YOUR COMPLIMENTARY COPY EXCLUSIVE INTERVIEW Finance Minister Mehmet Şimşek tells The Turkish Perspective about how Turkey has prepared for 2012

MARCH–APRIL 2012 ISSUE 9 ECONOMY BUSINESS FOREIGN TRADE ANALYSIS

BRIEFING The Weapon of Design and R&D Eyes on Reciprocity in Real Estate BRANDS A Global Brand in Porcelain Designs That Pause Time SPECIAL REPORT Robert Fisk on “The Role of Turkey in The Middle East” A CHANGE OF LAW AND MENTALITY The new Turkish Commercial Code that will be come into effect in July is changing not only the rules, but also the way of business in Turkey TURKISH EXPORTERS ASSEMBLY IS WORKING TO REACH TURKEY’S 2023 EXPORT TARGET OF 500 BILLION DOLLARS The Turkish Perspective 1 Contents

05 | A Meeting of the Record Setters in Growth 06 | Increased Competitiveness through Clustering 07| Giants of Turkish Cinema Enjoy Virtual Flight 08 | Imports Map for a Solution to Trade Imbalance 09 | Attracting Capital Investment 10 | A New Partnership with Korea 11 | Goldman Sachs Revises Its Forecast for Turkey 35 30 COVER A Change Not Only of Law, But of Mentality Too As the date it will come into effect and initiate a deep-rooted change in Turkish business approaches, debates on the new Turkish Commercial Code are increasing. Investors and businesspeople both local and foreign are waiting for July for a 00 brand-new way of doing business that is shaped by the touch of the new TCC 12 PANORAMA 14 BRIEFING 400 years of Dutch – Turkish 14 | the crossroadS of the natural stone industry, pos- Diplomatic relations relıgıons sessing a significant portion of the 2012 promises to be a peak year Turkey draws tourists not just world’s reserves and a high-quality in Dutch-Turkish relations, with its range of climates suited manufacturing base laying a solid foundation for to various types of recreation, but even deeper cooperation and 24 | Eyes on Reciprocity also with the religious treasures it friendship in the future in Real Estate 14 houses The change in real estate law is 17 | What Draws International expected to increase the input of Funds to Hospitals? foreign capital even more Turkey exhibited great 26 | Renewable Opportunities performance in drawing hospital Renewable energy sources care investments in 2011 (RES) are attracting the interest 19 | The Weapon of Design and of Turkish and international R&D in the Battle of Competition companies alike The Turkish furniture industry 28 | Playing for Leadership is preparing to leave Germany with a Sportsmanlike Vision behind in quality, Italy in Turkish Airlines is Turkey’s face design, and China in price as it abroad, representing the country collects the three great powers of with the amazingly successful competition in its hands sponsorship agreements it has 22 | Marble Country been signing in sports 26 Turkey is playing for leadership in 2 Content

38 exclusive interview “the economy ıs safe, sound and 38 suffıcıent” Milton Friedman would probably MANAGEMENT be proud. Finance Minister Publisher on Behalf of Turkish Export- Mehmet ŞimşekΩone of the ers Assembly/ President of The Turkish most active ministers in the Exporters Assembly MEHMET BÜYÜKEKŞİ cabinetΩbelieves sincerely in the power of the market and the Manager In Charge Mustafa Mente importance of foreign capital PUBLICATION BOARD M. İlker aycı, BÜLENT AYMEN, 44 opinion İBRAHİM BURKAY, MUSTAFA ÇIKRIKÇIOĞLU PhD, ALİ NEDİM GÜRELİ, AHMET KELEŞ, “History Goes Forever” TEMEL KOTİL PhD, ŞAHİN OKTAY, Robert Fisk has witnessed nearly TAHSİN ÖZTİRYAKİ all aspects of life in the Middle PUBLICATION MANAGEMENT East. “History goes forever,” says the President illustrious journalist, in summation 44 Serkan Ünal of his statement on the unique GROUP Coordinator nature of the events occurring in Mehmet Mücahİd Demİr the region today and his view that Finance Coordinator Selİm Kara one shouldn’t expect results from Edıtorıal them in the short term Editor In Chief Serdar Turan 48INDEPTH EditorS Ceyhan Aksoy, Aynur Şenol altun, 48 | The Element of innovation merve kara, Can gursu, in Growth 58 derya engİn kutlu The air of spring prevailing in ENGLISH Editor the economy of Turkey for quite 58 BRANDS ALTAN ORHON some time has facilitated the 58 | a global Brand in 64 | The World’s Kitchens Design birth and growth of many new Porcelain Are Made in Turkey Group Design Director business ideas that will be key in Porcelain, once an imported good, The number of companies active in N. EMRAH YÖRÜK sustainable growth is now becoming an industry in the industrial kitchen furnishings Design Director ÖZKAN ORAL which Turkey is known as a brand industry in Turkey is increasing day 54 | Time for Turkey to Shine DEPUTY Design Director Big-budget research funds are still 61 | JEWELS ILLUMINATING LUXURY by day. Launched in the ‘80s, the AHMET ÇELİK industry now rides a massive wave responsible for a great number As the definition of luxury Photo Editor of growth ŞEREF YILMAZ of discoveries, but small, well- changes, Bee Goddess’s jewelry constructed, agile research groups aims to reflect the concept of Contributors 66 | The Turkish Delicacy That doĞacan sİlİvrİ, emel iŞitan are today significant producers “enlightened luxury,” meaning Captivates the World of them as well. Turkey, with the the shift from status symbols to PRıntıng Layers and layers of thin dough smart steps taken by the public and symbols of the soul BİLNET MATBAACILIK BİLTUR Basım Yayın VE HİZMET A.Ş. combine with vibrantly colored Dudullu Organİze Sanayİ Bölgesİ 1. Cadde No: 16, private sectors, is rising confidently Esenkent – Ümranİye 34476 - İstanbul Tel: (0216) 444 44 33 • www.bilnet.net.tr in the rankings of R&D studies 62 | Designs That Pause Time ingredients and set out from Upon introducing her new ready- Turkey on a tour of the planet to-wear clothing collection in upcoming days, Dilek Hanif aims 68 AGENDA to develop a more active presence contact meetıngs, faırs, AND summıts ın [email protected] abroad the next two months www.infomagyayincilik.com Neither text nor photographs from this publication may be reproduced either in full 70 FIGURES or summary without acknowledging the source and without prior permission from the a look at employment and publisher. 48 exports

MARCH-APRIL 2012 ISSUE 9 The Turkish Perspective 03 Editorial Mehmet BüyükekŞi President (TIM)

As Turkey Continues to Grow, Exporters Pass New Milestones without Cutting Pace With the success and dynamism it has attained, Turkey continues to draw interest in the world today, just as it did yesterday

e have left behind yet an- As the Turkish Exporters Assembly, W other year that was intense and we organized many trade delega- very full for us. At a time when global tions and business forums this month trade, manufacturing, and investment in order to increase our global trade took major wounds, Turkey rose to and contribute to welfare by way of the position of one of the world’s most commerce. We hosted Chinese Vice attention-getting countries with the President Xi Jinping—who came to growth rates and foreign trade figures Turkey as the invitee of our President, it achieved. As the world’s economies Mr. Abdullah Gül—and the business face the danger of recession, Turkey delegation with him at the Turkey-Chi- continues to serve as an example to the na Economic and Trade Cooperation whole world with its growth figures. Forum we held. Seeing that the economic indicators we The world’s countries are slowly over- targeted for 2011 were attained contin- coming the convalescence period of the ues to inject us with hope and motiva- crisis. Positive news has started to come tion for 2012. from Greece—euro zone finance minis- Covering more than 1,000 compa- ters agreed to measures that will reduce nies, the Exporter Tendency Survey Greece’s debt to 120.5% of its GDP by conducted by the Turkish Exporters 2012, too. Turkey’s exporters continue 2020. We saw here the best example of Assembly bore results showing that production, investment, and export how mutual empathy can solve prob- exporters continue to maintain posi- uninterrupted and without cutting lems. Assessing the risks in the global tive expectations for the coming term. pace. markets, we might not be expecting a According to the Q4 2011 results of With the 135-billion-dollar export and year as bright as 2011, but with the posi- our survey, our exporters envision 375-billion-dollar foreign trade figures tive news coming from world economies 7.8% growth for 2012. In 2011, our we attained in 2011, Turkey proved once we do believe that 2012 will be positive exporters had predicted 8.6% growth. again that it is one of its region’s most and are seeing the signs of this. Growth figures are so far expected to important centers of trade. The Turkish As it did in 2011, we believe that Tur- come in at 8.3%, showing how well our exporter aimed to strengthen its manu- key’s star will continue to shine through exporters read our country’s growth. facturing infrastructure, increase high- 2012 too. Turkey is coming closer to its In an environment in which Turkey’s tech production, and be more active in ideals with each passing day. It looks Medium-Term Program predicts 4% new markets, and as a result of this it toward a bright future with hope, and and the IMF 2% growth, our exporters’ succeeded in taking Turkish products all with the success and dynamism it has positive expectations show that Turkey over the world via high-level proactive attained, it continues to draw interest in will continue to grow at a high speed in marketing strategies. the world today, just as it did yesterday. C M Y CM MY CY CMY K 5 Contents: Increased Competitiveness through Clustering P6 Reduced Salt Spurs Olive Exports P6 Giants of Turkish Cinema Enjoy Virtual Flight P7 A Global Ski Center in Kayseri P7 Imports Map for a Solution to Trade Imbalance P8 More ConfidentP8 Attracting Capital Investment P9 Exporters Hold High Hopes for Growth in 2012 P9 A New Partnership with Korea P10 Goldman Sachs Revises Its Forecast for Turkey P11 Editor: Ceyhan Aksoy

First EXPORTS, MEETINGS, PARTNERSHIPS, TOURISM...

China and Turkey agreed to improve cooperation in energy and mining and A Meeting of the cultural dialogue RecorD Setters in Growth China, the 2011’s record setter in growth and Turkey, which ranked second, came together to conceive a collaborative fusion of the joint strengths of their powerful economies

he Turkey- attended by Chinese businesspeople the ad- Xi Jinping expressed the strengthening of T China Eco- Vice President Xi vantages of investing in a desire for increased cultural dialogues. nomic and Trade Jinping, Turk- Turkey with emphasis economic and trade re- Ali Babacan also Cooperation Forum ish Deputy Prime on the nation’s booming lations between Turkey spoke at the event, held in Istanbul by Minister Ali Babacan, economy, dynamic pop- and China. Xi offered emphasizing that they the Turkish Exporters Economy Minister ulation of 74 million, four proposals to ac- value cultural as well as Assembly (TIM) aims Zafer Çağlayan, and innovation-friendly complish this, namely political and diplomatic to improve economic, numerous delegations, investing environment, the strengthening of relations between the cultural, and interso- businesspeople, and incentive opportunities political trust between two countries and not- cietal friendship and members of the press. and low tax rates, and China and Turkey, ing that this year is the cooperation between TIM President large domestic market. increased cooperation year of China in Turkey the two countries. Mehmet Büyükekşi “As European countries in energy and mining, and 2013 will be the The meeting took spoke at the forum entered a recession the implementation of year of Turkey in China. place February 22 at hosted by the organi- with the crisis, Turkey measures by the state The forum ended with the Hilton Conven- zation he represents, continued to grow,” he and related authori- the signing of mutual tion Center and was explaining to Chinese continued. ties to ease trade, and agreements. PHOTOGRAPH BY AA 6 First

clusterıng olıve and olıve oıl Increased Competitiveness Reduced Salt Spurs through Clustering Olive Exports The Aegean Exporters’ Associations’ clustering project Turkey started to export olive to the was one of the four projects to receive the support of the mainlands of olives European Commission urkey exported and a challenger for the T 126.8 million dol- rank of first—noted lars’ worth of olives for that they were able to table consumption in increase the number the 2010–2011 season. of countries to which Black olive exports they export from 18 to accounted for 102.31 36 over the past two million of this, with years after reducing the remaining 24.49 the amount of salt in million being that of olives to 2.5%, adding green olives. Germany that they even export was the top importer of olives to Greece—“olive Turkey’s olives, receiv- country” itself. ing 28% of Turkey’s ta- ble olive exports to total 28.99 million dollars’ wroth of black and 6.05 million dollars’ worth of elected as one of the four projects to re- “We need not green olives. Romania, S ceive support from the European Commission to walk, but to a traditional export within the scope of its Competitiveness and Innova- leap. We need market for Turkey’s tion Framework Programme, the Aegean Exporters’ table olives, imported Associations’ (EİB) “Cluster Management Model companies that 19.3 million dollars’ and Cluster Manager Educational Program” was communicate with worth of black and 1.23 each other and 28% realized in the EİB. The two-year-long project has a million dollars’ worth of GERMANY’S SHARE IN budget of 385,000 euros. The “Cluster Comparison have developed green olives. Turkey’s olive exports Tool” prepared by the European Commission will be a culture of Turkey exported transferred to Turkey and domestic clustering efforts working jointly,” black olives to 77 will be compared to examples from Poland and says Mehmet countries and green Iceland. Thanks to the project, Aegean exporters will Büyükekşi olives to 69 countries 126.8 gain increased competitive ability by benefiting from last season. Hidamet million dollars similar experiences from around the world. Asa, Chairman of TURKEY’S OLIVE EXPORTS Mehmet Büyükekşi spoke at the project’s promo- Marmarabirlik—the tion meeting, saying, “We need not to walk, but to world’s second top leap. We need companies that communicate with producer of table olives each other and have developed a culture of working jointly.” He mentioned the successes of countries that practice this model, including China, India, Italy, and the US, and stated that Turkey, too, could develop a unique model of its own. “There are successful examples in clustering of automotive in Bursa, carpets in Gaziantep, and shoes in Konya. There are clustering efforts in some industries in İzmir as well. Our purpose here is for clustering to spread throughout Turkey by means of several projects and be implemented. With projects in this direction, achieving the 500 billion dollar exports target for 2023 will become easier,” said Büyükekşi. PHOTOGRAPH BY AA MARCH-APRIL 2012 ISSUE 9 The Turkish Perspective 7

avıatıon avıatıon avıatıon QUALITY Giants of Turkish CONFIRMED

Cinema Enjoy Virtual Providing service for more than 40 years Flight as part of Turkish Yeşilcam stars tasted the excitement of virtual flight Technic Inc., the thanks to Turkish Airlines Calibration Labora- turkısh tory recently had its aırlınes quality accredited by the Turkish Board EXPANDs TO of Accreditation NEW (TÜRKAK). Cali- brations, which are DESTINATIONS important for test- ing and measuring With flights to 189 instruments to make destinations around accurate and reliable the world, Turkish measurements, are Airlines is now adding considered a basic pri- Mogadishu as its 190th ority of flight safety. route. The Mogadishu flights, via Khartoum TOURISM in Sudan, launch on March 6. Another new route to be added to A GLOBAL SKI the airline’s network is Novosibirsk in Siberia, CENTER IN Russia’s third largest eteran stars of Yeşilcam— simulators at the Turkish Airlines KAYSERİ city. The flights, which V the Hollywood of Turkey— Flight Academy. Kadir İnanır ex- will begin on March 14, recently tasted the excitement of pressed great pleasure at being able The Municipality of are currently slated to virtual flight thanks to Turkish Air- to sit in the captain’s seat. Türkan Kayseri has embarked run three times a week. lines. Türkan Şoray, Cüneyt Arkın, Şoray said she felt safe despite a fear on an ambitious proj- Hülya Koçyiğit, Kadir İnanır, Ediz of flying and stated that she always ect to make Turkey’s Hun, İzzet Günay, Zeki Alasya, uses Turkish Airlines on flights Mount Erciyes the avıatıon Tamer Yiğit, and Çolpan İlhan took abroad. Zeki Alasya showered world’s second-ranking part in the event in the company praise on the airline, saying, “Have winter tourism spot of Hamdi Topçu, chairman of the no fear about service or safety.” after the European FLYING TO airline’s board of directors and exec- Following the virtual flight, Hamdi Alps. NEW YORK IS utive board. The actors experienced Topçu presented the actors with With a 280-mil- a virtual flight to Los Angeles using certificates in memory of the day. lion-euro investment, EASIER THAN the “Kayseri Tourism EVER Master Plan” aims to draw tourists for a full Turkish Airlines is FAST RUNNERS IN EXPORTS 12 months of the year. increasing its flights to Jewelry, tobacco, and carpets were the industries to increase their exports The income will go New York on the 2012 the most in January 2012 toward the construc- summer timetable. The tion of ski lifts, snow flights, direct to New machines, ski slopes, York from Istanbul, will and hotels. run thrice daily May Kayseri has so far 28 through September spent 100 million 16, making travel to the 223 33 32 dollars on the project. Big Apple even more Preliminary infrastruc- Jewelry TOBACCO Carpets convenient for Turkish ture is expected to be Airlines passengers. completed by 2014. 8 First

ECONOMY INCREASED CONFIDENCE The consumer confidence index rose from 92 points in December 2011 to 92.2 in January

The consumer confidence index, which is calculated based on survey results, can have values ranging from zero to 200. Values greater than 100 indi- cate positive consumer confidence, while those TRADE below 100 are a sign of pessimism. This increase shows that job opportuni- Imports Map for ties and purchasing power a Solution to Trade are improving. Imbalance AQUATIC PRODUCTS Turkey’s Economy Minister Zafer Çağlayan announced that his RUSSIAN TASTE ministry has studied an “imports map” as part of efforts tor everse the FOR TURKISH foreign trade imbalance FISH Russia increased conomy Minister Zafer Çağlayan imported goods worth 240 billion dollars, its imports of E called on Turkish manufacturers to while the value of products the country sold fish from Turkey make the best of government incentives to overseas reached 135 billion dollars last year, upgrade their production quality, speak- generating a 105-billion-dollar deficit in 22-fold between king at a press conference on February 14 in foreign trade. Recalling that the export figures 2008 and 2011, Istanbul. The minister’s remarks indicated for 2011 were a historic record for Turkey, according to the that the government is now speeding up Zafer Çağlayan had some reservations. “We Seafood Promotion an earlier announced strategy to encourage are uncomfortable with what happened on Committee (STG). domestic production in certain industries the import side. The government is carrying that are highly dependant on foreign goods out studies to reverse the foreign trade imbal- Noting STG’s participa- as part of efforts to tame a widening current ance,” he explained, referring to government tion in PRODEXPO 2012, account deficit. efforts to subsidize domestic production. which took place in Mos- The government last year announced a plan Çağlayan said there were 65,323 import com- cow February 13-17, STG to offer incentives and subsidies to increase panies in Turkey in 2011, adding that 40% of President Melih İşliel said production capacity and competitive power in Turkey’s imports were made by 59 large-size the Turkish fishing indus- six industries—namely machinery, iron and firms alone, only two of which are state try shared a dish cooked by steel, automotive, chemicals, textiles, and food owned. This group of 59 firms imported 53% chef Özkan Koç with par- and agriculture. Studies in this regard have more products last year than in 2010. The ticipants at the fair. He said been under way since June. The government minister attributed soaring imports depend- Russia is becoming a huge says its market research showed these six ency to rapid company growth, which boosted market for Turkey’s fishing industries were responsible for the coun- the demand for foreign intermediate goods in industry, adding, “Russia’s try’s widening current account deficit more new investments. “An uncontrolled expansion fish imports from Turkey than others and that it expects an effective in businesses along with a domestic market- totaled 920,000 dollars in operation here could cut Turkey’s imports by oriented growth strategy was behind the surge 2008 and increased to 21 as much as 30 billion dollars a year. Turkey in imports last year,” he explained. million dollars in 2011.” PHOTOGRAPH BY AA MARCH-APRIL 2012 ISSUE 9 The Turkish Perspective 9

FOREIGN INVESTMENT EXPORTS rates of exporters who state they have achieved growth in production ATTRACTING Exporters Hold High Hopes and exports are 51.1% CAPITAL and 52.3% respectively. Companies in the top INVESTMENT for Growth in 2012 500 list are relatively Istanbul attracted Exporters’ growth forecast for 2012 exceeds the common more optimistic con- expectations cerning exports and more capital export profit margins in investment in Q1 2012 in comparison 2011 than in the ccording to to other companies. entire three years A the Exporter The rate of companies previous Tendency Survey con- reporting that they ducted once every three were able to enter new Foreign investment months by the Turkish markets in Q4 2011 was in Istanbul increased Exporters Assembly 30.6%, with the highest by 110.77% in 2011 to gauge exporters’ figures being reported from a year earlier, economic expectations, by those in machinery, according to a study exporters expect to see electrical and electronic released by the growth of 7.28% in goods, and IT (44.51%), Istanbul Chamber 2012. The exporters followed by iron, steel, of Commerce (ITO). demonstrated their and nonferrous metals The total number insight last year with (43.4%), chemicals of foreign investors a prediction of 8.6% (36.4%), and grains increased by 52% in growth in 2011, a figure will grow 4 percent, and legumes (35%). the same period. that exceeded average they are predicting Russia is the top Over the course of estimates then but 7.28 percent. We, as market that companies 2011, 4,693 foreign would prove quite ac- TIM, think that growth expressed intent to enter investors set up curate. TIM President figures will be revised in Q1 2012. It is believed businesses in Istanbul, Mehmet Büyükekşi upward to around 5 that the agreements bringing in roughly disclosed at a meeting percent. But our com- signed between Turkey 1.7 billion Turkish the results of the survey panies are even more “We, as TIM, and Russia over the liras in investments. for Q4 2011. Büyükekşi optimistic than we think that growth first months of the year, By contract, in 2010 said, “Our exporters are.” In parallel to these figures will be particularly concern- some 3,044 foreign achieved practical expectations, exporters’ revised upward ing energy, will create investors invested pinpoint accuracy by targeted contribution to around 5 new opportunities for 823 million liras in correctly predicting to employment in 2012 percent. But companies to gain easier Istanbul. the growth in 2011, approaches 180,000 access to their targets. which was expected to jobs. our companies The US again held on to come in at around 8.3 According to the are even more second place in targeted percent. Now, in an results of the survey, optimistic than markets, followed by the atmosphere in which which saw participation we are,” says United Arab Emirates, everyone says Turkey by 520 companies, the Büyükekşi Iraq, and China.

