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Table of Contents
Section Contents Page No.
1 About Turkey 4
2 Location & Resources & Advantages/Disadvantages of Location 5-8
3 Economic Integration and Trade Relationships 9 - 10
4 Cultural Beauty of Turkey 11 – 12
5 Overall Attractiveness of Turkey (Cost, benefits & risks) 13
6 Turkey’s Present CPI and the creation of barriers in FDI 14
7 Future Possibilities and Recommendations for Turkey 15
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About
Turkey...
Turkey is a country, which is located between two continents. These are Europe and Asia. Its neighbors are
Greece, in the west, Iran and Iraq in the east, at north lies Russia, and in south is the Mediterranean Sea. It is a
very geologically important country. The reason for that is that Turkey controls three different seas, which are
the Black Sea, the Aegean Sea, and the Mediterranean Sea. The country has a very long history. It is the
continuation of the old Ottoman Empire, which has ruled the whole Europe, part of Africa, and most of the Middle
East for over three hundred years. Over these years, Turkey has been faced with a lot of problems from its
neighbors. One of these is the Kurdish-problem.
At this point, I would like to introduce you the Kurds. The Kurds are the people who live in the Northern part of
Iraq, southwest of Iran, and southeastern part of Turkey. The Kurds claim that they are a nation and after the
Serve Agreement they requested a considerable piece of land from those three countries. However, the land that
they claim theirs is almost half of Turkey and the north part of Iraq. Both countries deny this and they both
stated that not even a square foot of land will be given to the Kurds. This is where the problem begins.
The Turkish army has been fighting with Kurdish terrorists (PKK, Kurdish Independence Party) for over fifteen
years now. In this regional war, Turkish government has spent ninety billion dollars and lost fifty five thousand
civilians and soldiers. The war between the PKK and the Turkish army has no rules. Turkish villages have been
attacked, bombed, burned to the ground, and most importantly the residents of these villages have been shot in
front of their children by PKK.
Turkey has a very colorful history and evidence has been found of the earliest forms of civilizations living in the
lands that now are classed as part of this country. Empires that ruled for centuries include, but are not exclusive
to the Lycians, Romans, Greeks and Selcuk Dynasty. All over Turkey but specifically on the South West coast are
historical sites relating back to these periods. One of the most prominent empires to rule was the Ottomans? If
you go to Istanbul, visit the former home to rulers of the Ottoman Empire, Topkapi Palace. They ruled for
approximately 900 years however by the year 1918, the Ottoman sultans sided with the losing countries of the
First World War and the Anatolia region was due to be separated for ruling by the winning countries.
This prompted the war of independence led by Mustafa Kemal Ataturk. The war was won in 1923 so
independence was declared and the Republic of Turkey was formed. One of Mustafa’s first decisions was to move
the capital, formerly Istanbul to Ankara in the center of the country.
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Location & Key Resources of TURKEY
Where Turkey is located in world map:
Turkey has an attractive geographical location, situated partially in Asia and partly in Europe. 97% of
Turkey is located in Asia.
The Republic of Turkey is continental country in Eurasia, located in Western Asia, with a smaller
portion on the Balkan Peninsula is in Southeast Europe. Turkey is bordered by
Eight different countries. Greece and Bulgaria to the northwest and the Georgia to the northeast;
Armenia, the Azerbaijani exclave of Nakhichevan and Iran forward to east; and Iraq and Syria in the
south. Turkey is surrounded by seas on all three sides, with the Aegean Sea in the west, the Black Sea in
the north, and the Mediterranean Sea in the south. The country has a north-south extent that ranges about
300 to 400 miles (480 to 640 km), and it stretch along almost 1,000 miles from west to east. By land
area, it is the 37th largest country in the world of ranking.
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Geographical Advantages & Disadvantages
of TURKEY
Advantages because of location:
Turkey gets many advantages because of the location it is in. Which are given below:
• As there are large countries that are neighbor of Turkey, those have large population too. These
large populated country with different type of people need different types of things. So to fulfill
those need, these country have to import from Turkey. So, it help in increasing amount of
export with Turkey.
