Turkey aims to spread industry to deprived regions

• East and central regions neglected
• Plan spurred by peace with PKK
• FDI has fallen

Turkey has announced plans to build up manufacturing in regions away from the country’s industrialised northwest to boost employment and attract investment in deprived regions. 

The new zones, to be built as part of a long-term industrial programme, will cover an area 11 times larger than existing areas, according to Fatih Kacır, industry and technology minister. 

“We will offer our investors smart and green production bases with completed infrastructure and enriched with social facilities,” Kacır said last week.

In July treasury and finance minister Mehmet Şimşek told investors in London of the possibility of “massive economic gains” brought about by peace with the PKK, a Kurdish separatist group active in the neglected southeast.

A year ago the government announced plans for up to $14 billion in new projects to create 570,000 jobs in the region. 

Turkey currently has 371 industrial zones, covering a combined area of 130,000 hectares, according to the ministry. However, many of these are concentrated around the inland Sea of Marmara and the İstanbul region in the northwest, or along Turkey’s western seaboard. Less developed eastern and central provinces are under-represented. 

The new proposals however met with some scepticism from economists who questioned whether the announcement will lead to a significant pivot away from the northwest. 

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“Competitive power and logistics superiority play a key role,” Ayhan Zeytinoğlu, the head of the İstanbul-based Economic Development Foundation, told AGBI. “So for example, a car production factory in Kocaeli would not move to Diyarbakir in the east even if you gave free land or covered the costs of minimum wages.” 

Foreign investment has fallen in recent years, so the government should focus on reforms that attract overseas funds into industry, Zeytinoğlu said.

“I do not see foreign investment going into Anatolia if you just give them free land or even wage support.”