By Publisher-Chairman Lee Kyung-sik with VCs Choe Nam-suk, Joy Cho, Editor Kevin Lee
The Republic of Türkiye, with its strong economy, favorable investment climate, and highly skilled and competitive workforce, presents exceptional opportunities for South Korean companies to access profitable markets and expand their supply chains.
This statement was made clear by Commercial Counsellor Ms. Ayse Ferdag Tekin at a recent interview with her at the Embassy of the Republic of Türkiye in Seoul on July 4, 2023. She provided a wide measure of information at the interview which was viewed to be very useful in the promotion of relations and cooperation in the economic and commercial areas.
Details of the interview follow:
Question: What are the areas the Republic of Turkiye would want Korean companies in your country and what are the areas where you would wish your business people to invest in Korea?
Answer: Türkiye serves as an ideal gateway to European markets, especially due to its Customs Union agreements, as well as to other regions including the Middle East and North Africa (MENA) and the Commonwealth of Independent States (CIS) countries. Furthermore, Türkiye offers attractive incentive packages that providing robust supply chains, local industry clusters, and reliable and cost-effective power sources, providing companies with numerous advantages to capitalize on in the Turkish market.
Another compelling reason to consider investment in Türkiye is its strategic logistical position. With the ability to reach 156 cities in 53 countries, including Russia, all European countries, the Middle East, Central Asia, and Northern Africa within a four-hour flight, Türkiye offers unparalleled access to a population of 1.6 billion people and a potential trade volume of 8 trillion dollars.
In 2022 alone, Türkiye attracted foreign capital totaling 239 million USD, leading to an increase in the number of foreign capital companies established in the country to approximately 78,000. Notably, the top three countries contributing to foreign investment in Türkiye are the Netherlands, the United States, and the United Kingdom.
Since January 1st, 2012, a new investment incentives system is in effect aiming to boost development in Türkiye. The main goals of the incentive system are to increase production and employment, to steer investments to large scale, to minimize regional development discrepancies and to reduce dependency on import of intermediate goods.
Investment incentives system comprised of five different schemes for general investment, regional investment, priority investment, large-scale investment and strategic investment.
The system offers tax exemptions, customs duty exemptions, tax reductions and refunds, social security premium support, interest rate support as well as land allocation. We welcome Korean firms to take advantage of this system fully.
As of February 2023, there are 383 companies with Korean capital operating in Türkiye. Since 2002, Korean investors have made total investments of 1.3 billion USD in Türkiye. Considering Korea's total foreign direct outward investment amounted to 77.1 billion USD in 2022, we believe that the level of investment from Korea can potentially increase further. Furthermore, the Türkiye-Korea FTA, with its sections on "Trade in Services" and "Investment," provides a well-established legal infrastructure that will undoubtedly help attract more investment from Korea and create a balanced and sustainable trade relationship between our countries.
Türkiye offers diverse opportunities across its 81 cities, with each city possessing unique capacities in various sectors. The Turkish mergers and acquisitions (M&A) market holds significant promise for South Korean investors. Korean investors have been actively involved in sectors such as ICT, manufacturing, e-mobility, infrastructure, energy, entertainment, gaming industry, logistics and transportation, media, and wholesale. Investing in Turkish companies and establishing joint ventures not only provides business growth opportunities within Türkiye but also in South Korea and other third countries.
Türkiye is home to numerous promising export-oriented companies in various sectors, experiencing rapid business growth and actively seeking equity partners to expand their export markets. Strengthening the capital structure of these companies can yield substantial returns.
Türkiye boasts a deep and flexible talent pool, driving economic growth and fostering a thriving start-up culture. The country's technology start-ups are vibrant and attract investors from around the world. South Korean investors have the opportunity to invest in private equity funds and venture capital funds dedicated to Türkiye, as well as directly in promising start-ups.
As the government of Türkiye, our objective is to enhance the quality and diversity of investments, attracting more high-quality investments to the country. We aim to position Türkiye at a higher level in the global supply chain. To achieve this, we prioritize attracting value-added and technology-intensive investments in sectors such as e-mobility, life sciences, medical Technologies, energy technologies, chemicals-petrochemicals, information and communication technologies, machinery, high-quality manufacturing technologies, defense and aviation, and agri-food.
While emphasizing investment priorities, we also ensure alignment with sustainable development goals. We actively support investments that align with the United Nations Sustainable Development Goals (SDGs), including responsible production, sustainable development, green energy, and a green economy. We are actively working to enhance the business climate and regulatory framework to align with the SDGs and the European Green Deal.