• Falling energy prices are making the country even more competitive.
• This country is surrounded by seas on all the three sides. so, ship route can use in exporting the
produced things. It lessen transportation cost and attract the importers. Low transport cost
• This geographic location can attract foreign investors. . Railway transport facilities to Central
and Eastern Europe. Well-established track routes and direct delivery mechanism to most of
the EU countries. A natural bridge between both East-West and North-South axes, thus
creating an efficient and Makes it easy to supply about 1.6 billion customers in Europe, Eurasia,
the Middle East and North Africa. Istanbul is the only City that lies on two continents (Asia and
Europe) and is a hub from where we can reach everywhere as we wish.
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• The Marmara region is located in both Europe and Asia and it consist with plains, low hills and
high and big mountains. The land is suitable for any farming and industries.
• As this country is located in Asia and Europe both so, It is easy to communicate Turkey can
easily make good relation with Asia’s country and European country. That can help in business
and creates much customers. And can enhance knowledge about process and policy of
business.
Turkey have to face some Disadvantages too because of the location it is in. Which are these:
• The war in Syria and Iraq coupled with a bloody campaign against Kurdish militants at home
and a coup attempt has left Turkey bruised and battered in 2016. It bore a bad impact on
Turkey’s economy. Because of its geographic location. As it influence it
• It became very competitive when there are big and powerful neighbor country. Because those
country may have more opportunities in many respect. So, the buyer or the exporters may
attract to those country easily. And shifts those consumers to the powerful and larger countries
that besides it.
• Sometimes, it’s an extra pressure of having powerful countries by side. These can pressurize
Turkey for many things. That can bear unfavorable impact in economy.
Top 5 Local Companies Situated In Turkey:
• Arçelik : Founded in 1955,consumer electronics and home appliances industry.
• Oyak Renault: Founded in 1974
• Ford Otosan: Founded in 1959, Auto motive industry
• Tüpraş: Founded in 1983, Oil and Gas industry
• Elektrik Üretim: Founded in 2001,utilities ,energy industry.
Top 5 Foreign Chain Companies Situated In Turkey:
• Coca-Cola : entered in Turkish market in 1964
• Hyundai: entered in 1990
• Nestle: entered in 1909
• Microsoft: 1993 entered the Turkish market.
• Hilton: formed in Texas in 1919 but it was to be another 73 years before they looked to
expanding in Turkey
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Natural resources is Turkey rich in:
These are the natural resources that Turkey rich in:
coal, iron ,ore, copper, chromium, antimony, mercury, gold, barite, borate, strontium, emery,
feldspar, limestone, magnetite’s, marble, pumice, pyrites ,sulfur, clay, arable land, hydropower.
Turkey’s mining sector comprises mining subsidiaries of domestic combine, metal and mineral
traders, and construction industries. Exploration work for copper, gold, nickel and zinc explorations
have been growing in the country as government regulation and way have been altered to match the
foreign investor. In 2010, Eti Alüminyum A.S. enhance the production quantity of its Seydisehir
alumina plant to 400,000 Mt/yr of aluminum hydrate from 200,000 t/yr in the respective years.
Utilizing those natural resources in Turkey’s production:
Yes these natural resources have been utilizing for many years very efficiently in many types of
production.
Barite, which can be used in paint, Feldspar, which is used to make tiles, Limestone, which is used
as a building material, Clay, which can be used for many purposes such as art and dishes.
As there are many company in this country which are depended on natural resources of Turkey.
Such as:
• Adana Çimento: this industry in cement producer. They use limestone and clay in
production of cement.
• Avsar Enamel: it is a industry of consumer goods. They make kitchenware. Copper, iron,
ore these natural resources are used in these production.
• Borusan Holding: This is actually a Conglomerate industry and local company. They are
famous for Steel, energy, logistics. Steel does made of iron, chromium which are natural
resources.
