Sustainable Investment in Turkey 2010

Abstract

The Turkish market is relatively small when compared with Brazil, Russia, India and China (BRIC) countries; Turkey is growing and is the largest emerging market (EM) in the process of accession to the European Union (EU). With prospective EU membership as an anchor and support from the International Monetary Fund (IMF) standby agreement, Turkey has made significant improvements in overcoming macroeconomic instability since 2001. Turkey is now a functioning open market economy with an ongoing democratic consolidation process. With its solid banking system, robust public finances, and strong growth prospects, Turkey has become a market that investors can no longer ignore. The nation still faces structural problems. Low savings rates and a current account deficit contribute to a persistent reliance on external finance. Turkey's economy remains vulnerable to changes in external financing conditions. The main objectives of this report are 1) to understand and provide a review of the current state of the Sustainable Investment (SI) market in Turkey; 2) to identify the drivers and obstacles for sustainable investments and assess the commercial feasibility of different approaches and initiatives that may stimulate the SI market in Turkey; and 3) to analyze the institutional prerequisites and interventions that will fuel the development of investments, which would, in turn, encourage a better allocation of local and international capital to sustainable enterprises and hence support sustainable development of the Turkish economy.