OUTSTANDING PERFORMANCE IN 2011 Turkish exporters are rapidly pushing on their 2023 targets 135 18.5 20.4 16.3 16.1 BILLION DOLLARS BILLION DOLLARS BILLION DOLLARS BILLION DOLLARS increase in exports Turkey’s total in 2011 over 2010 Automotive indus- Chemicals exports Ready-to-wear exports in 2011 try exports in 2011 in 2011 exports in 2011 PHOTOGRAPH BY AA 0610 First

READY-TO-WEAR COLLECTION PREMIERE ISTANBUL Ready-to-wear companies received orders totaling 450 million dollars at the fair

he Collection offices of Puma in five T premiere istanbul countries including Iran Fashion and Ready-to- and Russia, El Corte Wear Fair held simul- Inglés of Spain, Iranian taneously with Istanbul bridalwear store Aroos, Fashion Week brought German online re- ready-to-wear manu- tailer navabi.de, Charles facturers and buyers Vögele of Switzerland, PARTNERSHIP together. Organized by and Nico Spa of Italy Istanbul Trade Fairs were among the major Inc. in association with groups of buyers at the A New Partnership With Korea İHKİB and IGEDO fair. The countries that The Korea Importers Association (KOIMA) and officials Co., the fair welcomed sent the most visi- from the South Korean Ministry of Strategy and Finance a total of 15,286 profes- tors to CPI were Iran, signed a declaration of intent with Turkish executives in sionals, 3,552 of whom Russia, Greece, Egypt, were foreigners. Buyers Ukraine, and Germany. February placed orders total- Among the 55 countries ing an estimated 450 that sent buyers were he 20-person, tion will benefit both used in the automobile million dollars from the Bulgaria, Canada, T delegation sent by sides,” and added, industry in Turkey. companies at the fair. Italy, Australia, the US, KOIMA was hosted by “The textile, automo- Korean-Turkish Russian supermarket Tunisia, Libya, Jordan, the Turkish Export- tive, and machinery relations are expected chain Magnit, Kazakh Britain, Holland, Israel, ers Assembly (TIM), industries are very to go beyond a simple sportswear brand Sweden, Qatar, and the Istanbul Mineral advanced. Turkey also FTA in the new world Zibroo, the purchasing Kuwait. and Metals Exporters’ manufactures for a lot economy, in the post- Association (İMMİB) of popular brands.” global crisis era, as and the Uludağ UİB Deputy Chair- the level of economic Exporters Association man Orhan Gençoğlu development in Turkey (UİB) in the prov- spoke of the rapid and Korea is now more ince of Bursa, where increase in trade vol- comparable. Korea’s both sides signed a ume between Turkey location in Southeast declaration of intent and Korea, saying, Asia, and Turkey’s at to increase trade rela- “The trade volume was a global crossroads tions and cooperation 1.3 billion dollars in offer both countries between Korea and 2003, and increased unique opportunities Turkey. to 6.8 billion dollars to enter new markets. Speaking to par- in 2011. Our wish is The market potential ticipants at the signing to work collectively to of Turkey attracts large ceremony, KOIMA advance bilateral rela- foreign investments Vice Chairman Gyu- tions and increase the in addition to offer- Hwa Jang said, “Tur- trade volume.” Bursa’s ing a high potential key has a great interest automotive industry return in such diverse in the automobile and exports are worth 20.4 industries as energy, textile industry and we billion dollars, and health, agriculture, have a lot of knowl- 72% of its recipients tourism, machinery, edge and experience in are in the European iron, steel, transporta- these industries. For Union. This shows tion, high-speed train this reason, I believe the high quality and manufacturing, and that bilateral coopera- advanced technology shipping. PHOTOGRAPH BY AA (RIGHT) MARCH-APRIL 2012 ISSUE 9 The Turkish Perspective 0711

AGRICULTURE INTELLECTUAL PROPERTY AVIATION SEED EXPORTS Europe’s Trademark New grow Security SEVENFOLD Champion Measure The Ministry of Food, The Turkish Patent Institute (TPE) announced that The restrictions on liq- Agriculture, and Animal uids carried in in-cabin Husbandry announced Turkey filed the most applications for trademarks in Europe in 2011 with a total of 120,000 applications hand luggage during that Turkey exported air travel have been re- seeds to 66 countries, vised. Already in effect particularly Russia, on international flights, Ukraine, and Italy. The they will now apply on country’s 2011 seed domestic flights as well. exports totaled 109 mil- The new restrictions lion dollars in value. will go into effect at Noting its support Istanbul’s Atatürk and for private and public Sabiha Gökçen Airports research institutes, the starting March 1 and ministry announced, on all domestic flights “Seed production rose starting April 1. Under from 145,000 tons the new restrictions, in 2002 to 635,000 passengers will not be tons in 2011 with the prohibited from car- implementation of such rying liquids; only the regulations. Over the quantity of liquid they same period, the size may carry will be limit- PE head Habip Asan said the 41% increase over 2010. Asan of the industry grew ed. The liquid products sevenfold and increased T results are the outcome of the emphasized that such an increase hard work done by the institute to is proof that Turkey is moving in that passengers may from 120 million to 960 carry in clear plastic million dollars.” increase awareness of trademarks the right direction with respect to and patents. Turkey placed third in overall awareness of intellectual zip-top bags may not 2009 following Germany, but pulled property rights, which are becom- exceed 100 ml in vol- ahead to rank second in 2010, he ing more and more important every ume. Liquid products said. In 2011, Turkey rose to first year. He added, “Turkey has ranked in containers of more place, surpassing 2010 champion high in industrial design patent than 100 ml will not be France. Trademark applications in- applications for the past five to six allowed on the plane. creased by 28% to 54,000 in the first years, in contrast to a decline in Passengers will also ECONOMY six months of 2011. The 2011 figure these applications in many Euro- be asked to show the of 120,000 applications represents a pean countries.” liquid products in their hand luggage to inspec- GS REVISES ITS tors at the final security FORECAST FOR checkpoint. Passengers INDUSTRY BREAKDOWN OF TURKEY’S may therefore find it TURKEY JANUARY EXPORTS convenient to carry Goldman Sachs upped their liquid products in Agriculture accounted for 1.5 billion dollars’ worth of exports in January, while industry their checked luggage. its previous growth and mining products exported 8.7 billion and 276 million dollars’ worth respectively forecast for Turkey of 8.1% for 2011 to 8.5%. The firm anticipates 14.4% 83% 2.6% 4.5% growth in 2013 Agriculture Industry Mining for Turkey. The analy- sis states that the cen- tral bank is expected to bring the current maximum lending rate of 12.5% down to 10% in Q2 2012. PHOTOGRAPH BY AA (BOTTOM) 12 Panorama Panorama Onno Kervers Consul General of the Netherlands in Istanbul

Located in Beyoğlu, the Palais de Hollande presently houses the Dutch Consulate General in Istanbul. The building has come to symbolize close and long lasting relations between the Netherlands and Turkey 400 years of Dutch-Turkish Diplomatic relations 2012 promises to be a peak year in Dutch-Turkish relations, laying a solid foundation for even deeper cooperation and friendship in the future

his year Turkey and the Netherlands jointly After a journey of more than four months, in March 1612 celebrate the fact that the two nations established Dutch envoy Cornelis Haga arrived in Constantinople, mark- diplomatic relations 400 years ago. Focusing on trade ing the start of a long-lasting and remarkable relationship and commerce, these uninterrupted relations con- between the Netherlands and Turkey. The young Dutch Re- Ttinue to be very successful today as the two nations have become public considered establishing diplomatic relations with the important economic partners. In 2012 a number of events will Ottoman Empire as crucial for better safeguarding its com- take place both in Turkey and the Netherlands, with a focus on mercial interests, the Levantine trade being an important political and commercial relations, cultural cooperation, and source of income. But political considerations also played intersocietal contact. their part: as the Dutch Republic was struggling for indepen-

MARCH-APRIL 2011 ISSUE 9 The Turkish Perspective 1313

dence with Habsburg Spain, the Ottoman court considered erlands Foreign Investment Agency, which gives confidential support for the “Batavian rebels” an important piece in the free-of-charge advice to potential Turkish investors in the power struggle with their long-standing rivals in Spain. Netherlands. Cornelis Haga settled in Pera, where other states and na- The celebration of 400 years of diplomatic relations this year tions such as England, France, Poland and Venice also had is an excellent opportunity to further deepen our ties. Last year, established their embassies, and which can be considered the Dutch Foreign Minister Mr. Uri Rosenthal and his Turkish world’s cradle of modern diplomatic representation. Roughly counterpart Mr. Ahmet Davutoğlu agreed to focus on politi- a century later, Dutch envoy Jacobus Colyer bought a plot cal, economic, and commercial relations, arts and culture, and of land in Pera in the immediate vicinity of the spot where intersocietal contact. A great number of activities will take place Cornelis Haga lived. Located on İstiklal Avenue in Beyoğlu, in 2012 based on this, the most important of which are a state the Palais de Hollande presently houses the Dutch Consulate visit in April to the Netherlands by President Gül and a business General in Istanbul. The building has come to symbolizes the delegation; a visit in May by Dutch Minister for Economic Af- close and long-lasting relations between the Netherlands and fairs, Agriculture, and Innovation Mr. Maxime Verhagen; and a Turkey. visit of Dutch Prime Minister Mr. Mark Rutte with an economic So how have these relations survived the ravages of time? delegation in November. Notable cultural events include the Toward the end of the 18th century, trade relations de- Pera Museum’s “Sultans, Merchants and Painters;” three exhibi- creased in importance but remained intact. Since the Turkish tions from the Eindhoven van Abbe Museum at SALT Beyoğlu economy started to boom at the beginning of the new millennium, com- merce and trade acquired a new élan and as a result The volume of the bilateral relations between our two coun- bilateral trade tries today are very much grew more than alive and kicking. These relations go beyond threefold from economic dimensions 2 billion dollars in and cover political and cultural cooperation and 2001 to 7 billion intersocietal contact. The dollars in 2011 latter are not only driven by the 1.2 million Dutch tourists visiting Turkey each year, but certainly also by the al- and SALT Galata; “La La La Human Steps” (of the Rotterdam most 400,000 people of Turkish origin living and working in Boijmans collection) at the Istanbul Modern; and “Rembrandt the Netherlands. In the political arena, in 2008 a special an- and His Contemporaries—The Golden Age of Dutch Art” at nual bilateral conference—the Wittenburg Conference—was the Sabancı Museum. In June, the fabulous Netherlands Dance established to discuss various issues at political level. On the Theater hosted by IKSV—a partner of Turkish Airlines—will cultural front, bringing Dutch culture to the whole of Turkey enliven Istanbul with modern ballet, and in November the is an important tool for deepening our mutual relations. On world-famous Royal Concertgebouw Orchestra will play there top of that, as a new “creative city,” Istanbul plays a special too. The Netherlands will be guest of honor at the Tüyap Book role in Dutch international cultural policy. Fair, and it will be represented at the Istanbul Tulip Festival in Meanwhile, trade and commerce—the leitmotif of 400 Emirgan. CER Modern in Ankara will be hosting a wonderful years of relations—has seen considerable growth during M.C. Escher exhibition. Many other cultural activities will also the past decade, with the volume of bilateral trade expand- take place outside Istanbul: Dutch visual arts, music, theater, ing more than threefold from 2 billion dollars in 2001 to 7 and literature will be travelling to Ankara and various cities billion dollars in 2011. For six years now, the Netherlands including Adana, Antakya, Bursa, Diyarbakır, İzmir, and Sinop. has been one of the top foreign investors in Turkey (rank- Numerous Turkish cultural activities will likewise be taking ing first in 2011 with over 1.3 billion dollars in FDI). The place in the Netherlands. The fourth “Turkey Now” festival Dutch Economic Network Turkey, with the Embassy in is planning for a special edition in 2012. The festival aims to Ankara, the Consulate General in Istanbul, and the Neth- introduce Turkish art and culture to Dutch people. erlands Business Support Office in İzmir as its main pillars, In summation, 2012 promises to be a peak year in Dutch- is intensely involved in promoting trade. The Consulate Turkish relations, laying a solid foundation for even deeper General in Istanbul also hosts the Turkey Office of the Neth- cooperation and friendship in the future. 14 The Turkish Perspective Contents: What Draws International Funds to Hospitals? P17 The Weapon of Design and R&D in the Battle of Competition P19 Marble Country P22 Eyes on Reciprocity in Real Estate P24 Renewable Opportunities P26 Playing for Leadership with a Sportsmanlike Vision P28 Editor: Ceyhan Aksoy

Briefing HEALTH CARE, FURNITURE, NATURAL STONE, REAL ESTATE, ENERGY, AIRLINES...

Hagia Sophia, one of the world’s tourısm oldest cathedrals, is of monumental importance to the crossroad of relıgıons Christendom Turkey draws tourists not just with its range of climates suited to various types of recreation, but also with the religious treasures it houses

By DOĞACAN SİLİVRİ

urkey is one of the lifestyles, their beliefs, and the land witnessed complex inter- also under the influence of the T world’s leading coun- things they left behind draw faith relations. The influences artifacts they have seen. tries in tourism. The reasons intense curiosity today, lead- and artifacts left by all these for this include not only the ing hundreds and thousands different faiths make Turkey a ISTANBUL, AN IMPORTANT fantastic embodiments of the to visit the sites where they unique place in the history of CENTER FOR THE THREE ABRAHAMIC four seasons found around the once lived and see artifacts of faiths, giving the country an RELIGIONS nation, but also the trove of how they lived. exceptional advantage in faith Istanbul—or Constantinople R cultural treasures it has accu- The lands today occupied tourism. Tourists flock from as it was once known—is a İ DEM

R mulated as one of the world’s by Turkey and those who lived all over the world to Turkey leading faith tourism destina- İ oldest civilized areas—a trove on it have had reciprocal influ- to fulfill the rites required by tion thanks to its historic ABDULKAD built by the peoples who lived ences on each other. Having their beliefs, returning to their significance and the empires it BY

H in Anatolia and the rest of the housed dozens of different homes not just with the satis- was part of. A city straddling P country for millennia. Their cultures through time, the faction of having done so, but the continents of Asia and HOFOGRA P MARCH-APRIL 2012 ISSUE 9 The Turkish Perspective 15

Europe, a confluence where tenth sultan of the Ottoman gathered them all and in three Claus in Western Christian- Eastern and Western cultures Empire. The tombs of Sulei- years set the bound founda- ity—after his death. In the mix, Istanbul is one of the man and his consort, Hürrem tion galley underground. In second half of the century, richest locations in Turkey for Sultan—also known in the three more years, the founda- Italian sailors broke into and faith tourism. The silhouette West as Roxelana—are on the tion rose to the surface and raided the contents of St. of Istanbul—an imperial grounds of the mosque too. emerged into a building…” Nicholas’s sarcophagus, the capital for centuries, from the Ottoman traveler and writer Istanbul is also home to nu- remaining parts of which are Byzantines to the Ottomans— Evliya Çelebi wrote about merous synagogues including on display in Antalya Mu- contains the outlines of works the mosque’s construction: the 17th-century Etz Ahayim seum. The recently reinitiated of monumental importance to “However many thousands of Synagogue, the Ashkenazi Christmas Eve services and all three Abrahamic religions. excellent, masterful build- Synagogue built by Ashkenazi the International Santa Claus One of these is the Hagia ers, workers, stoneworkers, Jews from Austria, and Zül- Festival held in Kaş are among Sophia, which is among the and masons there were in the faris Synagogue in Galata. the several draws contributing world’s oldest cathedrals. It entire Ottoman realm, they to the approximately 500,000 was built on orders by Byzan- ANATOLIA: A CRADLE OF FAITH AND visitors to Antalya for faith tine Emperor Justinian I be- TOLERANCE reasons over the past few years, tween the years 522 and 537, Antalya draws more interna- together with the Byzantine- and in 1453 was converted to tional tourists than any other built Church of St. George and a mosque following Mehmed province in Turkey. More than the Kale Mosque built on the II’s conquest of Constanti- ten million tourists visited orders of Seljuk Sultan Alad- nople. Mehmed II took care to Antalya through January– din Keykubad I. ensure minimal harm to the Having housed dozens November 2011. In Demre, Turning southeast, we mosaics inside the cathedral, of different cultures Antalya, there is the Church of head to Mardin, one of the which were coated with a thin through time, Turkey St. Nicholas built in the sixth region’s most charming layer of plaster. Thanks to the has witnessed complex century to memorialize the cities. It is home to numer- sultan’s sensitivity, these works interfaith relations saint—known also as Santa ous monasteries, mosques, of art can today be exhibited tombs, and churches, but in the Hagia Sophia, which is the most prominent is the now a museum. 1,615-year-old Monastery Another of the most note- of St. Gabriel situated in the worthy religious structures middle of Tor Abdin plateau. in Istanbul is Süleymaniye Founded in 397 AD by the Mosque, a beautiful remnant monks Mor Samuel and Mor of the nascent period of the Simon, the monastery gained Ottoman Empire. Built by renown within such a short legendary Turkish architect time that it quickly came to Mimar Sinan for Sultan the notice of the emperors in Suleiman the Magnificent Rome and Constantinople. (for whom it is named) in the St. Gabriel’s—once named years 1551–1558, the mosque is “second Jerusalem”—has the regarded within the architect’s distinction of being one of the oeuvre as a product of his ap- world’s oldest active Christian prenticeship and is seen today monasteries as one of the few as one of the most important to have kept the monastic works of Ottoman architec- lifestyle and tradition alive for The 1,615-year-old ture. Its dome sits atop four Monastery of St. sixteen centuries barring times columns resembling elephant Gabriel situated in when it was empty due to the middle of Tor feet, and despite the more Abdin plateau in wars and conflict. It therefore than one hundred earthquakes Mardin was known would be no exaggeration as “the second to have affected Istanbul since Jerusalem” to say that the monastery is its construction, not even a one of the most important crack can be seen in its walls. buildings in the history of the Four minarets rise above world and in Turkish culture. the mosque toward the sky, The monastery’s construction representing Suleiman’s status differs noticeably in charac- as the fourth sultan to reign teristics in certain areas due after the conquest of Constan- to being built piecemeal over tinople, and the minarets’ ten several different periods. The balconies signify his being the eye-catching structures from 16 Briefing

the fifth and sixth centuries, The influences and apostles, is known to have artifacts left by all rare mosaics from the Byzan- different faiths make worked intensely in Antioch tine era, tunnels, bell towers, Turkey a unique place to spread Christianity. In in the history of faiths, Midyat stone-cut gate, and giving the country an 1963, the Grotto was declared exceptional advantage in the motifs embellishing all of faith tourism a site of pilgrimage by Pope the construction renders the Paul VI. All that remains of monastery—one of the Syriac the church’s original décor are Orthodox Church’s most im- pieces of floor mosaics and portant centers of faith—en- traces of paint on the walls. chanting to all. The church also notably Another Turkish province served as a tunnel to the where Islam, Christianity, mountain where Christians and Judaism intertwined and would hide from persecution. continue to live on together The water steaming from the is Hatay, in the very south of rocks was used for baptisms the country. In Hatay, outside and is considered holy by Antakya (Antioch), carved visitors. Due to earthquakes, into the side of Mt. Starius flow has fallen consider- by the road from Antakya to ably in recent years. In the Reyhanlı, is the Grotto of St. center of the church, there is Peter—the world’s first cave a stone altar placed there for church. It is believed to have St. Peter’s Platform Holiday, been built around the time which used to be celebrated when, according to the New on February 21. The statue of Testament, “The disciples St. Peter on the platform was were called Christians first at erected in 1932. The church Antioch.” (Acts 11:26), which draws hundreds of local and suggests that it was the very foreign visitors to Hatay place where this occured. every year, today serving as a St. Peter, one of Jesus’s 12 museum.

Osman Ayık Oktay Varlıer Tİmur Bayındır President, Seçİm Aydın Touristic Hotels and Investors President, Anatolia Tourism Chairman, Turkish Hoteliers Former President, Association (TUROB) Federation (TÜROFED) Turkish Tourism Investors Managers Association (ATİD) Association (TYD) Turkey is a very important Turkey has serious potential in country in terms of faith tour- It is not possible for us to de- faith tourism. Looking at it as a The way toward increasing the ism because a large part of the termine the exact share of faith product, there are valuable sites share of faith and culture tour- start of Christianity took place tourism in tourism in Turkey, ism in Turkey goes through on Anatolian land, on which because they account for part everywhere in Turkey that could spreading tourism in Turkey to support faith tourism. Turkey there are countless holy sites of the share of general tourism. the 12 months and taking it out Even if we can’t give an exact is a country that houses very of coastal regions to spread it including the House of Mother important locations for all reli- throughout Anatolia. And this Mary in Ephesus, İzmir among figure, there is significant rising gions. This must be turned into is possible through the practice countless others. The places interest in faith tourism. And a theme, and these treasures of approaches that put our re- where the first Christians or our Ministry of Culture and must be emphasized exception- gions that are involved in faith idolaters hid and worshiped are Tourism is running some ef- ally in the coming term. If this tourism in the spotlight and in Cappadocia. St. Paul passed forts concerning this. . Ertuğrul promote them. We have signifi- through all of Anatolia; start- Günay, our minister, has intense can be achieved, the creation of cant potential in this area. Fur- huge potential could be at hand. ing from Hatay, he has churches interest and contributions in thermore, dependence on just this area as well. Turkey is one of the Ministry of Culture’s budget all over. We must be better at for the restorations to be done promoting faith tourism. Addi- the world’s leading countries in should be avoided—the tax cuts tionally, some of these places are faith tourism because it is able for the private sector for restora- very well preserved, and some to appeal to all religions. What’s tion expenditures should act as others are being restored excel- important is for Turkey to plan an incentive in this matter. lently by the Ministry. this very well and integrate it into world faith tourism.

MARCH-APRIL 2012 ISSUE 9 The Turkish Perspective 17

Turkey has 39 hospitals accredited by the Joint Commission International, the global division of the main hospital-accrediting body in the US

lion dollars in late 2011. As the Ministry of Health speedily continues its new hospital investments, the entry of the aforementioned capital interests has contributed ad- ditionally to the strong growth exhibited by both public and private hospital enterprises. The ministry’s reforms will be continuing at full throttle this year, through which 44 hospi- tals are planned to open in 29 provinces. A 750-million-dol- lar figure has been earmarked for the new hospitals, which are to feature cutting-edge HEALTHCARE technology. Besides the public’s relatively generous spending, investments on the part of the private sector will continue as What Draws International well—there are 499 private hospitals currently in operation in Turkey, and 105 new private Funds to Hospitals? hospitals granted approval Turkey-wide will be opening Turkey exhibited great performance in drawing hospital care as of next year. The number investments in 2011. The interest shown by international funds is of private hospitals in Turkey expected to continue into the future will therefore reach 604, with a cumulative capacity of 39,503 By MERVE KARA

he health care care industry, especially since T system has been under- 2004. Several major Turkish going an overhaul with the health care companies— for 2003–2013 Health Transfor- example, Universal Hospitals mation Program. The purpose Group, Medical Park Hospital of this program is to increase Group, and Memorial Health the quality and efficiency of Group—have already attracted the health care system and partnership or buyouts from Emİn Taylan Tax Partner of Grant enhance access to health care major equity investors like the As the Ministry of Thornton in Turkey facilities with the introduction US-based Carlyle Group. The Health speedily of a number of reforms. The latest health care company to continues its new We think the outlook will reforms touched all areas in attract the attention of global hospital investments, parallel the spark that has the industry from technology equity investors is Integrated been under way the past few the entry of various years and that foreigners’ in- to drugs, hospitals, and care Healthcare Holdings (IIH). capital interests terest in the Turkish health providers, collectively making Acıbadem Group, one of has contributed care sector will continue. We them an industry in which Turkey’s largest private hospital are of the opinion that the u

ğ additionally to investments continue at a groups, reached an invest- interest of foreign players in r bu i the strong growth this sector, which is open to ah rapid pace. Turkey has been ment deal with Malaysian- v e new investment opportuni- c attracting many high profile owned IHH to sell 60% of the exhibited by hospital BY

ties and collaborations, will H P multinational firms operating company with an estimated enterprises both public keep rising. in different areas of the health transaction value of 650 mil- and private HOFOGRA P 18 Briefing MARCH-APRIL MARCH-APRIL care, showing clearly that it clearly showing care, in the health investments Turkven have notable made and NGBI, ADM Capital, as Management, Debt Asia such funds Private capital in 2011. especially years, few over the past volume growing in shares purchasing been Foreign small. haveplayers large both and on companies have eyes had their particular in funds years—international to made changes it in recent the with interest national ing and more inter more in Turkey has drawbeen in Turkey. Tax Partner of Grant Thornton investment,” says Emin Taylan, of primary consideration for Turkey has become a company presents new opportunities, terms of the industry, and still future to foreign investors in ment , promises a profitable country that is ripe for invest Here, due to the fact that it is a which to put capital to use. countries and industries in investors toward seeking new economic crisis has pushed ing years as well. The world trend will continue in the com 2012, too. “We believe this key to many investors through present opportunities in Tur care system will continue to beds. The overhauled health The health care sector sector care health The

