Pharmaceutical managing this giant organiza- managed from the Regional Companies (AIFD)’s data shows tion out of Istanbul will give him Headquarters in Turkey – that the share allotted to invest- several advantages in the coming independent. The company put ments within cumulative health period. 58 Opinion / John Dineen & Karim Karti

Three years ago, GE ‘‘It’s more than moving Healthcare announced its headquarters; running our plans to establish a regional business here is different from running it in Dubai or headquarters in Istanbul, Europe,’’says John Dineen from which it now coordi- nates eighty countries in the Middle East, Africa, Central Asia, and Russia regions. Can you explain why you chose Istanbul as a manage- ment hub for this region? JOHN DINEEN: There are several reasons for that; the fi rst one is obviously geographical. Istanbul is in the center of this vast region. Second, Turkey is a great market itself, a country that’s investing in social infrastruc- ture; healthcare is taking a signifi cant part from that. I can say that the third is talent, an extremely strong talent- base from both a technical standpoint and a cultural standpoint. Companies are working through the entire region. It’s more than moving headquarters; running our business here is different from running it in Dubai or Eu- rope. We put the team in the middle of the action. Turkey’s a very dynamic country, a very dynamic market. Hence, we keep focused on the opportu- nities emerging in this part of the world.

Istanbul is the nerve center of a very large region. What are the foremost advantages to management in Istanbul? KARIM KARTI: We have the region is the same as in role in this decision directly, refl ecting average health- huge advantages by being in China and India. Specifi cally, but as we start more manufac- care spending among the Istanbul in terms of talent however, there are many turing here and become more region, we see that it’s lower and cultural sincerity. This different countries in the localized, it’s going to be very than OECD average. Is this enabled us to build a team region, so we have to become helpful. The other thing that I a problem or an opportunity here that understands how extremely local and choose see is the government stimulus for you? to respond to different needs the right leaders. supporting the construction JD: When we look at these around the region. The of hospitals. There is a lot of fi gures, we see opportunity. fact that Turkey is oriented What kind of a role did the private investment supported The fundamental invest- towards the countries it helps Prime Ministry Investment by the government. As the ments that governments also allows us to move faster. Support and Promotion government helps with the can make in a society are in We are really growing rapidly Agency (ISPAT) play in your healthcare build-out, that education and healthcare. here, by 20 to 30 percent decision of moving your creates an opportunity for us. We expect that both public per year, and have already regional headquarters to That’s a direct benefi t, so busi- and private spending in doubled our workforce. The Istanbul? nesses have to think about it. healthcare infrastructure growth and investment in JD: ISPAT played a strong When we look at the fi gures will continue to increase.

MARCH-APRIL 2011 ISSUE 3 The Turkish Perspective 59

We expect that the building ference from other emerg- A common issue in this type of problems. We’re de- of healthcare infrastructure ing markets is the talented region is that healthcare veloping products with better here shall go on, represent- workforce of Turkey. It is a systems are undergoing a technologies and lower-cost ing a very good business developed market. Its very period of transformation. solutions. On the other hand, opportunity. talented employment base How does this affect you? we offer solutions; healthcare and sophisticated govern- A lot of countries face the IT is all about digitizing and Can you make a general ment gives a real advan- challenge of budget con- making healthcare more assessment about Istanbul’s tage to Turkey above other straints because of the fi nan- productive. We really see this three years as being the regions. cial situation. But at the same problem as an essential need headquarters? time, healthcare is a funda- for more productive health- KK: We have a business in What are the main reasons mental investment. At the care, not less healthcare. Our Ankara. After a few years behind your decision to product portfolio provides us of being headquartered grant this region autono- tools that enable us to make in Turkey, we have started mous status? healthcare systems more pro- engineering and manufac- JD: One is that we want to ductive and bring them to a turing new products here invest more, and I believe higher quality. How do we get not only for Turkey but for that direct connections will better access and more quality all regions as well. Turkey fuel the growth. The other in a world when we can’t just is the center of innovation one is speed. This is a very throw money at the problem? now, and there’s a potential fast moving market. Cus- We have to invest in the right opportunity to expand that. tomers need decisions; they technologies. Otherwise we’ll This region was created three need capabilities and better be dealing with trade-offs like years ago, and the second service; by having a team higher costs or lower stand- step that we’re taking now is on the ground with more ards of service. becoming independent. It’s responsibilities and bigger a big step, because we have leaders, I think we will re- Can you mention from your more capabilities now to spond to our customers bet- plans for this region? drive our innovation in the ter. If an organization has to JD: We want to build a more region as we work with our go to several levels in order ‘‘We have huge ad- local business and manufac- global innovation centers. to get a problem fi xed, that vantages by being in ture more products tailored JD: In the short term, like makes it a slower organiza- Istanbul in terms of to the needs of this region. We every market that we’ve tion. Creating autonomy on talent and cultural will continue to invest more gone through, there’s a very the ground makes us feel sincerity. This enabled money for the needs of this challenging situation from more like a local com- us to build a team here local market. We want to con- fi nancial standpoint. It’s not pany and faster. Speed and that understands how tinue to build our local team as bad as other parts; the customer service were the to respond to diffe- as well; we don’t like it here US market was much more greatest motivations. This rent needs around the when the team has to rely on dramatic during the down- region used to report to resources in Paris, or London, turn, for example. When you European operations, and region’’ or Chicago in order to get look at running a business European operation used to things done. We want our like this, you must look out report to me. We decided to team to be self-suffi cient in over the next 10 or 20 years. cut that line; now, European terms of the tools, the resourc- I think Turkey is going to states are separate; we made es, and the factories. We are be a dynamic market again this region to be directly in service level of the healthcare going to pour the resources in in ten years. Also from the contact with me. We elevated system, deterioration is not being a more local company. capabilities perspective, the entire region in terms of acceptable, because people We want to have the agility Turkey has a very capable its importance in order to pay a lot of attention, no mat- of a local company and we population, people have very improve the local decision- ter which part of the world want to have the technology strong educations, there’s a making capability. Rather they are in. It’s a political pri- and strength of a giant global lot of talent in the engineer- than have to work through ority. This is a very sensitive company. We already have the ing base, a lot of talent in the European organization matter, governments have a technological strengths of a the medical community and for approvals, we established challenge because they don’t 17 billion dollar company, and there will be many invest- a stronger team in its place want the level of healthcare we’re going to invest in locali- ments as well. with bigger leaders here. service to deteriorate; but zation. Just remaining global We tried to be able to move from a spending standpoint, isn’t enough today, we need Can we say that this talent faster and to be able to make they are looking for new to become more connected. base separates Turkey from the decisions in front of the ideas. When we look at our I think that’s a real challenge other emerging economies? customers to serve them portfolio, our technology is and change for my generation JD: One signifi cant dif- better. designed to help with this of leaders. 60 Content: The Three Musketeers of Fashion P60 Sold! P64 The Secret Heroes of the Grand Bazaar P66 Editor: Ceyhan Aksoy

