DT. wrote:Viewpoint wrote:Wishful thinking DT Turkeys economy is more robust than is was in the past and departure from the EU would mean new pastures and new areas of economic development, where would that leave you guys with regards to a solution? up the swanny with no paddle me thinks.
What new pastures? What new areas? Your market is the EU. Your chief employer is the EU. More and more European car manufacturers are moving into Turkey, setting up shop and employing your labour. If all ties are severed with the EU no company will be able to feel safe in an unstable Turkey.
Trust me, my fund is a heavy investor in Turkey.
The important point here is the customs union with the European Union that came into effect at the end of 1995. Manufacturers can freely export their products from Turkey to the European Union, and that is all they need. Whether or not Turkey eventually acquires full EU membership is largely irrelevant from their point of view - in some respects, it would even be a disadvantage given the additional regulations and labour rights that would come into force.
You must be aware of predictions that car production in Turkey will rise from the current 1.3 million to 2 million in 2012. Two more major world players are said to be considering major investments in manufacturing plant in Turkey. Another interesting development is that certain Turkish car manufacturers are planning to move some of their production to Russia and Romania to take advantage of cheaper labour there.
Turkey is a real enigma at the moment. The country is in the grips of probably the gravest political crisis in its history. Public finances are in a mess and foreign debt has risen to over 260 billion dollars. Yet, many sectors of the real economy of flourishing.
Sure, a great many potential foreign investors are spooked by the turmoil which has engulfed the country. However, the Turkish real economy has shown great resilience in the past and has previously rapidly pulled back from many severe crises to resume its upward march.
Given a little political stability, Turkey would rapidly be transformed into a tiger economy. Even if the country continues to lurch from crisis to crisis, the kind of momentum that has been achieved means that long-term growth will most probably continue. The prospect of a strong Turkey can either be a threat or an opportunity for Cyprus. I think it is dangerous for Cyprus to underestimate Turkey's potential.