2012 ISSUE 9 - - - - - recent years changes made to it in interest with the more international drawing more and in Turkey has been The health care sector Turkey’s hospital industry is of Health, the outlook for initiatives of the Ministry ing chain in the country. Acıbadem Hospitals, a lead- Abraaj Capital invested in example. To provide another, for an undisclosed sum, for hospital chain Dünyagöz 30% of leading Turkish eye Bank of Kuwait—acquired subsidiary of the National hospitals. NBK Capital—a interest are health care and investors are showing great industries toward which Gulf past ten years. Among the neled to Turkey over the investments has been chan- 30 billion dollars’ worth of Persian Gulf, from which from countries based in the erable investment has been value. in as is a appreciating sector Thanks to the resolute Another source of consid- growth today. is expected to continue this it welcomed annually, and it number of medical tourists close to 100% growth in the Back in 2010, Turkey gained and the latest of equipment. on cutting-edge technology investments that are based the fruits of recent health care states in Central Asia thanks to especially from the Turkic visitors coming for treatment income European patients and welcoming medium- to high- result of this, Turkey started the country’s facilities. As a of the newest technology in to facilitating the installation tion to local patients—due foreign patients—in addi while also potentially drawing competition in this respect ment provides the means for The inflow of capital invest in the medium and long term. the short term, it is profitable that rarely provides returns in care sector is a pricy endeavor though investing in the health country but the US itself. Al total and more than any other almost 10% of the worldwide in the US—accounting for hospital accrediting body the global division of the main Commission International, pitals accredited by the Joint Today Turkey counts 39 hos improving in every aspect. - - - - cesses with its partners. fully as it achieves great suc- continuing to grow success- and-a-half years, it has been ment Bank. And for one- 20% to Qatar First Invest- 20% to Argus Capital and its shares in August 2010— this, our group sold 40% of nership. As the outcome of copious proposals for - part 2006, and it was receiving by foreign investors since too, has been much admired Memorial Health Group, share of medical tourism. accounts for an important abroad, the industry now opened up to the market industry is very clear. Having before the Turkish hospital among foreigners, the path some unsuccessful examples Although one can point to partnered with hospitals. many foreign investors have ity service. In this regard, country that provide qual- the hospital groups in our had long shown interest in mographic change in Turkey nomic development and de- investors who saw the eco- foreign patients. Foreign traction for local and many has become a center of at- Turkish hospital industry technologies being used, the ish hospitality to the latest their fields. Adding Turk- who are very successful in a cadre of quality doctors Turkish surgeons, there is our country and to skilled superb medical schools in frastructure. Thanks to the high-quality hospital in- possesses a very strong and roeconomic figures; that it relatively very good mac- for this is that Turkey has The most important reasons pitals field in recent years. eign investors in the hos- a lot of interest from for- Turkey has been receiving Health Group Chief Executive,Memorial Uğ ur ur G en ç

PHOFOGRAPH BY AA PHOFOGRAPH BY AA The Weapon of Design and R&D in the Battle of held January 9, 2012 in Kay- Exports in Furniture” seminar tion at the “Innovation and Products Exporters’ - Associa ranean Wood and Forestry Chairman of the Mediter- years,” said Bülent Aymen, world brands emerge in five Adana. We aim to have five İnegöl, İzmir, Ankara, and of furniture, such as Kayseri, ket in cities that are centers Furniture R&D Project Mar- labs within the scope of the we will be establishing design T competition in its hands Italy in design, and China in price as it collects the three great powersTurkish of furniture industry is preparing to leave Germany in quality, FURNI by by c ating innovative products, o support eyhan aksoy eyhan T URE SMEs in cre- five years from the Turk- creating five world brands in export. specifications, and wish to are capable of producing to with foreign partners warmly, furniture, regard investments production in every branch of exports—that are engaged in ture manufacturing and important center of furni- are companies in Kayseri—an industry. He said that there expected in the furniture all listeners to developments seri, drawing the attention of When we ask whether Competiton

visit Masko—command the tion that came with him to Levchenko—and the delega- Industry Chairman Vadim Chamber of Commerce and and attention of the Sochi that won the admiration Karcı states that the brands Turkey’s furniture exports. and it accounts for 10% of world’s largest “furniture city,” City is characterized as the tainly not.” Masko Furniture Furniture City, says, “Cer- Karcı, the President of Masko optimistic a target, Hasan ish furniture industry is too lined up in many countries see Turkish furniture stores your fingers, today you can that they could be counted on brands until a few years ago adding, “While we had so few the Games harbor for Masko, the significant opportunity held in Sochi in 2014 preludes up to the Winter Games to be Industry of Russia leading Chamber of Commerce and takhov, Representative of the by Levchenko and Ildar Fat- visit to Masko Furniture City well. Karcı points out that this same attention worldwide as Turkey reached 9 bilion The Turkish Perspective furniture industry in The volume of dollars in 2011 the 19 20 Briefing

from Iraq to China. Our com- R&D, innovation, Turkish furniture worldwide design, and mercial relations develop as technology has been was bolstered.” a result of the meetings and the four principal Memduh Boydak, CEO of elements underlying visits we are conducting, and the furniture the largest producer of Turk- industry’s push in they will increase our power 2011 ish furniture industry with abroad even more.” the brands İstikbal, Bellona, The potential for this Mondi, Deco, and İstikbal power to grow was already Regina explains the impor- evident in the figures for tance of R&D, design, and 2011. “Retail prices and innovation in the furniture consumption figures in our industry as follows: “Design industry—that is to say, assists in branding, through business volume—rose 12 constant change, develop- percent on the dollar and ment, and innovations; 30 percent on the Turkish design builds dependency in lira in 2011, reaching 9 bil- customers and increases their lion dollars,” says Ramazan expectations for the prod- Davulcuoğlu, President of uct. In how it appeals to the the Furniture Industrialists’ consumer, design facilitates Association (MOSDER). union with the consumer The furniture industry and increases the element exhibited the same perfor- of brand loyalty.” Boydak mance in access to interna- adds, “In an economic sense, tional markets, succeeding in design increases demand; it increasing its exports by 19% bolsters a brand’s image and in 2011. “That our exports, recognition in target markets which totaled 1.4 billion and becomes a reason to dollars in 2010, exhibited an choose it. It increases sales increase in 2011 to reach 1.8 and ability to compete against billion dollars is quite an im- other brands; it strengthens portant development for us,” our country’s image and it says Davulcuoğlu, adding increases the brand’s market that Turkish furniture style share.” is commanding more and The efforts of brands in more attention worldwide bolstering this reputation every year. should not be overlooked. R&D, innovation, design, R&D, and branding.” The 7th Turkey aims to create five Masko President Karcı, whose global brands in five years and technology were the four National Home Furniture via investing in design and furniture city houses more principal elements underly- Design Contest held by MOS- innovation than 500 companies over ing the furniture industry’s DER with the intent of send- 483,000 square meters, says push in 2011. Increasing its ing a message to the industry that Turkish companies— investments in these ele- is also a significant indicator which in 2011 increased the ments, the industry simul- of the importance given to number of countries to which taneously enlarges its target design by industry represen- they export to 173—have and claims too. “We have the tatives. “With the design con- received partnership propos- potential to be Turkey’s third- test, we rewarded professional als from abroad, adding that largest exporting industry students studying Industrial the furniture industry, which after automotive and textiles,” Products Design and Interior One of the most is progressing rapidly toward says Hasan Karcı. Ramazan Design at universities” says important reasons for branding, is older than all Davulcuoğlu explains the Davulcuoğlu. He continues, the rapid development other industries and—like reasoning behind this bold “The continued growth of the of the furniture a sycamore—has roots that claim with the words, “One of R&D and design depart- industry and its status stretch deep. the most important reasons ments of companies active in as one of the national Doğtaş, which is celebrating for the rapid development of the field of furniture made it its 40th anniversary this year, the furniture industry and its possible for the products to be economy’s locomotive is one of the brands proving status as one of the national of better quality and feature industries is the rapid Karcı’s words. Exporting to AA advancement in the

economy’s locomotive indus- more original designs. The 65 countries, Doğtaş exhibits BY

ION

tries is the rapid advance- industry’s perspective thus fields of design, R&D, one of the best examples of a T RA ment in the fields of design, expanded and knowledge of and branding transition from manual labor T ILLUS MARCH-APRIL 2012 ISSUE 9 The Turkish Perspective 21

to industrialization and from Doğan says they achieved this 2011. Doğtaş started receiving The Turkish furniture subcontract manufactur- success thanks to a crew that is Turquality support in 2008. industry and the brands ing to in-house design. In capable of design at interna- “With Turquality certification, opening the industry up 2011, the company worked tional standards, stating, “In we concentrated more on our to the world see the fruits with such famous design- addition to creating products initiatives abroad. As we did of their performance espe- ers and architects in 2011 as of suitable design and price domestically, we are growing cially at international fairs Atıl Kutoğlu, Ece Sükan, and for our target audience, we and gaining strength abroad, and conventions. IMOB—the Federico Delrosso. Today, maintain Doğtaş’s intriguing, too. Sustaining this improve- Istanbul Furniture Fair, one Doğtaş is among Turkey’s top colorful, modern, innovative, ment at full speed, we progress of the world’s largest such three furniture exporters. It is and functional approach.” with sure steps toward becom- fairs—presents significant one of the country’s 500 big- He also notes the effect of ing a world brand. We are opportunities to brands in this gest companies and is among Turquality—the world’s only forming growth strategies and respect and also allows them the top three in the furniture state-supported branding pro- continue our efforts to develop to gauge international interest. category revenuewise as well. gram—on the brand’s success new markets abroad,” says MOSDER President Ramazan Doğtaş Chairman Davut and close to 34% growth in Doğan. Davulcuoğlu states that IMOB

The Furniture Maker’s Road Map Is Ready The representatives of the Turkish furniture industry have already been applying the measures necessary for Turkish furniture brands to exhibit global successes in the future

memduh BOYDAK HASAN KARCI DAVUT DOĞAN RAMAZAN DAVULCUOĞLU Chief Executive, Boydak Holding President, Masko Furniture City Chairman, DOĞTAŞ President, MOSDER

With the institutionalization of The furniture industry employs As the Turkish furniture industry, Thanks to its openness to Turkish furniture companies approximately 270,000 people facilities manufacturing at world innovation and manufacturing and the branding that parallels and is a source of income for one standards were established approach fusing quality and this, growth in the industry has million families. While industrial in recent years. With the design, the furniture industry is sped up. To create world brands, furniture accounted for just retailization strategies in an gaining admiration worldwide Turkish furniture companies around 10% in our total furniture environment of heightening and our export volume is must especially analyze the production until practically competition, we attained expanding. Standing out for industry’s development and yesterday, this portion is around significant amounts of sales their original designs and quality, expectations in the global arena, 30–35% today. The small capacity domestically and abroad. our products have now created develop human capital, place workshops of yesterday have Developments and growth that a style that stands apart from importance on innovative R&D started transforming into large were very positive in terms of other furniture. The creation of work, and follow trends constantly factories today. Artisans in Turkey our industry took place in 2011. the Turkish furniture style and while also remaining original. adapt very quickly to technology. With the targets set for 2023, the continuance of investments To be trendsetters, they must I don’t believe a single furniture we, as the furniture industry, in design carry great importance constantly develop innovative manufacturer will remain in have set for ourselves a target in terms of branding. The projects and present these with Turkey by ten years from now of 10 billion dollars. Like our most important investments the right marketing strategy, at who doesn’t work with an interior country, which aims to be the to be made for branding are the right time, and in the right architect or designer. To this end, world’s tenth-largest economy, design and R&D investments. places. Innovation is an essential as the exporters’ associations, we we will become the world’s tenth Furthermore, when exporting condition to becoming a brand. are establishing R&D centers. largest furniture exporters with products abroad, conducting Becoming a brand a world brand The Undersecretariat for Foreign this 10 billion dollar exports such exports with our own brand is not easy; therefore, working Trade is supporting promotion target. As the industry, we names instead of outsourced patiently without giving up is efforts in the furniture field— predict that our industry will production is another important a requirement. As the Turkish as the exporters’ association grow even more especially as our element. That there are young, furniture industry, 2011 was a in Istanbul, we have received branded companies appeal to educated designers in Turkey positive year especially for Boydak 250,000 dollars of support. world markets too and with the also makes it possible to be a Holding’s furniture brands, and as We provide 75% support to Turquality support provided by brand by moving forward with a result of our disciplined efforts, manufacturers or suppliers the state. a source of skilled humans. we achieved growth in furniture participating in fairs. We therefore believe Turkish that exceeded our targets and furniture will expand its exports increased our market shares. map in the near future. 22 Briefing

2012, which welcomed visitors “We attended IMOB, which natural stone from places ranging from could be the world’s third- Europe to America, Africa, largest furniture fair, this year Asia, and South America, again as the brand that made plays a significant role in the most waves,” says Doğan, M arble Country exports. Among the coun- adding, “This year is Doğtaş’s Turkey is playing for leadership in the tries participating in the fair 40th, and in this special year, natural stone industry, possessing a were Germany, Azerbaijan, we experienced the joy and the UAE, Belgium, Bul- excitement of promoting the significant portion of the world’s reserves garia, Algeria, France, Croatia, collections we possess. As and a high-quality manufacturing base Holland, Iraq, England, Doğtaş, we became the most Iran, Ireland, Spain, Qatar, attention-getting brand with By CAN GÜRSU Kazakhstan, Kenya, Libya, our products and stand among Lebanon, Hungary, Egypt, the brands participating in the Moldova, Romania, Russia, fair this year, too. We were met Saudi Arabia, Turkmenistan, by great interest by visitors Ukraine, Jordan, and Greece. from abroad and took great Additionally, besides purchas- steps toward new cooperation.” ing delegations, groups of buy- Memduh Boydak also ers from neighboring countries emphasizes that the interest like Iran and Russia visited shown in Turkish furniture the fair too. “IMOB 2012, the increases continually as Turk- Turkish furniture industry’s ish furniture companies start showcase opening up to the becoming brands and adds, world, once again brought “The greatest proof of this is various industry profession- that the number of interna- als together such as those tional visitors attending the representing furniture stores, IMOB fair held in Istanbul chain stores, wholesalers, dis- for the past eight years has tributors, importers, exporters, been increasing constantly. architects, interior architects, When our companies finish decorators, industrial design- becoming brands and give ers, and furniture parts and importance to design and atural stone and antiquity. Used to embellish components manufacturers. innovation to meet customer N marble have been part of palaces, temples, and monu- Welcoming around 100,000 expectations, Turkish furni- human civilization for thou- ments since prehistoric times, visitors, IMOB 2012 was the ture brands will soon assume sands of years. Historically, marble represents the richness meeting point for local and their rightful place in the natural stones have been used and elegance of Anatolian international furniture profes- global arena.” by many different civiliza- history. The Temple of Artemis sionals,” says Davulcuoğlu, The Turkish furniture tions in their monuments and in Ephesus, one of the Seven nothing that the interest industry is resolute about imposing buildings. Today, Wonders of the Ancient World, shown toward the fair is an maintaining the performance interest in natural stone and is thought to be the world’s indicator of the ever-greater it exhibited in 2011 in the marble is continually increas- first temple built using marble. admiration for Turkish fur- years to come. The industry ing,” said Turkish Exporters Parts of the Temple of Artemis niture. Davut Doğan’s words aims for 10 billion dollars Assembly (TIM) President still stand today, signifying the about the interest shown in exports in the year 2023, Mehmet Büyükekşi at the durability and quality of Turk- toward Doğtaş at IMOB af- the centennial of the Turkish opening speech he delivered ish marble from antiquity all firm Davulcuoğlu’s statements. Republic, planning to rise for the International Marble the way up to today. to the rank of tenth world- and Natural Stone Products Natural stone is used wide. Notable for a volume and Technology Fair. Located approaching 9 billion dollars on an Alpine belt in which the today, the industry seems world’s richest marble beds are like it will utilize an arsenal found, Turkey ranks among of quality, design, and great the natural stone industry’s Turkish furniture prices to prevail in the global leading countries with its manufacturers aim to competition with the belief broad selection of colors, 1.68 be world’s tenth largest that it will have a say after the its patterns, and its product billion dollars likes of China, Italy, the US, diversity. furniture industry in Natural Stone Germany, Poland, Canada, The history of natural Exports 2023 Mexico, and France. stone in Turkey dates back to

MARCH-APRIL 2012 ISSUE 9 The Turkish Perspective 23

heavily today especially in Exporters’ Association (IMIB) tries, the 1.85 million tons of expected to exhibit growth. construction, finishing, floor- Chairman Mehmet Özer, add- processed natural stone exports IMIB Chairman Mehmet ing, sculpting, gravestone ing, “Considering that Turkey plays a significant role. The Özer says, “We estimate that construction, graveling, the has the largest share in imports country is gaining strength the increase in exports in the porcelain and glass industries, of processed marble travertine not only through its reserves, natural stone industry will optics, and decorative objects. by the US—the biggest im- but also thanks to its advanced be around 10%,” and adds, The industry in Turkey has porter in the world of natural industry. According to IMIB “Based on this, we expect been gaining momentum stone—is Turkey, we could say data, there are 1,100 quarries, our natural stone exports for lately, especially with the entry that our export to the US will 1,500 factories, and 7,500 2012 to total around 1.85 of new producers to the mar- exhibit growth over that of workshops for natural stone in billion dollars.” Turkey has ket. Interest in Turkish natural 2011.” Recovery in the Chinese Turkey. As the economic crisis, pinpointed strategies to be a stone is increasing daily. TIM, and US economies, besides whose effects and limits are still net producing—not consum- supporting branding and other countries struggling with uncertain, continues to affect ing—country, and in spite of international marketing efforts economic crises, is strength- many countries around the the danger of recession seen in the natural stone industry, ening Turkey’s hand in this world deeply, Turkey aims to in other countries around plays a significant role in this area. In 2011, 50% of Turkey’s continue its stability based on the world, it is expected to increasing interest. Mehmet mineral exports were to China, the driving force of exports in continue growing. Büyükekşi states that their the US, and Italy, according to the years to come, too. The natural stone industry target is to attain stable growth TIM Industries Council Min- Turkey aims to grow 7% in Turkey has been launching in natural stone. Besides aim- eral Industry Board Chairman in 2012. Natural stone, too, projects to increase its share ing to create a reliable reserve Ahmet Keleş. He states that is among the industries in the nation’s total exports as system complying with inter- expressed in its goals for 2023. national standards in natural Turkey ranks among the Turkey ranks among the glob- natural stone industry’s leading stone production, Turkey is countries with its broad al giants in the construction planning to create a marble selection of colors, its patterns, sector. Mehmet Özer indicates and its product diversity exchange market vis-à-vis its that they aim to promote goals for 2023, the centennial Turkey’s natural stone among of the Turkish Republic. architects, interior architects, Turkey expects 7 billion dol- designers, and project own- lars in income from the natu- ers—the people who decide ral stone industry in 2023. what type of natural stone to In terms of reserves, it ranks us—and to reach foreign ar- among the world’s leading chitects and project owners via countries, possessing 33% of English publications as well. global marble reserves. Turkey The construction projects it is exports natural stone to more undertaking all over the world than 160 countries, most of make Turkey quite strong in all to China, the US, Iraq, and this respect. Turkish Marble, Saudi Arabia. China is the Natural Stone, and Machinery leading recipient of Turkey’s once a resurgence of export (Million Tons) Manufacturers Association exports, paying 639 million activity is seen with the end Amount General Secretary notes that Turkey advances confidently toward dollars yearly—a figure 7.3% of the Arab Spring—the long- significant development is its 2023 target with its 7.2 million higher than that of the previ- running chain of events that under way worldwide in ap- ton exports in 2011 ous year. China is followed by began early last year—and pre- proaches to the environment the US with 237 million, Iraq vious levels in exports to these 7.2 and urban planning, adding with 83.6 million, Saudi Ara- countries are attained in 2012, 6.6 that large projects and designs bia with 62.8 million, and the the industry will be affected will therefore be the case and UK with 46.5 million dollars’ positively. The optimistic air that Turkey will utilize its worth of natural stone imports that is emerging in the world is 4.9 advantage in this area as best from Turkey. 2012 is expected filling Turkey’s sails. as it can. to be influenced positively Having exported 6.6 million Turkey is coming one especially in relation to high tons of natural stone worth step closer to the long-term projected growth for China 1.57 billion dollars in 2010, industry plan it is focusing on and its increasing need for raw Turkey advances confidently and its 7-billion-dollar exports material. toward its 2023 target with its target for 2023. Turkey’s Signals appeared as of the 7.2 million ton, 1.67 billion dol- strong economy and the natu- second half of 2011 that the lar exports in 2011. In mineral ral stone industry’s production ata: İ MM B ata: US economy entered recov- exports, one of Turkey’s most D and export figures of previous ery, states Istanbul Mineral important exporting indus- 2009 2010 2011 years support these forecasts. 24 Briefing

Leading in real estate acquisitions in Turkey are citizens of Germany, the UK, Greece, and Austria

be abrogated. Işıl Dinçer, General Manager of Indus- trial Development Bank of Turkey (TSKB) Real Estate Appraisal, noted that citizens of non-European neigh- boring countries, Persian Gulf countries, and Turkic states are unable to own real estate—or are faced with myriad difficulties when doing so—due to the lack of adequate reciprocity, adding, “Yet (Persian) Gulf and Arab countries and Turkic states wish to buy houses from Tur- key, and because they can’t do this as real persons, they end up having to incorporate in Turkey.” REAL ESTATE Dinçer says home sales numbered 427,105 in 2008, 531,746 in 2009, and 357,341 in 2010, and that Eyes on Reciprocity the average over the past three years is 440,000 home sales annually. Achieving an in Real Estate average of 500,000 home sales in the coming future The change to how reciprocity is addressed in real estate law, won’t be at all difficult, ac- which currently limits property purchases by noncitizens, is cording to Dinçer. With this assumption, a contribution expected to further increase the input of foreign capital on average of 5 billion dollars annually from the sale of BY aynur şenol altun homes to noncitizens could be expected to benefit the n the last days of 2011, the reciprocity section—to Turkish economy. Dinçer is I a number of important parliament for signing. If just of the view that this figure developments in the real that amendment alone would will rise even higher with the estate sector headed the list be ratified, around 5 billion sale of all types of real estate of topics occupying Tur- dollars in foreign capital is to noncitizens. Urban Land key’s headlines at that time. expected to enter the country. Institute (ULI) President Changes in urban transfor- The real intention in the Haluk Sur says that the Turk- mation—regarded as one of amendments to be made is ish real estate sector, having the sector’s greatest deficien- to make it easier for non- drawn intense interest from cies—laws, 2B properties, and citizens to buy real estate in If the amendment in investors in recent years, will reciprocity signified that 2012 Turkey. If the amendment is maintain its allure through would be a very lively year for ratified, citizens of countries urban transformation 2012, and that the housing the sector, and that indeed is that do not allow real estate law is ratified, around sector will put its mark on the case now. Sector players purchases by Turkish citizens 5 billion dollars in the next 10–15 years with a were also given hope by the will gain the right to buy foreign capital is focus on urban transforma- presentation of the proposed property in Turkey—that is expected to enter tion. The increase in demand amendments—especially to to say that reciprocity will Turkey based on the young popula-

