Beginning with the COVID-19 shift, the production trend in Turkey’s nearby regions will become more important in the immediate future, and the country is therefore set to work on attracting its fair share in global investments in production and industry, Independent Industrialists and Businessmen’s Association (MÜSIAD) Chairperson Abdurrahman Kaan said Wednesday.
Kaan was speaking at a press meeting held to introduce MÜSIAD’s new road map as well as to evaluate the economic and political developments, with particular importance given to a new project of development and branding of cities with original values.
Kaan, commenting on the prospect of increased production in the region, said that two important companies, one from the U.S. and one from Pakistan, both currently operating in China, want to manufacture in Turkey.
“An investor from the U.S has an investment of nearly $90 billion in China with a turnover of approximately $25 billion. We are currently in negotiations. This investor wants to shift a certain part of his production in China to Turkey,” he said, adding that the other company, which is a Pakistani company in China that produces cards and chips also wants to invest in Turkey.
There are a lot of businesspeople in the Middle East who want to invest in Turkey, Kaan said, noting that these are not to be evaluated only as an investment but rather as investment, production and trade as a whole.
Stating that Turkey has not been able to achieve its potential in recent years, especially in terms of foreign direct investments, Kaan said, “Although 2020 was a year that saw a decrease in investments all over the world, reopened economic activities and trade are shifting toward developing countries, while Turkey, unfortunately, does not get its fair share.”
Kaan noted that 70% of global direct investments poured into developing countries while Asia received approximately $476 billion, with China leading the market share in both the region and around the world in 2020.
Talking about the decline in global foreign direct investments in 2020 due to the pandemic, Kaan said Turkey last year received only $6.8 billion. The main investments made most recently were an investment coming from London-based firms and Qatar’s purchase of 10% of shares in Borsa Istanbul.
“We can say that investments have stopped completely as of 2021,” he added.
Kaan stated that a new era has begun in the world and the concept of investment has changed.
“Unless we follow this change well and establish the right investment network around the world, unfortunately, I think that our current situation in terms of direct investments will not be sufficient and it will trigger the melting of our national capital stock,” he said. The country should adopt the logic of making Turkey the world’s investment market and create a widespread investment network, he said. It is an outlook that needs to be adopted by all parties of the country, from political actors to the business world.
4 criteria for new era
Explaining their work on how to attract capital to Turkey, Kaan said an investor first starts to search for the regions where it will be most advantageous for its production.
The quality of the workforce, installation costs and procedures needed are factors that are evaluated by a potential investor. Other factors include cost optimization, reassuring legal procedures and infrastructure that will not cause problems in time.
Emphasizing the concept of investment diaspora and diplomacy, Kaan said: “Ensuring the sustainability of investment is both a state strategy and strategic cooperation that industrial organizations will undertake jointly. Some criteria are indispensable for the new period. These are structuring in the form of branches in each country; management of investment from a single source; economic and commercial intelligence system; and investor hunting,” he said.
Branding of cities
The MÜSIAD chair also explained an investment network project entitled “Development and Branding of Cities with Their Own Values,” which will encourage the production of high-value-added assets and capital.
Noting that they found it appropriate to run the two models that are most compatible with the country in the literature review they made at the beginning of this project, Kaan went on to explain: “One of them is ‘City Performance Measurement with 6 Criteria’ to classify cities in six different categories, also called 6Ps, and to compare the unique qualities of cities with each other through these criteria. It is for making a comparison between the assets in the cities in the same categories and the value they produce, and to enable the city that produces less value to reach the level of the other city with the same assets and to determine the necessary road map for achieving this.”
Kaan noted that the second most compatible model for Turkey is the “Complete Cities Model According to the Global City Index.”
“In this model, cities are divided into two groups as excellent cities and cities with rapid development. Cities with rapid development move themselves to a higher league within the framework of four sub-criteria. Perfect cities, on the other hand, group the cities among themselves where the five basic criteria such as the vitality of business life, human resources, information exchange, cultural experience and engagement in political life are most common. Under these basic headings, the most likely and easiest city to reach the main factor, that is, to be matched, is determined with various sub-criteria.
“We benefited from the basic elements of both models while building the infrastructure for our work and planning our action,” he said, as they matched 81 provinces in Turkey with cities across the globe per the value they create.
Kaan highlighted why the city brand and this matching are important for Turkey.
“Positioning our cities in the new world will be easier and more effective than positioning the state. In the future, cities, not states, will compete. If we develop similar inputs with effective investment and business models,” he said, for example, Aydın – a city in Turkey’s south – “will be positioned in the world economy as a city with the same added value as Bordeaux, France.”
“The entrepreneur’s understanding and assimilation will actually be a positive move to embrace the city and accelerate investments there. Although our cities have the same assets as their peers in the world, unfortunately, the expected output cannot be achieved and the potential capacity of the city is wasted because they cannot use their capacities by concentrating on the right areas,” he said.
Kaan underlined that this project will revive the cities’ economies by evaluating the Turkish cities and their counterparts abroad.
Kaan, who gave information about the project details, said that, for example, Isparta, a city in the country’s southern central region famous for rose production will be a city for cosmetics; Burdur in the south will be a city for marble production, medicinal aromatic plants and livestock; Erzurum in eastern Anatolia will be a city known around the world with winter tourism; Afyon in central west Turkey will be a popular city for thermal tourism, southeastern Gaziantep for gastronomy, Istanbul for finance and western Izmir for agriculture.