Major Economic Indicators
Recent Developments
Current Economic Situation
Thanks largely to the nascent global recovery and its low interest rates and sustained public spending ahead of general election in June 2011, the Turkish economy ended last year with strong GDP growth of 8.5%. Under the dark cloud of the European sovereign debt crisis and the political uncertainty in the Middle East and North Africa (MENA) region, however, the sharp improvements of labour and credit market conditions have shown signs of cooling in recent months, while industrial production has faltered in light of slowing demand from its major export markets.
With a more restrictive monetary and fiscal policy mix coming into play to rein in inflation and external imbalances, Turkey is forecast to see growth moderate to a more sustainable pace in the balance of 2012. The tightening credit conditions and the uninspiring economic conditions in many of its trading partners are set to limit the contribution to growth of investment, industrial production and exports, while the deteriorating employment prospects and higher lending rates are set to cool domestic demand. On the whole, Turkey is forecast to see a slower growth of 3.2% in 2012.
Trade Policy
Turkey has significantly liberalised its import regime, especially in the last decade. Any individual or enterprise can freely register to engage in the import business. It is a member of the WTO, and its tariff scheme is based on the Harmonised System (HS) for commodity coding.
EU-Turkey Customs Union
The EU-Turkey Customs Union came into force in January 1996, under which Turkey and the EU have abolished all customs duties, other surcharges and import quotas levied on most manufactured products from each other. Turkey has also adopted the EU’s Common External Tariffs imposed on imports from third countries and economies. Products imported from sources other than the EU and Turkey can thus move freely within the EU and Turkey, if all import formalities have been complied with and customs duties, or charges having an equivalent effect, have been levied in the importing country.
Nonetheless, traditional agricultural products are not covered by the arrangements, and will be included in the Customs Union only after Turkey has completed the alignment of its agricultural sector with the EU’s common agricultural policy. On the other hand, some industrial products from the least developed and developing countries (including the Chinese mainland) benefit from the EU’s Generalised System of Preferences (GSP). With the creation of the Customs Union between the EU and Turkey, such products are also covered under Turkey’s GSP regime.
Measures not covered by the Customs Union
Trade-protection measures such as anti-dumping, however, have not been eliminated between the EU and Turkey. Such protective measures have likewise not been eliminated with respect to dumped and subsidised products from third countries. In other words, Turkey has its own anti-dumping actions, which are separate from those of the EU. Turkey used to impose safeguard quotas on certain textile products originating from the Chinese mainland, which were again different and separate from those of the EU, but they were expired by the end of 2008.
Product standards
The Turkish Standards Institution, or TSE, is the product standardisation body of Turkey, responsible for setting product standards and ensuring compliance. Taking electrical and electronic products as an example, while there is a minimum two-year warranty requirement, it is also necessary to obtain technical approval by TSE, and attain the European CE standard certification under the requirements set out by TSE, before the products can be imported and placed onto the Turkish market. As for toys, TSE also imposes a number of safety standards, which in large follow those required by the EU. Therefore, the attainment of CE standards certification can serve as a good reference for fulfilling the TSE requirements.
RoHS and WEEE
To harmonise with the relevant EU directives, the Turkish version of the RoHS directive entered into force in June 2009, while the Turkish version of the WEEE directive was published in the Turkish Official Journal on 22 May 2012 and to be implemented starting from January 2013 onwards.