Brands CPI, ISTANBUL FASHION WEEK, ISTANBUL SHOPPING FEST, FINE ARTS, JEWELRY DESIGNERS...

of such trends for many long The Three Musketeers of years, in recent years, Turkey has lately been moving toward setting the trends. FASHION Turkey grounded its bases of production with Collection Featured on the catwalk this time was Istanbul, with three Premiere Istanbul (CPI), different events concerning the production, design, and retail fashion and design with Is- tanbul Fashion Week (IFW), stages of ready-to-wear clothing and retail with Istanbul Shopping Fest (ISF). Now, the country’s ready-to-wear BY GAMZE GÖREN BY CEVAHİR BUĞU and textile industries appear to be analyzing tenden- ROM FIG LEAVES TO human history. The world cies gaining momentum F cashmere, fashion has bloomed into fl ower with in the global market and evolved alongside human- the hippies in the 1960s, have picked up much speed kind itself. Its greatest leap and then stood elevated in in putting their plans into forward within this long voy- the 70s on platform heels. action. age, however, fi ts into a space Racing on toward the 21st CPI, which was organized of 200 years. The pages of century at full speed, the at SantralIstanbul Febru- fashion history begin in the shoulder pads of the 80s were CPI and IFW were ary 2-4, brought the leading 1800s with Charles Frederick to return later in the form of organized for near brands and designers in Worth, who is considered the caricatures. Few escaped the dates in order to the world’s fashion sector fi rst fashion designer. After grunge explosion of the 90s creaste synergy. And it together. Organized with that, the fl apper girls of the without at least a torn pair the support of IGEDO – the 1920s greeted the bloodiest of jeans and a fl annel shirt. seems the strategy has German company that is yet most creative century in After merely being a follower worked one of the world’s largest fair

MARCH-APRIL 2011 ISSUE 3 The Turkish Perspective 61

organizers – and the Istanbul accelerate the process by Textile and Apparel Ex- which Turkish ready-to-wear porter Associations (ITKIB), DESIGNERS’ INSPIRATIONS clothing brands – which CPI’s mission is to create an • Özgür Masur, who set off to feel fashion week. Another thing that have over 200 stores abroad important bridge of fashion the time between the past and was at least as talked about as – will reach their exports and culture uniting the Mid- the future, based his newly- the brands and celebrities were target of 60 billion dollars in dle East and Europe. CPI, released collection called “Ten the designs and their unusual 2023. This year’s IFW was which reached 10 thousand Dökümü” (Skin Shedding) on the sources of inspiration. Atıl the fourth, and offered its brands and designers in fi ve season of winter Kutoğlu’s collection, which bore followers the opportunity to continents, is propelling traces of English director Alfred watch 21 shows along with 18 Turkey out of merely being Hitchcock’s fi lm “The Birds,” drew designers and 9 brands. The a producer of ready-to-wear some of the most attention. fashion week, during which clothing and toward being a the fall-winter 2011-2012 country that markets its own collections were promoted, fashions and designs. The accrued as much mention event, which had a budget of for those taking part in it as 1 million dollars, is expected for the designs. Workshops to carry the export of ready- added color to the event to-wear clothing up to 16 along with shows, while billion dollars in 2011. “Labor educators such as Jill Martin problems and price increases of the London College of in countries that are large Fashion also participated in producers of ready-to-wear the event with workshops and clothing, primarily China seminars. Martin delivered • Jale Hürdoğan, taking and Bangladesh, has directed a workshop named “Circle Nietzsche’s statement that “one orders from the EU and the Project” as a guest of the must have chaos within oneself, USA toward our country,” Istanbul Fashion Academy. to give birth to a dancing star” to says Hikmet Tanrıverdi, • Tuvana Büyükçınar calls Gamze Saraçoğlu, one of heart, took her brand – Janucha – President of the Istanbul everyone to listen to her story the designers who took part to the catwalk with her collection Ready Wear and Ap- with the collection she titled in both CPI and IFW, says, titled “Dancing Star.” parel Exporters’ Association “The Storyteller.” The infl uence “I am of the thought that (IHKIB). He adds, “Though • In addition to many foreign of 19th century Tsarist Russia Istanbul had long entered the much participation from the celebrities, Turkish television and the English monarchy on the world fashion calendar,” and Middle East was not possible actors also took part in the collection is also visible. adds, “The intense participa- this year due to problems tion that rises each year is in the region, we think that participants from the Middle Europe and the Middle East.” ISF IN NUMBERS East will show great interest CPI, IFW, and ISF will have in the time to come.” One key roles in Turkey’s play element that will increase for alternative markets, and this participation will be that they also bring the fruits of CPI has been placed on the the mutual visa agreements European Union incentives signed with 60 countries to list. Thus, the event will be at the Turkish fashion sector. considerably greater fi nancial It is no coincidence that ease. “In a few years, it will CPI and IFW are organized 29 SHOPPING CENTERS, become one of the world’s so close together this year. 6 AVENUES most important fashion The two events were planned 143 events,” says Tanrıverdi, for near dates with the BILLION DOLLARS listing the reasons for this as intention of creating synergy, WORTH OF BRANDS such: “The participation of which appears to have been European brands shall also achieved. While IFW and CPI be ensured. 50 to 60 brands were attended by 38,500 peo- from Europe shall also take ple in 2010, this fi gure was 50 part in 2011’s second CPI around 45,000 in 2011. “We THOUSAND event, which is planned to met our targets both in terms ADDITIONAL JOBS 3 take place at the end of sum- of the concept and in terms BILLION DOLLARS mer. Thus, our brands will of participants,” says Hikmet TARGETED TRADING be able to open up both to Tanrıverdi. These events will VOLUME 62 Brands /Fashion Organizations

