Deputy Prime Minister in charge of Economy of Turkey, The Hon. Ali Babacan, September 2012

Business Focus: This year’s World Economic Forum (WEF) on the Middle East, North Africa and Eurasia 2012 was a breakthrough as it pushed forward the idea of Europe, the Middle East, North Africa and Central Asia emerging as a key mega-region of the future. Under such a proposed landscape, Turkey’s influence and regional leadership would increase exponentially. Could you briefly review Turkey’s economic performance so far in 2012 and the outlook for 2013? Is 2012 going to be a “soft landing” for the Turkish economy or in contrast should we expect growth to continue?


Hon. Ali Babacan: Despite the Eurozone crisis and developments in the MENA region, Turkish economy succeeded to grow at record high levels. Growth rate was 9.2% in 2010 and 8.5% in 2011. On the other hand, we detected some signs of overheating fuelled by high credit growth. To avert the buildup of risks, we implemented macroprudential measures coupled with a tight fiscal policy stance. As a result of these policies and global economic outlook, our growth rate decelerated to 3.1 percent as of the first half of 2012.

For 2013, we project a growth rate of around 4%. It is worth highlighting that, even in 2012 and 2013, Turkey will be one of the fastest growing economies in Europe.


Business Focus: In anticipation of a move in this direction, the Turkish Ministry of Development launched the initiative “Istanbul International Financial Center (IFC-Istanbul)" in 2009 as part of its 9th Development Plan 2007-2013. It was accorded top priority and importance by the Government and required the participation of other key stakeholders, including representatives from more than 80 public and private sector agencies, civil society organizations and universities. What are the major implications for the Turkish economy and could you review the most relevant results of the 9th Development Plan so far?


For 2013, we project a growth rate of around 4%. It is worth highlighting that, even in 2012 and 2013, Turkey will be one of the fastest growing economies in Europe.

Hon. Ali Babacan: As part of our vision for 2023, we launched a project that will transform Istanbul into one of the prominent global financial centers. Since the announcement of the action plan in 2009, we have managed to take a long way toward realizing this goal. The action plan is being implemented phase by phase.

I would like to briefly refer to what have done so far. Above all, in order to enhance the legal infrastructure, a new Capital Markets Law has been drafted recently and I do hope that it will be legislated as soon as possible. Also, new Turkish Commercial Code was enacted last year. All these efforts will pave the way for sound and less risky setting for investors. Moreover, we have taken concrete steps on the ground of increasing the diversity of financial products and services that will meet the demands of investors of any type. Markets for sukuk, warrants, and corporate bonds are growing rapidly. Following the enactment of the new Capital Markets Law, significant progress will be achieved on this front. Lastly, we are working on the introduction of institutional arbitration center and specialized courts for financial services which will bring expeditious and effective solutions of disputes in this field.

Istanbul Financial Center Project has stimulated quite a number of reforms to maintain the setting required for a financial centre. This project will facilitate the further development of Turkish financial services industry and significantly contribute to the development of Turkish economy as a whole.


Preserving the macroeconomic stability and stepping up the structural reform process so as to build a favorable environment for sustained and balanced growth will be the focus of our policies.

Business Focus: Last May, the “Building Istanbul as a Key Financial Center” conference, organized by the Institute of International Finance and hosted by Akbank, showed the unanimous support from all stakeholders to establish Istanbul as a major financial center. It is without doubt considered one of the most important milestones for Turkey’s future development and a key element in the country’s ambition to become one of the world’s 10 largest economies by 2023. With the 2023 target in mind and considering the effects of the crisis in the EU and elsewhere, how is Turkey addressing current and future challenges from a policy formulation and economic viewpoint?


Mr. Hamali Jebali: Preserving the macroeconomic stability and stepping up the structural reform process so as to build a favorable environment for sustained and balanced growth will be the focus of our policies. As the government, we have a solid track record of embracing bold measures whenever necessary and I would like to highlight that we are determined to safeguard fiscal balances and preserve our banking sector’s resilience.

On the structural reform front, we are focusing on reforms that will further improve the capacity, competitiveness and dynamism of Turkey. In this regard, upgrading skills, eliminating barriers to employment, enhancing labor market flexibility, promoting innovation and high-tech production, increasing energy efficiency and propensity to save are of critical importance for Turkish economy.