Business hours In Turkey, government offices and banks are open Monday through Friday, and are closed on Saturday and Sunday. The opening hours for government offices are from 8:30 am till 5:30 pm, with an hour lunch break during 12:30-1:30 pm. But banks normally have shorter opening hours from 8:30 am till 5:00 pm, with a lunch break during 12:00-1:30 pm. As for other business offices, they also follow the five-day working practice. But most have slightly different business hours from 9 am till 6 pm. During summer months, the government offices and many other establishments in the Aegean and Mediterranean Regions are closed in the afternoon. These fixed summer hours are determined by the governing bodies of the provinces. On the other hand, some government offices and business establishments may have certain temporary arrangements to advance their working hours by 15 or 30 minutes in order to fully utilise the daylight and save energy. Regarding retailing, in general there are no special restrictions on the business hours. Shops and bazaars are normally open Monday through Saturday, 9:30 am till 7:00 pm (some may have a lunch break), and closed on Sunday. But most stores in shopping malls and major shopping districts are open seven days a week, with a longer opening time that can run till the late evening. Religion and holidays While Turkey’s dominant religion is Muslim, it is a secular country with a long-standing tradition of tolerance and co-existence between peoples of all beliefs and creed. At the moment, about 99% of the Turkish population is Muslim. The remaining 1% consists mostly of Orthodox Christians, Gregorian Christians and Jews. Notably, Hong Kong companies that intend to do business with Turkey need to observe the Turkish business calendar, as Turkish holidays do not exactly match those of the West. While the official holidays there include some national days, such as holidays for the celebration of Republic and Victory, there are also two important religious holidays, namely Seker Bayrami or Ramazan Bayrami (three days) and Kurban Bayrami (four days), which are observed by most Turks and business people in the country. The dates of these religious holidays occur 10-11 days earlier for each Western calendar year, because they follow the Muslim lunar calendar, which is different from the West. As most Turks have their religious rituals and celebrations during these festivals, Hong Kong companies are advised to observe such periods when doing business with Turkey. Public holidays in Turkey 30-31 August Business meetings Although Turkey is a Muslim country, Turks are largely used to conducting business in a Western style. As for business meetings, a handshake with exchange of business cards is common among businessmen during greetings. Meanwhile, the dress code in the business community is similar to that in Western Europe. For example, men normally wear a suit with tie and white shirt. For ladies, however, it is noteworthy that a skirt with conservative length is recommended. Moreover, ladies should refrain from using strong perfume, lipsticks of bright colours and luxury jewellery. Meeting schedule One should try to avoid setting up business meetings with their Turkish counterparts in the months of July and August or around the times of national or religious holidays. This is because many staff and executives may be on leave during these periods. It is difficult to reach the Turks especially during the periods around the two major religious holidays Seker/Ramazan Bayrami and Kurban Bayrami (see above section for details of the holidays). This is because many Turks usually take a long break during such periods for the corresponding celebrations and family gatherings. Usual business language In the business community, English is increasingly spoken by Turkish businesspeople, especially among the younger businessmen. English in fact is the most common language for liaison with foreign companies in Turkey. Despite this, not all the business people can speak English well. Although some of them may indicate that they can understand English, it is still better to arrange an interpreter, which will surely be helpful for foreigners to communicate with their Turkish counterparts in a more effective and accurate way. Business gifts As regards business gifts, items for office purposes, such as quality pens (including those with your company logo), are acceptable items in the Turkish business community. But alcoholic items may not be an appropriate option. For example, while whiskey is welcome by many people, wine is not preferable as a gift in many circumstances. Turkish cuisine As Turks are largely Muslim, pork is not consumed in general. But there are markets in the big cities where pork and bacon are for sale. There is also an age limit of 18 for the sales of tobacco-related products and alcoholic beverages. However, following the establishment of the Food Auditing and Certification Research Association (G?MDES) in 2005, Turkey has been cashing in on the concept that virtually all goods and services can be certified Halal (the Arabic for “permissible”), including but not confined to food and beverages. Tipping Service charge normally is not included in restaurant bills nor on their listed prices. It is common to give tips at a rate of 10% to 15% of the total when checking the bill. However, tipping is not expected by taxi drivers, it is enough to pay the amount recorded by the meter in the vehicle.Turkey : Business Practices
Date for 2010 Date for 2011 Event 1 January 1 January New Year’s Day 23 April 23 April National Sovereignty and Children’s Day
(anniversary of the establishment of Turkish Grand National Assembly)1 May 1 May Labour and Solidarity Day 19 May 19 May Commemoration of Atatürk, Youth and Sports Day
(the arrival of Atatürk in Samsun, and the beginning of the War of Independence)30 August 30 August Victory Day (victory over invading forces in 1922) 9-11 September
1 SeptemberSeker Bayrami or Ramazan Bayrami
(Three-day festival when sweets are eaten to celebrate the end of the fast of Ramadan.)*29 October 29 October Republic Day (anniversary of the Republic of Turkey) 16-19 November 6-9 November Kurban Bayrami
(Four-day festival when sacrificial sheep are slaughtered and their meat distributed to the poor.)** The dates of these religious festivals change according to the Muslim lunar calendar.
from HKTDC