Q: What are your competitive products and/or services attractive to Korea? Who are the companies of your country exporting your products to Korea?
A: Türkiye and South Korea have a diverse range of economic sectors, which opens up various opportunities for export and trade between the two countries. Here are some major products and services that Türkiye might wish to export to Korea: automotive Products, textiles and apparel, food and agricultural Products, construction materials and machinery, furniture and home decor, healthcare and medical equipment, pharmaceutical, tourism and hospitality Services. Moreover, we would like to increase our trade relations in the new areas such as bio-technological products, content market and in the area of digitalization, e-trade, and blockchain technologies.
Turkish health services sector is one of the most attractive services. Turkish health institutions host a wide range of international patients from all around the world. Türkiye has been rapidly progressing towards becoming one of the leading countries in health tourism thanks to its advanced health infrastructure, worldwide developed health institutions, young and qualified labor force, and the high-quality services provided by internationally accredited health institutions.
he official statistics also prove the success of Türkiye in healthcare sector. According to the Türkiye Statistical Institute (TÜİK) database, on 2022, the revenue of health tourism 2.1 billion $ and the number of patients that visited Türkiye to receive treatment is 1.258.382. Healthcare services export aim in 2023 is 3 billion $.
Q: What are the Korean products and services that your country might wish to import?
A: Türkiye imports a wide range of products and services from South Korea. While the total amount of Turkish exports to Korea 1 billion USD, Korean exports to Türkiye was 9 billion USD. However, this does not mean that the trade volume cannot be increased. On the contrary, we strongly believe that there is great potential for Korean companies to export more through investment, collaboration in various areas. Some major products and services that Türkiye might wish to import from Korea include electronics and electrical equipment, automobiles and automotive components, machinery and industrial equipment, chemicals and petrochemicals, pharmaceuticals and healthcare products, consumer goods, information technology and software services.
Q: Who are the Korean companies (large of small) actively engaged in bilateral economic cooperation between the two countries? Please introduce them in detail in the order of size and scale of business activities.
A: Korea has made significant investments in Türkiye, particularly in the automotive, electronics, textiles, machinery, and chemicals sectors. For instance, Korean automaker Hyundai has substantial investment in and operates a manufacturing plant in Kocaeli, Türkiye since 1997. The plant has become a manufacturing hub, with automobiles produced there being exported to 45 countries, primarily the EU, the Middle East, and North Africa.
Another Korean conglomerate, POSCO Steel, made its first joint venture investment with Turkish Kibar Holding and Daewoo International in 2011 and became the 14th highest exporting company in 2021. Most recently, the consortium of Daelim and SK E&C, along with Turkish companies Limak Holding and Yapı Merkezi, constructed the 1915 Çanakkale Bridge, which is now the longest suspension bridge in the world with 2,023 meters length and the world's widest open suspension bridge with a 333-meter-height. The bridge opened on March 18th, 2022, with the participation of Korea's then Prime Minister Kim Boo-kyum.
In regards to online services, Netmarble acquired game developer, Joygame. Turkish online shopping platform n11.com was established in 2013 in partnership with Doğuş Group and SK Group.
The joint-investment announcement by Korean battery manufacturer LG Energy Solution and Ford Otosan is one of the most recent investments by Korea. This multi-billion dollar investment is going to be a major contribution to Turkish electric vehicles and battery ecosystem.
Moreover, Türkiye and Korea has been in collaboration in the area of defense. This collaboration that reflects their shared commitment to regional security and stability and it encompasses various areas, including defense industry cooperation, joint military exercises, information sharing, and technology transfer.
“Nuclear Energy would be the another important area of cooperation. Although still on the intention level, if this project realized it will have a huge impact on Turkish-Korean relations in almost every field and will bring our cooperation to the next stage.”
These are merely a handful of Korean companies that have conducted business activities and made investments in Türkiye. Alongside these companies, there are numerous other Korean enterprises, varying in size, that participate in the bilateral economic cooperation between Türkiye and Korea across various sectors. The investments made by prominent Korean conglomerates such as Hyundai, POSCO, and SK are clear demonstrations of their confidence and positive perception of the investment environment in Türkiye.
We aspire to further increase the volume of Korean investments in the near future, and we extend an invitation to all Korean companies to explore the investment incentives available for their future investment plans in Türkiye.
Q: What are the major products/services which your country might wish to export to Korea?
