Q&A: Why Turkiye remains an attractive place for German entrepreneurs

  • 3 Jan 2022

The opportunities clearly outweigh the risks - BWA chairman Michael Schumann explains why.

( AP )

The Federal Association for Economic Development and Foreign Trade (BWA) has been supporting members from medium-sized and large companies in many countries around the world for over 18 years.

 From the BWA's point of view, Turkiye is an attractive location for investors, including those from Germany. In addition to traditional industries in which German investors are already established, there are also other investment opportunities with growth potential in the so-called future markets. In an interview with TRT Deutsch, BWA CEO Michael Schumann explains why companies should invest now and what Germany can learn from Turkiye.

Turkiye is trying to attract foreign investors with the help of a variety of promotional measures. How was the course set accepted?

MICHAEL SCHUMANN: I think the numbers speak for themselves. Though we are currently hearing a lot about the turbulence of the Turkish lira in the media,  if we look back at what Turkiye has achieved in the last 17 years, then it is very, very impressive. And, even in this challenging and difficult year, the economy continues to grow.

I still believe that Turkiye is a very attractive investment location. We also have a significant number of German companies, I think there are 7,500. According to current surveys, those who are on the road in Turkiye are very optimistic in the long term, despite the short-term concerns that we now have.

In your opinion, which industries offer particularly great potential?

MS: You have the classic points: Turkiye as a tourism market, Turkiye as a market to manufacture and for export. The country is also seen as a hub, as a link to the markets in Asia and the Middle East. It is also very important, perhaps, to see what other options are available.

I believe the image that we have of Turkiye in many German minds is a bit out of date and perhaps no longer reflects how the country has developed. I believe that it can also be an interesting location for future technologies, innovations, the automotive industry, IT, e-commerce and finance.

Hotels in Turkiye resumed operations with full push in the summers while international tourists flocked in huge numbers after months of setbacks caused by the pandemic.(AP)

Turkiye was one of the few countries in the world to have a growing economy even in the pandemic year. Could German companies operating in Turkiye also benefit from this?

MS: Yes, of course. Among the German companies that invest in Turkiye, we have many that work for export there, and that means: You export and bill, in euros or dollars, and have costs in lira. Perhaps, it has never been such a good time as it is now to go to Turkiye with a comparatively strong euro.

It is very regrettable that Volkswagen did not implement its project as it was planned at the time. But maybe we will also see new developments in the field of electromobility. We also see such in the field of health cooperation. Pharmacy, MedicalHealth - these are the topics that were also washed up by the pandemic. Here, too, Turkiye is an interesting production location.

Despite phases of turbulence in the Turkish economy, German companies continue to invest and earn money in Turkiye. Is that a contradiction?

MS: Companies cannot be blamed for taking their chances. That is why such framework conditions, as we are currently finding, will lead to further investment incentives. It is to be hoped that more German companies will become active there, that they will then also create jobs, that they will continue to contribute to the economic growth in Turkiye, that profits will also be reinvested.

What challenges does a German entrepreneur who wants to get involved in Turkiye face?

MS: As I said, a lot of the information that you have here is, in my opinion, a bit out of date. Added to this is the current media climate, which unfortunately only focuses on critical topics or negative headlines and very rarely puts the positive first. I believe that the entrepreneur may initially actually develop a feeling for the market from his own experience and observation. I think it's very, very important that you really build contacts on site, build networks and then thoroughly analyse the market. And the offers of the chambers are also very helpful. I believe that the opportunities outweigh the risks. 

Are investment decisions overshadowed by political calculations?

MS: I think it is important that we should, first of all, take a look at where our well-understood economic interests lie. And Germany is very, very dependent on the export economy. We are not a resource economy. We live from international engagements. And it is unfortunately regrettable, but simply to state that the published opinion and the political discourse on the one hand and the more real politically oriented discourse of the middle class and the economy are not moving towards each other. Sometimes, you get the feeling that we are rather diametrically divergent. This is not a good development when it comes to Germany as a business location.

I hope that the new government, which consists of very different parties, will succeed in following a course that is in the interests of the country. The new federal government may not have been chosen primarily to change German foreign policy, but rather to modernise the country. And when it comes to modernising Germany, we still need a strong export economy. Then we have to look: What are the emerging economic areas, the regional powers, with which one can work? And Turkiye is certainly one of them and also belongs in the first place.

This is true if you look at the history of how closely our societies are intertwined—including what Turkish people have contributed to economic growth in Germany, and what Turkish entrepreneurs are doing here in Germany. And I think ideology should never replace expertise, and that is very important.

Is the turmoil in the market homemade or the result of Turkish policy?

MS: The key figures that the Turkish economy is displaying and the growth that the Turkish economy has shown through the crisis are factors that actually do not justify devaluation of the currency, as we are currently seeing on the international financial markets. I think that all of the hard facts that we have, that characterise the Turkish economy, and the success story that has been seen should actually lead to more confidence and security, also with regard to the currency.

Look at the euro and the stabilisation measures that have been taken in the euro area, also out of necessity due to the pandemic ... and the inflation rates that we are facing. You can also ask yourself whether the euro still deserves the rating it has at the moment.

In your opinion, how will Turkiye develop further?

MS: I assume that it will develop well, not that much is being done wrong in Turkiye. I think that it is also important to see what we can learn from other countries, from other economic areas, especially now when it comes to modernisation and reform and the new beginnings, so to speak, also within Germany. So, maybe, I would like to formulate the question like this: What can we actually learn here in Germany from the Turkish economy and Turkish development? And that we take a look, and there are points, for example, in online banking. A lot of things worked very quickly and better and more efficiently than was the case here in Germany. They are also able to build good airports.

What always really impresses you is the service mentality— including the customer service of companies. If you buy a household appliance here in Germany today and then you see that you can get the craftsman to add it, you will grow grey hair. Everything went better and faster in Turkiye and also the cordiality and warmth of the people there, also the friendliness that one encounters, to the optimism that has been rejected: That is something that we have unfortunately lost a little in us in Germany. And I would like us to be a little more inspired.