TÜRKİYE celebrates the 100th anniversary of its foundation, and the country has stepped into the second century of the foundation of the Republic with new economic plans. According to these plans, inflation will be controlled, and steps will be taken towards achieving growth targets by enhancing domestic production and exports. The 2024-2028 period will mainly be the period to lay new foundations for the long-term development plans. The average growth rate of the developed countries in this period is projected to be 1.7 per cent. The Euro Zone is estimated to follow a yearly average of 1.5 per cent growth. Türkiye aims to maintain the growth rate over the five per cent average. So, how will Türkiye achieve this?

ADVANCED TECHNOLOGY

Türkiye is a rich country considering the classical production factors, and the country will maintain its position in the growth race by benefiting from its underground and ground sources, trained human resources, geographic advantage, logistics facilities and production capacity. The rate of indigenousness in the import-dependent products and sectors will be increased through R&D activities and fixed investments as part of the country’s target to enter the league of major economies. The focus will be on producing high-tech goods as the domestic production capacity enhances. To this end, both domestic and foreign investors’ investments in production facilities

will be supported.

SCHEDULED STEPS

The Medium-Term Program (OVP) was declared in the previous months in light of the objectives above. In the program that contained the goals for economic development in the 2024-2026 term,

a schedule was determined for the steps to be taken to achieve the goals.

Immediately after the OVP, Türkiye’s 12th Development Plan was revealed.

The plan includes the vision of “A stable, strong and prosperous Türkiye that is environmentally-conscious, resilient against disasters, equipped with cutting-edge technology and that produces high added value and fairly distributes the income.”

The 12th Development Plan was designed with the contributions of representatives from public bodies, private sector, NGOs and academic circles under the coordination of the Presidency of Strategy and Budget. Assessment of the circumstances, requirements of the business realm and the issues considering economic growth were defined clearly.

The plan covers the first five-year period (2024-2028) of Türkiye’s long-term development strategy, elevating the country to the league of developed countries by 2053.

MAIN OBJECTIVES

The objectives planned to be achieved in line with the 12th Development Plan are as follows:

* Macroeconomic stability and sustainability

* Reinforcing the rule of law, democracy, fundamental rights and liberties

* Competitiveness based on a green and digital transformation in all spheres

* A technology-based structural transformation in the manufacturing industry

* Security of supply in energy and food

* Strengthening international cooperation and strategic partnerships.

PRIORITY SECTORS

Priority sectors are standing out as part of Türkiye’s growth targets. A structural transformation based on technology is planned for the manufacturing sector, and active industry policies will be implemented in the following sectors: chemistry, pharmaceutical and medical devices, electronics, machinery, electrical equipment, automotive, and rail system vehicles. Following are some of the things to do as part of the main targets and priorities:   

* Increase in the investments through international capital, direct investments in particular, will be prioritized.

* Capital markets will be improved, the fintech ecosystem will be supported, participation in the institutional structure of finance will be reinforced, and relevant legislation will be developed.

* The manufacturing industry’s share in GDP will be enhanced.

* Growth of the agricultural sector will be encouraged.

The support mechanisms for commercializing the R&D activities towards the targets above will be increased. Besides, the changes towards producing high-technology goods and increased added value will be encouraged. Both domestic and foreign investments to realize these targets will be promoted.

WHAT WILL BE DONE, WHEN?

Some of the steps to be taken as part of the economic growth and development plans and their schedule are as follows:

* A legislation study will be conducted for justice and effectiveness in the taxation system. Regulations will be launched to build a plain and applicable structure. The share of the direct taxes will be raised in the medium term. This step is projected to be realized in the third quarter of 2024.

* In improving business and investment environments, transparent and predictable regulations in line with international norms will be developed. The output of the legislative and administrative activities will be presented in the third quarter of 2024.

* The processes regarding the investments, such as permits, licenses and certificates, will be transferred to the online platforms, and their duration will be reduced. The administrative regulation to this end will be completed in the second quarter of 2025.

* Activation of the judicial processes and reinforcement of the alternative dispute resolution methods will be provided. The required legal and administrative regulations will be completed in the third quarter of 2025.

* The digital applications will be further extended in the company and trade registry processes to simplify the bureaucratic processes. Relevant new administrative regulations will be launched in the third quarter of 2024.

ASSIGNMENT OF INVESTMENT SPACE

* An investment space inventory containing suitable investment spaces will be formed for the investors. This step is to be realized as of the first quarter of 2025.

* Public lands will be planned based on regions, sectors and scales in line with the long-term investment requirements, and allocation processes will be accelerated. This step will be taken in the second quarter of 2024.

* The expropriation process will be revised to accelerate the investment space allocation processes for large-scale and strategic investments in the manufacturing industry. The required legislative and administrative study will be completed in 2024’s third quarter.

Tablo

TARGETS      2024    2028

INFLATION  36%     4.7%

GROWTH      4%       5%

EXPORTS      267      375

(billion USD)

Support to the investments in semiconductors



Investments in semiconductors, electric vehicles, batteries and critical technology products within their value chain will be encouraged.

The activities on the critical materials and components required by the strategic sectors such as electronics, aviation, defence and biomedical sectors will be boosted.

As part of the plans, support will be provided to develop and produce critical products and technologies through indigenous facilities.

The development of rare earth elements and lithium production technologies and the launch of a large-scale production facility will be realized.



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