40 DAYS AND 40 NIGHTS KANYON With events set to take place at centers all over the city, Istanbul Shopping Fest AKMERKEZ is sure to entertain shoppers both local and foreign. METROCITY

DEPOSITE CARREFOUR BAYRAMPAŞA ASTORIA

CITY’S 212

TORIUM MY MEYDAN MERTER KUYUMCUKENT KALE OUTLET

CARREFOUR HARAMİDERE FATİH HISTORIA OLIVIUM

BEYLIKDÜZÜ MIGROS GALERIA GRAND ATAKÖY PLUS BAZAAR

•ISF will begin with a • In addition to 29 shopping • There will be concerts by Fire cortege that will take place centers, the main strips of • Established in 1660, the of Anatolia in Beyoğlu, and by in Sultanahmet, Beyoğlu, Taksim, Nişantaşı, Bakırköy, Grand Bazaar is the world’s Babazula and Burhan Öcal in Nişantaşı, and Bağdat Avenue, Şişli, Fatih, and Kadıköy will oldest shopping center Nişantaşı featuring 600 musicians also be part of ISF

extremely effective in improv- ing and internationalizing CREATING A NEW HUB the event.” The three fashion organizations aim to make Istanbul a prestigious, Designer Tuvana global fashion center Büyükçınar ascribed the suc- cess that has been achieved to the size of the budget, the demand of designers and brands, sponsor support, and professional teamwork, while designer Niyazi Erdoğan, one SÜLEYMAN ORAKÇIOĞLU YILMAZ YILMAZ VOLKAN ATIK of the participant designers, Chairman of the Consulting Board of President of the United Brands CPI CEO characterizes the event as a IFW and head of Damat Tween Association and Chairman of the long play, stating that their Board of Koton Illıminating the Path The Power of Solidarity true mission as members of Center of Entertainment CPI CEO Volkan Atik states “That IFW is meeting with fashion the Fashion Designers’ As- “Besides shopping, and in addition that though Turkey exports lovers for the fourth time is very ready-to-wear clothing and sociation is “creating (their) important in terms of the event’s to wining and dining culture, we also aim to establish Istanbul apparel to over 180 countries, own school of fashion and longevity. Furthermore, it has a very 80 percent of exports are to important difference from previous as a center of entertainment. promoting it to the world.” Furthermore, when we look EU countries, and adds, “In Followed by a broad base fashion weeks; it is a project that an environment where the creates its own sources. The IFW at cities that organize similar ranging from fashion editors shopping festivals, we see that search for alternative markets project has great solidarity behind to the EU market – which has to journalists and bloggers, it, a consortium consisting of they increase their retail revenues in those periods by 200 to 300 shrunk due to various reasons IFW pleased all who attended the United Brands Association, – continues, CPI illuminates ITKIB, and the Fashion Designers’ percent. ISF is a project that has with intense foreign interest. the potential to fulfi ll expectations the path of the ready-to-wear Association, as well as the support sector.” Designer Aslı Güler, who was of many brands and designers.” in this regard.” among the fi gures participat- ILLUSTRATION BY SEDAT GİRGİN BY SEDAT ILLUSTRATION MARCH-APRIL 2011 ISSUE 3 The Turkish Perspective 63

• A vitrine design competition art. After being marked with will be organized as part of the codes and their brands, the festival. Retailers will rent and vitrines will be presented to add their designs to vitrines – the admiration of the public in showcases – that are aimed to Taksim, Nişantaşı, Eminönü, turn Istanbul into a work of Bakırköy, and Kadıköy.