• Limak Holding: this is a construction based company. Pyrites, marble uses in this process.
• Elektrik Üretim: A local company .it is a Utility based industry. They produce energy here.
Hydropower use in these production.
• Salcano: consumer goods making local industry. Which produce bicycles. They use iron,
copper when making bicycles parts.
• DYO Boya Fabrikaları: it is a basic material industry. They make chemical and paint.
Paint is made with clay and sulfur is used in making chemical.
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Present Economic Condition of TURKEY
(GDP, Inflation, Business, Trade)
Economic Background of Turkey:
Turkey succeeded after adopting Western regulations but has alternated between democracy and
authoritarian or military rule. The Islamist agenda of President Recae Tayyip Erdogan’s Justice and
Development Party has scarped away ties with the West. When the military coup failed in 2016,
Erdogan operated the state of emergency to consolidate power. But referendum replaced the
parliamentary system in 2017 with a presidential system. Although industrial and service sectors drive
the vast free-market economy of Turkey, but agriculture accounts for about 25% of employment.
Domestic uncertainty, populist spending measures, government interventionism, and security concerns
generate financial market volatility and threaten Turkey’s economic outlook.
Overall Present economic Condition:
• Turkey’s economic freedom score is 65.4, making its economy the 58th freest in the 2018
Index. Its overall score has increased by 0.2 point, with a significant improvement in the score
for the government spending indicator offsetting declines in property rights, fiscal health, and
business freedom.
• Worldwide Ranking of Turkey is ranked 28th among 44 countries in the Europe region, and its
overall score is below the regional average but above the world average.
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• Impacts of Country’s Public finances & foreign Capital inflows: During earlier periods of
political instability, Turkey’s economy maintained resilience thanks to the country’s solid public
finances, well-capitalized and well-regulated banking sector, and vigorous, diversified private
business sector. The intensification of political instability in the current crisis could have a
negative impact on foreign capital inflows. Critical challenges include lack of transparency in
government and erosion of the rule of law. The judicial system has been severely disrupted and
has become much more susceptible to political influence.
• Present Statistics of Turkey:
GDP (PPP):
▪ $2.0 trillion
▪ 3.8% growth
▪ 5.5% 5-year compound annual growth
▪ $24,912 per capita
Inflation (CPI):
▪ 7.8%
FDI Inflow:
▪ $12.0 billion
Trade Relationships of Turkey under European Union:
Overview: The EU and Turkey became associated with each other under Customs Union agreement.
This came into action came into on 31 December 1995. Turkey was enlisted as a candidate country in
order to join the European Union since 1999, and also became a member of the Euro-Mediterranean
partnership.
Present Trade Picture of Turkey:
✓ Turkey has the position of EU's 4th largest export market and 5th largest provider of imports.
The European Union has always been Turkey's 1st import and export partner.
✓ EU exports to Turkey: Machinery and transport material, chemical products and manufactured
goods.
✓ Turkey's exports to the EU: Machinery and transport equipment, followed by manufactured
goods.
✓ Turkey's main export markets: EU (44.5%), Iraq, USA, Switzerland, United Arab Emirates
and Iran.
✓ Imports into Turkey: The EU (38%), China, Russia, USA, South Korea and Iran.
Ref: [Link]
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Cultural Beauty of TURKEY……
The word Turkish comes from the ancient word Türk, Turkish people is basically known as Anatolian
Turks and they are the largest ethnic group in Turkey. They are speak Turkic language.
• Language
The official language of turkey is Turkish. Turkish also official language and educational language of
Northern Cyprus and Cyprus. In Germany, Bulgaria, Macedonia, Greece people also speak in Turkish.
In turkey 71 million native speakers and 17 million second language speakers. This is the most spoken
language of the country. Turkey has more than 30 ethnic language but few number of people speak a
few of the ethnic language. English, German and France are the common foreign languages used in
Turkey and English has wide coverage among foreign language.
