1. The Opportunities in Turkey for UK Companies October 2007

2. The Turkish Economy Basic Facts  Turkey: World’s 17th, Europe’s 6th largest economy  GNP for 2006: $ 662 billion  GNP per capita for 2006: $ 9,000  Unemployment rate 9% in 2006  Inflation (CPI) down to single digits: 9.6 % in 2006; 4% 2007 target  FDI in 2006: $20 billion (due to successful privatisation)  Bilateral trade volume (UK-Turkey)  $ 10.5 billion in 2005  $12 billion in 2006

3. Main Economic Agenda  Improved economic stability under AKP’s one party government.  AKP sustained its strong majority in Parliament, with 48% of votes.  Presidential elections on the way.  EU Accession Talks started on 3 October 2005.  Key Government reforms include:  Social security reform  New legislation on tax administration and tax policy  Mortgage legislation

4. TRADE  Total trade volume of Turkey in 2006 was $ 224 billion, increasing 62% from 2005.  UK is the top 8th importer to Turkey, with $ 5.1 billion in 2006.  The total trade volume between UK and Turkey was $12 billion in 2006 increasing  UK is Turkey’s 2nd export market as of 2006  Turkey has Europe’s third largest population  Turkey is EU’s 6th largest trade partner  Turkey is in top ten emerging markets including markets like China and India

5. Why You Should Consider Turkey Now  Average growth rate is 7.3% since 2004 - top three strongest growth in OECD  Turkey attracted $30 billion FDI in the last two years and expected to attract another $25 billion in 2007  Turkey becomes “operation and production hub” for multinationals  Dynamic Private Sector  Springboard to Central Asia & Northern Middle East  EU Accession Negotiations  Key driver for change  Labour market reform as the prior issue in government’s agenda

6. Top Exporters to Turkey ($ bn)

7. Key Privatisations  Turkish Airlines  TEDAS (State electricity distribution company)  TCDD (State Railways)  TEKEL (State tobacco company)  National Lottery Full details from Turkish Privatisation Agency (www.oib.gov.tr)

8. Other Key Factors  Banking Sector  Majority of World’s largest banks merged with Turkish banks- consolidation is expected to continue  Large untapped SME market  Environment  70 billion Euro investment required (World Bank estimate)  EU driven and subsidised  Waste Management, Water Basin Management, Recycling legislation under consideration

9. Other Key Opportunities Cont.  Financial Services  Huge potential for mortgage market  Scope for further consolidation in non-banking financial sector  Transport Sector  Extension of rail network  Extension of suburban/commuter transport systems  Redevelopment of Airports  Ongoing rehabilitation of road network  Privatisation of sea ports

10. British Companies in Turkey Over 900 UK companies have operations in Turkey Arcadia GroupGroup 4 Balfour BeattyHSBC BATImperial Tobacco BOC International Power BP Amoco Marks & Spencer British Standards Inst.Oxford Uni Press CadburysTesco Coats Viyela Thames Water Corus Unilever Glaxo Smith Kline Vodafone

11. Doing Business in Turkey  Get yourself a good distributor/agent  Make sure you reach the decision maker at the top  Handle problems promptly and properly - close knit business community means bad news travels fast  The usual methods of payment are used  In general, Turkish firms have a good payment record  Credit checking facilities are available if needed  Export credits/insurance is available  Target the main cities first - Istanbul, Ankara, Izmir

12. Business Customs  European business ethics and modern management practices  Highly (often foreign) educated managers & an increasing skills base  Increasing use of English for business, but fluency varies  Turks will take the time to meet foreign business visitors and entertainment is part of the normal process  Personal relationships are very important, always exchange pleasantries before getting down to business  Accept the offer of a tea/coffee/water when you meet  Be prepared to be invited out to dinner with your contact and maybe even to meet his family

13. How Can we Help  Provide informal assistance and advice  Produce reports on the suitability of your product for the Turkish market and its chances of success  Find potential agents/distributors  Arrange visit programmes  Help arrange product launches  Put you in touch with the right people

14. Could it all go Wrong  Uncertainty about presidential elections  Iraq/Iran/Syria security tensions increase and spill over into Turkey  Cyprus - deadlock continues, tensions increase within EU, provokes major row  EU Accession Talks stall and fail Turkish intransigence on “sovereignty” Turkish critics gain support and succeed in scuppering accession