CARREFOUR ÜMRANİYE MEYDAN

CARREFOUR OPTIMUM İÇERENKÖY PALLADIUM

NEO MARINE KOZZY

CARREFOUR MALTEPE NAUTILUS

PENDORA

VIAPORT

ing in the fashion week for Those who are tired of ing the tempo of fun in the These three events send the the fi rst time, indicates that watching and wish to get city. Signifi cant sales of the message, “One for all, and all intense interest by the foreign their hands on the clothes new season’s products await for one,” just as in Alexandre press has had a positive effect right away will be able to do those who will be in Istanbul Dumas’s renowned work on brand recognition, and so when Istanbul Shop- during the festival, with the “The Three Musketeers.” The thinks that the event’s youth ping Fest begins on March added privilege of being Istanbul Fashion and Fashion brings such advantages as 18. Hundreds of thousands able to shop until 2 AM and Retailing Fair that will take easily adapting to new things. of visitors from all over the experience Istanbul to the place March 3-6 at CNR- Those in the fashion scene world will attend the festival. fullest on spring nights. Expo may be the legendary explain Istanbul’s fashion In addition to opening and D’Artagnan to this trio. offensive with the mission closing events, many events Countries in dire economic of setting trends by leading are planned in various straits – most of all Greece – the season. Designer Mehtap places in Istanbul as well have shown great interest to- Elaidi also thinks that the as in shopping centers and ward IFF, which will welcome longevity of this interest stores that will remain open the chambers of industry and can be maintained through until late. The festive spirit CPI, IFW and ISF commerce of many countries. strong collections and by permeates not only shopping will have key roles It seems that all these events, exhibiting a stance that centers, but also Istanbul’s in Turkey’s play for whether with the density of refl ects “us” and belongs to important shopping thor- alternative markets their schedules or their dates, us, while Özgür Masur states oughfares such as the Abdi will make it impossible for Is- that showing that a brand İpekçi, İstiklal, and Bağdat and they also bring tanbul not to come up among has been accepted in its own avenues. Street festivities, the fruits of the mu- fashion circles in some capac- country by participating in concerts, shows, special tual visa agreements ity. Istanbul, which woke up the fashion week is an impor- games for children, parties, signed with 60 count- to fashion on February 3, tant reference for entering contents, and fashion shows ries to the Turkish continues advancing tirelessly foreign markets. shall go on for 40 days, rais- fashion sector on the global catwalk. 64 Brands /Fine Arts

According to the latest studies, the sales volume of the Turkish art market, which was 5 million dollars in 2001, increased twenty- fold by 2010 to reach 105 million dollars

fi nd the chance to express themselves, are increasing this contribution by creat- ing a distinct dynamism. The motion added to the markets by such artistic enterprises is best explained by numbers. For instance, Contemporary Istanbul, which was expected to join the ranks of such fairs as FIAC, ArtBasel, ArtCologne, and LISTE within a short time, brought 420 artists SOLD! to art fans in 2010 with 80 The compass of artistic movements now points eastward. galleries. The organization just completed its fi fth year, The Turkish arts market is becoming a focal point of interest for during which it put a total of collectors as well as world-famous auction houses 50 million liras worth of art- works on display, 83 percent BY GAMZE GÖREN of which were purchased. The artworks market index HEN OSMAN HAMDI, tuations rattled confi dence tors has also been observed prepared by Asst. Assoc. W one of the most in investment tools and the with this economic growth. Prof. Dr. Aylin Seçkin of important fi gures of the Ot- markets, and has continued “Art galleries, which are in- Istanbul Bilgi University’s toman enlightenment and to fl ourish since 2004. Ac- creasing in number each day, Department of Economics the founder of Turkey’s fi rst cording to the study called are contributing to this de- and Dr. Erdal Atukeren of academy for the fi ne arts and ‘‘Turkish Art Market’’ by the velopment by forming their ETH Zurich is one if the its fi rst archeology museum, magazines Artist Actuel and own masses,” says Baraz. important studies showing completed his work titled Artist Modern, sales volume how profi table an invest- “Kaplumbağa Terbiyecisi” of the Turkish art market A PROFITABLE INVESTMENT ment art has become. 30 (The Turtle Trainer) in 1906, which was 5 million dollars Organizations such as thousand data points based he probably did not think in 2001 increased twenty- Contemporary Istanbul and on 1,030 paintings by 30 that it would be bought for 5 fold by 2010 to reach 105 Art-Ist, where many artists artists were used to prepare million liras a century later. million dollars. Perhaps the the index, which was created Osman Hamdi’s painting, most benefi cial side effect with the same techniques which sold for a record price was the discovery of works of used to generate indexes for in 2004, is considered a art – the spoils of past wars the real estate and auto- milestone in Turkish art. – as an investment device. Globally renowned mobile markets. The index In terms of the Turkish art- Yahşi Baraz – owner of Galeri auction houses such shows that investments works market, 2004 was also Baraz, one of Turkey’s oldest as Christie’s and made in paintings between a breaking point that clearly galleries in continued exist- Sotheby’s are sen- 1989 and 2005 yielded 54.9 showed the transformation ence – says, “This liveliness ding the message that percent in profi ts per annum under way. The artworks in the artworks market is due when adjusted for infl ation. market became known as the to the upturn in the state of they intend to stay in Considering that gold and most profi table investment the Turkish economy,” and Turkey through the the US dollar yielded 47.5 tool after real estate after says a serious increase in the partnerships they have and 46.1 percent on average 2000, when economic fl uc- number of artists and collec- entered with banks over the same period, works PHOTOTOGRAPH BY AA MARCH-APRIL 2011 ISSUE 3 The Turkish Perspective 65

