Since the establishment of the republic in 1923, Turkey has been in a state of constant flux. Due to domestic and global developments, the country was marred by political and economic instability for decades. The economy was hindered by political setbacks, growth was underperforming and the country struggled with skyrocketing, chronic inflation.
By the end of 2002, however, Turkey had entered a new era of stability, prosperity and economic development under the stewardship of the Justice and Development (AK) Party. Hand in hand with democratic reforms, the country has significantly improved its investment environment. With a staunch belief in the entrepreneurial spirit of the private sector, the current administration has embarked on a comprehensive reform programme that over the years has created a robust business climate in which the private sector has flourished.
Turkey’s economic growth, led by the private sector, has yielded impressive results in many areas, such as macroeconomic stability and socioeconomic development. Over the past 11 years, the economy has grown by an average of about 5% a year in real terms. As a result, the size of the economy reached $820bn by the end of 2013, up from $230bn at the end of 2002. Inflation has meanwhile been tamed down to the single digits, budget discipline has been achieved and public debt has been reduced from 74% of GDP in 2002 to 36% in 2013.
We have also made sure that our economic policies improve people’s socioeconomic conditions. In this regard, per capita income has more than tripled, reaching about $11,000, while poverty has been drastically reduced. As an illustration of this, back in 2002 the portion of the population that was living on less than $4.30 a day was more than 30%. Within a decade, this figure had been reduced to 2.3%, and we remain determined to eradicate it completely. Alongside this decrease in poverty, a new middle class has emerged and spurred economic growth.
Political and economic stability, together with a favourable investment climate, have also acted as a magnet for foreign investors. Attracting foreign direct investment (FDI) has been one of the main pillars of our economic development policy. To this end, in 2003, we introduced a new FDI law granting foreign investors equal treatment to local investors; guaranteeing their rights and the transfer of profits; allowing them to purchase real estate in Turkey; and providing them with the mechanisms for settling international disputes. Moreover, we reinforced the legal framework with effective institutions, establishing, under the auspices of the prime ministry, the Investment Support and Promotion Agency of Turkey, which serves and assists inbound direct investors and reports directly to the prime minister’s office. These efforts have yielded concrete results. Turkey has attracted more than $140bn of FDI since 2002, compared to a total of less than $15bn during the preceding eight decades.
I believe that this trend will continue apace. We have embarked on a new economic journey that will create more and more opportunities in Turkey. We have set specific targets to achieve by 2023, the centennial of the republic, and after a decade of impressive economic performance, we have not become complacent. Our targets for 2023 include making Turkey one of the top ten economies in the world with a GDP of $2tn, increasing GDP per capita to $25,000 and boosting the country’s exports to $500bn. Also counted among the 2023 targets are important upgrades to Turkey’s education, health care and energy infrastructure.
We have already launched many of the infrastructure projects that will pave the road to 2023, and I am happy to see foreign investors contributing on this journey. As the prime minister of the Republic of Turkey, I invite foreign investors to invest here, and I give them my assurance that we will support and assist them at every stage of their engagement.