The Speech of Ambassador Kerim Uras at the Turkish – Greek Trade and Business Dialogue in Thessaloniki - 18.12.2012
It is a great pleasure for me to participate in the “Turkish-Greek Trade and Business Dialogue” and to address such distinguished participants in Thessaloniki, a city which owns a special place in the minds and hearts of Turkish people. Let me thank Mr. Tuğrul Biltekin, Consul General of the Republic of Turkey in Thessaloniki, for organizing this event.
Thessaloniki is situated in the heart of the Balkans and is the natural gateway from the Mediterranean to the Balkans and vice versa. The city is now hub of a new trading network not only in the Balkans, but also in a wider sphere.
Exactly a century ago, we, the people of this region, witnessed a devastating humanitarian tragedy because of the Balkan Wars. Today, it is incumbent on us to learn lessons from our shared history. Our principles must be based on peace “regional cooperation”. Our leading objective must be the acceleration of the existing cooperation through the creation of areas of joint interest between our countries. I, therefore, firmly believe that economic cooperation and bilateral trade are the best serving tools in order to achieve this aim.
Today I would like to make a tour d’horizon on the current situation of the Turkish economy in general terms, then present you some updates on the recent developments in Turkish-Greek economic and commercial relations, as well as our perspectives for the future.
As we all witness, though bitterly, the global economy is going through the deepest recession in the post-Second World War era, and recovery rates among the regions and economies display divergences.
We all see that Greece is waging a big struggle against this economic crisis. This struggle is not only waged by the Government, but by the people as well, which is no easy task. We are confident that all these commitments together with heavy burden undertaken will prove worthy. Indeed, some positive outcomes have already been achieved.
No country is immune to the effects of this global financial crisis. But I can say that the Turkish economy was enjoying strong fundamentals before this crisis. Hence, the effects of this crisis on the Turkish economy have been limited. This was neither by coincidence, nor a stroke of luck. Basically, it was a consequence of a lot of hard work, the structural reforms and our prudent policy approach.
Before 2008-2009 crisis, we went through a very strong fiscal adjustment process. We were able to reduce our public debt and budget deficit dramatically. We completed our reforms in the banking sector, social security, healthcare, public financial management and control. Also, during the 2009 crisis, we started to implement a fiscal consolidation program rather than a fiscal stimulus program. We announced a 3 year Medium Term Program through which we said we were going to reduce our budget deficit even further down. 3 years in a row we actually over-performed when compared to our fiscal targets that we announced in 2009.
Confidence indices in the country are very high, both for consumers, producers as well as for the banking sector. It is a private sector led growth now that we are going through. In 2010 the Turkish economy grew by 9.2 percent and by 8.5 percent in 2011. According to the IMF, the Turkish Economy is expected to grow by 3% in 2012. In the first two quarters of 2012, the Turkish economy grew by 3,2% and 2,9% respectively, resulting in an average growth of 3,05% in the first half of 2012.
Since the peak of the crisis we were able to generate 3.7 million additional jobs of which 1.5 million are filled by women. Moreover, our income distribution has been consistently improving. GDP per capita in 2011 is over 8.000 Euros whilst it was only 1.500 Euros in 2001. Unemployment is under 10 percent. Gross debt to GDP ratio is less than 40 percent and the budget deficit is below 2 percent.
Today, Turkey is the 16th largest economy in the world and the 6th largest in Europe. The services, industrial and agricultural sectors account for 60%, 30% and 10 % of the GDP respectively. As one of the top 10 emerging markets, it is also a member of G-20.
Let me briefly touch upon Turkey’s foreign trade: Turkey has been pursuing an export-led growth since 1980. By virtue of economic reforms, restrictions on imports have been lifted, safeguard practices were reduced, and foreign exchange transactions were liberalized. As a result of these steps, both the volume and composition of the Turkish foreign trade changed radically. The volume of Turkish exports has increased more than 20 times. Meanwhile, the composition of Turkish export products has also been altered considerably. While it was dominated by raw materials and agricultural products, it is now industrial goods that lead Turkish exports.
Let me present you the most recent figures on Turkey’s foreign trade. Turkish exports reached 103 billion Euros in 2011, whereas the imports was 183 billion Euros. The figures for January-September 2012 period is as follows: Exports were 86 billion Euros and imports 135 billion Euros. In January-September 2012 compared to the same period of the previous year, exports increased by 13,7 % and imports decreased by 2,9 % respectively.
Despite the gradual drop in our trade volume with Europe, the EU is still Turkey’s 1st trade partner. The EU’s share in Turkey’s trade volume was 37 % in January-September 2012. This dropped from %52 a couple of years ago. At the same time, Turkey has managed to diversify its trading partners to compensate. The countries from the Middle East, Asia, Africa and Latin America are new emerging trading partners of Turkey. Thus, we have become less vulnerable vis-à-vis the economic crisis in the Eurozone. Nonetheless, we can never be immune to it and that’s why we are closely monitoring the developments in the EU.
We all appreciate the role of the private sector in the economy. Turkey has a very dynamic private sector. The recent performance of Turkish businessmen displays that the Turkish private sector is able and ready to take the lead in the economy. The Government supports the private sector by promoting a business-friendly environment for all. In addition to the Customs Union Agreement signed with the EU in 1995, Turkey has signed Free Trade Agreements with more than 50 countries around the world. This reflects its commitment to a liberal international trade system based on the principles of free competition, non-discrimination and elimination of trade barriers.
