Turkey to offer 'whatever it takes' for strategic investments, including 20 tax-free years
REUTERS photoTurkey will do “whatever it takes,” including specialized incentives and a 20-year tax holiday, to make it possible for strategically crucial investments to be realized in a number of sectors, Economy Minister Nihat Zeybekci has said in an interview with Reuters.
“We will offer whatever it takes to create our global giants, to secure our material and energy future and to encourage several strategic investments in key areas,” he said.
Giving an example from the iron-steel sector, he noted: “For instance, we will choose five-six companies which can meet Turkey’s needs in this sector and ask what they want. If they want land, we will give it. If they want ports, road or railways, we will offer them as well. If they want affordable electricity, we will offer them a 20-year price plan. If they want 10- or 20-year-long tax holidays, we will [offer] it as well. We will do all of them publicly.”
Zeybekci noted that the same was also planned to be applied in the metal industry, petrochemicals, electronic products and electrical devices.
“Turkey will build around 25,000-30,000 megawatts [MW] of wind power plants in the next decade. We can also offer the same plan on the condition that the whole process will be 100 percent indigenous,” he said.
“Do they want protection? We will offer them protection regarding the entrance of others into Turkey… We will provide all as long as the investment is made in Turkey,” Zeybekci noted.
Central Bank rate cuts
Zeybekci also said he expected the Central Bank, which has cut its lending rate for three straight months, to continue with rate cuts and that a 50 basis point reduction each time was a good level.
“When we have a look at the European side, we see that Turkey is still a safe harbor for money to flock [to]. In this vein, there is no need to worry about the rates. My expectation is the continuation [of rate cuts] in the same manner. A 50 basis point cut each time is a good level,” he noted.
The Central Bank cut the top end of its interest rate corridor for the third straight month in May amid cooling inflation and political pressure for lower rates.
According to Zeybekci, the decisions by the European Central Bank affect Turkey more than the decisions of the U.S. Federal Reserve (Fed) do.
He said he expected economic growth in the first quarter and the full year to be above market expectations, saying there was no need to revise the 2016 target of 4.5 percent.
The year-end inflation target of 7.5 percent was achievable, Zeybekci also said.
He expected exports to reach $150 billion in 2016, just shy of a target of $155.5 billion, after declines in the first half.