of art – especially paint- drawn over 250 thousand The artworks market national collectors, such as ings – appear to be more visitors with their Picasso index shows that in- The Art Newspaper, Flash profi table than traditional and Salvador Dali exhibits vestments made in pa- Art, Art Review, Frieze, and investments. alone, SSM’s latest surprise intings between 1989 ArtAsiaPacifi c. He con- is the Golden Age of the and 2005 yielded 54.9 cludes, “It is unthinkable REALIZING THE POTENTIAL Netherlands exhibit they for Turkey, which will take “All of these developments will organize toward the end percent in profi ts per its place among developed are bringing about new of the year. Ölçer states that annum when adjusted countries, to stay behind in norms. Increasing interest they have achieved what for infl ation the world arts market.” also shows that the his- was seemingly impossible World-famous auction tory and culture of these by exhibiting the works companies like Christie’s lands is being embraced,” of world-famous artists at and Sotheby’s, which says Nazan Ölçer, direc- the museum and creating postponed their decisions to tor of the Sakıp Sabancı opportunities for Turkish ing to catch up with is not open offi ces in Turkey since Museum (SSM), one of the artworks to be exhibited unaware of the arts in these the 90s for various reasons, most successful exam- abroad via the museum. The lands. Olgaç Artam, Board are also among those who ples of private museums arts market, which slowly Member of Antik A.Ş., have seen this light. ‘‘Turkey in the country. Since the crept forward with the indicates that international already had a serious poten- day of its founding, the establishment of important art dealers who missed the tial; what was missing, was museum has worked to artistic venues such as the rise of art in countries like collecting and investment in change habits through the Sadberk Hanım Museum, India and China are turning art’’ says Ahmet Güneştekin, exhibits it hosts. Ölçer, who the Istanbul Modern, their eyes to fresh stars like the artist who came third says they are focused on SantralIstanbul, the Pera Turkey. Artam says that they in the ranking of total sales surprise from the fi rst stage Museum, and the Elgiz and have conveyed the names in 2010, and adds; ‘‘Now I to the very last, mentions Arter Museums of Contem- of Turkish art and artists to believe that the inevitability that their joint work with porary Art, is now sprinting the global arts market once and the importance of this Sabancı University has also to catch up with the pace content promoting their phenomenon is beginning contributed greatly to the of the rest of the world. Of auctions appeared in pub- to be understood’’. museum’s success. Having course, the world it is try- lications followed by inter- An untitled work by Fahrelnissa Zeid became the fi rst Turkish work of art to command a price in the TURKEY’S RECORD PAINTING PRICES millions outside of Turkey when it was sold for more Alberto Pasini “Harem Bahçesi” than 1.5 million liras at a (Harem in the Garden) 2010 auction of Turkish 2,800,000 TL (2007) Antik A.Ş. arts held by Sotheby’s. In 2009, Burhan Doğançay’s “Yarık” (Rift) was sold for 290 thousand dollars at an auction directed by William Lawrie at Christie’s Dubai. These globally renowned auction houses are also sending the message that they intend to stay in Tur- key through the partner- ships they have entered with Ahmet Güneştekin Arayış (The Search) banks. Banks are offering 185,000 TL new opportunities – in- (2010)Beyaz A.Ş. cluding various sponsor- ships, art consultations, and painting credit lasting up Osman Hamdi Bey “Kaplumbağa Terbiyecisi” to forty-eight months – to (The Turtle Trainer) art lovers thanks to these 5,560,000 TL (2004) Antik A.Ş. agreements, with Akbank and Yapı Kredi teaming up Burhan Doğançay “Mavi Senfoni” (Blue Symphony) with Sotheby’s and Christie’s 2.770,000 TL (2009) Antik A.Ş. respectively. 66 Brands /Jewelry Designers

There is always a Donec consectetur customer segment varius nisi eget aliquet. interested in Vivamus fermentum custom designs. auctor imperdiet. They prefer Phasellus gravida. handcrafted produccts

is everything to me,” says focus on promotional activi- Bıçakçı. Because his son took ties in the upcoming term. THE SECRET HEROES OF THE over production in recent Preparing a collection and years, he mostly concentrates opening an exhibition are GRAND BAZAAR on design. “One must know also in the works. The items No matter what anyone says, the Grand every step of production make extensive use of plati- Bazaar is still the center of jewelry. Its for design,” says the experi- num and gold, while precious enced master. He works with stones such as diamonds, crowded, chaotic streets conceal highly many luxury brands. Master emeralds, and rubies are also gifted designers... Matiyos, who works with indispensable. Some designs international certifi cates, use thousands of diamonds now wants to sell his crea- and take two or three months BY AYŞEGÜL SAKARYA tions under his own brand. to make. Thus, design and His aim is to enter foreign workmanship is what makes HOUGH IT’S ONLY mid- who was a dental technician markets. Thus, he plans to jewelry valuable, not gold T February, the weather – entered the profession at and gems. “We design unique is so nice and sunny that it the age of twenty-fi ve, partly products that will pass on could just as well be spring. out of interest and partly out from grandmother to grand- Cağaloğlu is perfectly still, of necessity. Getting through child,” says Matiyos Bıçakçı, as if it is preparing for the thirty years was not easy, of Training starts at a and adds, “We are at a point bustling crowd that will course. He patiently perse- very young age and where technology cannot soon besiege the entire area. vered in the face of diffi culty, encompasses a pro- beat us. These are products Matiyos Bıçakçı greets us in just as he does when incorpo- that cannot be made without his offi ce in an old build- rating thousands of tiny gems cess that stretches from mastery.” ing. It seems unlikely that in a piece of jewelry... Design apprenticeship to mas- Master Matiyos is not jewelry, symbolizing power becomes a passion upon tery. Thus, handcrafted the only example; there and splendor, is designed in entering this magical world. goods always mainta- are many other design- such a modest place by such “I suffered many diffi culties. in their value and stay ers hidden in the streets a modest person. Bıçakçı – Because of this, my work in fashion of Cağaloğlu and the PHOTOTOGRAPH BY AHMET BİLAL ARSLAN MARCH - APRIL 2011 ISSUE 3 The Turkish Perspective 67