• Turkey Cultural Norms and Values:
✓ Turkey people has some greetings and common expression like Gecmis Olsun meaning get
well soon and Hos Geldiniz which means welcome.
✓ Turkeys people believes in the Nazar Boncugu that known as evil eye in offices, homes, in
transport and business
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✓ Each and every home use carpet and rugs proudly on the floor.
✓ They invite newfound friends around to their house for a dinner party and gift is not accepted
in this time.
✓ Turkish national drink is Tea, served black in tulip – shaped glasses.
• Food in Turkey
Food is not merely a thing to satisfy the hunger, it’s rather a way to spend a good time with friends and
family .Turkish people prefer eating homemade meals at home with friends and family. Their food tend
to be spicy and oil with much sauce. Vegetables have an important place in Turkish cuisine and soups
are the most common starter to all turkeys’ meal. Turkish kitchen star is rice and pilav and bread is
another indispensable part of every Turkish life. Among many delicious dishes are kokorec, doner, pide.
• Etiquette in Turkey
✓ Before eating they read their prayer in the name of God, the merciful to all his creation, the
merciful to his believers.
✓ All the members should be attend in the dinner tables.
✓ Elder members start eating first and younger ones usually serve meals in a traditional
Turkish family.
✓ .Before giving alcohol to anyone be 100% sure that they drink because Turkey is a Muslim
country.
✓ In business relationship gift giving has no real place.
• Religion
Turkeys is a secular country and everyone has freedom of religion and beliefs. It has been home to all
three great revealed religions – Judaism c Christianity and Islam. 98% people of turkey today are
Muslim and Christians are minority religion in turkey. Among the Islamic countries Turkey is the only
country which has included secularism in her constitution and practices it.
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Overall Attractiveness of Turkey (Cost,
Benefit & Risk)
In recent years, Turkey has overcome a series of political and economic challenges and is now
enjoying a period of stable and solid economic growth.
The country still has great untapped potential, with its economy set to grow at least 5% each year in the
medium term.
Turkey’s world-class features include its strategic location at the crossroads of Europe, Asia and the
Middle East and the size of its domestic market. These strengths are attracting a number of investors,
who remain confident about Turkey’s future.
Indeed, over half of respondents to the survey are considering establishing or developing additional
activities in Turkey over the next year.
Historically, Turkey has been reliant on the developed economies for a significant portion of its trade
and investment.
"Turkey stands out as a promising emerging market alongside Brazil, Russia, India and China." -
Zafer Çağlayan, Minister of Economy, Republic of Turkey.
However, Turkey is now looking to do more business with other parts of the world, including the
Middle East, Africa and Asia.
This shift in focus and capital flow will accelerate the investment and growth of Turkey. Important
sectors for FDI span across manufacturing and services.
Istanbul is the most preferred destination for investors in Turkey. Nevertheless, the Government has an
opportunity to balance regional development by replicating similar growth in other cities and provinces.
We can expect Turkey’s new investment incentive scheme and continued reform program to boost
investors’ confidence in the country further, and quicken its development into a regional and global hub
for operations.
However, there are some key challenges to overcome. Turkey’s proximity to the political instability in
neighboring countries, an ongoing account deficit, as well as the need to accelerate its innovation and
R&D capabilities are all seen as factors that limit the country’s attractiveness for FDI.
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Turkey’s Present CPI and the creation of
barriers in FDI
Turkey Corruption Index
The Corruption Perceptions Index ranks countries and territories based on how corrupt their public sector is perceived to be. A
country or territory’s score indicates the perceived level of public sector corruption on a scale of 0 (highly corrupt) to 100 (very
clean).