MARCH-APRIL 2012 ISSUE 9 The Turkish Perspective 25

tion and domestic immigra- Iran, Russia, and countries in tion further catalyzes the Antalya Commands the Most Interest the Persian Gulf, and İnanlar sector’s growth. “Further- Although construction firms maintain their focus onI stanbul, buyers from Construction Chairman more, with reciprocity, it is a abroad are mostly drawn to Anatolia. Serdar İnan believes there time of significant demand will be heavy interest from in terms of the citizens of Province Name Number of Buyers Percentage all over the world except for countries who wished to ANTALYA 32,048 28.20 South America. There are buy houses in Turkey from MUĞLA 1,789 13.01 certain special efforts that abroad but experienced need to be undertaken to AYDIN difficulties in doing so as 13,062 11.49 draw South America and well. I believe that the flow İSTANBUL 12,522 11.07 Turkey closer together. İnan İZMİR of capital from abroad—cur- 5,434 4.78 explains the reasons be- rently around 2.5–3 bil- BURSA hind this potential interest 5,278 4.64 lion dollars—into the real ANKARA in Turkey: “Capital in the 2,283 estate sector will continually MERSİN 2.01 West—which is in crisis right increase,” says Sur. With the now—is seeking an escape to HATAY 2,126 1.87 placement of sound rules, balance its own risks. Turkey 1,992 the annual input of foreign KAYSERİ 1.75 is characterized as a stable capital into the sector in the DİĞER 22,883 1.10 country that promises profits near term is expected to rise TOPLAM 113,662 100 in this respect. The Middle to 5–6 billion dollars and East, too, due to the effect of later to 8–9 billion dollars. Data:Land and Registration Agency (TKGM) Statistics on Acquisitions of Immovables by Foreigners the Arab Spring, is seeking “It won’t be a surprise if this a safe harbor for the capital amount reaches the vicin- it has at hand, “just in case.” ity of 4–5 billion dollars in Both religious commonality 2012,” Sur adds. and past Western experi- İnanlar Construction ence are causing them to Chairman Serdar İnan agrees turn their routes to Turkey. that the change to the law will Central Asia feels close to us affect the sector very positive- because of our shared lin- ly, but assistance in matters eage. As our country’s power of property, development, increases, we will observe bureaucracy, and hosting; rapid increases in the inflow the preparation of subregula- of Central Asian capital. Our tions; and the presentation country is one of the rare of success stories for foreign beautiful countries worth liv- capital are necessary, he says. ing in. In terms of its natural Uğur Dumankaya, a board environment, people, and member of Dumankaya business opportunities, Tur- Construction, is of the view key is a comfortable, acces- that this transformation sible country.” Dumankaya is a development that has Eyes on Turkey in Real Estate Construction Board Member been expected for years and The change to the article on reciprocity is Uğur Dumankaya expresses will contribute to the sec- expected to increase the interest shown toward his thoughts on Turkey’s rise tor’s medium- to long-term Turkey even more as follows: “With its position, development. the beauties it possesses, and developing economy, Why Turkey? Turkey is becoming a star in Işıl Dinçer from TSKB and the world. All these qualities Dumankaya Construction draw the interest of foreign- Board Member Uğur Du- ers to our country. Invest- mankaya are of the opinion Işıl Dİnçer Serdar İnan Uğur Dumankaya ments in our country, which that the people who will General Manager, TSKB Chairman, İnanlar Board Member, has a developing economy in Real Estate Appraisal Construction Dumankaya Construction show the most interest in spite of the global crisis, are Turkey following the amend- “Turkey is one of “As a stable country “Investments in our alluring to foreigners.” ment—those challenged by the most alluring that promises profits, country, which is investment regions in Turkey is attracting developing in spite the law in its previous state, the real estate sector.” the attention of all of the global crisis, Istanbul Is Essential —will be citizens of Azerbai- other countries.” are attractive to Işıl Dinçer believes that the jan, Kazakhstan, Kyrgyzstan, foreigners.” locations that will prove most 26 Briefing

attractive to noncitizens will short time. We are not in a be branded luxury hous- position to meet the existing ing developments situated potential right now, but the centrally in Istanbul featuring legal ownerships that will sea views or, if no sea view, emerge with the 2B law and good transport infrastructure the construction of the new at the very least. New housing cities announced by our developments near Istanbul, Prime Minister Recep Tayyip in Bursa, and on the shores of Erdoğan will constitute an the Mediterranean and Aege- important foundation for an regions, together with new foreign purchases.” Uğur Du- investments to be made on mankaya, on the other hand, the shores of the Black Sea via is of the view that significant incentives could contribute increases in demand are not significantly to the economy expected over the short term through the sale of houses to following the ratification of noncitizens. However, con- the law, and that no difficulty struction companies are ex- will appear in meeting exist- pected to continue their focus ing demand. on Istanbul for now, and the views of Uğur Dumankaya What Will Change in the and Serdar İnan confirm this. Sector? But according to the Turk- According to TSKB’s Işıl ish Land and Registration Dinçer, the new regulations Agency (TKGM)’s statistics will kick off a period of great on real property acquisitions transformation in the sector Energy by noncitizens, Istanbul ranks in which the construction fourth among provinces in sector will prepare to de- which noncitizens bought the velop projects suiting foreign most real estate, a somewhat investors’ housing and Renewable surprising figure. Antalya, lifestyle preferences as real Muğla, and Aydın rank first estate marketing companies in this list, with Istanbul be- meanwhile start to increase Opportunities ing followed by İzmir, Bursa, both their marketing abilities and Ankara. and technical knowledge in Renewable energy sources (RES) are Whether or not the sector order to provide the consult- attracting the interest of Turkish and will be able to respond ad- ing services foreign investors international companies alike equately to the increase will need. In fact, they have in demand that will take already started. Additionally, by Mehmet Erdoğan Elgin place with the change to many foreign funding and the law is another question. consulting companies are he Caspian Sea is pipeline had to be shut off. Serdar İnan approaches the expected to enter the sector T located in one of the Turkey, undoubtedly, was subject rather cautiously: in order to provide financing world’s areas richest in oil and one of the countries to be “I believe that the sector will and consulting services to natural gas. Lately, it has been affected most by this failure. provide an answer within a foreign real estate investors. affected negatively by the However, the Ministry of En- winter chill that has affected ergy and Natural Resources much of Europe and Asia—to (ETKB) has accelerated its Updates to Law to ATTRACT Investors illustrate, the Caspian shores efforts in order to prevent any of Azerbaijan experienced disruption, and it envisions Noncitizens were sold 82,000 square meters of land from 2003 their coldest days in the last some structural changes in to 2011. In addition, companies gained the right to run 15,000 110 years. Even natural gas the sector. The ministry is square kilometers of mining space for leases of 29 or 49 years. When the law no. 5782, an amendment to the Title Deed Law, extracted here and exported aiming to reduce the share of was ratified by the Constitutional Court on May 12, 2011, all to many countries was af- natural gas usage in electricity barriers before sales of land to noncitizens were lifted. According fected by the rough weather. generation from 50% to be- to the updated law, noncitizens will be able to buy up to 10% of a province’s land development plan as opposed to 0.005% of the Shah Deniz 1, the country’s low 30% by 2020. “To reduce province’s area as it was before. Furthermore, according to the most important natural gas the share of natural gas in previous regulations, plots of land sold to foreign individuals and companies were not allowed to exceed 300,000 square meters in field in the Caspian, experi- electricity generation, local size, and this limitation has been lifted too. enced technical problems due sources of generation to meet to the cold weather and its the required level of produc-

MARCH-APRIL 2012 ISSUE 9 The Turkish Perspective 27

tion should be found, and a one source protects against tant factor for international which are near the general significant portion of these such uncertainties, technical companies to invest in the electrical tariff, is turning Tur- resources can be supplied,” disruptions, or price volatility Turkish market. key into an important place says Önder Karaduman, in the market.” One of these companies is of investment in this field,” Chairman of the Electric- The RES Law that came Gehrlicher Solar. The Ger- and adds, “With our Turkish ity Producers Association. A into effect in 2005 and the man solar power company partner Merk Solar, we aim to RES-oriented strategy is in Incentive Tariff ratified last established a partnership realize successful projects in place here—by 2023, RES year are the ministry’s most with Turkish firm Merk Solar the coming term.” are expected to account for important playing cards to to build solar power infra- International companies around 30% of electricity pro- encourage new investments. structure in Turkey. are expected to increase their duction in Turkey. The aforementioned tariffs Nothing Turkey’s rapidly investments in renewable Many energy companies in stand out as important instru- increasing demand for energy, energy sources in Turkey. Turkey have taken their own ments for local companies to Gehrlicher Solar CEO Klaus Turkey’s growing energy measures against potential plan their investments. Gehrlicher says, “The incen- market and growing inter- difficulties with natural gas. Meanwhile, the purchase tive prices applied to RES est on behalf of local energy The most important of these prices at hand are an impor- by the Turkish government, companies in renewable measures, of course, is to energy sources are seen as the increase the ratio of renew- most important reasons for able energy sources within this. Partnerships between their portfolios. Companies Turkish and foreign compa- possessing balanced portfo- nies may also increase in the lios based on varied resources coming term. Such partner- are in a more advantageous ships in the energy market position against risks that are being discussed more could occur in the market. often as of late. Murat Sungur Akenerji, an important actor Bursa, CEO of Zorlu Energy in the Turkish energy market, Group—one of Turkey’s large is just one of these compa- energy companies—says, nies, and it stands out for its “We consider partnerships successful partnership with with foreign companies if Cez—the Czech Republic’s the interests of both sides are biggest energy company—and compatible.” its investments in renewable energy. Akenerji CEO Ahmet Ümit Danışman says, “As Ak- enerji, besides our natural gas investments in particular, we By 2023, renewable are trying to balance our port- energy sources are folio with hydroelectric and wind turbine power plants. expected to account Renewable sources comprise for around 30% of 46% of our present portfo- electricity production lio. Not being dependent on in Turkey

Big Opportunities in Wind Turkey has access to some of the best winds among European countries. This potential represents a great opportunity for investors both local and foreign

Installed wind power capacity of selected European countries

29,060 MW 21,674 MW 6,800 MW 6,747 MW 6,450 MW 1,799 MW GERMANY SPAIN FRANCE ITALY United Kingdom Turkey 28 Briefing

AVIATION Playing for Leadership with a Sportsmanlike Vision Turkish Airlines is Turkey’s face abroad. With the amazingly successful sponsorship agreements it has been signing in sports, it is making its voice heard more and more in the international arena

BY CAN GÜRSU

monumental contract signed with FC Barcelona in 2010 was a harbinger of even greater things to come. Turkish Airlines, which has become a global player in aviation and bears the distinc- tion of being named best airline in Europe by Skytrax, secured the monumental deal with Barcelona’s soccer club with the signing of the contract on the evening Janu- ary 18, 2010 in Camp Nou Stadium. Within the scope of the agreement, Turkish Airlines flies the team safely to tournaments and camps it attends outside Spain as its official sponsor. Turkish Air- lines proved that this contract t Is estImated that the ment of technology, rising with FC Barcelona—a team I world’s airline industry consumption of sports as a that made history by winning lost approximately 5 billion product, and increases in the six cups at once in a single dollars in 2008 and 2009 number of people reached season (2008–2009)—was due to the global economic are among the leading forces only a start with yet another crisis. Many airline com- behind the expansion of major agreement it signed panies, which are trying to sponsorship budgets. While four days later. increase their competitive the global crisis’s effects con- On January 22, 2010, ability by cutting costs, are in tinue to be felt, ever-bigger Turkish Airlines doubled the search of partnerships. The sponsorship agreements are stakes by signing a three- industry is going through a still signed day after day. and-a-half-year sponsorship time of transformation – it Turkish Airlines is Turkey’s agreement with Manchester seems that mergers and buy- face abroad. With the amaz- United FC, the world’s most outs will be par for course for ingly successful sponsorship valuable soccer team. Based the next few years. agreements it has been sign- in Old Trafford, one of the The importance of spon- ing in sports, it is making its Kobe Bryant, the world’s most important soccer sorships is increasing day by voice heard more and more in famous player who stadiums and England’s third day as part of the marketing the international arena. Work- is an inspiration to largest, the team boasts 11 and communication strate- ing with the best of the best in millions of basketball Federation Cups, 18 Premier gies of globally important sports ranging from basket- League championships, and brands. Sports sponsorships ball to tennis, soccer, and golf, fans across the globe, 3 European Cups, together account for the largest share Turkish Airlines seems poised serves today as the with 333 million fans world- of large companies’ sponsor- to continue its success in the global face of Turkish wide. Trusted by Barcelona ship spending. The advance- years to come. The airline’s Airlines FC and preferred by Man-

MARCH-APRIL 2012 ISSUE 9 The Turkish Perspective 29

chester United, Turkish ketball fans across the globe, Women’s Tennis Associa- lines expands its access to Airlines is gaining global serves today as the brand’s tion Istanbul Cup 2010 and a broad range of profiles. recognition thanks in part to global face, especially in the PTT Thailand Open 2010, Although Turkish Airlines these major sponsorships. US. Bryant was named MVP and it selected top female ten- may be gaining global renown Besides sponsoring two of thrice and has won five NBA nis player Caroline Wozniacki today for its international soccer’s biggest names, Turk- championships. For Turkish as its face for Business Class. sponsorships, as a flag carrier ish Airlines is a supporter of Airlines, the basketballer en- Regarded as one of the most it plays a pioneering role in European basketball too. The tered the kitchen for the first promising young names in helping to organize effective, league held with the name time ever—the resulting ad is tennis, 20-year-old Wozniacki fruitful sponsorships within Turkish Airlines Euroleague broadcast to viewers in more holds the title of youngest ten- Turkey as well. Such invest- Basketball will close with than 80 countries. nis player in world rankings. ments as primary sponsor- final four showdowns as the Turkish Airlines provides its Golf is another of the ship of the Turkish national Turkish Airlines Euroleague material and moral support world’s most popular sports, soccer and basketball teams Final Four. The agreement in tennis, too. The airline and Turkish Airlines is well and transport sponsorship of is doubly significant as being sponsored Sony Ericcson aware of this—the company the clubs Beşiktaş, Bursaspor, the first agreed to with a was the main sponsor of the Fenerbahçe, Galatasaray, and brand in Euroleague history. tournament Golf Live 2011, Trabzonspor help strengthen Turkish Airlines Board Chair- helping the world’s most fa- ties between the brand and man Hamdi Topçu says, “The mous golfers to come together its target audience. Turkish Euroleague naming sponsor- at this three-day-long event. Airlines contributes signifi- ship is a strategic step that has A sponsor of such cross- cantly to Turkish sports with bolstered our brand’s strength European golf tournaments as the support it gives to 47 on the global plane.” Because the European Challenge Tour, federations and second- and Turkish Airlines flies to over Working with the Turkish Airlines also inscribed third-league soccer teams. 70 locations in Europe, which best of the best in its name on the Turkish Turkish Airlines seems to accounts for the largest share sports ranging from Airlines Ladies Open tourna- have succeeded already in its in its income, they believe basketball to tennis, ment held in Belek in Antalya mission to become a global that this move will facilitate Province, Turkey. Turkish brand thanks to its well- the establishment of much soccer and golf, Airlines helped welcome 108 placed strategies and spon- more effective communica- Turkish Airlines seems professional female golfers sorship activities around the tion between the brand and poised to continue its from more than 30 countries world. The concentrated use its potential customers in that success in the years to to Turkey. By participating in of sports in the sponsorships area, says Topçu. come such activities, Turkish Air- of the airline, which cooper- Turkish Airlines’ basket- ates with the most prestigious ball sponsorships are not faces and teams in order to limited to those in Europe—it improve brand awareness, is actively involved in world boosts its influence over the basketball too. Kobe Bryant, target audience. As a signifi- the famous player who is an cant advantage is obtained inspiration to millions of bas- in the European market with the sponsorship of the Euro- league, a grand leap is being taken in brand recognition with its sponsorships of world giants Barcelona FC and Manchester United. Potential Business Class passengers are Turkish Airlines targeted via tennis and golf selected top female tennis sponsorships, which also player Caroline Wozniacki as its contribute positively to a face for Business prestigious perception of Class in 2010 the company’s brand. As Turkish Airlines lives up to its slogan—“Globally Yours”—with the spon- sorships it undertakes, it ascends surely and rapidly on its path to the very top. 30 Cover /The New Turkish Commercial Code

MARCH-APRIL 2012 ISSUE 9 The Turkish Perspective 31

A Change Not Only of Law, But of Mentality Too As the date it will come into effect and initiate a deep-rooted change in Turkish business approaches, both debates and informational meetings on the new Turkish Commercial Code are increasing in number and intensity. Investors and businesspeople both local and foreign are waiting for July for a brand-new way of doing business that is shaped by the touch of the new TCC.

By CEYHAN AKSOY By SEDAT GİRGİN 32 Cover /The New Turkish Commercial Code

aith gives one plea- organizations—among them sure on the cross/ the Turkish Industry and Busi- “F And so Jesus was ness Association (TÜSİAD) young, I said,” says Ünal Teki- and the Union of Chambers nalp, recalling two lines from and Commodity Exchanges of Turkish poet Yahya Kemal Turkey (TOBB). Beyatlı’s poem “Yol Düşüncesi” The decision to formulate (Thinking on the Road), add- a new code came in 1999. ing, “I was quite young too, First, the Ministry of Justice back then.” What the chair of invited commercial law faculty the commission that prepared members from universities, the new Turkish Commercial members and chairs of the Code (TCC) refers to by “back Supreme Court’s 11th and 19th then” is the year 1999, which is Chambers (which examine when he started working on the business and company law), new code. He worked day and the Capital Markets Board, night for 13 years on the new the Banking Regulation TCC, attending 195 meetings and Supervision Agency, and conferences to promote it. and representatives of He feels great pleasure to have professional organizations signed his name on such a including the Union revolutionary change to Turk- of Turkish Bar As- ish commercial life and of the sociations, the Union hot debate surrounding the of Notary Publics, and code. Besides ongoing TCC ef- the Union of Chambers and forts and his own books, Teki- Commodity Exchanges of nalp works on many projects Turkey (TOBB), creating a including stem cell patents for commission of 42 individu- the European Science Acad- als. The commission elected emy Standing Commission for as its chair Professor Ünal Intellectual Property Rights, Tekinalp, PhD, Chairman of digital libraries, Google Settle- the Department of Commer- ments, and EU patents. cial Law at Istanbul Univer- Small-scale amendments to “This isn’t a law of dusting off sity. Tekinalp also headed the it weren’t enough to keep up or retouching; to the contrary, it university’s Department of with contemporary needs. Still, is the creation of a new concept Private Law at time and thus preparing a new draft to follow in trade—it is a redefinition,” has a very clear familiarity a perfect code would be some- says Professor Ünal Tekinalp, with commercial law. FOREIGN thing of a heavy responsibility. PhD, Chairman of the Com- The new code took a lengthy COMPANIES’ The TCC Commission and its mission for the New Turkish time to prepare, due largely 45 members therefore started Commercial Code, explaining to the considerable inadequa- BRANCH OFFICES working as soon as it named the changes the new code will cies in the code that had been The new TCC is bringing new its chair. Professor Tekinalp’s bring to the Turkish sphere of in place since 1956. The code regulations for foreign companies’ steadfast discipline naturally business. His words are enough today is more than 50 years old branch offices in Turkey. According influenced the commission’s to fully express the revolution- and it had already started to to the new regulation on this matter, work—he demanded the com- ary nature of the new TCC. The exhibit its age and difficulty in Turkish branch office managers of mission’s first meeting just five new 1,535-article Turkish Com- adapting to the times in 1999. foreign companies are responsible hours after the subcommit- mercial Code signifies a brand- for publishing in Turkey the branch tees’’ chairs were chosen. The new approach not just in terms office’s financials and its parent commission was dismissed at of the rules and regulations it company’s year-end conglomerate 11:00 a.m. and reassembled by financial summaries and annual contains, but also in the way in 4:00 p.m. to have a meeting reports within six months after being which was created and drafted. Transparency appears granted the necessary approval in which the subcommittees For the first time ever, all con- required by the set of laws that would present their initial aims cerned NGOs and professional in the new TCC not as and suggestions, thus kicking just a rule, but as a applies to them. This satisfies part of organizations in Turkey were the requirement to inform the public off the story of the new TCC. consulted during the prepara- keystone of corporate by disseminating information about The draft of the new code tion of such legislation. The governance that the financial condition of foreign was created with all com- drafted articles were discussed embodies the spirit of companies. ments received, past practices, with some 16 institutions and the new code opinions, and the necessities

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[it] has been placed in the the rules that will be applied to the company is one of the new Turkish Commercial to publicly traded companies. requirements of the code Code within the context of However, due to the need geared toward instituting the “This isn’t a law Information Society Services. for corporate governance to principle of transparency. An- of dusting off or The tool through which this is be applicable to all enter- other important matter is the made tangible is the web- prises, every line of this code changes brought to the rights retouching; to site.” As part of the essential was considered as a codex of minority interests outlined the contrary, it elements of transparency in intended to give assurance in the current code to bring is the creation the new TCC, information of to investors and facilitate them up to date, which offer of a new concept importance to stakeholders, sustainable development. In greater protection not just in trade—it is a shareholders, and investors this way, the new code consti- for the rights of minorities redefinition” must be made available on tutes the foundation that will but also all shareholders. For these websites. There is an support Turkish companies example, minority interests additional point Tekinalp in becoming institutionalized are able in the new code to wishes to highlight here: there and competitive. Being aimed request special oversight and is no requirement to share with the regulations concern- gain greater say by organizing any information projec- ing principles of corporate via the structure of “corporate tions, manufacturing secrets, governance, which feature representation.” When corpo- expenses, suppliers, and in many of the new code’s rate governance therefore pre- details of debts owed and due. articles, is the institution of vails in the system with all its “I feel the need to explain this the criteria of transparency, parameters, companies will repeatedly to overcome mis- justness, accountability, and become enterprises that are information to this effect,” he responsibility. The estab- managed fairly, transparent, says. Transparency appears in lishment of a website for accountable, and responsible. the new TCC not as just a rule, every company on which but as a keystone of corporate there is information about a THREE-DIMENSIONAL OVERSIGHT governance that embodies the company’s finances, impor- The International Financial spirit of the new code. tant decisions it has made, Reporting Standards (IFRS) The guiding principle of directors’ board and general system and independent the new code is corporate assembly meeting minutes, oversight are two other impor- governance, or the whole of and third-party bodies related tant parameters that bolster

of modern business in mind, and it was approved by the Grand National Assem- bly of Turkey last February. It is set to go into effect on FAIRNESS July 1, 2012. Companies are When making decisions, now scrambling to complete company divisions must act in their preparations to take the a way to as to harm interest TRANSPARENCY changes brought by the new holders as little as Universal accounting possible. standards/independent code in stride by July—and accounting and not only Turkish companies, transaction accounting/ but also international busi- information society nesses that plan to invest CORPORATE services in Turkey, open franchises, GOVERNANCE: or partner with Turkish THE ESSENCE companies. OF THE TCC ACCOUNTABILITY PRINCIPLES OF CORPORATE The organizational GOVERNANCE directive includes RESPONSIBILITY The new Turkish Commercial mutual responsiblities at all company levels. The new TCC codifies Code will be changing many mechanisms for responsibility business habits at the root. in a rational fashion. Its biggest contributions are based on transparency. “This transparency is an effective, active transparency,” says Ünal Tekinalp, adding, “and 34 Cover /The New Turkish Commercial Code

these principles. The new The TCC has changes to a company’s legal code requires all companies, legally enshrined status. The shareholder’s right Website whether publicly traded or pri- to be represented in the gen- vate, to comply with the fully the principle of the eral assembly is made more Requirement IFRS-compatible Financial thorough and fair useful and dynamic with the Reporting Standards for Tur- view right to be informed and to The new TCC requires all stock key (TFRS/TMS) published participate in the general corporations to maintain a website. by the Public Oversight, assembly. This requirement is to ensure that the public is informed as best as Accounting, and Auditing Tekinalp characterizes all possible. Users will be able to easily Standards Authority of Turkey these changes as the “indis- access information, documents, (TMSK). The homogeniza- pensable elements of the reports, tables, and announcements tion of the current cornucopia enterprise’s sustainability. The European investing climate.” about companies from their of practices will create fiscal establishment of an internal Creating this climate is a websites. Companies that do not savings and facilitate world control system is aimed to primary objective for the code serve the files they are legally integration in accounting facilitate the productivity and will be highly influential required to or provide inaccurate information systems. This of an enterprise’s activities, in drawing foreign investors information are faced with the full regulation will be in effect as of the preservation of company to Turkey. Tekinalp worries weight of the penalties for breaking January 1, 2013. Additionally, assets, and the compliance of about the dissemination of the law, as do their boards for failing to fulfill their responsibilities. The to ensure that certain special operations with regulations. information pollution regard- penalties have not been disclosed. operations are performed in The new TCC also increases ing this matter, but still, the accordance with the law and the value of holding a com- peace of mind brought by the to protect both a company’s pany’s shares. New rights are fact that the new TCC will capital and the rights of given in the code to share- create a business environment Special concerned parties, transac- holders that strengthen their in Turkey that matches up to tion auditing will be required position, including the right international standards helps Requirements of all joint-stock and limited to part from a company in turn the weariness created by For partnerships. To ensure that the case of a merger, the right manipulative criticisms and the principle of transparency to be proposed in the case of by running from meeting to CoNGLOMERATES is upheld, companies will be conditional capital increase, meeting into satisfaction— subject to independent and the appointment of auditors, and even if it accounts for a The new TCC prohibits parent internal auditing in addition and cancellation or the right couple of more gray hairs on companies from abusing their to transaction auditing. Joint- to issue a liability suit in the Tekinalp’s head, it makes his power to control the subsidiary. The controlled company’s board will stock and limited companies case of share-splitting and soul younger. have to prepare a report within three will be overseen by indepen- months of each year-end describing dent auditors in compliance in detail: with the Auditing Standards • All of the formally documented of Turkey. What the new TCC aims to do with this practice transactions entered into with INDEPENDENT the parent company, with other is to increase competitiveness AUDIT affiliates or for the benefit of the and universalization. With parent company or other affiliates the same goals, and in line in the preceding year. with the principle of transpar- • Any action taken or not taken for ency, the TCC also envisions the benefit of the parent company a change to the structure of or other affiliates. companies’ boards of direc- • Any losses incurred by the tors, putting into action here “internal auditing,” another controlled company as a result of board such transactions or actions. auditing mechanism. The auditing of the institutional The parent company’s shareholders can request reports system is enshrined among a on the financial status of the board of directors’ inalienable, Risk INTERNAL MANAGEMENT affiliates at the parent company’s indispensable powers and AUDIT ordinary general meeting. responsibilities. With the pro- The parent company will have vision of means of oversight to compensate affiliates that, on and control for the board of directors, the establishment OPERATIONAL balance for the year, suffer any AUDIT losses resulting from control of an internal control system exerted by the parent company. appears before us as an im- portant change in terms of an

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ation. This picture will, like a passport photo, be unaltered, non-retouched, and clearly visible. The second important point is that all corporations and limited companies have been made subject to auditing by independent auditors. This will be conducted in large companies by independent auditing institutions and in medium- to small-sized companies by at least one sworn financial advisor or inde- pendent accounting financial advisor. According to the IFRS and international auditing standards, transparency means for Turkey to speak the language of the international markets. And this lan- guage is extremely important especially for the foreign investor, because it is not only those who come here to invest, but also those who will come here for com- merce who will find partners that speak the language they understand.

