German investors maintain faith in Turkey as bilateral trade booms

Turkey is still a very attractive country for German investors, as Marc Landau, chairman of the İstanbul-based German-Turkish Chamber of Commerce (AHT) told Today’s Zaman on Thursday in İstanbul.

Germany has become the most important export market for Turkey. At the same time, Turkey has become more and more attractive for German investors over the past few years. Germany takes the first place in foreign-owned enterprises in the country whera more than 4,600 German-owned firms operate. This number was 1,000 ten years ago

Germany has become the most important export market for Turkey. At the same time, Turkey has become more and more attractive for German investors over the past few years. Germany takes the first place in foreign-owned enterprises in the country whera more than 4,600 German-owned firms operate. This number was 1,000 ten years ago

In spite of the economic turmoil in Europe and rising concerns about a potential overheating of the Turkish economy, the AHT receives many requests from German companies willing to invest in Turkey. The AHT, which is no government agency, but financed by German and Turkish companies, offers advice and help for German and Turkish businessmen interested in the other country.

This year the trade between the two countries will reach new record levels according to Landau. Last year, goods and services worth $29 billion were sold from Turkey to Germany. About 10 percent of Turkish exports go to the economic powerhouse of Europe, making Germany the most important export market for Turkey. At the same time, Turkey has become more and more attractive for German investors over the past few years. “The number of companies in Turkey which are at least partly owned by German investors is rising rapidly,” Landau said. Ten years ago, some 1,000 German enterprises were based in Turkey, now there are more than 4,600, he added. According to numbers released by the Turkish Statistics Institute (TurkStat) this week, Germany takes the first place in foreign-owned enterprises in the country. In 2008 — the most recent year data was collected — almost every fifth foreign company in Turkey was either German-owned or one Germans had shares in.

“German investors will not ignore Turkey’s high current account deficit [CAD] and the danger that the economy could overheat,” Landau noted. “But generally they remain optimistic about the country’s economic prospects,” he added. Landau thinks that even if the Turkish economy faces a crisis, it would pick up rapidly to continue the growth path as it has done following crises in the past. A recession will not let companies shy away. As an example, he mentioned that the economic downfall in Turkey during the financial crisis had not led to a reduction in German investment in the country. “Our chamber had 360 member companies in 2008, now, only three years later, we have about 660,” he said. This, he argues, showed that investors believe in the long-term perspectives of Turkey’s economy.

According to the AHK head, a problem for Turkish-German trade relations is Germany’s strict visa policy. It is often very complicated and time-consuming for Turkish businessmen to apply for a visa. “Germany was much stricter in granting visas than other EU states,” Landau said. He highlights that the share of visas which were turned down was relatively higher in the EU. France and Italy, for instance, would apply much less strict visa procedures. “This leads to frustration among Turkish businessmen,” Landau said. “The German government must understand that Turkish companies do not solely rely on Germany. … If it is easier to travel to France, Turkish enterprises would be more prone to open a branch and create jobs there and not in Germany,” he said.

Landau is not the only German business lobbyist complaining about his country’s strict visa regulations for non-EU member countries. Recently the Committee on Eastern European Economic Relations (OA), an association of German companies which are active in Eastern Europe and Russia, put pressure on Chancellor Angela Merkel to ease the visa requirements. The German Foreign Ministry supports these claims but the Interior Ministry stresses the importance of a strict approach.

Landau fears that the “unfriendly visa policy” could lead to the impression in Turkey that Turks are not welcome in Germany — an impression which was already nurtured by a debate that ensued after the publication of the book “Germany Abolishes Itself” by former Central Bank official Thilo Sarrazin, who warned about a coming “Islamization” of German society. “Germany and German products have a good image in Turkey,” Landau said. “But this is not written in stone.”

 

 

 

07 October 2011, Friday / BJÖRN FINKE, İSTANBUL