Racism over Capital Drives Foreign Investment away

Saturday, October 15 2005 @ 10:36 am UTC

Foreign capital is taking growing interest in Turkey in proportion with the political and economic stability. Many companies that never thought of investing in Turkey in the past are now eagerly looking for ways to direct their capital into the Turkish market. Despite that, some campaigns against foreign capital were conducted before and after the privatizations of Turk Telekom (TT) and ERDEMIR, the state-run iron-steel monopoly, with the result of attracting reactions from the business world. Turkish Prime Minister Recep Tayyip Erdogan\'s remarks, \"Some people are approaching foreign capital with racist views\" drew a huge amount of support from the business world.

\"What is important about privatization is not whether the company is Turkish or foreign; what matters is the amount of money that the Treasury will receive,\" said Omer Sabanci, president of Turkish Industrialists\' and Businessmen\'s Association (TUSIAD) as he described the recent privatizations as \"revolutionary\".

Murat Yalcintas, head of Istanbul Chamber of Commerce (ITO), voiced his thoughts that debates over the color of capital is bound to frighten foreign capital away. The total influx of foreign capital in 1995-2003 was $11.1 billion; but the total foreign capital amounted to $7 billion in the last 2.5 years.

Opposition parties and anti-privatization movements criticize Sami Ofer for his Jewish origin, who bid $3.5 billion for Galataport, and Crown Prince of Dubai, Sheikh Mohammed Bin Rashid Al-Maktoum for his Arab origin, who plans to make a $5 billion real estate investment in Turkey. The Prime Minister reacted to criticisms that this is pure racism on the basis of capital. Turkish business circles keep abreast of the debates that are likely to drive away foreign capital, a need for stabilization and the solution of unemployment.

Sefa Gomdeniz, the Chairman of the UAE/Turkey branch of the Foreign Economic Relations Board, pointed out that within the last year the Turkish building contractors received tasks worth $1 billion only in Dubai. To oppose capital coming from the United Arab Emirates is wrong. Causing enmity and forming fronts makes Turkey lose dramatically according to Gomdeniz. MUSIAD, the Independent Industrialist & Businessmen\'s Association, Foreign Relations Commission Chairman Gazi Misirli warns, \"Making discriminations between Jewish or Arab investments is not right.\" Arab-origin businessmen he meets ask him in what ways they can invest in Turkey, Misirli said. \"The most coward thing in the world is capital. If we make racism of investment, these investments will quite easily go to other countries.\"

Sabanci responded in the following way to the reaction against what the nationality of foreign capital is: \"While a company is privatized-whether with foreign or domestic capital- what is important is the money to enter the Turkish Treasury and what kind of strategies, employment and export targets the company has. That is what we take into consideration. We do not make any discriminations between local and foreign capital.\"

Foreign Capital Association Secretary-General Mustafa Alper said the discussions will cause trouble for foreign capital.

Tourism Investors Association Chairman Oktay Varlier, while expecting a boom in tourism investments after October 3, finds the discussions on \"Should the capital come or not from Israel and Arab countries?\" meaningless. Varlier says \"As the necessity of forming a new employment for 600,000 people every year is obvious, as it is known that the healthiest way of closing the budget deficit is direct capital entry, I do not understand why such a discussion is made.\"

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