Turkey: Industry to become driving force of new economic model

By Azernews

By Vugar Khalilov

The industrial sector will be the driving force of Turkey’s new economic model to save the economy from price scissors, Yeni Shafak has reported on November 29.

Contrary to the economic policy that prioritized high-interest rates, the industrial sector will be the main actor in the new economic model, which promotes investment, production, employment and exports, the report added.

It was added that the number of employees in the industry grew by 116 percent and reached 4.7 million. Despite the challenges of the pandemic, the number of industrial workers increased by 700,000 people in 2021.

While the number of enterprises saw 74 percent growth and reached 410,000, the number of enterprises registered in the industrial registry information system amounted to 13,500 in 2021 alone. The volume of the production in the sector increased by 146 percent and reached $23 billion (291bn TL).

It was noted that the new economic model is aimed at making Turkey a global base for value-added and high-tech production. Thus, the share of high value-added products in exports has significantly increased recently, the report underlined.

While the export volume saw seven times growth, the share of machinery and equipment grew from 5.8 percent to 9.8 percent, and the share of motor land vehicles from 10 percent to 13.9 percent in the last 19 years. Moreover, the share of processed food and beverage products with high added value in exports also increased.

On the other hand, the share of clothing and textiles has significantly decreased.

It was added that 24 industrial fields such as steel, petrochemistry, energy, pharmaceuticals and automotive production will play an important role in the new economic model, where cost-effective investment areas have been offered to the industrialists through leasing.

In 2020, $7.5 billion revenue was made from the industrial fields, where approximately 25,000 people are employed. However, this figure is going to reach $25 billion once all investments are completed. Additionally, the number of employees is expected to amount to 108,000 people.

Furthermore, new incentive systems will be launched in line with the new economic model. As well, regional incentives will be applied to reduce the development gap between provinces. In this context, it was stated that the socio-economic development ranking of the provinces had been studied and the incentive system had been revised according to the differing needs of the provinces.

Moreover, priority investments determined in the legislation and investments with high added value that will contribute to reducing the current account deficit will be supported. In addition, incentives will be provided to projects that will realize technological transformation. On the other hand, it was reported that $135 billion (1.7 trillion TL) incentive certificates have been issued for investments since 2003.

In line with the new model, investors will be directed to the production of medium-high and high-tech products, as well as, investments will be made in technology and research and development fields. In this direction, rational and effective policies will be implemented in many areas from the R&D and technology ecosystem to qualified human resources, from SMEs and entrepreneurship to regional development.

So far, $6.6 billion export has been made from the Technology Development Zones, where 7,073 companies and 73,645 employees are involved, the report concluded.