Let me sum up my words on the “Turkish economy”.
We have gained enormous experience from the economic crises and the stability programs during the last twenty years. We are now well aware that “political stability”, “fiscal discipline” and “financial sector soundness” are key factors for a stable macroeconomic environment.
Our strong relations with the international financial institutions, especially the IMF through its technical and financial support was also critical to provide confidence to the markets. On the other hand, our experience shows that IMF programs alone cannot help a country to recover from a crisis. Political and public ownership are most critical aspects for the success of economic programs.
Turkey’s vision for the 21st century is to maintain sustainable economic development and to become a full member to the EU.
Before moving to Turkish-Greek economic and commercial relations, I would like to share with you the reply of Prime Minister Erdoğan, to a question regarding the reasons of the recent economic miracle of Turkey, at a time when the rest of the world is suffering from the consequences of crises. Prime Minister Erdoğan named three significant factors which led to that development:
- strict observation of the fiscal discipline at all costs,
- always maintaining confidence,
- not extending state guarantees to the banks and insurance companies, so that they can stand on their own feet
With these principles, Turkey now is a center of attraction for foreign investments. In 2011, the amount of foreign investment reached 8,5 billion Euros. In January-August 2012, this number has been around 6 billion Euros.
Now I would like to dwell upon economic and trade relations between Turkey and Greece, which have a stake also in the stability of our wider region. Both Governments have the political will to further improve bilateral cooperation in all fields. Economy and trade is no exception, despite the global economic crisis.
Our economic and trade relations with Greece have also gained momentum since 1999 along the lines of positive developments witnessed in bilateral political relations. According to 2011 data, Greece’s exports to Turkey was 1,95 billion Euros, Turkey’s exports to Greece was 1,18 billion Euros, and trade volume was 3,23 billion Euros. Thus in 2011, Turkey ranked 9th in Greece’s imports and 3rd in exports. In line with the current data, during the period of January-October 2012, the trade volume has already reached 2,7 billion Euros (with 1,5 bn. Greece’s exports), signaling that the volume might break new record levels by reaching 3,5 billion Euros.
The investment sector continues to be promising. The increasing amount of Greek investments in Turkey signifies the potential of our economic interaction. The banking sector is the number one sector in the field of direct investments between Turkey and Greece. The National Bank of Greece (NBG) entered the Turkish finance sector through acquisition of majority stakes of Finansbank. On the other hand, as the largest Turkish investment in Greece, the Athens and Komotini branches of Ziraat Bank have been in operation since 2008. The Xanthi branch was opened in 2010 and the Rhodes branch started operations in 2011. Greek investors, apart from the banking sector, operate in such fields as information technology, agricultural applications, packaging, plastics, pharmacy, cosmetics, fisheries, tourism and construction sectors in our country. The total worth of Greek companies’ investments in Turkey exceeded 4,5 billion Euros. Unfortunately this is far from being balanced.
Our joint perspective is to increase bilateral investments. To this end, we have pave the way to create fertile grounds for investors in our countries. Within this context, let me express my appreciation about the event organized by “Invest in Greece” in İstanbul in March 2012.
Tourism is another sector where we have a great potential. In 2011 more than 702 thousand Greeks visited our country, whereas more than 552 thousand Turks visited Greece. In 2012, during the period of January-September, the number of Greek tourist which visited Turkey was nearly 500 thousand. During the period of January-June 2012, almost 250 thousand Turks visited Greece.
We welcome these figures as an indication of the progress achieved in the field of tourism, upon which we attach particular significance, not only from the vantage point of economic growth, but as well as from the perspective of human contacts, cultural exchange, boosting mutual understanding and elimination of prejudices.
Here I would like to state that we welcomed the pilot project of visa facilitation in 5 Greek islands for Turkish citizens. However, if visa exemption, is provided to all Turkish citizens for their trips to Greece, the number of Turkish tourists will increase enormously, exceeding 1 million, and this will be a bonus boost for Greek tourism. Thessaloniki will be one of the first centers to benefit from this growth.
Taking the positive developments in our respective tourism sectors into consideration, I firmly believe that we can work together to attract more tourists from the other countries, in particular from far away destinations such as China, Japan, USA, Canada, Australia and South America by offering joint package tours.
Turkey and Greece, together, have a lot in common to offer to the distant countries. We can create a common marketing strategy to promote joint tours. Through the joint campaigns, we can advertise İstanbul and Athens, or İzmir and Thessaloniki, or Bodrum and Rhodes… We can even encourage our tourism agencies to establish joint ventures and operate as partners.
In concluding my speech, I would like to say that, during the last decade, the most tangible outcomes of the dialogue and cooperation period between Turkey and Greece have been achieved in the field of economic and trade relations. We believe, economic and commercial ties will continue to be an outstanding pillar of Turkish-Greek relations, based on the new paradigm that will also guide our relations throughout 2013.
The level of economic interaction between Turkey and Greece also displays the confidence of the business circles to the dialogue and cooperation process. It is also a clear message to the both governments to further the cooperation perspectives.
I am confident that further development in economic bilateral relations will continue in the period ahead which in turn will positively contribute to the rapprochement between two countries.
Thank you for your attention.
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