In this case, could we say that the code is bringing the standards of interna- tional commerce to Turkey? Turkey is a country that is engaged in discussions with the European Union “ThIs Is the Start of a for full membership. However slowly these discussions may be progressing, Change IN Mentality” and even if this situation has come to the point where it tests the Turkish Dr. Ünal Tekinalp, Chairman of the Commission for the New people’s patience, like all other legislative arrangements the purpose of the new Turkish Commercial Code (TCC), replies to criticism of the new Turkish Commercial Code is to establish code that will go into effect in July a European investing climate. The Eu- ropean investing climate brings with it a change of mentality in Turkey. The char- By CEYHAN AKSOY By ABDULKADİR DEMİR acteristics of the Turkish Commercial Code that we previously mentioned are hat does the new code bring ers, and investors. Investors could be indeed parts of the European investing W to Turkish business? How will characterized in another way—as users climate, too, and they are its indispen- the new code change the business en- of financial statements, which in fact sible elements. However, the TCC has set vironment in Turkey and for foreign means a broader definition of investors. this as a purpose of especial importance investors especially? So whoever is to invest or change their and therefore, it has brought European The code brings close to ten new area of investment, they will be the ones directives to the mergers, demergers, things to Turkish business that will to use this information. This is where and legal entity type changes to Turk- also concern foreign investors, above transparency assumes its most tangible ish law. The European investing climate all transparency. This transparency is form. But there are many principles has been adopted exactly in the delivery an effective, active transparency and of transparency in the new Turkish of capital to companies and the preser- has been placed in the new Turkish Commercial Code. The first is that all vation of delivered capital. The rights Commercial Code within the context of Turkish enterprises and companies will given to stockholders and minorities are Information Society Services. The tool use Turkish standards equivalent to exactly equal to those in the European through which this is made tangible is the International Financial Reporting investing climate. the website. Whether public or not, all Standards. In addition to these, the TCC As Turkey brings a somewhat lighter corporations will establish websites, as has legally enshrined the principle of version of the European investing en- will all limited companies both small the thorough and fair view translated to vironment, it also projects penalties and large. And on these websites, Turkish as “fair picture”—that is to say regarding commercial crimes for the first they will put information especially that financial statements will present a time in its laws. And this is an impor- concerning shareholders, stakehold- fair picture of a company’s financial situ- tant matter for the European investing 36 Exclusive Interview /Dr. Ünal Tekinalp

climate. One of the most important to be Turkish and reside in Turkey. But partner. Until now, this situation was instruments of the European investing this is not a discriminatory clause—it not so clearly obvious. In the new Code, climate is the single-member company. was set only in order to find a legal ad- if a foreign company were to establish a Turkey has codified the single-member dressee in situations where a liability suit limited company in Turkey, there isn’t company in compliance with European is launched against shareholders and even a requirement for the company’s directives—it has accepted both single- creditors and to make it possible to file administrator to be Turkish. The shareholder corporations and single- such suits, and there are similar clauses requirement for a Turkish member on partner limited companies. in other countries. Other than that, there boards of directors is only imposed on is no clause that could be deemed dis- limited companies. Foreign law firms, Does the Republic of Turkey treat its criminatory. Care was taken specifically too, state that the regulations in the citizens and foreigners differently in to avoid imposing clauses that could be new code concerning single-partner the code? interpreted as being discriminatory. companies will play quite an important This is a very important matter—in role in attracting foreign capital. this code, Turkey has not discriminated What are the advantages that single- between Turks and foreigners in invest- partner companies will create for The new Turkish Commercial Code ing, company partnership, and com- foreigners in terms of being able to was much debated domestically. How pany management. There is no kind of work in Turkey? was it perceived abroad? What kind discrimination whatsoever. Perhaps the The single-partner company means of responses have you so far received only matter that could be perceived as that foreign capital will be able to invest from abroad? discrimination is the requirement for at in Turkey in their direct investments I can speak of several different sources least one member of a board of directors without having to seek and obtain a on this matter. Most notably in the Financial Times, many positive articles were published in the foreign press about the TCC. Secondly, the new TCC Board of Directors was covered quite extensively in the OECD publication Corporate Gover- The new regulations for companies’ boards of directors diverge in several nance in Turkey. The new TCC has notable ways from the present system. Corporate governance principles placed special importance on corporate were given significant importance in the new regulations and changes were made to the structure of the board system with the intent of promot- governance, and the OECD’s evaluation ing professional governance and facilitating transparency. The new TCC of the draft was very positive. I’d like to emphasizes professionalism in the board of directors and promotes even read some things to you. The new things greater administrative functioning n companies. The “professional execu- brought by the code are explained in tive” concept successfully practiced for years in the US and EU countries is detail in this report. expected to become widespread in Turkey with the new TCC. The board of Turkey is a country whose economy directors will shed its superficiality and gain a more functional quality, mak- is formed in large part by SMEs. As ing decisions about the company more transparent. Furthermore, the legal the new code is being debated, one of and penal measures in the new TCC that relate to board members’ responsi- the matters raised most frequently is bilities will encourage effective, careful practices. whether or not SMEs will have difficulty adapting. Notable changes brought by the new TCC can be listed as follows: The Turkish Commercial Code is being subject to much debate and I, The current stipulation that a board of directors selected by legal persons will be able to speak on as commission president, am very should consist of at least three members is their behalf on a company’s board of directors. pleased. And the commission I repre- abandoned, thus making it possible to have a At least one board member is now required to live one-person board of directors paralleling sole sent is very pleased too. There is a very in Turkey and have Turkish citizenship. This will small segment made uneasy by the new proprietorship. Administration is expected to make legal and penal liabilities easier to apply in TCC—part of this small circle is people become simpler in practice due especially to practice. small-scale joint-stock companies not needing who wish to use their companies’ safes a three-person board of directors. This flexibility Board meetings will be allowed to take place in as personal safes. The first group is is, in turn, expected to enable easy transitioning virtual environments, eliminating disruptions made up of these people. This is being to the establishment of professional companies. relating to assembling the board of directors forbidden definitively for the first time in especially for companies with foreign funding. However, some question whether a single- Turkey. Just as in America and Europe, person board of directors can truly be called a A new interpretation of joint liability with regard it is treated as “robbing the company”—it board. to the evaluation of faults has been brought in is considered embezzling or funneling The requirement for board members to maintain relation to board liability. funds from the company. This legal shares is lifted, therefore allowing board members At least one quarter of board members are required aberration is so internalized that some to be selected from experts and professionals. to have had higher education. This is intended to businessmen are objecting to this. In Like natural persons, legal persons are allowed encourage the professionalization of management. this opposing minority, there are also to become board members. A representative This rule will not apply to single-person boards. certain financial advisors who find it easier to work via the account we call a

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I would also like to note that the Union of Chambers and Commodity Exchanges of Turkey (TOBB), a con- stitutionally foundedw organization, should support the state. As I said, TOBB is a constitutionally founded organization and collects dues. Where it should spend this income is not in- dicated by law. TOBB can use this in- come in this area. For instance, I think TOBB should sponsor the creation of software relating to IFRS and interna- tional auditing standards and distrib- ute these to limited companies free of charge. This would be of great benefit for the establishment and unified application of this new system. What limited companies are requesting from TOBB is as easy as it is for a pianist to fulfill a request for a standard—just as no cost is incurred on behalf of the pianist to do so, fulfilling this request were transplanted directly from the represents no expense for TOBB. “Like all other legislative existing law, the remaining 15 crimes are arrangements the purpose of penalized with a fine of around 20,000 the new Turkish Commercial liras. Here, just as with the website Code is to establish a European matter, a sort of information pollution investing climate. The European is being spread around with claims that everyone could be jailed. This isn’t true investing climate brings with either. And furthermore, the penalties Other Tangible it a change of mentality in are so light as to be incomparable to Turkey” penalties in countries I have had the Changes Brought chance to examine in Europe, particu- by the New TCC larly France, Germany, and Austria. This information pollution works to frighten people and create confusion. But this air company’s shareholder current accounts. is now dissipating. The processes of establishing and They account for a very small segment of I have said that limited companies, restructuring companies have been the very large population of financial ad- too, are subject to financial reporting streamlined. They are also backed by stronger visors. Together with certain circles, they and auditing. Limited-liability compa- guarantees. are creating great information pollution nies are the prototypes of SMEs. The Limited companies and joint-stock and confusion. And, for example, they state in Turkey provides great financial companies have been brought closer say that a company’s plans, projections, possibilities to limited companies. together logically. manufacturing secrets, expenses, suppli- They want to move limited companies Every aspect of conglomerates has been ers, and detailed accounts of their debts out of the scope of auditing and use codified fully. and the money owed to them. None of the incentives in an unchecked fash- The establishment of companies is based on these are true. The principle in what will ion, and for this they claim that the a rational, fluid, transparent system. be placed is content within the scope of auditing of limited companies imposes The protection of capital is guaranteed by information society services—meaning new expenses. There is an element of many-sides rules. it is content that concerns the owner, truth in this criticism of its expense, interest holder, and creditor. No content but don’t forget that the state could Various alternatives regarding the structure of governance and executive organization are concerning trade secrets appears here. award a small part of the incentives introduced. This is where the most information pol- as payment of fees for SME auditors. lution is being created. And in places that don’t have large Partners and executives will not be able revenues, capital, and employees—like to use company resources at their own Does the TCC envision heavy penalties limited companies—auditing fees will discretion. for commercial crimes? be lower. If the state pays this (and Reorganization—mergers and demergers While a jail penalty is envisioned in only I am of the opinion that it should) the especially—has been codified clearly. five cases in the TCC, three of which expense for this won’t be that high. 38 Exclusive Interview /Mehmet Şimşek, Finance Minister

“the economy ıs safe, sound and suffıcıent” Milton Friedman would probably be proud. Finance Minister Mehmet Şimşek—one of the most active ministers in the cabinet—believes sincerely in the power of the market and the importance of foreign capital. As one of the architects of its financial strength, Şimşek explained Turkey’s economy to The Turkish Perspective.

By Ceyhan Aksoy By ŞEREF YILMAZ

The new Turkish Commercial Code that comes into effect in July 2012 imposes additional financial burdens on enterprises. Should these obligations are not fulfilled; companies may face the risk of being shut down. Do you believe that the market and enterprises are ready to meet these financial obligations? After more than 5 years of deliberations, the New Turkish Commercial Code was approved by the parliament in January 2011. Considering that the law comes into effect from July 2012 and onwards, enterprises had plenty of time to adjust. However, we are aware that some micro companies may need time, financial and administrative capacity to adapt to these changes. We hear them and we will support them. The purpose of the new code is to improve investment climate, enhance transparency, increase competition and productivity, and improve public confidence in Turkish companies. More importantly, enhanced accountability and transparency is the main pillar of the new code, and it should help SMEs access bank credit more easily. Despite some reservations expressed by SMEs, we do not plan to water down an important structural reform. The new code replaces an outdated and more than half a century old law. Turkey cannot compete on a global scale with an a la Turca commercial code.

MARCH-APRIL 2012 ISSUE 9 TheThe TurkishTurkish PerspectivePerspective 39 40 Exclusive Interview /Mehmet Şimşek, Finance Minister

It is all about being more transparent, preparing financial statements in line with international accounting and auditing standards, paving the way for mergers and acqui- sitions, and making it easier to establish and operate companies.

Estimates for Turkey’s growth in 2012 exhibit considerable variance, ranging from 2% shrinkage to 4% growth. Although you say you don’t believe in point estimates, wouldn’t you agree that such a broad range of growth estimates are a source of con- fusion in the markets and especially for investors? Following a rapid recovery from a deep recession, growth is likely to moderate in 2012. Ensuing a 9 percent GDP growth in 2010, the Turkish economy is likely to have expand- ed by around 8 percent last year, underlined by strong domestic demand. This past two years’ growth rate has been substantially higher than the Turkish potential growth rate. Hence some sort of moderation of growth rate from cyclical highs is likely. The slowdown is also driven by an overall slowdown of the global economy. Finally, the moderation is likely to be exacerbated by the euro area debt crisis. We believe that Turkey will grow around 4 percent this year, managing a soft landing. The labor market is in good shape. While the pace of credit expansion is slowing, there As I have mentioned earlier, we do not is no deleveraging. Barring the risk of substantial deterioration in global financial and expect the Turkish economy to experience economic conditions, the risk of a contraction in GDP growth is extremely low. Further- even a mild recession in the absence of a more, we have fiscal space to respond should growth slowdown more than expected. 2008-style global financial shock. Finally, we are about to introduce a generous investment scheme to increase private sec- We recognize that Turkey has strong tor investments and employment. trade and financial linkages with the euro Market estimates of growth probably reflect uncertainty surrounding the euro zone zone (accounting for 47 percent of our crisis and possible fall out from a generalized slowdown in the global economy. We have exports, 60 percent of tourist arrivals, and noticed that consensus estimates have begun edging up in the past few weeks on the nearly 80 percent of FDI inflows) repre- back of strong momentum and rising confidence in EU’s ability to fix its problem as well senting a substantial downside risk for the as better than expected macro data from the US. Turkish economy. We believe that investors should continue to focus on the medium and long-term Nevertheless, Turkey’s fundamentals are growth prospects in Turkey. Favorable demographics combined with structural reforms strong and we have sufficient fiscal space aimed at boosting productivity should keep Turkey on a strong growth trajectory over the to limit a possible (but not likely) shock next few decades. from the euro area. On the fiscal front, we are already back Again in relation with growth estimates, it is stated in a report issued recently at the pre-crisis levels. Fiscal consolida- by Merrill Lynch that growth will not occur in the first half of 2012 and that the tion along with strong economic growth economy could even shrink, but that the total yearly growth of around 2.3% will let us improve our fiscal indicators be based on performance in the second half of the year. Are precautions or policy considerably. I expect last year’s general changes being considered for the first half of the year? What kind of measures government debt to GDP to be around will be taken against the risk of shrinkage? 39.8 percent and budget balance around 0.6 percent. These figures are around the pre-crisis levels of 2007. Further, our PERCENT PERCENT USD BILLION fiscal prudence let us almost nullify net 75 -12 350 external debt, which used to be close to 70 NET TOTAL DEBT -10 300 the level of net domestic debt in 2002. 65 DEBT/GDP Having kept our house in order would -8 250 60 allow us to provide fiscal stimulus in case 200 -6 the fire gets out of control in Europe. 55 Similar to what we did in 2009, we have BUDGET 150 NET DOMESTIC DEBT 50 BALANCE / -4 room to provide temporary tax breaks to GDP, RHS 100 45 incentivize consumption and investment. -2 50 Banking sector is safe and sound. 40 NET EXTERNAL DEBT Unlike a majority of the advanced 35 0 0 economies, we did not need to save any 30 2 -50 of our banks during the global financial crisis. Our banks have sufficient capital, 2010 2010 2002 2003 2004 2005 2006 2007 2008 2009 2002 2003 2004 2005 2006 2007 2008 2009

2011* more than twice the 8 percent level that 2012* 2013* 2014* Q1-2011 Q2-2011 Q3-2011 Source: Tresury, Medium-Term Program is required by Basel II, and nearly two *Projections times what will be required by Basel III

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policies, we have ensured fiscal discipline and we adopted structural policies investing in our people, our future. But most of all, we have political stability. During the global financial crisis, our government has proved that we can get our act together. We can appropriately applied necessary policies in a timely manner. Likewise, the same government is here and ready to extinguish any flames that may spill over to our economy.

The Central Bank’s monetary policies are subject to frequent criticism. What is your assessment of the CBRT’s policies? First of all the Central Bank is independent. It is managed by smart and experienced economist and in principle, I do not comment on the appropriateness of monetary policy. In late 2010, the Central Bank began pursuing an unorthodox monetary policy, on the back of substation capital flows to emerging markets. It has adopted a broader macro- financial framework aimed at limiting capital flows and keeping inflation at its target. For this, the CBRT has started to target both the policy rate and the policy corridor. There is an ongoing debate on the effectiveness of unconventional monetary policy; in 2019. They are profitable and have low however, we are going through uncharted territories requiring unconventional thinking NPLs. Our banks have good insulation and employment of unorthodox tools. against a bad weather outside. While the new policy increased Central Bank’s flexibility, admittedly it also limited We have created jobs improving house- predictability for the market player. That does not mean that the policy is inappropriate. hold balance sheets. Household liabilities On the contrary, I would say that the monetary policy has been effective in re- increased in line with financial develop- balancing of the economy, in particular, since the second half of last year. Market ment and economic stability that we dem- interest rates have risen significantly, reducing domestic demand. Credit growth onstrated post-2002. However, household declined from the peaks of 50 percent in the first of half of last year to less than liabilities remain low at 18.8 percent of 10 percent more recently. GDP as of June 2011, much lower than the 60 percent average of the EU member The new constitutional reform process is expected to gain momentum in 2012. How states. Strong job creation that accompa- will it affect Turkey’s economic prospects? nied the successful rebound from the crisis Political stability has been critical to the success of the Turkish economy over the past has helped reduce household’s interest decade. The work on a new constitution, which began late last year, is likely to enhance payment as a share of their disposable the standards of Turkish democracy, further boost fundamental rights and freedoms, and income from 5.2 percent in 2009 to 4.2 strengthen Turkey’s institutional framework. percent as of September 2011. We advocate a progressive, contemporary and pro-business constitution. Thanks to our macroprudential Our main goal is to reform our institutional infrastructure. One must note that eco- policies, household balance sheets are nomic growth cannot nurture without its main anchor, i.e. the good and sound institu- not exposed to exchange rate risk. Our tions. One can clearly see the relevance by glancing at Scandinavia, the land of rich and macro-prudential policies do not al- stable countries, versus Zimbabwe, a country that has managed to shrink over the last low households to borrow in foreign two decades. exchange (fx). Hence, we have managed to reduce the share of fx and fx-indexed loans in total consumer loans from 13 PERCENT PERCENT percent in 2002 to less than 0.8 percent in December 2011. 20 15 The new “industrial policy” would also CONSUMER LOAN BUSINESS LOAN bring fresh blood to the economy. As the RATES RATES news is spread out, we have been work- 16 ing on a new industrial policy to reduce regional development gaps and the cur- 10 rent account deficit. The new scheme will 12 bring investment incentives to produce high value-added and import-intensive products in Turkey and more so in less developed regions. Such incentives would 8 5

help private sector gain its momentum in 11 11 11 11 11 11 11 11 11 11 11 11 11 11 11 11 11 11 11 11 11 11 11 11 12 12

v v c c p p r r ct ct ul ul p p AN AN un un an an j j j j case of an unexpected slowdown. j j 7feb 7feb 7 7 7o 7o 7se 7se 7de 7de 7a 7a 7J 7J 7aug 7aug 7 7 7no 7no 7may 7may 7 7 7mar 7mar We have a Medium-Term Program Source: Bloomberg ensuring prudent policies. Thanks to these 42 Exclusive Interview /Mehmet Şimşek, Finance Minister

A well-functioning and sound legal system is the main pillar of an institutional infra- structure, the main pillar of democracy, human rights and freedom. In that regard a new constitution is a must for Turkey. It is the way to the league of advanced countries. It is a step further in ensuring the fundamental rights and freedom of our people. I believe the constitutional reform will also help Turkish economy transition to a more market-friendly and competitive environment. It will be significant in transition- ing Turkey towards a performance-based culture, encouraging entrepreneurship and promoting economic activity. We believe that the new constitution would improve Turkey’s standing in the interna- tional arena.

In international investor surveys, there is a concern on the complexity of Turkish tax system, on high taxes, especially in industries such as communications and auto, and a relatively narrow tax base. Do you plan to reform the system? Our tax system is not perfect but the gap between perception and reality is unfortunately wide. First of all, we have been reforming our tax system, bringing it in line with interna- tional best practices. For example, we did a corporate tax reform in 2006, simplifying the rules and regulations as well as reducing the average tax burden on corporate earnings (corporate tax plus withholding tax on income) from 65 percent in 2002 to 34 percent. “I believe the constitutional Currently, Turkey has one of the lowest corporate tax burden among OECD reform will be significant countries. Furthermore, for new investments we have lowered corporate income tax rate as low as 2 percent. in transitioning Turkey towards a performance-

PERCENT based culture, encouraging 70 entrepreneurship and

60 promoting economic activity”

50 Similarly, we have reduced the income tax burden over the past sev- 40 eral years. Highest marginal income tax bracket was cut down from 49.5 per- 30 cent to 35 percent and the lowest bracket from 22 percent to15 percent, and the 20 number of tax brackets were reduced from 6 to 4. We are currently working on a major 10

. overhaul of personal income tax. We are e e e a a a a a p n ı ı ı ı ı ıc le ı v c c an ı r a usa p h t ak en p on ugal ıt aly a da c ral v

v hoping to submit the PIT reform to the hre t s t srael mex j urkey eland korea anada oland t c ı nland c gree t ı fran erland reland e c p e es aus sweden ıc enmark norway ı f or belgium O england slo hungary slo germany D p herlands aus cz ıtz parliament by July. t luxemburg Turkey2002 sw newZealand ne In 2008, we introduced an R&D Source: OECD reform, providing special incentives for R&D investment projects if a minimum of 50 personnel are employed in an With minimum Wage Subsidy R&D center. It allows up to 225 percent (2008 and onwards) With minimum Wage Subsidy (2008 and onwards) deduction of R&D expenditures from Minimum Tax Burden on the tax base. In addition, it includes up Efective Tax Burden Disposable Income to 90 percent income withholding tax Single 12.8 5.95 5.3 exemption for employees, and 50 per- Married 12.8 5.95 3.8 cent of social security premium exemp- Married-1 children 12.8 5.95 2.6 tion for employers for a period of 5 years. Married-2 children 12.8 5.95 1.5 Tax exemptions also include stamp duty. Married-3 children 12.8 5.95 0.7 These incentives within the new law will Married-4 children 12.8 5.95 0 remain in effect until 2024.

