Official Declaration from ISPAT (Investment Support and Promotion Agency of Turkey):
As The Republic of Turkey Prime Ministry Investment Support and Promotion Agency (ISPAT) we state that the recent failed coup attempt in Turkey, however tragic and unfortunate, will further strengthen democracy and the rule of law in Turkey.
As such, these events are nothing but a labor pains of the democratic process. The Turkish people have shown that the only source of legitimacy in Turkey is the will of people, as they heroically thwarted the coup against their democratically-elected leader, President Recep Tayyip Erdoğan.
The events demonstrate that when democracy and national sovereignty are at stake, the Turkish people and politicians will put aside their differences and support the democratic institutions in the country. All of four political parties in the parliament condemned the attempt and said in a joint statement that “democracy” in Turkey can’t be used together with the word “coup”.
The markets responded with confidence to the recent events, given that security has been restored and the public has strong support for the government which will result in a more stable political environment. While short-term negative pricing in financial markets is a normal reaction to such a troubling event, the markets will overcome the uncertainty and stabilize in a couple of days. Policy-makers, regulators, and all of the economic actors in Turkey are vigilantly following the recent developments and are taking all necessary measures to reassure the markets.
Turkey has been and will be able to retain sound macroeconomic fundamentals thanks to supportive fiscal and monetary policies. The Turkish economy has been growing robustly over the past 14 years with an annual average real GDP growth rate of 4.7 percent. Turkey stands out as one of the fastest growing economies in the world. Moreover, Turkey achieved a growth rate of 4.8 percent in the first quarter of 2016, despite the overall modest recovery in the global economy.
The Turkish government has been constantly introducing reforms to improve Turkey’s investment and business climate. Thanks to these structural reforms, the amount of FDI, which was about USD 15 billion during the 1923-2002 period, increased to more than USD 165 billion between 2003 and 2015. Also during this 2003-2015 period the number of foreign-owned companies rose from 5,600 to almost 46,000. Although the recent events have cast a shadow over Turkey’s economic success, the public reaction to the coup has restored confidence in Turkey’s robust financial institutions. Emboldened by the support of the people, the government will continue to implement economic reforms that will also strengthen Turkish democracy. The Turkish business community also has strongly opposed the coup and has voiced its support of the democratically-elected government and the President. Early feedback from international investors indicates growing confidence and an increased appetite for investment in Turkey.
The likely short-term effects of this attempt will not be accompanied by any deterioration in major economic indicators, and the likelihood of a decline in foreign investments is low as Turkey’s economy proved resilient during periods of global and domestic turmoil in the past.