Turkey offers big opportunities for UAE businesses

DUBAI — A recently-released Dubai Chamber of Commerce & Industry study on Turkey’s economic status maintained that the country could hold lucrative opportunities for the UAE businesses, not only for trade and investment in the domestic market, but also in partnership with Turkey, in investment and trade with Africa, Central Asia and Eastern Europe.

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Published: Thu 16 Sep 2010, 11:16 PM

Last updated: Mon 6 Apr 2015, 11:50 AM

With its strategic location, young population and economy, Turkey is prospering on the back of improved political and economic stability. Improved governance, increasing levels of Gross Domestic Product (GDP) and government incentives have created lucrative trade and investment opportunities in this growing consumer economy.

The study further revealed that Dubai and UAE investors should evaluate the risks and possibilities for themselves and initiate long-term relations with their Turkish partners. This will ensure that they are positioned to profit from this country’s advance to become one of the major economies of the world.

The study informed that Turkey which for years has looked westward, seems to have finally realized that it can also offer the east a model of stability and prosperity. This coupled with its historical and linguistic ties with, among others, Central Asian countries means that Turkey’s prospects are not only due to its domestic economy, but also because it can be a bridge from the Middle East to Central Asia and Eastern Europe.

Turkey’s economy has experienced an economic revival in recent years. Its economic growth, coupled with government efforts to look eastward, is enabling Turkish enterprises to use their expertise, linguistic and historical ties in many regions.

Turkey is becoming an increasingly important market for UAE importers and exporters. In 2009, the UAE imported Dh9.4 billion worth of items from Turkey, while it exported Dh681 million worth of items and re-exported Dh414 million worth of items to Turkey.

From 2001 to 2009, imports from Turkey to UAE grew at a Compound Annual Growth Rate (CAGR) of 194 per cent, while exports grew at a CAGR of 47 per cent and re-exports at a CAGR 31 per cent. Turkish exporters are therefore trading more with their UAE counterparts, while UAE exporters have also made some inroads into this important market.

For exports and re-exports from UAE to Turkey, pearls, precious metals and stones, plastics and articles, aluminium and articles, essential oils and resinoids, boilers and machinery and vehicles other than tramway and railway have been important products.

These products have shown strong growth rates with exports and re-exports of pearls and precious metals growing at a CAGR of 92 per cent, while plastics and articles grew at a CAGR of 62 per cent, aluminium and articles grew at a CAGR of nine per cent, essential oils and resinoids grew at 40 per cent, boilers and machinery grew at a CAGR of 46 per cent and vehicles other than railway and tramway have grown at a CAGR of 28 per centfrom 2005 and 2009.

Turkey can be regarded as an attractive investment destination because the country has experienced more economic and political stability recently, which has reduced the risk premium that investors demand.

One reason for the sudden and strong rise in FDI inflows from 2004 onwards is that, in 2004, Turkish real GDP growth accelerated compared to 2003 and remained high for the next few years. Also, important economic indicators, such as debt to GDP ratio and debt-service to GDP ratio, continued to decline during this time. This may have increased investor confidence in the Turkish economy becoming more stable. Key sector opportunities are in the construction, tourism, infrastructure, manufacturing, transport and logistics, utilities, education and health and environmental technologies sectors.

business@khaleejtimes.com



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