“Keynote address of Ambassador Ünal Çeviköz at the “Build Turkey” event, 16 April 2012”
Ladies and Gentlemen,
It is a great pleasure for me to address you at this event organized by the London Chamber of Commerce and Industry in collaboration with the Turkish-British Chamber of Commerce and Industry. Let me express my sincere appreciation for both of the Chambers for their hard work in promoting bilateral trade, investment and joint ventures between Turkey and the United Kingdom. I have no doubt that this event will open new avenues for cooperation between Turkish and UK firms.
Today, Turkey and the United Kingdom enjoy a “Strategic Partnership” based on strong bonds of alliance, friendship and mutual trust. Our relations are flourishing in almost every field. We have developed close and effective cooperation in a wide range of areas as well as on major regional and international issues.
Economic and commercial ties between Turkey and the UK represent an important aspect of our bilateral relations. There is a steady increase in our bilateral trade. Despite the global economic crisis, annual trade volume between our countries reached 12 billion US Dollars in 2010 and 14 billion Dollars in 2011. The UK is Turkey’s 3rd largest partner in exports and 11th largest partner in imports. However, the potential that we have is much greater, and we are committed to move forward towards the common goal of doubling our trade volume within the next five years.
The UK is the second largest investor in Turkey. More than 2.300 British firms have made investments worth of 4.1 billion Dollars in Turkey. UK firms are extremely enthusiastic in investing in Turkey for a very good reason. Economic performance of Turkey over the past decade has been impressive. In a global environment where many countries registered either little or no growth, Turkey grew 8.5 percent in 2011, posting the second biggest growth rate in the world after China. Moreover, our growth has been an employment generating growth. At a time when the ratings of many developed market economies are downgraded, Turkey’s credit rating has been upgraded three times since 2009. The determination of our country to create a stable and strong economy with favourable investment conditions has attracted foreign investors. Turkey has emerged as a top investment destination as a result of the elimination of bureaucratic barriers. The total amount of FDI inflows in the last four years has reached 70 billion Dollars. The number of foreign companies operating in Turkey exceeded 27 thousand. Turkish companies have become major players in the global market place. Hundreds of thousands of jobs in Europe depend on Turkish business. Turkish firms already employ more than 700 thousand people across Europe. One in four of the largest companies in the Middle East and North Africa are Turkish and 65 percent of industrial exports from the MENA region originate from Turkey. GDP has reached almost 1 trillion Dollars and per capita income has soared to 10 thousand Dollars. The strong performance of the Turkish economy has also boosted foreign trade, while exports hit 135 billion Dollars in 2011 and tourism revenues exceeded 23 billion Dollars. We had a foreign trade volume of over 375 billion Dollars last year. Turkey, with industrial goods amounting to over 90 percent of its exports, is the seventh largest trade partner of the EU. One of Turkey’s biggest assets is her educated, young and dynamic human capital. The average age is 29 in Turkey whereas it is 42 in EU countries.
What’s more, Turkey is transforming herself to a knowledge based economy. The Turkish “software” market recorded 100 percent growth rate in recent years and reached the level of 2 billion Dollars as of 2009. Mobile phone subscriptions reached almost 65 million whereas the number of broadband Internet users is 50 million. We also attach particular importance to Research and Development activities and envisage allocating 2 percent of our GDP to R&D expenditures. Between 2003 and 2009, domestic intellectual property right applications and licensing increased five-fold.
In sum, significant improvements in such a short period of time have registered Turkey as the 16th largest economy in the world and the 6th largest economy in Europe. Goldman Sachs predicts that Turkey will be the 2nd largest economy in Europe and 8th in the world by 2050. Our aim is to be the world’s 10th largest economy by 2023 on the 100th anniversary of the foundation of the Republic.