550-year-old Grand Bazaar. this business is to love your technologies that have been “We design unique Şefi k Çulçi creates custom- job. When I can’t work, I developed now, produc- products that will pass designed jewelry and repairs even see it in my dreams.” tion can be accomplished on from grandmother antiques in his tiny shop Çirkinoğlu is bound to his with computers and various to grandchild,” says in the Grand Bazaar for profession by great passion, technological devices. This Matiyos Bıçakçı customers from all around and cannot help but criticize is how many brands are the world. Like many of the changes in recent years: able to reach large masses his colleagues, he came to “Everything is fabricated with thousands of kinds of the Bazaar as a child. After now; the value of the artist products. However, there is training alongside his mas- is unrecognized.” always a segment inter- ter for many years, in 1990, To a certain extent, ested in custom designs. he opened his own shop. Çirkinoğlu is right; the They prefer handcrafted Today, Çulçi’s little shop human passion for jewelry designs requiring meticu- is visited by fi gures from is as old as the history of lous labor – jewelry is, after various segments of society humankind itself. While all, a diffi cult craft… As the – from bureaucrats to artists production used to be primary materials are so – seeking to repair family entirely manual, with the valuable, it is unforgiving heirlooms or for a custom of mistakes. Training starts Matiyos design for themselves. Bıçakçı at a very young age and He works motifs from encompasses a process that many civilizations, from the stretches from apprentice- Urartu to the Ottomans, ship to mastery. Thus, into his designs. “I reinter- handcrafted goods always pret motifs from antiquity,” maintain their value and says Çulçi. The recent popu- stay in fashion. So, when larity of historical televi- you are in the Grand Bazaar, sion series has positively which conceals those who affected Çulçi’s business too. are special like itself in its “Roman motifs will also be historic streets, be prepared very popular in the upcom- to encounter surprises. ing period,” he says. Çulçi uses many other materials Şefi k Çulçi besides gold and silver in his designs. In addition, he is one of the few that repair antiques. Antiques come from countries such as Ger- many, France, and Spain. “In jewelry, we call doing something without knowing anything and messing it up the old-fashioned way,” says Çulçi, and adds, “I learned to repair antiques in this way, through my own efforts.” There are nearly two Forty-two-year -old thousand diamonds in this Diran Çirkinoğlu also bracelet, which is one of Bıçakçı’s custom items works in the profession. His job is placing precious and semi-precious stones in their settings. “He can even set a diamond in steel,” say his friends, describing Çirkinoğlu. For 31 years, he has worked with millim- eter-scale diamonds with great patience. When con- fronted by puzzled glances, his response is, “The key to Diran Çirkinoğlu PHOTOTOGRAPH BY ŞEREF YILMAZŞEREF PHOTOTOGRAPH BY 68 The Turkish Perspective

Agenda FAIRS, EXHIBITIONS, SUMMITS, MEETINGS IN THE NEXT TWO MONTHS

WORLD LEADERS WILL MEET IN ISTANBUL FROM NOW ON he Leaders of Change Summit is planned for the summit which will be held at T taking place in Istanbul in 2011, at a Istanbul Congress Center. time when Turkey is taking steps towards During these sessions, the latest becoming one of the key decision making developments in international social and centers in the world. economic policies, the backgrounds of the Leaders who guide change from various transformations and the change processes HEADLINES FROM THE SUMMIT countries and arenas will meet in Istanbul on that participants were involved will be • Turkey’s New Role and Its Regional Eff ects March 14 and 15, 2011. discussed. Politics of problematic regions of • Leadership in The Modern Age-Why It Has to Be The summit, jointly organized by Istanbul the world will be opened up for discussion International? University and the Turkish Future Researches by panelists from differing points of view. All • The Future of the Global Economy Foundation (TUGAV), will host respected subjects and views discussed at this summit • Is Peace Possible in The Middle East? statesmen, opinion leaders, bureaucrats will help current decision makers in shaping • A New Finance Center-Istanbul and the business elite as well as renowned short and long term future targets. • A New Perspective on Development academics from reputable universities. • Diff erent Beliefs, Common Values The summit aims to create an annual • Thinking Green, Economy Strategy for 21st Century platform where future politics and power • Global Changes and New Balances balances will be discussed and examined • Historical Changes in The Middle East-Whats’s from a global point of view with the Next? participation of world leaders. • Regional Security-Global Energy Ten sessions, four business councils, and • Future of Mankind parallel sessions with different participants • Media That Changes The World including Kofi Annan, Ahmet Davutoğlu, • Paths to Confl ict Resolution-Cultural Stephen Kinzer and business leaders, are Communication