MARCH-APRIL 2012 ISSUE 9 TheThe TurkishTurkish PerspectivePerspective 43

Corporate wage bill was eased to Countries CDS 10 Year Bond Yield S&P Credit Ratings Fitch Credit Ratings endorse further employment. We have reduced employer’s contribution to the France 177.5 3.0 AA+ AAA employee’s insurance premium by a quar- Austria 164.8 2.9 AA+ AAA ter, from 19.5 percent to 14.5 percent. Slovenia 401.9 5.2 A+ A Since 2008 we have established the Spain 365.0 5.0 A A minimum wage subsidy, easing the tax Slovakia 291.3 4.3 A A+ burden on the poor. The subsidy keeps at Italy 382.0 5.4 BBB+ A- least half of the minimum wage earn- Ireland 575.0 6.7 BBB+ BBB ers income outside the taxable income Turkey 246.3 5.4 BBB- BB *February 22, 012 depending on his/her marital status and Portugal 1,102.1 11.5 BB BB+ *Countries are ranked according to number of kids. For instance, we have nul- Greece 10,713.4 29.5 CC C their S&P ratings lified the income tax for a minimum wage earner who is married and has four kids. As a result, we have reduced the average took the office. Rating agencies have upgraded Turkey from B- in 2002 to BB- in 2007. tax burden on wages, including social Post-Lehman crisis, further upgrades have followed by two notches taking us to BB while security premiums, from 42.5 percent in many advanced markets have been downgraded. 2002 to 35.9 percent. Hence Turkish wage Despite these upgrades, we believe that ratings remain laggard in assessing the earners do not any more carry the highest fundamental economic and political transformation of Turkey. Markets continue to rate tax burden among their OECD peers; we Turkey higher as reflected in Turkey’s risk premium. moved 9 steps down in this ranking. Turkey has strong macro fundamentals. We also reduced the burden on indirect • First we satisfy Maastricht criteria on debt and deficit. Last year’s debt-to-GDP is taxes. around 40 percent, and budget deficit-to-GDP around 0.6 percent. • Helping the consumption basket of the • Second banking sector is strong and healthy. Turkey was one of the few countries poor, that did not need to bailout banks. • Supporting the need for health and • Third, we have strong growth and job creation. We have created 3.7 million jobs education since 2007. • Stimulating investment and overall • Last, we have political stability. economic activity. • Supporting exports. Do you have any messages for foreign investors who plan to invest in Turkey in 2012? Following these reductions, effective Over the past nine years FDI inflows amounted to 109.4 billion dollars, much higher VAT rate in Turkey declined from 16 per- than the average 769 million dollars received during 1984-2002. This shows that we cent to 14.4 percent. This is an outstand- must be doing something right. ing reform considering that average VAT Why invest in Turkey? rate increased from 19.8 percent to 20.7 • We are a sizable economy. We are the 16th largest economy in the world with a percent in the European Union in the GDP of $770 billion and 18th in the world with a population of 74 million. More aftermath of the global financial crisis. importantly, Turkey is to be the second largest in Europe and 10th largest in the The perception that the tax burden in world by 2023. Turkey is high is due to the relatively high • We have business-friendly environment. According to the World Bank Doing Busi- taxation in autos, alcoholic beverages, ness 2012 Survey, Turkey ranks 71st out of 183 economies in terms of ease of doing tobacco products and a special tax on business. With this ranking, we are ahead of Italy (87), Argentina (113), Russia (120), communications. Brazil (126), and China (191). This is a great improvement noting that Turkey’s ranking has improved from 93 in 2006 among 155 countries. With the reduction of the credit scores • We have a business-friendly environment. One can start up a business in Turkey in 6 of many European countries, credit rat- days on average—it exceeds 14 days in the OECD countries. ing agencies are a hot topic once again. • We are getting more competitive. The Global Competitiveness Report shows that What are your expectations for 2012 we are climbing up the ladders. In 2009 global competitiveness index, we ranked 61st concerning Turkey in this regard? among 139 countries; in 2011, we ranked 59th among 142 countries. With recent cuts in sovereign ratings of • We have a Medium-Term Program investing in the future of our country. With our some European countries, rating agencies economic agenda, we are improving our business and investment environment, ad- are on the agenda once again. vancing infrastructure, reducing energy dependence, and moving up the value-added Turkey has been one of the very few chain. countries which have experienced multiple • We have a pro-active government supporting cooperation internationally. We have grade upgrades during the global financial eliminated reciprocity to facilitate real estate sales to foreigners; crisis. Thanks to political stability, struc- • We are keen on attracting foreign investment in Turkey through various projects such tural reforms and strong macroeconomic as the “New Investment Scheme” and the “Fatih Project.” performance, Turkey’s sovereign ratings • And most importantly, we have economic and political stability. have improved since my government So my message to foreign investors is “invest to Turkey.” 44 Opinion / Robert Fisk

MARCH-APRIL 2012 ISSUE 9 The Turkish Perspective 45

“History Goes Forever” Robert Fisk has witnessed nearly all aspects of life in the Middle East. “History goes forever,” says the illustrious journalist, in summation of his statement on the unique nature of the events occurring in the region today and his view that one shouldn’t expect results from it in the short term. History’s fingers never relax their grip; they never leave us unmolested and they can touch us even when we would never imagine their presence.

By CEYHAN AKSOY

“I don’t like the definition ‘war correspon- riences, Fisk started questioning not only the dent’. It is history—not journalism—that definition of journalism, but also the com- has condemned the Middle East to war. I mon Western perception of the Middle East. think ‘war correspondent’ smells a bit, reek- The journalist approaches the Middle East— ing of false romanticism: it has too much of a land whose history is mired in battle and the whiff of Victorian reporters who would blood—from a point of view that official eyes view battles from hilltops in the company of are unable to see. Today, the journalist again ladies, immune to suffering, only occasion- takes the spotlight in Turkey with the recent ally glancing towards the distant pop-pop reprint of the Turkish edition of his 2005 of cannon fire,” says Robert Fisk, the British book “The Great War of Civilization.” As the journalist who writes for The Independent, rather stiff winds of change brought by the questioning the nature of a descriptor often Arab Spring are interpreted by some as a new applied to him. move toward democratization in the Middle He was in Afghanistan during Russia’s in- East, Fisk approaches such ideas with the vasion, in Kuwait during Iraq’s invasion, and same suspicion he reserves for the concepts of in Baghdad when the US invaded in response civilization and terror. Fisk explains his views to Iraq’s Kuwaiti incursion, and he inter- on the region, Turkey’s rising image, and the viewed recently killed al-Qaeda boss Osama role played by the US in this transformation bin Laden three times. Following these expe- to The Turkish Perspective. 46 Opinion / Robert Fisk

s the aftermath of the wind “The Great War of Civilisation” is seen by of change that began in many as Fisk’s finest ATunisia, Egypt, Libya, and work Syria—the “Arab Spring,” as it has been termed—what foundations do you believe will come to underlie the balances in the region in the short to medium term? I don’t like the term “Arab Spring”; I I think that after these expressions of prefer “Arab Awakening,” which was self-rule—for that is what the uprisings the title of George Antonius’s fine book are—it will be difficult to reinstall an- on the 1916 Arab Revolt. It seems to other set of Hammurabis, as you put it. me there are no more “balances” in the What the Arabs wanted—and want—is region and that we are approaching— to own their own countries, not to have certainly in Tunisia and Egypt—the them treated as the personal property first real experiment in “Islamist” party of their respective autocrats and their rule. The FIS (Islamic Salvation Front) families—and of their Western backers. would have won the elections in Algeria but the poll was suspended by the Are the movements in the region truly army and led to civil war in the 1990s. revolutionary in nature? Is there not Of course, the military could insist on a risk that the forces that led these clinging to power in Egypt (I don’t changes will monopolize power think it will succeed) and the US would and fall away from just, democratic far prefer to deal with unelected gener- approaches to governance? Do you als with a facade of democracy rather believe it is possible for the region to than real democracy. But I don’t think settle in to stability in the short term if that works anymore. One of the most this becomes the case? remarkable elements to the revolutions Nothing is short term. History goes of the past year has been the way in on forever. And the “Arab Awakening” which each uprising remained within may not be fully completed until we its own national boundaries laid down have long ago died of old age. All these largely by the post-First World War revolutions are individual; they are not colonial powers (Britain and France). the same as each other and they will not The Tunisians didn’t rush to join the develop in the same way. Egypt was not Egyptian revolution or the Libyan Tunisia, Bahrain was not Egypt, Yemen revolution. The Egyptians didn’t go and was not Bahrain, and Libya was not Ye- fight for the anti-Gadhafi forces and Books men—and Syria is not Libya. the Jordanians are not trying to help “The Great War for Civilisation: the Syrian resistance. Maybe that is the The Conquest of the Middle East,” When you were in Turkey, you wrote, Robert Fisk’s 2005 masterpiece, “balance” we will see in the future... was well-received by critics and “there was much discussion of (…) students of international affairs whether Turkey should be a ‘role Will democracy truly come to Arab with its criticism of Western and model’ for the Arab world (another states at the end of the Arab Spring? Israeli approaches to the Middle 24-hour wonder produced by the Or, like Hammurabi of Babylon, will East. Some of his other works are Washington dream team).” What do one “Hammurabi” be deposed only to listed below you mean by “produced by the Wash- be replaced by another in Arab states, ington dream team?” Do you believe as has happened repeatedly through- • The Point of No Return: The Strike which Broke the idea of Turkey as a role model out history? the British in Ulster. London: Times Books, for the Arab world is an artificial 1975. I would like to think that there will be construct? democracy of a kind that will last— • In Time of War: Ireland, Ulster and the Price No. What I was saying is that the idea though we should not expect the Arabs of Neutrality, 1939–1945. London: Gill & of the Turkish “role model” was pedaled Macmillan, 2001 (1st ed. 1983). to model their future on French democ- by the columnists, pseudo think-tank racy or British democracy (or Turkish • Pity the Nation : Lebanon at War, 3rd ed. experts and State Department “sources” London: Oxford University Press, 2001 (1st ed. in Washington—who are often highly democracy, for that matter). It’s inter- 1990). esting that each uprising has demanded partial towards Israel. As far as I know, “justice” rather than democracy, dignity • The Great War for Civilisation: The Conquest of no prominent Turkish politicians sug- the Middle East. London: Fourth Estate, 2005. rather than new political parties. But gested that Turkey should be a role all have demanded an end to one-party • The Age of the Warrior: Selected Writings. model. America’s allegiance to this kind rule, dictators, corruption, et cetera. London: Fourth Estate, 2008. of fantasy is in the same bracket as “war

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on terror,” “axis of evil,” and other US is a short-term trend, or will it take grotesqueries. many years for the West to recover? Is speculation that world economics Views that Turkey doesn’t need the and politics will be shifting eastward EU have started to gain traction as of realistic, in your opinion? late. How do you see Turkey’s rela- Yes. Indeed, China’s desire to be involved tions with the European Union? Eco- in the Middle East is an expression of her nomically, Turkey is doing relatively demand for political power commensu- well today in comparison to several rate to her economic power. But since EU countries. Also in light of talk of China is no more interested in “justice” an EU breakup, do you think Turkey’s bıography in the Middle East than were the west- EU bid could be losing its significance ern powers, I wouldn’t recommend a in terms of the country’s democra- Born in 1946, English journalist and author Chinese overlordship in the region. tization efforts too? Or does Turkey Robert Fisk is Middle East correspondent need to become a member of the EU for British paper The Independent. Fisk has Does China, which has become the been living in Beirut for more than 30 years. to democratize no matter what? He is the recipient of more international world’s fastest-growing economy, If I were a Turk, I would certainly be awards than any other journalist in the UK have the potential to shape the future re-examining my earlier enthusiasm and was once characterized by the New York of the world? to join the EU. And given the Turkish Times as “probably the most famous foreign You need a Bertrand Russell or an economy, I would—as a European— correspondent in Britain.” Einstein (or an Atatürk) to answer this want to re-examine the EU’s earlier In 1991, he won Jacob’s Award for his coverage question! reluctance to accept Turkish member- of the first Gulf War on RTE Radio. He won ship. I believe that Turkey should be a the Amnesty International UK Press Award for You have met with many leaders in full member of the EU. But it MUST his coverage from Algeria in 1998 and for his the Middle East over the years and adhere to all the stringent rules on reporting of NATO’s aerial campaign against you are intimately familiar with the Yugoslavia in 1999; in the latter year, he also human rights. But again, I repeat that received the Orwell Journalism Award. The region and its cultures. Based on your Turkey should be a full member of the journalist has written several books, perhaps years of experience and knowledge, EU. It is utter hypocrisy for Europeans the best known of which is “The Great war for how would you assess Prime Minister to resent Turkish Muslim immigrants Civilisation: The Conquest of the Middle East.” Recep Tayyip Erdoğan as a leader? on the grounds that they want to live Fisk was named International Journalist of the Having never met Erdoğan—though away from Westerners in Muslim Year at the British Press Awards seven times. I would dearly wish to—I can’t really ghettoes—and then refuse Turkey In 2002, he became the fourth recipient of the answer your question. What is most when it actually wants to be part of the Martha Gellhorn Prize for Journalism. He was interesting about him was that he was European community! bestowed with an honorary doctorate from very quick to realize the changes in the St. Andrews University in 2004. In 2006, the Middle East—far faster than the Israelis University of Ghent in Belgium awarded him What kind of government do you ex- a doctorate in politics and social sciences. The (if, indeed, they have yet done so)—and pect will emerge in Iraq following the American University of Beirut also gave him an it was an extraordinary achievement to withdrawal of the US? Will we see a honorary doctorate in 2006, and in 2008 his have the Arabs waving the Turkish flag sovereign, united government in Iraq alma mater,Trinity College Dublin, presented over popular demonstrations in the old in the medium term? Or will sectar- him with a second (honorary) doctorate. Ottoman Empire. ian conflicts really be able to draw the country into civil war? The latter, I fear. Iraq is now a Shiite- dominated country and, up to a point, an Iranian-influenced country. Thanks to George Bush and Tony Blair, of course! I fear sectarian conflict will continue. But al-Qaeda’s efforts to reignite sectarian hatred are not very successful. It’s important to remember, by the way, that in all the Arab revolu- tions, there wasn’t a single picture of bin Laden or an al-Qaeda poster on the streets.

How do you view the rise of Asia in parallel with the global crisis affect- ing the West and especially devel- oped countries? Do you believe this 48 In Depth / Entrepreneurship

MARCH-APRIL 2012 ISSUE 9 The Turkish Perspective 49

The Element of innovation in Growth The air of spring prevailing in the economy of Turkey for quite some time has facilitated the birth and growth of many new business ideas that will be key in sustainable growth

By MERVE KARA

atih İşbecer noted on his 1994 in the States to Turkey and fill in a gap F visit to the US through the AFS that existed in the local market. They all student exchange program that the listened to İşbecer earnestly, and all were technological revolution under way convinced by the end of discussions. Div- there would eventually affect Turkey, ing into work straight away, the students too. İşbecer also noticed an opportunity first started by taking on software- emerging with the growing spread of the oriented freelance projects. After three Internet and software in Turkey in those years passed, İşbecer and his friends were years, taking his first step toward exploit- proven correct about the potentıal they ing this in 1997. The skilled young man saw in Turkey through the projects they was then a student at Istanbul Techni- completed, but further growth in that cal University’s Department of Physical fashion did not seem possible. “And thus Engineering. He met with schoolmates Pozitron was born,” says İşbecer, telling us studying in the same department in the the story of the foundation of a company school’s snack bar, telling them in a single that today is playing for leadership in breath how they could adapt what he saw the mobile software field in Turkey. This 50 In Depth /Entrepreneurship

birth, however, was quite ligent criticism, describing his Increased activity growing at a rate of 50% since a laborious affair—when resolve to continue in spite all abroad by Turkish 2007. In 2008, the company İşbecer first shared the idea he faced as almost some kind entrepreneurs fosters received the Harvard Business with his family members, they of “sickness.” İşbecer would the value they create in School Award and was a final- suggested taking on a job that not rest easy until he could ist in the Blackberry Innova- would secure his future and realize the idea that occupied both the regional and tion Awards. In 2010, İşbecer provide him a regular income. his thoughts. He founded global sense attended the Presidential The feedback he received in Pozitron with money he and Summit on Entrepreneurship those days were either entirely his friends collected from in the US and even had the against his idea or excessively their allowances. Now in its chance to meet with President polite. Today, he complains of tenth year, Pozitron resolutely Barack Obama with the sup- not having received intel- moved forward, having been port of Endeavor Turkey. Had the young entrepreneur taken the advice he received when starting to heart, he might not have been able to even dream of these. Together with the rise in unemployment since the global economic crisis upended the jobs market, entrepreneurs have taken on the role of saviors. A recent report from the International Labor Organization (ILO), Global Employment Trends 2012, highlighted a number of challenges in the global labor market. The world will % need to create 600 million 75 jobs over the next decade to AA

The rate of Endeavor Turkey y

provide 400 million new jobs B

H entrepreneurs who are for the growing global labor P OGRA doing business outside Turkey force and eradicate worldwide T HO P MARCH-APRIL 2012 ISSUE 9 The Turkish Perspective 51

Entrepreneural activity is a crucial measure for Turkey as ENTREPRENEURIAL ACTIVITY, 2010 the country aims for a transition Entrepreneurial activity is an important precondition for economic growth from being an efficiency- driven economy to being an EUROZONE OECD innovation-driven economy Chile Mexico (2008) Iceland Turkey Australia Norway and closure, the number of United States Netherlands companies founded increased Hungary by 7.54% relative to the previ- South Korea (2009) Ireland ous year and the number of United Kingdom France natural person-run commer- Finland cial enterprises increased by Israel Greece 20.11%. Among the triggers Switzerland Sweden of this continuing increase Slovenia are not only rapid growth but Portugal Spain also the long-running efforts Germany Denmark by the Turkish government to promote entrepreneur- ship. The Turkish government unemployment of 200 mil- ing entrepreneurship institute Middle East,” says Rottenberg. recognizes the importance of lion. Entrepreneurs, who are Endeavor, states that while Increased activity abroad by entrepreneurship and tries being looked at as the source many entrepreneurs from Turkish entrepreneurs fosters to foster an entrepreneur- of answer, have an even harder highly populated countries like the value they create in both friendly environment in order task to deal with at a time in Turkey aim to build national the regional and global sense. to encourage people to start which uncertainties are on the businesses, Turkish entrepre- According to the Union of businesses by cutting down rise. The number of entre- neurs want to have a global Chambers and Commodity on red tape, lowering taxes, preneurs has, however, been impact. “In fact, over 75% are Exchanges of Turkey’s statis- and providing incentives. The increasing rapidly at a time doing business outside of Tur- tics for October 2011 concern- Small and Medium Enter- when especially the growth of key, notably in Europe and the ing business establishment prises Development Organiza- the Turkish economy reaches record levels, and they stand out for business ideas that create a difference on a global scale. US Secretary of State Hillary Clinton, who visited Turkey last July, also affirmed the increasing worldwide in- fluence of the country’s entre- Bülent Saraloğlu Didem Altınbaşak Tulgan ALEMŞAH ÖZTÜRK preneurs. “Turkey’s economy Founder and Partner, Founder, Rafinera Founder and Partner, 41?29! can be an engine for economic Bukla Tur growth in the region,” said “When we saw that the ‘meal “We are in a period in which “We spent our first seven- Clinton, adding in emphasis plan’ systems I made use being an entrepreneur is eight years in this indus- of in the final stage of my at its most advantageous. that the more Turkey can try working as tour guides, pregnancy did not exist in The first reason for this is demonstrate entrepreneur- and we only saw the gaps Turkey, we started work- that many ideas or models ial activity, the more others in it once our ideas ma- ing on this business idea. We that have been successful in tured. Since the day we were focused on what could be America have not yet been can learn from the country’s founded in 2000, we have experience. done to adapt such a system tried in Turkey. Therefore, been advancing rapidly. Our to Turkey as best as possible it’s very easy to try on some- Thousands of entrepre- IT investments, including and make it as desirable thing for size. This is gener- neurs like Fatih İşbecer have those in ERP and CRM, are as possible for those with ally an easy route of entry brought their business ideas among our most important special dietary needs, like for first-time entrepreneurs. characteristics that distin- to life and produced inter- myself. Eventually, Rafinera Another important factor is guish us from our rivals. We was born out of this busi- the local and foreign inves- national successes in recent owe our leadership to these ness plan. Launching six of tors who wish to invest in years. They are seen as the differences.” the more than twenty dif- Turkey. Everyone is looking most important factor in ferent dietary solutions we for the next big project and Turkey’s ability to sustain its had prepared, we brought wishes to invest at all levels. growth. Linda Rottenberg, Rafinera to life.” I therefore see great advan- tages in these areas.” founder and CEO of pioneer- 52 In Depth / Entrepreneurship

tion (SMEDO) was formed in 1990 within the corpus of the Ministry of Science, Industry, TECH ENTREPRENEURS CONTRIBUTE and Technology. SMEDO aims to raise share of small MOST TO THE “RIPPLE EFFECT” and medium companies in economic and social develop- ment by providing support to OF ENTREPRENEURSHIP these companies and spread- ing a culture of entrepreneur- Linda Rottenberg, CEO and Founder of Endeavor, the ship. Thanks to the plan for nonprofit organization that pioneered the concept of high- supporting SMEs, a number impact entrepreneurship in emerging markets, explains of successes in fields ranging from technology to produc- the recent entrepreneurial activity around the world with tion have been achieved, such a specific focus on Turkey. as the equalization of exports to imports in the Turkish defense industry for the first Linda Rottenberg CEO and Founder time ever. of Endeavor Significant improvement has taken place in women’s entrepreneurship, too, together with the concrete steps that have been taken with regard indeed our global presence to improving the situation of is expanding! Endeavor women’s employment in recent opened two new offices in years. Thanks to this, women 2011—in Lebanon and In- entrepreneurs in Turkey today donesia—and our teams are outnumber those in the US. currently scoping in Saudi Support for women’s entrepre- Arabia, Morocco, United neurship gained momentum Arab Emirates, Malaysia, Vi- as a result of the harmoniza- etnam, the Philippines, Peru, tion of Turkey with the EU. Poland, and Greece. From Turkish women are encour- January 2010 to June 2011, aged to be entrepreneurs and we screened over 6,000 en- earn their own money. Togeth- trepreneurs and selected 128 er with organizations that pro- with the most high-impact vide microcredit to women in potential. Turkey, institutions and NGOs We’ve also expanded our like the Young Executives and services. Once selected, Businessmen’s Association Endeavor entrepreneurs (GYİAD), the bank TEB, and will receive a custom-built the United Nations Develop- advisory board, an initia- ment Program are supporting tive that began several years a highly significant project ago in Mexico but was this titled “Golden Bracelet.” The year made mandatory for all goal of the unique project is to Endeavor offices. Another ensure microcredit for young Can you make a general and earned 5 billion dollars groundbreaking program, entrepreneurs aged 18 to 35. assessment about the year in revenue. That is high the Investor Network, Female entrepreneurs who are 2011 in terms of entrepre- impact! connects venture capital- graduates of universities and neurial activities within As an organization, we’ve ists with our entrepreneurs. vocational high schools are Endeavor? entered a new phase we In less than six months, 17 a target group in the project. I’ve always felt that like to affectionately call top-tier Silicon Valley and While TEB is responsible for Endeavor’s impact is best “Endeavor 3.0,” in which we international firms joined as the funding and the supervi- shown through the success plan to expand and improve members. Last June, we also sion of the project, the UNDP of our entrepreneurs: in services to high-impact held the 2011 Endeavor En- provides technical staff and 2011, our 632 entrepreneurs entrepreneurs and fast-track trepreneur Summit in San GYIAD offers educational employed 200,000 people our global presence. And Francisco. The single largest support.