A: Türkiye Korea Free Trade Agreement (FTA) has been put into effect since May 2013. The objective of the FTA was to elevate the long-standing relations between Türkiye and Korea to a higher level. The Framework Agreement aims at the establishment of a comprehensive free trade area between the Parties and outlines the structure of the Türkiye-Korea FTA. The FTA also includes the Agreement on Trade in Services and the Agreement on Investment, which were negotiated and signed on February 26, 2015, and entered into force on August 1, 2018.
However, the commercial gains for our country have fallen short of expectations so far. While Korea ranks as the 8th largest exporting partner of Türkiye in 2022, it only holds the 51st position among the countries we export to the most. Furthermore, Turkish imports from Korea increased significantly after the FTA came into force in 2013, with bilateral trade volume peaking at 10 billion USD in 2022. Conversely, Turkish exports have grown at a slower pace, resulting in an import/export ratio higher than 9 to 1 in 2022.
According to the foreign trade statistics, while Türkiye exported 1 billion USD worth of goods to Korea last year, Korea exported 9 billion USD worth of goods to Türkiye. The top export items from Türkiye to Korea include immunological products, spare parts of automobiles, parts of airplanes, fur skins, and juice, while the top imported products from Korea include various chemical products, immunological products, tankers, and stainless steel, among others.
Therefore, we strongly believe that there is a real need to diversify our trade, especially by introducing Turkish consumer goods and brands to the Korean market. Our focus on closing the trade gap aims to create economic structures that complement each other, resulting in long-term benefits for both sides. It is a "win-win" formula.
Türkiye and South Korea have a diverse range of economic sectors, which opens up various opportunities for export and trade between the two countries.
Here are some major products and services that Türkiye might wish to export to Korea: textiles and apparel, food and agricultural products, construction materials and machinery, furniture and home decor, healthcare and medical equipment, pharmaceutical, tourism and hospitality services. Moreover, we would like to increase our trade Relations in the new areas such as bio-technological products, content market and in the area of digitalization, e-trade, and blockchain technologies.
Q: What are the major products/services which your country might wish to import from Korea?
A: Türkiye imports a wide range of products and services from South Korea. While the total amount of Turkish exports to Korea 1 billion USD, Korean exports to Türkiye was 9 billion USD. However, this does not mean that the trade volume cannot be increased. On the contrary, we strongly believe that there is great potential for Korean companies to export more through investment and collaborations in various areas.
Some major products and services that Türkiye might wish to import from Korea include electronics and electrical equipment, automobiles and automotive components, machinery and industrial equipment, chemicals and petrochemicals, pharmaceuticals and healthcare products, consumer goods, information technology and software services.
Q: What are the areas you might think the business companies of the two countries could further expand/increase their exchanges and cooperation?
A: We prioritize attracting value-added and technology-intensive investments in sectors such as e-mobility, life sciences, energy storage, chemicals-petrochemicals, information and communication technologies, machinery, high-quality manufacturing technologies, defense and aviation, and agri-food.
Q: What are the latest developments in your country in the commercial/economic spheres?
A: Türkiye, with strong economy and remarkable growth trend, has emerged as the 11th largest economy in the world. Over the past two decades, the Turkish economy has more than tripled, strengthening its position for sustained growth and prosperity.
One of the key indicators of Türkiye's economic strength is its average annual GDP growth rate, which stands at an impressive 5.4% between 2002 and 2022. This consistent growth rate positioned it as a promising player in the global economy.
The total population in 2022 reached 85.3 million with an income per capita of 39,301 USD (GDP per capita, current prices at purchasing power parity), which provides a large and dynamic consumer base for domestic and international businesses. Furthermore, having a young population, with half of its citizens under the age of 33.5, provides a dynamic labor force as well as great potential for economic growth and innovation.
One of Türkiye's strategic advantages lies in its Customs Union with the European Union (EU). This agreement grants Türkiye direct access to the EU market, which consists of an almost 1 billion consumers. In addition, Türkiye has successfully negotiated and concluded free trade agreements with 28 countries, creating new opportunities for trade expansion. Thanks to the strong manufacturing and service industries the total amount of export revenue reached 254 billion in 2022 and imports reached 363,7 billion USD.
In the last 20 years, our service export has increased more than 6 times. In the 2022, our service exports increased by 47.3% compared to the previous year and reached 90.5 billion dollars. In the same year, the trade volume in the service sectors increased by 43.8% to 130.9 billion dollars. In the first four months of 2023 our service exports increased by 22.6% compared to the previous year and reached 25.8 billion dollars. We expect to reach 120 billion dollars of service exports by the end of 2023.
Logistics and transportation and travel services are the two prominent service sectors of Türkiye. Last year, logistics and transportation services export contributed 36.7 billion dollars to Türkiye’s services export. Moreover, it directly affects and contributes to both our exports of goods and services.
