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March 29, 2023

Turkish Economy: Transformation Begins. Turkey and Romania: Strong strategic and economic partners

Following the economic liberalization of the 1980’s and the Customs Union agreement with the EU in 1995, the Turkish economy has had a remarkable success story boasting a GDP worth 789 billion USD as of 2019, and ranking the 18th largest economy in the World and the 7th in Europe.

Furthermore, Turkey’s export and import volumes have increased significantly, reaching up to 168 and 223 billion USD, respectively, in 2018. Given that 46% of Turkey’s export comprised of agricultural produce in the 1980s, it is obvious that Turkey has succeeded in diversifying its export goods. Accordingly, in 2018, the share of agricultural produce in Turkey’s export dropped to 3% while the share of manufactured goods (mainly vehicles and spare parts, machinery, textile, readymade clothes and metal products) rose to 94%. Turkey’s strategic geographic location provides opportunities to reach out to both European and Asian markets.

Thanks to its economic performance, liberal investment environment, affordable skilled workforce, access to a wide geography, through Free Trade Agreements and lucrative incentives and opportunities, Turkey attracted around 210 billion USD in foreign direct investments (FDI) between 2002 and 2018.

As a matter of fact, the success behind those indicators cannot only be attributed to the government sector. The Turkish private sector, which makes considerable efforts to increase Turkey’s international competitiveness, also plays a crucial role in it. All over the world, Turkish entrepreneurs have a legitimate reputation for risk-taking and outcome-oriented attitude even under adverse circumstances. Obviously, creating a business-friendly environment and motivating policies for the private sector encourages Turkish business circles to expand their worldwide networks. Turkish entrepreneurs’ direct investments abroad reached 42,7 billion USD from 2003 to 2018.

As for tourism, Turkey welcomed just over 46 million visitors in 2018, marking an increase of more than 21% over the last year. The number even exceeded that of 2015 when 42 million visitors came to Turkey.

Turkey has mobilized its resources towards the 2023 vision, which is a set of goals to be reached until the centennial anniversary of the Republic of Turkey in 2023. According to the 2023 vision, Turkey aims to be one of the top 10 economies in the world by reaching the value of 2 trillion USD in GDP and 500 billion USD in terms of exports. A roadmap towards achieving the 2023 targets in the form of a new 3-year economic program (2020-2023) was announced in September 2019. The new program will be maintained under the promising theme of “Transformation begins,” as outlined by the Minister of Finance and Treasury, Mr. Berat Albayrak.

The program envisages a promising perspective for the Turkish economy, as well as for foreign investors. Within this framework, the inflation rate is expected to decrease steadily, 8.5% next year, 6% in 2021 and 4.9% in 2022. Turkey’s year-end economic growth is estimated at 0.5% in 2019 and the targeted annual growth is 5% for the next three years each, generating approximately one million new jobs per year during the 2020-2022 period.

In the framework of the 2023 targets, Turkey has already carried out various infrastructure projects successfully, such as the Eurasia Tunnel and Marmaray, North Marmara Highway and Yavuz Sultan Selim Bridge which not only contribute to a more prosperous Turkey, but also  strenghten the Europe-Asia interconnectivity. Last but not least, the Istanbul New Airport, the largest infrastructure project in the history of the Turkish Republic, became operational at the beginning of this year. Once all phases of the airport are operational, the facility is expected to achieve a capacity of 200 million passengers.


Turkey and Romania: Strong strategic and economic partners


The Turkish-Romanian relations have witnessed a steady expansion over the last 30 years, by dint of excellent bilateral relations as well as strong collaboration and cooperation between the two countries’ business circles.

Currently, Turkey is the largest trading partner of Romania outside the European Union. The two countries are also each other’s largest trading partners in the Balkans. The bilateral trade volume which was only 2 billion USD back in 2003, increased to 6.4 billion USD at the end of 2018, marking more than a three-fold increase. Moreover, it continues to expand each year since the bilateral trade was recorded as 4.1 billion USD in the first eight months of 2019.

With regard to investment, Romania continues to be a major destination for Turkish businesses. Currently, approximately 15.000 Turkish companies are registered in Romania in a wide range of sectors, including banking, manufacturing, machinery, home appliances, construction, construction materials, textiles, health, transportation, tourism, agriculture and food industry. The total value of investments made by Turkish companies, both direct and indirect, has exceeded 7 billion USD.  We are also pleased to notice an increasing interest among Turkish entrepreneurs to participate and achieve success in various tenders offered by the Romanian government and local authorities.

The exchange of high-level visits between Turkey and Romania intensified in 2019 in tandem with the close political dialogue and friendly relations, which yielded fruitful results. In this regard, the first Turkey-Romania Joint Economic and Trade Committee (JETCO) meeting and a high level business forum took place on 19 April 2019 in Istanbul, with the participation of  Ms. Ruhsar Pekcan, Turkish Minister of Trade, and Mr. Ştefan Radu Oprea, Romanian Minister of Business Environment, Commerce and Entrepreneurship. Furthermore, both countries underlined their willingness to reinvigorate the Joint Economic Commission (JEC/KEK) mechanism, last meeting of which was held in 2013, and to organize the following JEC meeting in Turkey by the end of this year.

Tourism is another key element, which not only serves as a boost to our bilateral economic relations, but also helps to further develop the friendly relations between Turkish and Romanian peoples. In this vein, we are pleased to have hosted 660.000 Romanian tourists in our country in 2018. In the first 8 months of 2019 alone, over 560.000 Romanian tourists visited Turkey, marking more than a 25% increase over the last year.

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