Thursday, April 12, 2012

New economic incentives target the Southeast

If the residents of Hasankeyf and environs were to develop an investment and economic development strategy for Southeastern Anatolia, how might it differ from Turkey’s official regime of economic incentives?

“We are changing the region rapidly with big projects, schools, the most modern hospitals, roads, bridges, dams, and airports,” said Prime Minister Recep Tayyip Erdoğan, referring to Southeastern Anatolia during a speech announcing Turkey’s new economic incentive program.
Fog over Hasankeyf
The Ilısu Dam would flood Hasankeyf, making way
for electricity, fishing and water sports 

Dividing the country's 81 provinces into six categories of economic wealth (map), the new program offers higher incentives for industrial investments in less developed areas, in order to close the gap between Turkey's rich and poor regions.

It also seeks to promote market consolidation and economies of scale by giving preference to large investments. In other words, investors building large manufacturing facilities in the Southeast would see the biggest incentives, mainly in the form of reduced costs for labor, financing, and taxes.

In addition to steering investments toward less developed regions, there are special incentives for investments in economically strategic sectors such as Defense and Space & Aviation, which will be supported at the same level as those in Category Five provinces, regardless of geographic location. Investments in primary and secondary education; mining; rail, sea, and land transportation; and cultural preservation and tourism in developing regions will receive similar levels of support.

It is worth noting that by favoring large projects, the incentive program runs the risk of overlooking local initiatives, where faith, history, nature, and physical activity can be integrated with sustainable tourism.

It is also possible that the special incentives for tourism could actually open a door for entrepreneurs to propose innovative alternatives. What might happen if a large and socially minded investor backed a locally generated strategy for Hasankeyf and Tur Abdin?


1 comment:

  1. Thanks for the report on the PM's incentive program. The goals of the proposal sound good since it's obviously important to promote a better life for people with productive jobs and better educational opportunities. But this passion for the huge development projects - the 'crazy' projects - have a seemingly unstoppable, steamroller-like momentum which flatten the more modest, less profit-oriented initiatives. Let's see how it unfolds.