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gathering of Endeavor Entre- preneurs to date, the Summit welcomed high-profile speak- ers like Scott McNealy of Sun Microsystems, Marc Benioff of SalesForce.com, and our own board member Reid Hoffman of LinkedIn, and coordinated 223 one-on-one mentoring sessions for entrepreneurs. Finally, at our 2011 Endeav- or Gala in November we an- nounced the launch of what is possibly the most exciting de- velopment of the year. Though Endeavor Entrepreneurs give back by donating funds and a percentage of equity, we’ve felt for a long time that we could do more to reach our goal Linda Rottenberg: have a global impact. In fact, ited management expertise, of long-term sustainability. “I consider Endeavor over 75% are doing business lack of contacts or mentors, After many heated debates, we Turkey entrepreneurs outside of Turkey, notably in lack of trust, and lim- finally cracked the code: Cata- to be some of the Europe and the Middle East. ited access to smart capital. lyst. Catalyst is a revolutionary Not surprisingly, these compa- Entrepreneurial ecosystems philanthropic vehicle that uses most creative in our nies are growing in leaps and have begun to develop in donated capital to co-invest portfolio” bounds: average CAGR since emerging markets, breaking in entrepreneurs. When these selection of our entrepreneur down some of these barriers, investments produce returns, companies is 51%. but there is still a long way proceeds will support Endeav- On a personal note, I to go. or’s operations, as well as go consider Endeavor Turkey back into the Catalyst fund. To Entrepreneurs to be some of What can be said about the date we’ve raised 6 million of most to the “ripple effect” of the most creative in our port- future trends of innovation our 50-million-dollar target. entrepreneurship: they are folio. The genius of Alemsah by observing the entrepre- most likely to have successful Ozturk’s (41?29!) innovative neurs of today? Besides the influence of exits and to give back to the digital marketing campaigns Entrepreneurship has the crisis, we also see that next generation by mentoring is astounding. Mehtap and become sexy. An increasing Internet and recent techno- and investing in rising stars. Hasan Obuz’s beautiful number of entrepreneurs logical developments made At the same time, it’s designs for Ilio have garnered aren’t simply founding a tremendous change in the important to remember the many fans through Gilt, a mom-and-pop businesses; way that we do business. Can amazing innovation taking well-known American flash they’re aiming big. They’re we say that these two have place in traditional industries sale website. (Even before we looking to build innovative, been the industries where a like manufacturing. These connected them with Gilt’s rapid-growth businesses majority of entrepreneurial companies may not be quite founders!) that have the potential to activity has been focused as glamorous as the Googles I can’t wait to welcome scale, creating hundreds if worldwide and in the US? or Facebooks of the world, more Turkish entrepreneurs not thousands of jobs and From which other indus- but they create an enormous into the Endeavor family. fostering cultures of innova- tries have the majority of number of jobs and are often tion. Though tomorrow’s entrepreneurial activities surprisingly groundbreaking. What are the main risks entrepreneurs will likely sprung, in emerging markets that entrepreneurs face in be heavily focused in the especially? How do you see Turkey’s emerging countries lately? Is tech industry, where there High technology and the entrepreneur portfolio? How sustainability a big challenge is enormous opportunity, I Internet continue to be two of is it performing relative to for the business environment think we can expect to see the most exciting industries other developing countries? along these countries? many more high-impact en- for entrepreneurs, and many Many entrepreneurs from At Endeavor we say that trepreneurs across industries of Endeavor’s highest-impact highly populated countries emerging market entrepre- and borders. High-impact entrepreneurs innovate in like Turkey aim to build neurs face six main barriers to entrepreneurs see opportu- this area. We’ve found that national businesses, but our growth: the high cost of fail- nity where most people see tech entrepreneurs contribute Turkish entrepreneurs want to ure, lack of role models, lim- “status quo.” 54 In Depth /R&D

MARCH-APRIL 2012 ISSUE 9 The Turkish Perspective 55 Time for Turkey to Shine Big-budget research funds are still responsible for a great number of discoveries, but small, well- constructed, agile research groups are today significant producers of them as well. Turkey, with the smart steps taken by the public and private sectors, is rising confidently in the rankings of R&D studies

By can gUrsu

he company he founded with 15,000 dol- ful consumption—instead emphasizing conserva- lars in capital he got from his father and the tive resource usage and recycling—are replacing T government today has an estimated market high-pollution, high-consumption items. The im- value of over 14 billion dollars. The point reached in portance of R&D investments for the development 20 years by the mobile technology giant founded by of innovative, creative products that can be com- three young entrepreneurs once again proves the im- petitive in future markets and ensure sustainable portance of R&D and investment. Mike Lazaridis— development is therefore continually rising. the Turkish-born founder and CEO of BlackBerry Turkey is preparing to design its future through maker Research in Motion—spoke at the Turkish R&D. Today, countries are judged not just by what Innovation Conference in Istanbul last December, they produce or by their commercial activities, but noting that innovation is the oxygen of economic also by the intellectual base and brainpower back- development and that all of these constituted the ing their production capability. According to a 2010 foundation of the BlackBerry story, adding, “What report by the Organization for Economic Coopera- it’s important is to update today’s technology and tion and Development (OECD), Turkey is a much to invest not in today, but in the future.” Innovation younger country than EU countries and the US with has been the greatest driving force behind Research a mean age of 27.5, as compared to 40 and 38.2 for in Motion’s present position. Lazaridis says he al- the latter two respectively. Turkey is in an advanta- ternated between four months of academic study geous position relative to many of the world’s lead- and four months of internship when in college and ing countries with its young population, and through indicates that the college-industry cooperation he educational reforms and state incentives, it plans to benefited from was the most important factor in the take its advantage to the next level. founding of RIM. He says Turkey is important not Turkey has been accelerating its R&D investments just for himself but also for RIM, adding that Black- and activities in recent years. Foremost among these Berry’s first true banking application was developed investments is the Fatih Project, a project aimed to in Turkey. Today, RIM develops projects with 12 improve technology usage at schools in Turkey by universities in Turkey and 600 globally, working distributing notebook and tablet computers to all with more than 4,000 research personnel. preschool, primary, and high school students and Today, R&D is practiced to improve human qual- facilitating the interaction of these computers with ity of life, comfort, and safety, and to create a cleaner smartboards in the classroom. Lazaridis says the environment. Innovative products that avoid waste- Fatih Project will prove to be a good investment for 56 In Depth /R&D

children and indicates that in 2012.” With the R&D law Turkey’s focus on innovation Turkey put into effect in 2008 and education gives him and its investment initiatives, confidence in Turkey’s Turkey is climbing up the lad- future. Turkey has been der in a race it admittedly was making tangible progress in late to enter. R&D thanks both to public With the law that came incentives and to private into effect in March 2008, the sector support. scope and volume of incen- In the EU Commission’s tives for R&D investments in Progress Report 2010, in the Turkey were expanded. Since section titled “Science and then, R&D activities have Technology,” it is stated that been on the rise in the private Turkey is “well prepared” in sector. R&D centers employ- science and research and that ing 50 or more personnel and it has made “good progress” located within companies’ with respect to preparations for organizational charts separate- joining the European Research ly as per law, companies with Area and the Innovation Based on the current he presided, that Turkey aims fewer than 50 R&D personnel, Union. The report highlights outlook, Turkey is to be one of the world’s most public organizations like the the fact that R&D spending in expected to field more advanced countries in R&D Scientific and Technological Turkey increased by more than than 7,000 patents in within the next ten years. One Research Council of Turkey 10% from 2000 to 2009 and 2012 can immediately see the effects (TÜBİTAK), nonprofits like stated that Turkey is the fourth of Turkey’s R&D initiative the Technology Development fastest-growing European when looking at patent statis- Foundation of Turkey or R&D country in this area. The Sci- tics, too. and innovation projects sup- ence and Technology Policies According to information ported by international funds Implementation Plan (BTP- released by the Turkish Patent such as the European Union UP) 2005–2010 created by the Average Age in Institute, patent applications 7th Framework Program, and Information and Communica- increased by 25% from 3,250 startups created by young en- tion Technologies Authority of OECD Countries patents in 2010 to 4,087 in trepreneurs were made eligible Turkey (BYTK)—an organiza- 2011. Adding utility model ap- for a tax break of not 40%, tion that includes many public plications to these patent appli- but a full 100%. Since the law representatives—played a large cations, the figure approaches came into effect, thanks to role in Turkey’s performance the threshold of 10,000. Adres stable public policies, Turkish so far. Turkey aims to continue Patent General Manager Ali companies have been playing its stable growth in the area Çavuşoğlu notes that 15,000 for world leadership with rapid through the National Science, local patent applications can development and spectacular Technology, and Innovation be expected in Turkey based growth rates. Strategy (UBTYS) 2011–2016. on last year’s increase and says, Two Turkish companies Prime Minister Recep Tayyip 27.5 36.5 38.2 40 “Looking at industry develop- ranked within the top ten of Erdoğan stated in the 23rd Turkey us CANADA EU ments, I can say that we will the Deloitte Technology Fast BYTK meeting, over which Average easily exceed 7,000 patents 500 EMEA 2011 program, which determines the 500 fastest-growing tech compa- nies in the Europe, Middle East, and Africa region. One of these two companies, Logic Bilişim, ranked first, growing 28,617% over the past five years. The other, Elkotek, was ninth with 7,093% growth. Logic Bilişim CEO Fatih Öz- kentli says, “Logic Bilişim is a company that is developing in R&D spending in Turkey the growing technology sec- increased by more than 10% from 2000 to 2009. Turkey tor,” and adds, “We regularly is the fourth fastest-growing invest in our business and European country in this area employees.” Twenty-seven

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Turkish companies appeared in 2011’s Fast500 list for the EMEA region, pushing Tur- key ahead of Germany and Is- rael to rank sixth as a country. The many companies founded in technology incubation centers and R&D centers are of great significance as driving forces in Turkey’s economy. As of 2011, Turkey had 102 R&D centers employing more than 15,000 R&D personnel. Minister of Science, Industry, and Technology Nihat Ergün says that while there were just two installed technology incubation centers in Turkey, today this figure has reached 43. He adds, “And more than half of the close to 2,000 industry and technological financing for R&D activities in At the 4th companies established in incubation centers provides Turkey alone, while the public International Textile these technology incubation more benefit to large compa- sector accounted for 34%. and Apparel R&D centers are active in the IT nies than the R&D activities With the economic stability it Project Market, 235 and software fields.” METU they conduct on their own. exhibits, Turkey is providing an innovative projects Technopolis in Ankara is one Hakan Gürsu, founder of lead- opportunity for international of the many such incubation ing Turkish design and innova- players to invest in Turkey and both local and foreign, centers in Turkey. Ufuk Batum, tion company Designnobis, expand their existing invest- were presented to Deputy General Manager of says, “We live in a world order ments in the country. Economy Minister METU Technopolis, states that in which is not enough to de- According to the results of Zafer Çağlayan 3,750 people are employed veloping technology alone.” He global professional services there. Of the companies in the states that every new discovery, network Grant Thornton’s Q4 center, 56% are involved with invention, technology, or pat- 2011 business optimism study, IT, 22% with electronics, 6% entworthy piece of information Turkey is far ahead of many with telecommunications, must enter the lives of the European countries in that 2% with medical-biomedical- average person on the street so area. In the same study, upon Patent Applications biotechnology fields, and 14% that it can deliver added value inspection of answers by partic- with other fields like advanced to its owner, company, region, ipating executives from Turkey, by Year materials, aviation and space and country. Putting innova- it is noted that there will be an 5000 4,087 flight, energy, automotive, tions into people’s lives is only increase in R&D investments 4000 3,250 3000 2,588 and environmental sciences, possible through industry in coming years, and that 2000 according to Batum. Studies cooperation. The private profitability and investments 1000 0 show that cooperation between sector provided 41% of total in new factories and machinery 2009 2010 2011 will grow considerably. Togeth- er with advancing technology, equal access to opportunities is increasing in Turkey day by Deloitte Technology Fast 500 Program 2011 day. As difficulties in access- Ranking Company Country Growth Rate ing information disappear, UTILITY Model 1 Logic Bilişim Turkey 28,617% individuals are gaining greater advantages daily. Turkey, which Applications by Year 2 Fixnetix UK 24,557% has decoupled positively from 5000 the economic crises under way 4000 3 LeadPoint UK UK 2,842 2,994 3,175 21,801% throughout the world, con- 3000 2000 4 GPEG UK 17,716% tinues confidently on its path. 1000 To paraphrase Turkcell CEO 0 2009 2010 2011 5 PKR UK 9,314% Süreyya Ciliv, “Now, it’s time for 9 Elkotek Turkey Turkey to shine; it’s time for the 7,093% region to shine.” 58 Contents: Jewels Illuminating Luxury P61 Designs That Pause Time P62 The World’s Kitchens Are Made in Turkey P64 The Turkish Delicacy That Captivates the World P66 Editor: Ceyhan Aksoy

Brands porcelain , kitchenware, design, gastroNOMY...

A Global Brand in Porcelain Porcelain, once an imported good, is now becoming an industry in which Turkey is known as a brand

By AYNUR ŞENOL altun

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In Turkey, which occupies Gülden Güral a rather enviable position draws attention among developing countries, to the fact that expectations each advancing industry influence triggers progress in the other. product diversity The porcelain industry, too, is subject to this rule. Especially with the rapid development of the construction sector, inter- est in ceramics and porcelain, part of the ceramic family, is increasing continually. As local industry develops, demand from abroad likewise grows exponentially. Porcelain, once an imported good, is now be- coming an industry in which Turkey is known as a brand. Behind this ascent is not only the products’ quality, but also the success of their designs. Turkey, now an exporter to countries around the world, competes against countries in 1970. In 1984, 75% of the 52 countries. The primary rivaling it in the international company entered the control recipients of its exports are arena with designs that appeal of the Güral family; 25% of European Union countries, to consumers with a broad its shares are traded on the which boast high expecta- range of tastes. The numbers Istanbul Stock Exchange tions of quality and purchas- back up the reality of this today. Every year, Kütahya ing power, as well as the US, growth, too—the Turkish Porselen manufactures on a Canada, Japan, and North ceramics industry exported product basis more than 100 European and North African 1.53 million tons of product forms, at least two collections countries. The manufacturer in 2010 and 1.67 million tons for hotels, and close to 1,000 maintains a market share in in in 2011. Porcelain flatware designs. For years, it has been France, Spain, the Nether- and kitchenware accounted for investing in cutting-edge Stability is one of lands, Italy, and the UK as a 24,395-ton share of this in infrastructure and R&D. Kütahya Porselen’s well, engaging all producers 2010 and 27,486 tons in 2011. Kütahya Porselen doesn’t secrets to success, says and brands in establish- These figures equaled 67.2 just make porcelain—the Gülden Güral ing cooperation. Kütahya million dollars in 2010 and company produces floor and Porselen products are found 74.38 million dollars in 2011. wall tiles, porcelain machines, worldwide on the shelves of One of the most important ac- and even turnkey factories. such giant chain stores and tors in this success is Kütahya Boasting more than 160,000 supermarkets as Carrefour, Porselen, the well-deserved square meters of indoor space, IKEA, Auchan, El Corte pride of the land in which it the company possesses six fac- quality attained by Europe in Ingles, and Hiper Core. was born. The province of Kü- tories and numerous awards. 300 years in as short a time Kütahya Porselen exports tahya is one of the first places Having appeared in the as 41 years,” she says. She more than 60% of its produc- to come to mind on mention Turkish Exporters Assembly’s states that “stability” is the tion. According to Gülden of ceramics, chinaware, and (TIM) list of Turkish compa- most important of the steps Güral, this alone is enough to porcelain in Turkey. Founded nies that exported the most in Kütahya Porselen has taken justify the influence of global in Kütahya, Kütahya Porselen 2010, Kütahya Porselen’s 2010 toward being a brand, and gastronomic culture. Güral has played an important role exports exceeded 20 million she highlights the importance explains how this interac- in the province’s ascent to a Turkish liras in value. of practicing brand position- tion influences the company’s household name. With close to 150 pattern ing correctly. designs as follows: “In our options, Kütahya Porselen is products you will encounter Turning Its Home City into among the top ten produc- An Exporter to 52 Countries the minimalist lines of the a Brand ers in the world says Gülden Kütahya Porselen launched Far East as well as the effects One of Turkey’s most vener- Güral, one of the company’s its exports initiative in the of Italy’s coffee culture. To say able porcelain brands, Küta- board members. “We man- 1990s. Today, it continues that we produce a synthesis of hya Porcelain was founded aged to reach the level of this effort in 114 locations in other countries’ gastronomic 60 Brands /Porcelain

cultures with our own would technologies it has been Specifically, the educational therefore not be incorrect. making over the years. These High Production foundation named for Kü- Changing standards of living technologies significantly Capacity tahya Porselen Chairman and tastes reflect directly upon improved design speed and Nafi Güral is being used for our products. We have a broad quality. In addition to its own projects especially concern- product range that paral- crew, Kütahya Porselen Works ing education. Additionally, lels our capacity’s greatness. intensely with German, Ital- 16.13 respect to the environment Our saying, ‘We continue to ian, and French designers and million is very important for the produce goods for every wallet design teams. company, which is backed square meters and taste, but always at the Annual floor tile up by the fact that it is the quality you know us for’ says a The Importance of Social production sole company in posses- lot, actually.” Projects sion of the TS ISO 14000 The transformation of Kütahya Porselen has been Environmental Management people’s approach to food is as concentrating on its social 26 System Certificate. Kütahya influential as their tastes and projects recently as well— million Porselen also holds activities professional users’ demands Gülden Güral says that the pieces per year with several great founda- Production capacity of in the creation of products. positivity brought by such porcelain, flatware, tions and associations with Kütahya Porselen is support- projects to the brand are at and decorative which it engages in warm items ing its design crew with the least as influential as the dialogues. In recent years, the investments in cutting-edge quality of the products. brand created a platform on Facebook through which it is able to engage its custom- ers directly. Through the fun contests it has been holding via its account, it has in- creased its number of visitors considerably. With close to 150 pattern options, Aiming for Further Growth Kütahya Porselen in 2012 is among the top Kütahya Porselen is a leader ten producers in the in the world market and world, appearing in shapes the direction of the 114 locations in market today says Gülden 52 countries Güral, noting that the com- pany aims to grow in existing markets and increase their export figures by entering new markets. Preparing to introduce its fire-resistant “Porflame” prod- uct to consumers in 2012, the company will soon be releasing pots and pans utilizing this technology. The plainness that has been in vogue recently is a hallmark of this product group—pearly white, the entire series is based on modern design, featuring porcelain in close to every component. Additionally, the company will be appearing before custom- ers with brand-new series designed by Defne Koz for the Changing professional segment and the standards of living and tastes Horeca series, which is claimed reflect directly upon the products to bring an end to edge-chip- ping in porcelain items.

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people of various economic statuses,” she says, adding, “Luxury has now changed. We have 30,000-dollar items as well as 100-dollar items. The person who buys Bee Goddess jewelry represents a philosophy. What’s impor- tant is not what customers buy for how much, it’s what they want to get.” Likened to the Cha- nel of the 21st century by noted American trend expert Robyn Waters, Bee Goddess has a significant customer base abroad. Its creations have been exhibited and sold in countries ranging from the US to Greece. And through this, many famous individu- als had the opportunity to familiarize themselves with Bee Goddess—many celebri- JEWELS ILLUMINATING LUXURY ties reflect their inner light through the jewelry designed As the definition of luxury changes, Bee Goddess’s jewelry aims by Şirin, including the likes to reflect the concept of “enlightened luxury,” meaning the shift of Kevin Costner, Kylie from status symbols to symbols of the soul Minogue, and Kate Moss. Şirin says her main source of inspiration when design- By DOĞACAN SİLİVRİ ing was the Mother Goddess of Anatolia: “The place we ith its collections jewelry is the best to explain call Anatolia is a mosaic and w and philosophy, Bee the concept of “enlightened the world’s oldest treasure. Goddess as a jewelry pro- luxury,” meaning the shift Instead of promoting Tur- ducer has taken great strides from status symbols to sym- key’s destinations, Turkish toward changing the under- bols of the soul. Bee God- delight, or coffee, I’m trying standing of brands in Turkey dess became trendy within a “I’m trying to to promote Turkey’s soul. and in the world. According short time as a jewelry brand promote Turkey’s We constantly think about to Ece Şirin, Bee Goddess is bringing enlightenment to soul,” says Ece Şirin, what we should export from a brand that has a deep phi- luxury. Its founder, Ece Şirin, the founder of Bee Turkey. The world requires losophy. While most brands was deemed a “true creator” Goddess spiritual values like distinct- emphasize superficial quali- by Swiss luxury and jewelry ness and unity, and all of ties, Bee Goddess’s aim is to authority Gold’Or, and this these are in the essence of emphasize the strength and year she received the jewelry Anatolia. Until today, we energy inside people. The designer of the year award at as Turkey were unable to world is transforming from the Elle Style Wards. express this, but we have a place in which people are After receiving this award, started to express it with Bee separated from one another Ece Şirin seized the chance to Goddess.” by boundaries to a place of reach more people through Bee Goddess interprets the unity. Values are changing, the store she opened in Ak- energies that will excite us and as these values change, merkez, an upmarket mall in and amplify our light with ut- people can gain the oppor- Istanbul. “This is very much most elegance, using the most tunity to put their creativity against the traditional rules valuable of stones in this in the spotlight. Together of marketing, but we never task. Ece Şirin does with her with these changing values, had something like a target jewels what Rumi did with the definition of luxury is audience. Our audience is his poems and Beethoven did changing, and Bee Goddess’s everyone; we appeal to all with his music. 62 Brands /Fashion Designer

At a time when few designers practiced couture in Turkey—a time when almost no Turk dared to take steps in the international arena— Hanif applied to Paris Haute Couture Week by her own means

and never let you down,” she says. For Dilek Hanif, who Designs That Pause Time presents her designs with Upon introducing her new ready-to-wear clothing collection a person’s identity, stance on life, and style in mind in upcoming days, Dilek Hanif aims to develop a more active rather than what fashion presence abroad offers alone, uncovering the elegance within a woman with plain stylishness is By derya engin kutlu By ABDULKADİR DEMİR paramount. Having adopted for herself the mission of İlek Hanİf comes to the principles she has de- avoiding designs that do not D from a family that has termined as her own, design suit a woman’s body and been involved actively with is “timeless, plain chic.” Her style, not even for the sake the fashion industry for quite objective is to propel femi- of fashion, the designer says, some time. She has been nine elegance to the forefront “What’s important is to sew familiar with the designs with classic elements that self-updating designs that of various periods since a have maintained a strong will become classics for the young age. This background stance. “What’s important to right people.” played a significant role in me is for someone to be able the formation of her codes to wear something they buy Dilek Hanif has been The First Female Turkish of fashion when she grew today in combination with stamping her name on Designer at Paris Haute older. For the designer, who another item with great ease; Paris Couture Week Couture Week maintains absolute loyalty such designs become classic since 2004 Dilek Hanif took her first

