Incentives Worth $34 Billion to Be Granted to 19 Companies

The Turkish government has unveiled details of a new USD 34 billion project as part of efforts to create jobs and reduce the country's widening current account deficit. Under the scheme, incentives will be provided to 19 companies for a total of 23 projects, with the aim of directly creating 35,000 new jobs. According to an announcement made by the Ministry of Economy on 9 April, the planned investments are also expected to create 134,000 indirect jobs. Further details of the programme were disclosed by President Recep Tayyip Erdoğan, Prime Minister Binali Yıldırım and Economy Minister Nihat Zeybekci at an official ceremony held in Ankara on 9 April. "The USD 34 billion incentive package includes exemptions from customs duties and state support for employee insurance premiums," said Erdoğan, adding that the new package would help reduce Turkey's current account deficit significantly. Erdoğan also reiterated concerns about interest rates, noting that "it is impossible to increase investments without lowering interest rates." "If you do not lower interest rates, how will investments materialise? We call this an investment-based incentive system," he said. "We need to lower interest rates to attract more investment into the country. Increased investment will have a positive impact on employment, production and exports," he added. Through the programme, the current account deficit is expected to be reduced, bringing an additional USD 19 billion contribution to the economy. Zeybekci said, "We will see the positive effects of these incentives within the next two or three years," and added that all investments under the scheme were domestic or in partnership with foreign partners. "We aim to grow Turkey's economy with policies that will increase production and productivity, lower the inflation rate and reduce Turkey's high borrowing costs," he added.

Rise in Employment

Among those benefiting from the new incentives are Alvi Medica, Assan, Atayurt, armoured vehicle manufacturer BMC, CFS, Dow Aksa, Ekore, Ersan, polyester manufacturer SASA, İpek Mobilya, En Makine, Siirt Bakır, Metkap Enerji, TUSAŞ, Oyak Renault, Yıldız Metalürji, dairy producer SÜTAŞ, Tosyalı and technology and equipment manufacturer Vestel. The largest investment will be made by Vestel, with the company investing TRY 28.4 billion (USD 7 billion) in energy-efficient electric vehicles. Tosyalı, SASA and Metcap will also generate projects with high investment volumes. Employment creation is planned to be highest at Vestel with 6,240 jobs, SASA with 5,000 workers, Alvi Medica producing stents at 4,000 jobs, and TUSAŞ at 3,200 jobs.