The Construction Industry in Turkey has been a driving force in the economic uplift of the country. The construction sector represents approximately six percent of the GDP employing around 1.3 million people. There is a strong presence of both contracting and consulting companies. The construction industry provides support to various sub-sectors like the production of building materials and others which in turn earn benefits from the export market. Turkey is among the top 12 producers of building materials in the world, particularly in the supply of such products as cement, glass, steel and ceramic tiles. Many of the Construction Companies have reached to other parts of the world from their base in Turkey. Over the past 40 years, Turkish contractors have undertaken almost 6,500 projects in 94 countries with a total value of 210 billion Dollars. Turkish Contactors are now able to carry out larger size and more value-added projects such as airports, subways, industrial plants, natural gas and petroleum refineries, highways and energy stations.
CIS countries and particularly central Asian states represent almost half of the Turkish overseas construction sector with a value of 92 billion Dollars. The Middle East region emerges as the 2nd largest market with a value of over 52 billion Dollars. Africa is the 3rd largest market with a value of 41 billion dollars. Saturated markets of Europe and America accounts for 8 percent of overall undertaking with a value of 17 billion Dollars. Asia accounts for 3.4 percent share with a value of 7 billion Dollars. An assessment of the breakdown of projects undertaken by Turkish companies shows that the value of residential projects worth 27 billion Dollars, transportation projects worth 49 billion Dollars and industrial plants’ projects worth 41 billion Dollars in sum. Turkey’s current strategy is to expand in Western and Central African countries, South Africa and India, while increasing their presence in Russia, North Africa and the Gulf.
Turkish companies have also started to knock on the doors of the UK. Currently, the Ağaoğlu Group, a Turkish firm with investments in large-scale housing projects, is set to make its first international real estate investment in London. The company will construct two towers that will accommodate a five star hotel and residences in Canary Wharf, London’s central business district.
The unique geographical location of Turkey contributes a great deal to the global competitiveness of Turkish construction products and contracting services abroad. That said, Turkey's strength in the field is not only due its location, as the country also boasts cost-effective service at international standards, high client satisfaction, credibility in partnerships and familiarity with the business environments in the nearby regions.
Another healthy sign of the Turkish construction industry is that the number of contracting firms in the world’s top 225 contractors is on the rise. Back in 2003, there were only 8 companies in the list. However, the number of the Turkish companies in the “Engineering News Record list” climbed to 31. There is a steady increase in the number of the Turkish contracting companies in the list.
Let me also highlight the opportunities within Turkey regarding the construction sector. The domestic market is full of potential in infrastructure, healthcare buildings and commercial spaces. There is a growing number of infrastructure projects in Turkey, with funding available from the EU, World Bank, European Investment Bank and European Bank for Reconstruction and Development. The European Union has already allocated pre-accession funding to Turkey, which is mainly bound for the building and refurbishment of highways, railways and ports. In addition to the EU, the World Bank focuses on improving the railways and a number of municipality services including energy, health, education and banking. Furthermore, concession contracts, including very large transportation projects and PPP projects are continuing to present opportunities for those providing technical and legal services to lending banks and project consortia. Such major projects may also provide opportunities for the UK companies that supply niche design services, materials or products to form part of the supply chain. Contracts for such projects are often formed by consortia of Turkish and foreign contractors.
Turkish contractors are open to international partnerships not only in the field of contracting, but also in construction industry investments, ranging from the manufacture of construction materials to infrastructure, housing, industry and tourism projects. The extensive know-how and experience gained through working abroad for nearly four decades, in all kinds of challenging engineering projects and in all forms of business environment, constitute the distinctive elements of the Turkish construction sector.
Ladies and gentlemen,
A new report by “Global Construction Perspectives and Oxford Economics” predicts that growth in global construction will outpace world GDP growth over the next decade. Global construction will grow by 67 percent from 7.2 trillion Dollars today to 12 trillion Dollars by 2020. A total of 97.7 trillion Dollars will be spent on construction globally over the next ten years. Construction will become one of the most promising global growth industries of the next decade driven by emerging markets.
There is a huge opportunity for Turkish and UK firms. Corporates need to work out how to deploy skills and develop the best alliances to benefit from the excellent growth opportunities that exist. Collaboration with Turkish contractors or consultants could simplify market entry into some of the more challenging but potentially lucrative markets of the Middle East and North Africa and the Central Asian Republics. I sincerely believe that this event will achieve tangible results and stimulate joint ventures in regions of mutual interest to our companies.
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