Japanese companies’ direct investment in Turkey showed a significant increase in recent years while many other investors seek new investment opportunities in the country not only for its domestic potential but also for being a hub for regional trade.
Japanese companies are looking forward to the conclusion of the bilateral Economic Cooperation Agreement which is still being negotiated between the two countries.
There are three main reasons behind the interest of the Japanese business world to Turkey, according to Kenichiro Yamanishi, Japan-Turkey Economic Committee chair and executive corporate adviser of Mitsubishi Electric Corporation.
“One of the reasons is that the population of Turkey is big, and the majority of its population is young generations. So, they have potential,” Yamanishi told Hürriyet Daily News in an interview.
The second thing is historical relations between Turkey and Japan, he noted, emphasizing people of both countries have sympathy towards each other. This feeling has a background that dates back to the Ertuğrul Gazi incident and as well as the evacuation of Japanese citizens from Iran by a Turkish Airlines airplane during the Iraq-Iran war, Yamanishi noted.
Turkey’s geographic location is crucial
“The third one and the biggest point is the geographic location of Turkey since it links between European countries and central Asian countries as well as the Middle East and African countries,” he stated.
“Turkey also has potential with its domestic market, but it can also function as a gateway for the European, African, Central Asian countries, so, to the other countries,” he said.
The two countries must strengthen their ties, Yamanishi underlined as Turkey and Japan have their unique advantages, noting they should merge these capacities.
“We expect more progress if we can merge the positive aspects of the two countries. For the Japanese one: Our technology and investment potential, along with Turkey’s historical experience [in the region], utilizing its potential abilities for production, and using its locational advantage. If we can merge these, we can see a further advance and progress,” he said.
The businessman recalled that many of the Japanese firms, such as Mitsubishi Electrics, has been installed their air-conditioning factories in Turkey. Toyota has been in Turkey since the early ages, he said, adding, “Once Mr. Hayakova from Toyota and vice president of the Japan Business Federation mentioned that the quality of products produced in Turkey is very good. This statement was made several years ago. When he was asked the same question half a year ago, he said the quality of Turkish products were better than Japanese ones these days.”
Asked which industries have the potential for Japanese to invest in Turkey, he mentioned the current potential in the automobile and air conditioning industries, and for the near future, a potential is seen in the space industry, thus, air navigation.
“Japanese companies already procured satellite in Turkey. Other fields such as finance, tourism and hotel industries, factory automation and railway industries have the potential and are attractive to Japanese companies,” he added.
There are three Turkish companies that are members of the Japan Business Federation, Çalık, Tosya and Turkish Airlines, Yamanishi noted. Probably the food, agriculture and tourism industries have been in their interests in the Japanese market, he added.
Erdoğan, Abe target strategic partnership
Having long and friendly relations in history, President Recep Tayyip Erdoğan and Japanese Prime Minister Shinzo Abe have decided on a strategic partnership in bilateral ties, Katsuhiko Takahashi, assistant minister at the Japanese Foreign Ministry responsible for the Middle East, told Hürriyet Daily News.
“Since then, the two leaders had 11 meetings on bilateral issues, and each party agreed to strengthen the relations further on a various level not only limited to economy but also culture, education and so on,” he said in an interview.
The Economic Partnership Agreement (EPA), still under negotiation, is important for Japan, Takahashi said, stressing that the deal will raise economic relations to a higher level. Although Erdoğan expressed willingness to conclude it by 2019, they hope they will be finalized in 2020.
“One of the important elements for us is negations on the Economic Partnership Agreement. We have been negotiating this agreement for almost five years. We had 17 rounds of negotiations. We are now trying to accelerate the final agreement. Each side confirmed a strong intention. Contentious issues have already been identified. But all those contentious [issues] need a political decision making. So, we are now finding out what will be the possible conclusion when it comes to the political issues,” he stated.
EPA focuses on the area of investment and trade. “Once this agreement is done, we will have more trade exchange. More Japanese companies will invest in Turkey and vice-versa. Turkey has a lot of potential as a market and as a base to export goods to Europe via Turkey. Those are the merits and reasons why we are seriously seeking to conclude the EPA,” he said.