Turkey and the United Kingdom will benefit from closer commercial and political relations over the next five years, said the U.K. consul general in a recent interview.
“Turkey is likely to become a top-10 world economy, and the second largest economy after the U.K. in the European Union in the next 30 to 40 years,” U.K. Consul General to Turkey Jessica Hand told the Hürriyet Daily News & Economic Review during a recent interview. “This growth can benefit the U.K. economy, which subsequently will benefit the Turkish economy.”
Turkey experienced 11.7 per cent growth in the first quarter of 2010.
“Relations between the two countries are enjoying a golden age," said Turkish Prime Minister Recep Tayyip Erdoğan, later reiterated by British Prime Minister David Cameron at a press conference on July 26 in Ankara, following a landmark first visit to Turkey by Cameron.
“This shows a commitment to a dynamic commercial relationship,” said Hand, referring to David Cameron's speech. In the speech Cameron set the goal of doubling trade with Turkey to $18 billion within five years.
“Turkey is in a cadre of countries with strong growth rates the U.K. government is looking to develop further commercial ties with,” Deputy Consul General Sarah Mooney told the Daily News during the same interview.
The U.K. economy entered recession in the second quarter of 2008, and continued to operate in recession until the fourth quarter of 2009. In the first quarter of 2010 growth returned, up to 0.4 per cent and rising to 1.1 percent in the latest second-quarter figures.
The effects of the global financial crisis meant a 9.5-percent decrease in U.K. exports in 2009 despite a weaker pound, the largest decline on record. Many hoped that the depreciated value of the pound would prompt greater demand for exports, helping lift the U.K. out of recession and return to growth.
In the first half of 2010, U.K. exports rose, causing the long-running trade deficit to narrow – although recent indicators suggest orders are falling despite the weaker pound. With fiscal cuts expected to lower domestic demand and sluggish growth of 0.5 percent predicted in the euro zone, a more difficult second half of 2010 for U.K. manufactures may be approaching.
The benefits
“We've seen a huge change in the Turkish market in the last 10 years, showing a large increase in expertise. We expect to see a significant increase in U.K. Turkey partnerships and trade,” said Hand.
“The U.K. is an excellent gateway to Europe for Turkish firms, London is the business and science capital of Europe, there is a very competitive environment and an ease of doing business. Also the U.K. is a multiplier market,” said Hand.
“Turkey has a young population, a good entrepreneurial spirit, and increasing educational standards,” said Hand, explaining what makes Turkey an attractive market to the U.K.
In Turkey, 61 percent of the population is under the age of 35, while 43 percent of the population is under 24, making it younger than all the countries in the European Union.
In 2009, foreign direct investment from U.K. companies to Turkey was valued at $2.3 billion, a significant rise from $141 million in 2003.
“There is a lack of recognition amongst smaller businesses in the U.K. to see Turkey as a huge, dynamic economy, and a persisting outdated image of Turkey as a 1970s beach-holiday destination,” said Hand.
“There is still some concern with Turkish bureaucracy for U.K. businesses interested in Turkey. It's not a credibility issue, but for the length of time for business outcomes,” said Mooney.
“We're working to make people aware that Turkey is a reliable place to do business and that Turkish means quality,” said Hand.
Mooney explained there are a “huge variety of missions to promote Turkey-U.K. commercial relations” over the next year, including a visit by the mayor of London in January.