MARCH-APRIL 2011 ISSUE 3 The Turkish Perspective 69

MARCH 2-5 Among the organizers of APRIL 6-10 • Electric Motors & Frequency EUROASIA RAIL the exhibition are Window MODEKO Inverters, Motor Drives Ankara -Anfa Altınpark Exhibition Manufacturers Quality Union International İzmir Exhibition Center • Gears, Mechanical Drive Center Association (PUKAB) and The most comprehensive Systems The EurasiaRail Rolling Stock, Plastic Profi le Manufacturers furniture and decoration • Cables & Equipment for Infrastructure and Logistics Quality Union Association fair of Turkey, MODEKO Electric Power Transmission Exhibition will bring into a (PUKAD), providing their Furniture, Decoration, Home sharp relief about the latest products and demonstrate and Office Equipments technologies and improvements the latest achievements in the Exhibition is opening for the APRIL 27- MAY 1 in the market. The production of windows 22nd time. TURKEYBUILD INTERNATIONAL International Trade Exhibition Modeko assists you to meet Istanbul -TUYAP for Eurasia rail rolling stock, thousands of visitors from all YAP Exhibitiion and Congress Center infrastructure and rolling which over Turkey and the world The International Turkeybuild is a top notch event to be held during fi ve days. MODEKO, Istanbul 2010 is a major in the industry related to the which is being held between gathering platform for the transport technology 6-10 April 2011 is at the most distinguished companies Culturepark Fairground in of Turkish and international İzmir construction industry. This MARCH 3-5 year, participants will have the Istanbul Fashion Fair opportunity to demonstrate Istanbul -CNR EXPO APRIL 7-10 innovations that would pave The International Istanbul PETROLEUM the way to the industry at a Fashion Fair holds distinct Istanbul -TUYAP Exhibitiion and larger scale and quench the importance as a platform that Congress Center thirst for new ideas spotlights Turkey’s performance International Trade Fair for on a global scale. This is a truly Petroleum Upstream and international trade fair with MARCH 17-20 Downstream Equipment, exhibitors and buyers coming ISTANBUL JEWELLERY SHOW Technology and Services is from all around the world Istanbul -CNR EXPO the international exhibition Istanbul Jewellery Show (IJS) of technologies and the is an outstanding international equipment for extraction and MARCH 10-12 trade event serving to the oil refi ning FCMG 2011 fast growing domestic Istanbul -FM Yeşilköy and international markets The principal objective of surrounding Turkey. IJS has APRIL 13-17 the FMCG fair is to play proven to be one of the most TESKON SODEX an important intermediary professional and dynamic Izmir- Tepekule Congress and Exhibition role between the buyers of gatherings of world jewelry Center chain stores, supermarkets, businesses The fi rst congress of the wholesalers, retail sales points, sanitary industry, “TESKON,” local and international retail has been organized by Izmir chain stores, regional/national MARCH 30- APRIL 3 Branch of the Chamber of distributors and manufacturers MIDDLE EAST MANUFACTURING Mechanical Engineers on with established brands or MACHINES AND ANCILLARY behalf of the chamber that has APRIL 28- MAY 1 products yet to become a brand INDUSTRIES FAIR united their powers under one ART BOSPHORUS in the Food & Drink, Cleansers Diyarbakır- TUYAP name. The aim of the congress Istanbul-Fulya Fuar ve Kongre & Hygiene, Packaging and The Middle East is to present the scientifi c and Merkezi’ Services, Cosmetics & Beauty, Manufacturing Machines technological progress both in Art Bosphorus 2011 is a and Houseware & Kitchenware and Ancillary Industries Fair theory and application gathering that aims to spread sectors will feature wood machines art to the masses, bringing and equipments, metal together Turkish and global processing, welding, hand APRIL 17-20 artists with followers in MARCH 13-17 tools, hydraulic-pneumatic ELECTROTECH Istanbul, one of the most ISTANBUL WINDOW systems plastic,packaging, Istanbul-CNR EXPO beautiful cities in the world. TUYAP Exhibition and Congress Center machines and equipment, The Energy, Electric and Istanbul has a very prestigious 11th Istanbul International food processing machines, Electronic Technologies Fair place in the world of arts and Exhibition of windows, electric -electronic automation, includes: culture, so it shall undoubtedly glass technology, industrial loading, discharging, handling • Transformers, Batteries, and draw attention from visitors all equipment and accessories logistic hardware job security Uninterruptible Power Supplies around the world 70

Figures MERGER AND ACQUISITIONS IN 2010; THE SURVEY OF EXPORTERS’ TENDENCY

M&A ACTIVITY IN 2010 HAS SOARED TO REACH THE HIGHEST NUMBER OF DEALS EVER The volume of Mergers and Acquisitions has reached 29 billion dollars via 203 deals in 2010. This represents a fi vefold growth in deal value over the previous year and the highest deal value since 2005

