Turkey bids to pull in foreign investors

Date: 11/04/1996

By Elizabeth Wise

TURKEY'S new government is looking for business - and the World Economic Forum is anxious to help.

The Davos-based money club will host a conference in Ankara next week which will bring traders and potential investors from around the world together with the leading lights from Turkey's own public and private sectors.

During two days of informal talks, round table meetings and working lunches, the Ankara government will have an opportunity to explain its economic policies and convince foreign investors that it can ensure political stability.

Turkish President Süleyman Demirel and Prime Minister Mesut Yilmaz, along with their ministers of trade, industry, foreign affairs, defence, energy, tourism, economic policy and privatisation, are to lead the offensive which is geared at business executives from Europe, the Middle East, Central Asia and North America.

Also expected to attend the 18-19 April meeting are former Premier Dr Tansu Çiller and opposition leader Necmettin Erbakan, whose Welfare Party won the largest number of seats in last December's elections, prompting fears that an Islamic regime would take over in Turkey.

For years, the Welfare Party has opposed Çiller's plans to privatise state industry and now that it has a parliamentary majority, the plan remains at risk. The Democratic Left Party, now part of the ruling coalition, also opposes selling state companies.

“The government has the intention to privatise, but we can't promise anything at the moment,” said one Turkish official. “We are in the same fragile situation.”

Ankara's intention to sell off state-owned telecommunication companies, banks, electricity distribution and manufacturers of iron, steel, cement and petrochemicals has been only partially realised, although Turkish officials say most of the firms which have been sold have been bought by European companies.

Although potential investors may well worry about whether the privatisation plan is still on track, they are generally bullish about Turkey's economic prospects, sensing political stability after a chaotic election season, and forecasting it will last.

Bankers also forecast that interest rates will continue their current slide, giving more encouragement to an already-healthy equity market.

And although market watchers predict an economic slow-down in Turkey this year, with a growth rate of 3.8&percent; likely in 1996 compared with the 5.7&percent; recorded last year, they point out that it would have the advantage of helping to bring down inflation, which hovered at a massive 84&percent; last year.

The Turkish lira has also been losing strength against European currencies and is expected to continue its decline, easing the road for Turkish exports.