CPI creating barrier in FDI towards the country :
Abstract: Despite the growing interest in foreign direct investment (FDI), substantial uncertainty still exists regarding what
stimulates foreign investors to operate in a foreign market. However, firm-specific and locational factors may vary across
industries and their sub-sectors, as proposed by Dunning (1998). Using panel data for the 2007 to 2012 period, the major
determinants of foreign investments into the manufacturing subsectors in Turkey are analyzed in this study
sector determaints: Sectoral Determinants of FDI Inflows Even though there is a huge body of literature investigating the
factors that affect foreign capital, only a few studies have engaged in identifying the determinants of FDI at the sectoral level
intermediate product markets are greater.’ The factors responsible for motivating foreign investors to invest in a country may
vary by the type of industry
Teritary sector: . Sectoral Determinants of FDI Inflows Even though there is a huge body of literature investigating the factors
that affect foreign capital, only a few studies have engaged in identifying the determinants of FDI at the sectoral level..
Market Size. The market size shows the demand side in the host market and is accepted as a key factor affecting FDI. But some
researchers, like Yeo et al. (2008), have argued that the impact of the market size on FDI inflows may vary with the type of
industry, requiring market-seeking FDI or resource-seeking FDI. They confirmed that the market size is a major determinant of
FDI inflows into the Korean service sector rather than the manufacturing sector, since the service sector is mostly market-
oriented rather than export-oriented. However, Awan, Khan, and Zaman (2011); Karim et al. (2003); and Xing (2006) also
found a positive relationship between market
Regulations. The legal restrictions associated with business activities comprising various taxes, regulations on trade like tariffs,
incentive policies aimed to attract FDI, or sector-specific restrictions on foreign ownership and entry might be considered
important determinants of FDI in the host country. However, since FDI policies are generally sectoral in nature, sector-specific
regulations may be much more important in explaining FDI flows than the host country’s general policies.
Political Stability. Most of the previous studies have argued that political uncertainty affects the overall FDI inflows negatively
inTurkey . However, this impact may vary in terms of its significance and its direction across sectors and sub-sectors. For
example, Desbordes (2007) explained in his study of a sectoral analysis of the US’s FDI in turkey that political uncertainties
regarding FDI are largely dependent on industry-specific characteristics. Labor-intensive industries and horizontally integrated
industries are less affected by political uncertainties in the host country.
Labor Market Flexibility. Radulescu and Robson (2013, p. 582) stated, “In the literature, flexibility refers to the ability of
employers to adjust the level of employment in response to the changing economic conditions.” Therefore, in principle, tight job
protection through labor market regulations is generally thought to affect FDI inflows into a country negatively.
Labor Cost and Quality. A lower labor cost is another motive for a certain level of foreign capital movement, particularly in
labor-intensive industries that do not require highly educated employees. However, capital-intensive industries generally require
a well-educated workforce rather than cheaper labor. For example, Liu, Daly, and Varua (2012) investigated the locational
determinants of FDI in China by dividing the manufacturing sector into two groups: low-tech and high-tech. They concluded
that, while labor cost has a significant negative effect on the low-tech manufacturing sector, it does not play an important role in
the high-tech manufacturing sector..
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Future Prospect and Possibilities of Turkey and
Recommendation
Turkey should be much-admired for the great progress it has achieved in recent years, which is reflected in the
country’s impressive rise in the competitiveness rankings. However, reforms and actions must still be carried
out on several fronts to achieve higher stage of development and European standards of competitiveness. There
is a challenging road ahead. With rapid growth rates and a young and increasing population of over 70 million,
Turkey has the potential to be the largest economy in Europe after Germany. Turkey is now a member in the
G20 club of important economies, and it is almost on par with the emerging giants of the BRIC club. Some
forecasts even suggest that during the next decade Turkey will grow faster than any other country besides India
or China. Nevertheless Turkey still has problems that need attention. Inflation is still prevalent, the current
account deficit is large, corruption is widespread, competitiveness is an issue, and most problematic,
unemployment is exceedingly high, especially in the east and south east, and among women and those first
entering the labor market. The current semi autocratic leadership and the growing fears about limits to free press
are also an increasing matter of concern. Turkey must overcome these obstacles in order to sustain healthy long
term economic growth.