YEAR 2007 2008 2009 2010 DEAL NUMBER* 160 169 102 203 DEAL VOLUME* US$19.3 billion US$16.2 billion US$5.8 billion US$29 billion PRIVATIZATIONS / SHARE IN TOTAL US$2.3 billion / 12% US$5.2 billion / 32% US$1.8 billion / 32% US$14.6 billion / 50% FOREIGN INVESTORS* 70% of deal value 85% of deal value 38% of deal value 36% of deal value FINANCIAL INVESTORS* 13% of deal value 30% of deal value 12% of deal value 3% of deal value AVERAGE DEAL SIZE c. US$120 million c. US$100 million c. US$55 million c. US$140 million*** LARGEST DEAL VALUE / SHARE IN US$606 mn TOTAL US$2.7 bn (Oyak Bank) / 14% US$3.1 bn (Migros Türk) / 19% (Sugar Factories)** / 10% US$5.8 bn (Garanti Bank) / 20%

(*) Including estimates for deals with undisclosed values and adjusted for canceled transactions. (**) The legal process regarding the sugar factories is on-going. No adjustments have been made. Data: Deloitte (***) Excluding privatizations and the Garanti Bank deal, the average deal size of the remainder was US$50 million.

FOREIGN INVESTORS’ INCREASING INTEREST ENERGY COMES FIRST While foreign investors’ interest towards Turkey has gradually increased over Energy is also expected to be the the past decade, Turkish investors have truly warmed up to M&A as well most dynamic industry in terms of M&A in 2011

TURKISH INVESTORS PORTUGAL 130 3 ENERGY AUSTRIA 27.6% FOREIGN 4 INVESTORS SERVICES 73 NETHERLANDS 5 11.6% DEAL UK2 REAL ESTATE NUMBER 6 11.3% FRANCE OTHER 6 BANKING 31 % GERMANY 11.0 6 INSURANCE 1 USA 10.6% TURKISH 12 INVESTORS HEALTH 16,072 % AUSTRIA 9.6 1,440 RETAIL FOREIGN INVESTORS 8.0% 9,375 CZECH REPUBLIC DEAL VALUE 406 MANUFACTURING NETHERLANDS (US$ MILLION, 314 5.0% DISCLOSED) JAPAN FOOD & DRINKS SPAIN 5,838 286 4.3% USA 243 OTHERS GERMANY 1.0% 676

1. Does not include one joint investment by a U.S. and a Turkish company. 2. Does not include one joint investment by a British and a Qatari company. Data: Ernst & Young

MARCH-APRIL 2011 ISSUE 3 The Turkish Perspective 71

EXPORTERS ARE HOPEFUL FOR 2011 The Turkish Exporters’ Assembly investigated exporters’ expectations for 2011 in a study among the top 1000 exporting companies. Sharing their goals and plans for the year in various fi elds from production to exports, the companies refl ect the positive state of the markets

More than 56 percent of exporters say their production and exports increased in 2010. Having shrugged off the last eff ects However, 20 percent have seen an increase in their general profi t levels of the global crisis, companies had intensifi ed their employment eff orts General First 500 Second 500 Other in 2010. Though they do not prefer the same intensity of employment in 2011, Production 56.2% 62.5% 64.0% 48.1% the study shows that personnel intake Exports 56.9% 64.4% 64.3% 48.1% will continue Capacity utilization rate 50.1% 59.6% 56.6% 41.0% Stock situation 28.8% 33.8% 27.2% 26.8% Input costs 74.6% 68.4% 77.9% 76.2% 14.2% Unit export price 40.0% 39.7% 44.3% 37.8% Imported input usage rate 21.7% 18.4% 25.7% 21.3% 30.6% Raw material unit import price 57.5% 55.1% 63.2% 55.6% General profi t level 17.5% 22.6% 19.3% 13.3% Exports profi t level 16.3% 19.9% 19.3% 12.4% 30.9% BASE 527 146 140 241 WHITE COLLAR EMPLOYMENT BLUE COLLAR EMPLOYMENT The Middle East, which has been going through some tumult as of late, R&D PERSONNEL maintains its priority among Turkey’s target markets 9.50% 9.30% 36.8% Plan to exploit investment incentives TURKISH for 2011 32.60% SECTOR ECONOMY 34.00% 57.90% 56.70%

WILL IMPROVE % WILL NOT CHANGE 76.1 Currently use credit WILL WORSEN

18.20% 19.90% 30.40% 34.00% EUROPEAN WORLD ECONOMY ECONOMY 7.62% The infl ation forecast for the end of 2011 is 7.62%; expected growth is 8.60% 47.80% 49.70%

Data: TIM Survey of Exporters’ Tendency 72 Figures

COUNTRIES TO BE ENTERED FOR THE FIRST TIME IN Q1 2011 FRANCE The events that have lately been % 8.2 occurring in the Middle East are not CANADA wearing down Turkish exporters. 4.9 % UK In spite of political shake-ups, the 4.2 % ITALY Middle East continues to be a favored region among exporters USA 5.1 % 5.1 % SPAIN 6.1 % ALGERIA MOROCCO 4.4 % 4.7 %

BRAZIL 6.6 % UKRAINE 6.8 % RUSSIA 16.7 %

GERMANY 9.1 %

IRAQ 13.5 % CHINA JAPAN IRAN 8.9 % SYRIA 7.6 % 12.5 % 10.8 % SAUDI ARABIA % INDIA EGYPT 7.8 LIBYA % 5.3 % 5.1 % 8.9 UAE 4.6 %

SOUTH AFRICA 4.6 %

Data:Turkish Exporters Assembly

MARCH-APRIL 2011 ISSUE 3