I recently had the honour to speak on a panel at a Financial Times Conference on International Financial Centres in Istanbul.
The conference included an interesting presentation by Turkey’s Investment Support and Promotion Agency (ISPAT) on Turkey’s powerful economic fundamentals and the potential benefits for foreign businesses in investing here.
British companies have been paying attention. According to Turkish figures, there are over 2,500 British companies already active in Turkey and in the five years to 2012 the UK was the largest inward investor here.
In discussion at the conference, I noted that Turkey was competing for inward investment from around the globe, including with other financial centres in the region such as Dubai. I noted the many advantages which Turkey offered including geographical location; time zones; Turkish Airlines; highly-qualified senior professionals; a hinterland of wide geographical spread and 77 million people; several thousand years of history; and straightforward beauty. I’ve been to Dubai and it’s terrific; but I don’t think many people would say it can compete with Istanbul for natural beauty.
Turkey should have a bright future as a destination for inward investment. An important element of Turkey continuing to attract investment in general, and to developing the International Financial Centre in particular, will be transparent and clear operating rules as part of a wider business eco-system that gives confidence to investors. Perceptions are important: I have heard some in the business community express concern about the independence of the rule of law in Turkey. To ensure such perceptions do not gain ground, it will be important to demonstrate for example, that businesses coming to Turkey from different countries can feel confident that the justice system is independent, predictable and fair.
Also on the question of perceptions, some businesses have pointed out to me from time to time that it is an important part of the investment ecosystem that foreign companies wanting to invest in Turkey feel they will be able to secure the work permits they need; and that they feel confident they will be able to gain access to good schools for their children.
Attracting inward investment, like most areas of economic activity, is a constant battle. There are many different countries seeking to attract a globally mobile pool of inward investment. Whenever you improve something in your own market, you are likely to find that your competitors have improved their offer too. So every country, including the UK and Turkey, needs to be constantly focused on making other countries feel welcome; and on making sure that attractions which look good on paper are genuinely as favourable as they seem.
I for one shall be continuing to encourage British companies to consider investing in Turkey. I hope that Turkey continues to be successful in attracting tons of inward investment – including from the UK – and vice-versa.