On the other hand, travel services contribution to Türkiye’s services export was 41.4 billion dollars in 2022, which accounts for 45.7% of the total amount of services export of Türkiye.
Recognizing the importance of international investment, Türkiye provides legal infrastructure for the protection of foreign investors through its Foreign Direct Investment (FDI) Law. The country has also established bilateral investment protection treaties with 86 countries, ensuring a favorable and secure investment environment. Additionally, treaties to avoid double taxation with 87 countries promote international business cooperation and facilitate cross-border transactions.
Türkiye has become as a manufacturing, management, and export hub for multinational companies and has become a hub for innovation and technological advancements, with over 550 international companies operating in techno parks and research and development centers. This vibrant ecosystem offers abundant opportunities across a variety of sectors, attracting both local and global entrepreneurs.
The Turkish economy's remarkable growth and its favorable business climate make it an attractive destination for investors and businesses seeking new avenues for expansion. As Türkiye continues to prioritize economic development and strategic partnerships, it is poised to cement its position as a key player in the global economy.
Q: Who is your government minister in charge and commercial and economic spheres?
A: Dr. Mehmet Muş was born in Sürmene/Trabzon on May 1, 1982.
He completed his primary and secondary education in Istanbul.
After graduating from Eastern Mediterranean University, Faculty of Business and Economics, Department of Business Administration, he went abroad for his graduate study. He accomplished his graduate program at Washington State University School of Economic Sciences in the field of economics.
Having had his PhD degree at Marmara University, Department of Economic History, Mehmet Muş worked in the private sector as a Budget Planning Expert.
He was actively involved in the Istanbul Branch of AK Party Youth Organization where he served respectively as AK Party Youth Organization Provincial Executive Board Member, Director of Economic Affairs and Head of the Organization.
In 2011, he was elected to the Grand National Assembly as AK Party’s Istanbul MP for the 24th Parliament of Türkiye. He remained in the office and continued to serve as MP in the 25th, 26th and 27th terms. He was a Member of Grand National Assembly’s Committee on Foreign Affairs, Plan and Budget Committee and European Union Accession Committee. Being a former member of NATO Parliamentary Assembly (NATOPA) Turkish Group, he also served as the Vice President of Public Relations at the AK Party Headquarters.
Q: What is the present volume of bilateral trade with Korea and what is its outlook in the next 12 months?
A: According to Korea Customs Service statistics between in the first four months of 2023 (based on GPS), Turkish exports to Korea reached 671,5 million USD and Korean exports to Türkiye reached 3,9 billion USD. We expect the trade gap to continue throughout the year.
Q: Korean people, especially the up-and-coming Korean businessmen need rest and recuperation. What are your tourist attractions?
A: According to the World Tourism Organization, Türkiye currently stands as the 4th most visited tourist destination worldwide in 2021. With its abundant cultural heritage and breathtaking natural landscapes, Türkiye is gaining increasing popularity among Korean travelers. While 45 million people visited Türkiye in 2019, this number decreased to 24,7 million in 2021 due to the Covid-19 pandemic.
In addition to the neighboring countries, visitors from European countries, UK and the US are the top countries sending tourists to Türkiye. Although Korea is not among the list, we strongly believe that, Türkiye has the potential for becoming a top tourism destination for Koreans get to know more about Türkiye.
Moreover, according to the data proposed by Turkish Statistical Institute (TÜİK), 44.6 million foreign people visited Türkiye in 2022, 98.2 thousand of them were from South Korea. Our goal is to attract 75 million tourists, generating a tourism revenue of 65 billion dollars by the end of 2023.
At the same time, Türkiye is a health tourism destination. Our strategy in healthcare services exports is not only based on medical tourism but also meets the demands of elderly and disabled individuals as well as it contains spa-wellness tourism. Türkiye with her unique landscapes, geographical diversity, climatic features and rich culture, offers quality spa-wellness therapy with approximately 1.500 thermal springs which ranks Türkiye 6th in the world and 1st in Europe.
We established Heal in Türkiye (http://healinTürkiye.gov.tr/) web portal which will be activated at the end of this year. Hospitals, clinics, wellness/thermal centers, elderly/disabled care centers and healthcare agents will be in the portal as providers. Moreover, treatments and other services offered by healthcare providers, their doctors, branches and locations will be communicated in the portal as well. The portal will not only promote healthcare services and institutions but it will also inform health tourists anything about their travel to Türkiye.
