The Medium-Term Program, prepared by the Ministry of Treasury and Finance and the Presidency of Strategy and Budget, is a key document in determining macro policies for the period 2024 to 2026. Strengthening the investment ecosystem, financial stability initiatives, and growth-oriented policies are being closely monitored, particularly by the business community.
It is anticipated that this policy document for the new period will introduce new regulations and support for the business world, the investment ecosystem, and entrepreneurs. The Medium-Term Program document emphasizes financial stability and combating general price volatility. In this context, the goal is to improve the current account balance through policies aimed at supporting technology-focused and high-value-added production, green and digital transformation goals, and strengthening the investment and entrepreneurship environment.
As Branchout Turkey, we have strived to prepare a document that will be easy for our stakeholders to read. Our goal is to summarize key topics such as direct capital investments, international investments, industry and growth, the enterprise ecosystem, and entrepreneurship under frameworks such as access to finance, digital transformation, green transformation, and regulatory compliance.
The Medium-Term Program's Impact on the Business and Investment Ecosystem
We observe that the scope of the program document prepared for the 2024-2026 period has been expanded compared to the previous year. In addition to the green transformation policies introduced in the previous period, a digital transformation topic has also been added, and policies aimed at strengthening the enterprise ecosystem have been expanded.
Important Call for Direct Investments (Greenfield Investments)!
Direct investments are a subject that is taken into serious consideration by all world economies in terms of employment expansion, technical knowledge transfer (know-how), closing the foreign trade deficit and providing significant opportunities for growth.
When this issue is evaluated from the perspective of the Turkish economy, a significant decline in the US dollar value of direct capital investments has been observed. In this regard, we see significant steps in the Medium-Term Policy to implement certain policies and measures aimed at increasing the level of greenfield and direct investments.
What does the program include regarding direct capital investments?
Developing an effective machinery in the expropriation process for the provision of land for strategic and large-scale investments, expanding industrial zones and establishing new logistics lines by integrating Treasury-owned properties into the economy.
Completion of legislative preparations for the development of operating and management models of logistics centers and connection lines.
By making the structure of the Coordination Board for the Improvement of the Investment Environment (YOİKK) more effective, more effective investor contacts will be ensured and the timeframes for procedures such as permits, licenses and permits for incoming investments will be shortened.
Creating an investment inventory for the benefit of investors and encouraging investments in semiconductors, electric vehicles, batteries and critical technology products in their value chain,
Updating the Green Deal Action Plan (1) and strengthening the dialogue mechanism with the European Union to increase competitiveness and Türkiye's position in supply chains in line with sustainable development and green transformation goals,
In addition to making development and investment banking more effective in financing investment projects, increasing incentives for private banks to support investments more.
(1)The Green Deal Action Plan was prepared by the Ministry of Commerce in 2021.
Active Diplomacy for Turkish Companies Investing Internationally!
The program includes efforts to initiate an era of active diplomacy for Turkish companies with international investments and to prevent loss of rights arising from tax updates.
What does the program cover for Turkish companies with international investments?
Strengthening the structure of the Istanbul Arbitration Center (2) and increasing its international visibility
Completion of the work on the harmonization process of the Personal Data Protection Law with the European Union acquis, especially the European Union General Data Protection Regulation (GDPR) (3)
Determining national standards based on international cooperation principles in the digital transformation of the business and investment environment
Pursuing active diplomacy to prevent loss of rights arising from tax updates for Turkish companies investing internationally.
(2) Istanbul Arbitration Center (ISTAC): It is an independent, impartial and autonomous institution that provides arbitration and mediation services to resolve disputes between commercial actors both in Türkiye and abroad.
(3) The European Union General Data Protection Regulation (GDPR) is a regulation in European Union law concerning data protection and privacy for all individuals within the European Union and the European Economic Area. The GDPR primarily aims to empower individuals to take control of their personal information and to ensure compliance of companies within the EU with this regulation.
Technology-Focused Structural Transformation in Industry and Export-Oriented Growth Target!
The policy text presents a key emphasis on increasing exports through a vision of technology-focused value-added production in the industrial sector. The program document projects a 2023 export target of $255 billion, followed by targets of $267 billion in 2024, $283.6 billion in 2025, and $302.2 billion in 2026.
What does the program offer as the basic policy towards the technology-focused structural transformation and export-oriented growth target in industry?
Supporting technology-focused investments in industry, preparing product-based investment roadmaps and providing investment supports for strategic products and technologies compatible with the Development Plan and the National Technology Initiative targets.
Encouraging technology and product development processes through collaboration between private sector, universities and public R&D centers, and transferring patented technologies to industry,
Expanding the use of green technologies as well as digital technologies such as artificial intelligence, autonomous systems, cloud computing and big data analytics in industry,
Supporting the development and production of critical products and technologies with domestic resources through new calls to be opened within the scope of the Technology-Focused Industrial Move Program,
Encouraging investments in semiconductors, electric vehicles, batteries, and critical technology products in their value chains, and supporting studies on critical materials and components needed in strategic sectors such as electronics, aerospace, defense, and biomedical sectors,
Expansion and effective operation of overseas logistics distribution networks,
Improving the structure of Türk Eximbank and providing financing sources that prioritize green and digital transformation for high-tech, high-value-added export transactions,
Plans to diversify the export financing mechanism to cover the additional costs that carbon pricing will create on sectors are coming to the fore.
Expansion of the Entrepreneurial Ecosystem and Steps for Entrepreneurs!
Among the policies and measures included in the program, one of the most prominent topics is the entrepreneurial ecosystem and venture support. Important messages are included regarding increasing the number of national enterprises and companies receiving investment from international investors.
We see that a series of measures and practices will be introduced, from strengthening intellectual property rights to increasing investment support and efficiency.
What does the program promise to the startup ecosystem and entrepreneurs?
Strengthening the legal infrastructure regarding the intellectual property system, developing systems that support the establishment of intellectual property rights, and completing processes for the protection of trade secrets,
Diversifying the funding sources provided to venture capitalists and increasing seed support for startups to scale companies, eliminating the problems encountered in the angel investment and crowdfunding ecosystem, which provides support especially to seed-stage companies, and increasing efforts to improve the ecosystem,
Providing support to national projects for Turkish researchers abroad and encouraging them to establish domestic ventures,
Increasing financial support for high value-added export activities in scaled enterprises and including private banks in financial support.
Encouraging financial institutions to invest in technology-based startups by purchasing their shares and providing financing by accepting their patents as collateral,
Having programs and strong promises to implement incentives for the employment of qualified personnel.
A General Assessment Instead of a Conclusion
We see that the program includes important policies and measures for the business world throughout. Tightening access to finance and price stability are emphasized. Consequently, working capital management is a crucial issue that requires careful consideration. Businesses should carefully consider "digital and green transformation to increase exports" to access qualified financing during a period of monetary tightening. The impact of regulations on businesses, particularly within the context of green transformation, should be evaluated.