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step in fashion with her An Ottoman Touch she likes to emphasize forms release of the Dilek Hanif Dilek Hanif says she has that are as splendid as they Line—a collection featur- always been influenced are refined. “In my designs ing both ready-to-wear and greatly by the rich texture of that feature transparent haute couture clothing—in the Ottoman and Anato- tulle, plunging low backs, 1990. She had her first lian civilizations. “In 2004, and handcrafted embroidery, fashion show in 2002, at when it became certain pastel tones like off-white, the church of Hagia Irene in that I was to participate in aquamarine, and beige are Istanbul. The idea to partici- Paris Haute Couture Week, dominant. The collection pate in Paris Haute Couture I started wondering how I “Participating in the that I prepared based on the Week started to form after could make a difference and fashion week was no contrasts between embroi- this show. At a time when present something extraor- easy task. To see your dery and the tones of fabric few designers practiced dinary within the broad capacity and what you places the embroidery at couture in Turkey—a time spectrum of things present- are able to do more the forefront.” The designer when almost no Turk dared ed by big designers. It then clearly, people sent by believes that every woman’s to take steps in the interna- came to my mind to turn the fashion week come stance requires different tional arena—Hanif applied to our roots and add details expectations and thus takes to Paris Haute Couture Week from that culture,” says to see you and your this principle as a founda- by her own means. Hanif. The Ottoman theme workshop” tion when preparing her “Just think—you tell them that made great waves when individualized designs. you want to participate with it first appeared on stage your designs as a fashion received so much positive designer from Turkey. But feedback that the successful because they have never had fashion designer continued such an application, they first in her fusion of East and want to see who you are and West in her later collec- what kind of work you have tions, perhaps with a design, done. For them to under- sometimes with a mold, or stand you—and vice versa— maybe with a caftan. you then realize that you Dilek Hanif has been need a crew.” Hanif says that stamping her name on participating in the fashion Paris Couture Week since week was no easy task, add- 2004. Today a global brand, ing, “To see your capacity and she ranks among the most what you are able to do more sought-after designers in clearly, people sent by the Europe’s leading boutiques. fashion week come to see you Hanif, known by top fashion and your workshop.” critics as a designer who elegantly synthesizes East Increased State Incentives and West, participated in the for Fashion 17th Paris Haute Couture It has become significantly Fashion Week with her 2012 easier for designers today to Spring-Summer Haute introduce their collections Couture designs presented to customers from various at Hôtel d’Évreux. Having countries and participate in started out with the eye- fashion weeks. Hanif says catching feminine styles of she realized her dream of the ‘90s, the designer says taking her collection abroad entirely with her own means. “I was responsible for the entire financial aspect of the task, but now, for the past ten years, it’s not as tiring as Dilek Hanif presents it once was for designers to her designs with a per- appear on catwalks in vari- son’s identity, stance ous countries and promote on life, and style in their collections thanks to mind rather than what state-offered incentives.” fashion offers alone 64 Brands /Industrial Kitchenware

the company now operates The World’s Kitchens with a staff of 1,200 over 100,000 square meters. Tahsin Öztiryaki, Chairman Are Made in Turkey of Öztiryakiler, says, “Sup- plying any kind of material The number of companies active in the industrial kitchen you might think of for ho- furnishings industry in Turkey is increasing day by day. Launched tels, restaurants, hospitals, in the ‘80s, the industry now rides on a massive wave of growth or military kitchen, both for machines and counter devices, and also products By CAN GÜRSU we don’t produce, we work turnkey.” The company ztİryakİler has was the first member in founded by and named Ö gained renown not its industry of Turquality, after Muharrem Öztiryaki just in Turkey but all over the program created by the on June 21, 1958 is as the world with its close to 50 Turkish Exporters Assembly Öztiryakiler Metal Goods years of experience and qual- (TIM) to transform Turkish Industry and Trade Inc. one ity in the kitchen furnishings brands into world trade- of Turkey’s and the world’s industry. Manufacturing marks. Öztiryakiler, which leading brands in industrial furnishings from copper, is guiding efforts to create a kitchens today. aluminum, and today stain- world brand in the field of Öztiryakiler conducts less steel, Öztiryakiler makes industrial kitchen furnish- most of its manufacturing turnkey kitchen solutions for ings, ranked among Turkey’s at its 80,000-square-meter- hotels, restaurants, hospitals, top 500 exporting compa- With its world- plus factory in Hadımköy, and military kitchens in Tur- nies in 2011. renowned brands, Istanbul. Its other produc- key and around the world. Having started with Turkey today prepares tion centers are located Öztiryakiler Metal Goods just 10–12 people in a to be a big player in in the Antalya Organized Industry and Trade Inc. 50-square-meter space, industrial kitchenware Industrial Zone in Turkey

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Öztiryakiler supplies 5,000 kinds of items with unlimited options by fus- 150 countries and top the 400–500 tons of stain- ing stainless steel, chrome hotel chains including less steel it uses monthly. In nickel, sheet iron, and local Hilton, Mövenpick, 2011, its revenues totaled components. Operating and Four Seasons 150 million Turkish lira, with a full-service approach with exports accounting covering project planning for more than half of this. to service, Inoksan conducts Öztiryakiler continues its all its production in its steadfast in its efforts to 20,000-square-meter facto- repeat or best the 35% in- ry in Bursa. Inoksan gained crease they attained last year the privilege of receiving in 2012, too, as it prepares to brand support within the distances can be overcome enter new markets. scope of the Turquality in trade and emphasizes Another pioneer in the project in the year 2011, and that his company is one blossoming Turkish indus- for the coming years, it aims that engages in or is ready trial kitchen furnishings in- to expand its distribution to engage in production dustry is Inoksan. One of the network rapidly. all over the world, being a industry’s leading companies Inoksan exports to five global brand. today with its world-class, continents today. Every And indeed, Öztirya- high-quality products and month, its operations kiler’s production capacity exports, Inoksan proudly consume 150,000 tons of is spread all over the world. represents Turkey in many stainless steel, fueling the Chile, Uruguay, Paraguay, countries as part of the in- production of 4,000 differ- Venezuela, Australia, China, dustry it entered in 1980. ent kinds of items. Around New Zealand, and at least Inoksan makes hundreds 25% of Inoksan’s revenues 10–12 African countries of kinds of industrial kitchen come from exports bound are part of Öztiryakiler’s equipment and devices for primarily to Europe, the market, and the company professional kitchens, from Balkans, Caucasia, Cen- maintains distributorships prep to cooking, serving, tral Asia, the Middle East, in Cyprus, Tunisia, Morocco, and dishwashing units. It and North Africa. Inoksan and in Rostov, Russia. Tah- Israel, Egypt, Saudi Arabia, also produces 4,000 kinds of Chairman Vehbi Varlık says, sin Öztiryaki explains their and Dubai. kitchen, cafeteria, fast food, “Azerbaijan, Germany, Rus- reasons for choosing Russia Öztiryakiler manufactures and bar equipment, offering sia, Kazakhstan, Turkmeni- as follows: “Russia is among stan, India, Brazil, and Italy our important markets, and are markets in which we there we generally produce have attained high export oversize items that are dif- figures,” noting that they ficult to carry and can be plan to grow in parallel with problematic at customs.” the developing markets of The company makes its the east and foster partner- dishwasher parts in Turkey, ships in developed countries but for items destined for (particularly with Western Tahsİn Öztİryakİ Vehbİ Varlık distant markets, assembly European manufacturers) Chairman, Öztiryakiler Chairman, Inoksan takes place in Thailand, in 2012. after which sales are con- Turkey is one of the countries that New designs and innovative Turkey’s growing con- ducted via their distributor can see its future. The tourism approaches are now indispensable struction and tourism in the Thai market. industry is developing speedily. parts of our companies’ agendas. industries contribute to the Living standards and standards We have designers who are head Öztiryakiler exports to of places serving food in public— to head with the world in project burgeoning of such indus- 150 countries. It provides shopping centers, schools, and design. Of course, in this, our tries that include indus- full service to the kitchens hotels for example—are changing industry association TUSİD trial kitchen furnishings of such well-known global and developing. And naturally, (Turkish Food Service, Laundry and too. The Turkish economy’s this situation acts as a trigger Service Equipment Manufacturers hotel chains as the Hil- for our industry to go forward and Businessmen Association) is stable, exporter-friendly ton, Mövenpick, and Four too. Meanwhile, the rise in the a driving force. In 2012, with our stance is among the top Seasons. It also supplies the construction industry facilitates R&D department, we aim to work factors influencing the kitchens of the militaries of parallel growth in the kitchen on energy and develop environment industry positively. With its several countries including industry. The path before us is friendly products that consume less world-renowned brands, cleared, and the fact that the energy and operate more efficiently. Iraq, the US, Russia, Indo- products we make receive full The Turkish kitchen industry’s flag Turkey today prepares to nesia, and Malaysia. Tahsin marks from consumers is the will fly around the world. be a big player in industrial Öztiryaki states that long clearest proof of this. kitchenware. 66 Brands /Baklava

A part of Turkish tradition for centuries, baklava is an indispensable element of holidays, weddings, and other events in the country

chefs of the Ottoman court were responsible for bringing baklava up to present day and developing the form in which we enjoy it today. The oldest mention in Ottoman records of the dessert appears in the cookbooks of the Topkapı Palace during the time of Sultan Mehmed II, where it is stated that baklava was cooked and distributed to the masses for the festivities held in the palace in the year 1473. Turkish traveler Evliya Çelebi, too, wrote in in his mid-17th century travel- ogues that he ate baklava at the mansion of the Bey of Bitlis. In Vehbi’s “Sur-name,” which relates the circumci- The Turkish Delicacy That sion ceremony conducted for Sultan Ahmed IV’s four sons in 1720, baklava is again Captivates the World mentioned as being served to guests. Ottoman records Layers and layers of thin dough combine with vibrantly colored show that baklava was a des- ingredients and set out from Turkey to tour the planet sert appearing mostly at the tables of those in positions of By DERYA ENGİN KUTLU - CAN GÜRSU By ŞEREF YILMAZ wealth and power. Its status as a dessert of the upper crust he making of baklava ments that constitute Turkish elevated baklava from being t is a task as pleasing as it cuisine. Baklava dough, made a simple baked good and was is arduous for the masters and from 40 paper-thin layers, instrumental in its survival to apprentices who delicately requires the most mastery out the present day. knead the dough stretched of all baked goods. In time, baklava entered out on pearly white marble Raising chefs able to make Ottoman state traditions and slabs. Layers and layers of thin the dessert is as challenging practices too. The “Bak- dough combine with vibrantly as making the dessert itself. lava Parade” tradition that colored ingredients as the ov- To raise such a chef takes six emerged in the late 17th cen- ens emit an enchanting smell years, and for a chef to rise in tury is the clearest example of that draws one toward them. the craft and gain recognition this—in mid-Ramadan, the With its butter and its dough, can take decades. sultan would send baklava baklava emerges as a different A part of Turkish tradi- from the palace to the Janis- delicacy out of the hands of tion for centuries, baklava is sary Headquarters as a com- every master. an indispensable element of pliment to the soldiers, and The dessert, made by filling holidays, weddings, and other the masses of Istanbul would paper-thin layers of dough events in the country. Various pour into the streets to watch with ingredients such as wal- claims have been made as Baklava dough, made the so-called Baklava Parade. nuts, pistachios, or almonds to the origin of baklava, but from 40 paper-thin For the people, who would according to the region in the prevailing view is that it layers, requires the lavish the sultan and soldiers which it is made, is one of is a dessert of Central Asian most mastery out of all with displays of admiration, the most admired of the ele- provenance. The experienced baked goods this became a traditional cer-

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emony. The tradition, which and Iraq, and according to “We earn 10 percent progress abroad. Therefore, made baklava a symbol of the Nejat Güllü, they are prepar- of our yearly revenues we will be able to get half of Ottoman sultanate, contin- ing to open five more. “We are from exports. Through all the investments we make ued until the abolishment of opening our second store in abroad from the state.” the Janissary Corps. Brooklyn and our first in New a warehouse to be situ- Seyidoğlu is another brand The province of Gazian- Jersey. Our service concept ated in Germany, we that has put the Turkish tep and its surrounding there is baklava and coffee. aim to increase our dessert on shelves in Europe area were of great signifi- The Greeks and Arabs make exports by distributing and America. It has been a cance in bringing baklava baklava too, but it’s not like to all of Europe,” says part of the industry for half a to this day—noted chefs of ours. There is nobody so far Serdar Seyidoğlu century. The company’s story the pastry are raised and who has tasted Turkish bak- began as Habeş Seyidoğlu pistachios are grown here, lava and not liked it. Because came to Istanbul in 1948. resulting in the tradition of of this, fans of this delicacy Opening its first production baklava-making spreading to increase in umber daily,” says facility in Laleli, Istanbul on the rest of the country from Güllü. the city’s historic peninsula in this region. There has been a Güllüoğlu aims to increase figures each passing day as 1952, Seyidoğlu started retail significant increase in exports its number of locations well. Exports totaled 797,796 operations and wholesale of the dessert over the past domestically and internation- dollars in 2009 and reached deliveries to Istanbul’s select ten years thanks to success- ally to 100 by 2015 and to be 1.99 million dollars in 2010 restaurants. It currently ful initiatives by Turkish listed on the global market and 606,078 dollars over the maintains a 60-store pres- brands. Güllüoğlu is one of in 2023. Nejat Güllü states first six months of 2011.” He ence in Turkey, and as a the brands to open up to the that their annual revenues in- notes that the company has wholesale brand it appears world and conduct significant crease daily: “They were 24.6 applied to Turquality, the on shelves abroad with more exports. A family company million Turkish liras in 2009, state-run program providing than 280 products, bak- that has been involved in and we raised this to 26.2 funding to brands that wish lava most of all. The brand dessert-making and confec- million in 2010 and 16.3 mil- to enter or have entered the exports to Spain, France, tionery for six generations, lion over the first six months international market, adding, Belgium, Poland, Romania, the brand began its journey of 2011. Additionally, we are “After we gain this support, Bulgaria, Albania, Belarus, 140 years ago as flour, fat, and raising the bar in our export it will be even easier for us to Azerbaijan, Turkmenistan, pistachios came together in Qatar, the United States, the hands of a master chef. Australia, and above all Founded in 1871 by Güllü Greece. General Manager Çelebi, the brand came to its Serdar Seyidoğlu says they present position thanks to have decided to establish Mustafa Güllü’s decision in a primary warehouse in 1949 to take baklava beyond Germany, which is consid- Gaziantep. At a time when ered the center of Europe. no one knew what Antep- “We earn 10 percent of our style baklava was, Güllüoğlu’s yearly revenues from exports. move toward increased Through a warehouse to be production was a significant situated in Germany, we aim step. to increase our exports by Güllüoğlu began with a distributing to all of Europe,” small store and eventually be- he states, adding, “Products came a global brand. Its first shock-preserved in Turkey export was in 1996 to Greece. will be packaged and stored In addition to Arab countries, in Munich and distributed the brand exports to the US through dealers. Our produc- and Europe too, employing a tion will therefore be further total of 350 people domesti- expedited.” Regarding future cally and abroad. Güllüoğlu goals, Seyidoğlu says, “As a produces up to five tons of Turkish brand, Seyidoğlu baklava every year, sending will further bolster its strong 50% to the US, 25% to Tur- position abroad in the days key, 10% to Arab countries, Güllüoğlu, which ahead. Seyidoğlu aims to and 15% to Europe. Abroad, celebrated its 140th increase the share of its ex- anniversary in 2011, is the company has locations one of the first brands ports in its revenues to 20% in Germany, the US, the to open up to the world and expand its distribution and conduct significant Netherlands, Libya, Kuwait, exports network in Europe. 68 The Turkish Perspective

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

Trends of the Year to Emerge at TEXBRIDGE

TEXBRIDGE, organized by Istanbul Trade The latest trends in fabrics and accessories Fairs Inc. with the support of UTIB, brings March 08-10 for the ready-to-wear industry are being set over 250 selected exhibitors together with The Textile and at TEXBRIDGE. The Trend Area at the fair more than 10,000 buyers from the Middle Accessories Fair will provide a glimpse of the next season’s East, the Balkans, Europe, Russia, the CIS, CNR EXPO CENTER in highlights. With the contributions of the and Africa. Istanbul exhibitors, the creative items in the Trend Area will be inspiring industry professionals. Turkey, the eighth biggest textile exporter, The Trend Area at the last fair was designed will showcase its variety in basic raw by Michel Minne within a concept titled materials at TEXBRIDGE this year. The ‘’Impulsive’’. Vibrant color and fabric range of product groups by local and combinations proved to be a big draw. international exhibitors will encourage Seminars will be held during the fair professional visitors to make new business with participation by fashion industry contacts. trendsetters.

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01 02 MARCH 8-11 Lighttech 5th International Electricity, Lighting, and Installation Fair 03 CNR EXPO CENTER The fifth Lighttech fair—the largest platform of the electricity 04 and lighting industry—will be held March 8–11 at CNR Expo. As the hub of international business connections, the fair will 05 again be bringing together the industry’s leading companies this year. It is organized by Senexpo International Fairs Inc., one of 06 Turkey’s first international fair and convention organizations. 07 MARCH 22–25 08 Istanbul Jewelry Show 34th APRIL 6-8 Farmavizyon Pharmacy Fair International Jewelry, Watch, And 09 Equipment Fair CNR EXPO CENTER The Farmafizyon Pharmacy Fair held jointly by the Turkish CNR EXPO CENTER 10 Pharmacists’ Association (TEB) and the Association of All Held for 26 uninterrupted years by Pharmacists Cooperatives bears the distinction of being the its experienced, professional team, 11 only fair in Turkey created by pharmacists’ associations. It will Istanbul Jewelry Show presents be held April 6–8, 2012 at Istanbul CNR Expo Center. opportunities for information- 12 sharing and business to jewelry industry professionals with scores 13 of buyers from Eastern Europe to APRIL 19–21 th the Near East and from Russia to 14 Busworld Turkey 4 International Trade Fair North Africa. For Bus Industry And Accessories 15 ISTANBUL EXPO CENTER Busworld Turkey is the Turkish version march 29-APRIL 1 16 of Busworld Kortrijk, the world’s most Gas Turkey 5th International LPG, CHG, LNG Exhibition prestigious international bus industry fair. CNR EXPO CENTER 17 It is being held by HKF Fairs Inc. on April Gas Turkey, which shaped the industry’s agenda each year that 19–21 at Istanbul Expo Center. So far, 110 it’s held, is bringing together the industry’s leaders March 29 18 companies have registered to appear at through April 1, 2012, at CNR Expo. Gas Turkey, the center the fair. of gas and gas equipment trade as it provides the means for 19 Turkey to export to all around the world, is organized by Senexpo International Fairs Inc. 20 21 22 23 24 APRIL 19-22 25 Aymod 8th International Footwear Fashion Fair 26 CNR EXPO CENTER MARCH 28–APRIL 1 The Turkish footwear industry exports to 156 countries, having th Hostech By Tusid 20 Hospitality Technologies Exhibition increased its strength with its added focus on design and R&D. CNR EXPO CENTER 27 AYMOD, the International Footwear Fashion Fair, is where The 20th Hospitality Technologies Exhibition HOSTECH footwear and leather fashion takes shape. by TUSİD will be held March 28–April 1, 2012 at CNR 28 Expo in Istanbul. Sponsored by TUSİD, the Turkish Food Service, Laundry and Service Equipment Manufacturers and 29 Businessmen Association, the fair will present the latest innovations and technologies in 30 hospitality to industry professionals. 31 70

Figures THE BASIC INDICATORS OF TURKEY IN THE FINAL QUARTER OF 2011

Unemployment Falls Unemployment dropped to 9.1% in the final quarter of 2011. The reported rate in Q4 2010 was 11%.

49.4 % 71.3 % 28.3 % 17% Workforce Participation Men’s Workforce Women’s Workforce Youth Rate Q4 2011 Participation Rate Participation Rate Q4 2011 Unemployment

Seasonally Adjusted Nonagricultural Employment Falls According to data with seasonal effects filtered, the nonagricultural workforce grew by 78,000 from October to November to reach 20.672 million. Nonagricultural employment increased by 113,000 to 18.327 million. As a result of these developments, nonagricultural unemployment fell by 35,000 and the rate of seasonally adjusted nonagricultural unemployment fell from 116 to 11.3%.

nonagricultural nonagricultural workforce AND nonagricultural unemployment 19 employment unemployment (PERCENT) 21000 (x1000 PERSONS) 18 20000 17 nonagricultural 19000 workforce 16 18000 15

17000 14

16000 13 Nonagricultural 15000 employment 12 AM BE T 14000 11 , UIK T NOV JAN MAR MAY JUL OCT NOV JAN MAR MAY JUL OCT NOV JAN MAR MAY JUL OCT NOV JAN MAR MAY JUL OCT NOV JAN MAR MAY JUL OCT NOV ource: ource: ‘06 2007 2008 2009 2010 2011 S

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Services Sector Employment Rises Services employment rose by 158,000 from October to November. This increase can be said to be the largest recorded monthly increase since the start of 2005. RATE OF EMPLOYMENT CHANGE BY SECTOR AGRICULTURE INDUSTRY 7000 5000 6500 4800 6000 4600 5500 4400 5000 4200 4500 4000 3800 4000 01 04 07 09 01 04 07 09 01 04 07 09 01 04 07 09 01 04 07 09 01 04 07 09 01 04 07 09 01 04 07 09 01 04 07 09 01 04 07 09 01 04 07 09 01 04 07 09 01 04 07 09 01 04 07 09 2005 2006 2007 2008 2009 2010 2011 2005 2006 2007 2008 2009 2010 2011

CONSTRUCTION SERVICES 2000 11800 1800 11300 1600 10800 1400 10300 1200 9800 1000 9300 800 8800 01 04 07 09 01 04 07 09 01 04 07 09 01 04 07 09 01 04 07 09 01 04 07 09 01 04 07 09 01 04 07 09 01 04 07 09 01 04 07 09 01 04 07 09 01 04 07 09 01 04 07 09 01 04 07 09 2005 2006 2007 2008 2009 2010 2011 2005 2006 2007 2008 2009 2010 2011

Source: TUIK, BETAM

FDI Rises industrial Foreign direct investment rose to 15 billion dollars in 2011. By comparison, FDI totaled 9 billion dollars in 2010. production index Considered the locomotive Foreign Direct Investment Inflow (Billion USD) of growth, the industrial 22 production index continued to 20 20.2 19.5 rise in 2011 15.7 15 10.0 10 8.4 9.0 5 2.8 8.9 % 1.7 1.1 Average industrial 0 production index 1993-2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 AVERAGE increase in 2011

Source: TUIK, BETAM 72 Special Report

NETHERLANDS BELGIUM 2.45 % 1.84 % FRANCE 5.1 % uk 5.82 % ITALY USA 5.1 % 3.41 % SPAIN 3.01 % The 20 countries to which Turkey exports the most and the export share of these countries

UKRAıne 1.32 % RUSsıa 4.48 %

germany ROMANIA % 10.41 2.15 % AZERBAICAN-Nakhichevan ıraq 1.59 % 6.21 % china IRAN 1.88 % 12.5. % saudı arabıa 2.15 % EGYPT algerıa 2.14 % 1.13 % ISRAEL UAE 1.82 % 2.25 %

Data:Turkish Exporters Assembly

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