Considering this fact, “Heal in Türkiye” portal will contain where to visit as popular destinations what to eat and drink, what to do in a specific region as well as accommodation, transportation, cultural, climatic information. Also, comment, rating and call center modules will be there in order for us to provide better quality services.
All in all, Türkiye is dedicated to be leader country in health tourism with her advanced healthcare systems, qualified personnel and effective initiatives system. I am sure that heal in Türkiye portal will contribute to improve Turkish healthcare providers capacity and offer unique experiences to health tourists.
Turkish Airlines, the national carrier of Türkiye, operates flights to over 121 countries and 341 destinations, including Seoul-Incheon. The airline offers daily flights connecting İstanbul and Incheon Airports, providing convenient transportation options not only to İstanbul itself but also serving as a transfer hub for Korean travelers looking to explore various destinations worldwide.
Türkiye has many world famous travel destinations. Our country is known for its rich historical heritage, beautiful natural landscapes, and warm hospitality, making it a popular destination for travelers from around the world. However, we can name just a few examples of the many tourist attractions here.
İstanbul as the cultural and economic hub of Türkiye is a must-visit city for all travelers. This cosmopolitan city, connecting Europe with Asia, is among top 3 destinations in Europe after London and Paris from 2019 to 2021. The iconic landmarks such as the Hagia Sophia, Topkapi Palace, Blue Mosque, and the Grand Bazaar are just a few examples in addition to its vibrant atmosphere, bustling markets, and a blend of Eastern and Western influences.
Located in central Türkiye, Cappadocia is famous for its unique landscape with its fairy chimneys, and underground cities. Visitors can also explore the first examples of the churches caved in rocks. Hot air balloon rides over the landscape are one of the most popular activities that visitors can enjoy.
Pamukkale is another wonder of the nature is known for its terraces of white mineral-rich thermal waters. Visitors can walk on the terraces filled with hot water, swim in the thermal pools, and visit nearby ancient Roman city of Hierapolis.
Ephesus, an ancient city located near İzmir is home to well-preserved ruins of a Roman-era city, including the Library of Celsus, the Temple of Artemis, and the Great Theater. Moreover, Virgin Mary House close te Ephesus is also one of the pilgrim destination for Christianity.
Antalya is known for its stunning beaches and crystal-clear waters. The city also offers historical attractions such as the ancient Lycia, Pamphylia, Pisidia, and Cilicia.
Bodrum is one of the most popular coastal towns with its beaches, nature and vibrant nightlife. Bodrum Castle, the Museum of Underwater Archaeology, and the Mausoleum at Halicarnassus, one of the Seven Wonders of the Ancient World are the must see points in the town.
Göbeklitepe is an archaeological site located in southeastern Türkiye. It is one of the most important and spectacular archaeological discoveries of the 21st century. The site is considered to be the world's oldest known temple complex and has changed the understanding of prehistoric societies.
Other destinations can be named as, Troy, Pergamon, Safranbolu, Gaziantep, Black Sea Coast.
Q: As the Commercial-Economic Counsellor/Officer of your esteemed Embassy, please introduce yourself fully.
A: My name is Ayşe Ferdağ TEKİN, Commercial Counsellor from Turkish Embassy in Seoul. After studying Political Science and Public Administration at Middle East Technical University in Ankara, I started working for the Undersecretariat for Foreign Trade (now Ministry of Trade) as an Assistant Foreign Trade expert in January, 2006. Subsequent to completing my exams and becoming a Foreign Trade Expert in 2009, I went to the USA to pursue my master's degree at Syracuse University, Maxwell School of Citizenship.
It is a nice coincidence that I chose the Republic of Korea as my term project topic for the International Development class, and I am very happy to experience the academic work I did during my studies here in Korea. I also received MBA degree in Korea at Seoul Business School, aSSIST University.
I worked at various DGs and departments within the Ministry. This enabled me to acquire deep knowledge and experience in Türkiye's foreign trade system. For 4 years, I participated in bilateral and multilateral negotiations of Türkiye as a member of the Turkish delegation with different countries and international organizations such as the WTO. I also took part in different projects for the formulation of Türkiye's foreign trade policies.
Korea is my first overseas assignment, and I consider myself privileged to be in our brother country Korea since November 2019. I am delighted to guide Turkish companies that wish to operate in Korea and Korean companies that want to learn more about Türkiye and Turkish companies and products.
Türkiye's foreign trade has evolved and developed significantly during my 20-year government career. Last year, Türkiye reached a record-breaking $254.1 billion in exports, and it continues to achieve successful results every year. I am very happy and proud to be a part of Türkiye's foreign trade family.