October 29 marks the creation of the Turkish Republic in 1923 and it is a symbol of the beginning of a new era in our country’s history. Today, we are celebrating the 93rd anniversary of our Republic with great joy and pride. The Republic is the fruit of the existential struggle of the Turkish nation, made under the leadership of great commander Atatürk. We attached importance to celebrate 93rd anniversary of our Republic in this year because coup plotters attempted an attack against a secular, democratic, social and constitutional state and against law and order. The horrible atrocities and attempted betrayal that took place in Turkey on the night of July 15th, 2016.
This coup attempt was perpetrated by the infamous Fethullah Gülen Terrorist Organization/Parallel State, against which our country has been fighting and about which we have been warning the international community. This is also history of how a nation during a desperate time became a united front in town squares across the country to repel this treasonous act.
In the aftermath of 15 July 2016, our nation and our economy both faced a serious test, but the gears of the Turkish economy continued to spin without disruption. The Turkish economy, despite all speculations and despite decision by certain international institutions, was not severely affected. The stock markets in Istanbul opened and operated normally on Monday, July 18th immediately following the events. The Turkish Central Bank’s Money Policy Board did not postpone its monetary decisions. On the contrary, it continued with the discounts it is implementing on the upper band of the interest rate corridor. The Turkish Central Bank also took important and radical measures to solve any emerging crises by providing unlimited liquidity for banks, zero commissions for intraday bank credits, being prepared to increase the USD 50 billion banks’ reserve if necessary, and enabling all ongoing electronic transactions and EFT operations to continue. Markets responded positively to this resolve and the precautions that were taken. The Turkish Lira lost less value than some international agencies were expecting. Our citizens demonstrated their confidence in the country starting the first night. There were no significant withdrawals on deposits and no extraordinary demand for credit. When viewed as a whole, these developments demonstrate that our economy, like our democracy, is built on very solid foundations.
Current and potential foreign investors were given detailed and regular briefings even under these circumstances. In the first quarter of 2016, Turkey was one of the fastest growing countries in the OECD and Europe, with a growth rate of 4.8 percent. Investors have been informed that Turkey is expected to continue this performance throughout the year. Ministry of Economy conveyed to investors that this performance will be retained for the rest of the year.
Growth rate, undoubtedly, is one of the most important indicators that a country’s economy is functioning well. The Turkish Economy managed to enjoy positive growth for 26 consecutive quarters, while at the same time many of its peers’ economies felt increasing burdens day by day. We are happy to see that our economy is maintaining its steady pace of robust growth that it seized upon following the 2009 global crisis. The biggest proof of this is the figures from the previous two quarters. Thanks to growth by %5.7 in Q4 of 2015 and by 4.8 % in Q1 of 2016, we are determined to reach an overall 4.5% growth rate in 2016.
Comparing our growth performance with other countries, we see that we are in a favorable position. Turkey, in this period of political uncertainties, enjoyed a performance far beyond the EU’s and Eurozone’s growth rates, which were 1.5% and 1.6% respectively.
The Turkish economy has continued its course of strong and stable growth while continuing to reduce its current account deficit in 2016 after the 26.1 percent decline in 2015. Our current account deficit fell 13 percent to 19.1 billion dollars in the most recent period of January-June 2016. Turkey is also a country whose growth performance has had a positive impact on the labor market. Our unemployment rate in May 2016 was 9.4 percent, which is the second lowest rate in the last 12 months.
Turkey continues to be an attractive place in terms of investment, and there will be no disruption to the reforms and projects we will implement to make it an even better place to invest. In fact, we will work even harder to strengthen our economy thanks to the solidarity demonstrated against the coup-plotters and these projects and reforms will be implemented even more quickly.
Turkey’s economic success story did not go unnoticed, and our country has become a major destination for many foreign investors. Thanks to its ability to retain stability through difficult times, Turkey is the gateway for opportunities and potential for both domestic and foreign investors.
Between 1984 and 2002, total Foreign Direct Investment amounted USD 13.1 billion; from 2003 until today, this figure increased more than tenfold to USD 169.1 billion. This a proof that Turkey has become a prominent destination for foreign investors.
We are not only attracting foreign investors, but also investing in foreign countries. Today, the total value of Turkey’s foreign investments stands at USD 35 billion. We see Turkish investors treading the globe and creating their own stories in every corner of world.
Romania is Turkey’s largest trading partner in the Balkans and a major center for investments. The total investments of Turkish companies in Romania, both direct and indirect, exceed € 6 billion. They operate in a wide range of sectors, including finance, banking, white good manufacturing, industry, glass production, wood production, construction, real estate, food processing, health, and media. Our active business community is a strong force in bolstering our relations. As our economies continue to grow, Turkish investments in Romania will grow as well.
Our focus in all of these efforts is for a new push in the area of exports. Therefore, we will mobilize all of our forces to support investors, producers, employers and exporters, just as we have done in the past.
However, Turkey has no fund or a similar resource to achieve its goal of becoming one of the world’s top economies, which is a serious handicap, so it established the “Turkish Asset Fund” (Türkiye Varlık Fonu) on 26 August 2016 to overcome difficulties in this regard. This fund will not only facilitate the financing of strategic investment projects in our country, but it will also provide depth to our capital markets. The Asset Fund is a very important and strategic vehicle for taking advantage of the potential that Turkey has possessed in the form of long-term income, but has been unable to leverage until now. The Fund will be structured based on similar examples around the world, and as a significant foreign policy instrument, it will give Turkey a greater voice and more maneuverability in the international arena. Instead of going to other countries, financing institutions, and agencies and asking for their resources to finance the joint ventures we have undertaken with countries, we will use our own capital to execute projects that we view as strategic.
We must take full advantage of Turkey’s position in this respect. As the famous philosopher İbni Haldun said, “geography is our destiny,” and we must carefully consider what this destiny will mean for us. Some of the countries in Africa and the Middle East, with whom we share a long history, also comprise our traditional markets. Our contractors execute numerous projects in these markets, and our exporters can also be leaders in these markets. Our companies have achieved some very impressive accomplishments both in terms of investment and contractor projects. But we must be clear about one thing. Some of the countries that are traditional markets for us are viewed as risky by international financial institutions, and funding requests made by our companies either for investment or exports are either rejected or come at a very high price. Our Asset Fund will provide support to facilitate the business our companies do.
One of the most important things we have done recently is our new incentive system, which will be a system that helps use public resources more efficiently while satisfying investors and accelerating investments by making it possible to accurately identify needs on an investment project basis and provide direct, need-based state support. The new regulation will meet our country’s current and future needs, ensure supply security, reduce foreign dependency, and help achieve our technological transformation with “project-based” high added-value investments that are innovative and R&D intensive.
All of these developments clearly demonstrate that our economy is on a good trajectory. Obviously, there are aspects of our economy that we wish were better, and we shall continue to strive to improve these areas. In the future, we hope to see a Turkish economy that grows much faster and employs a larger number of people due to the implementation of our reform packages.
In conclusion, the treacherous attack of July 15th that threatened the future of our country was defeated because as a nation we laid aside our ideological and philosophical differences and our political views and stood in unity. From this point forward, our country’s economic future will be much brighter. Turkey will move forward with confidence towards its 2023 Goals.
I would like to re-emphasize my conviction for the bright future of Turkish-Romanian bilateral relations in all fields. I have no doubt that we will achieve the desired level of economic and trade cooperation between our countries before the 100th anniversary of the Turkish Republic.