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Wooing Gulf investors

ISTANBUL: Turkish officials will travel to Gulf states to attract foreign investment, Prime Minister Tayyip Erdogan said yesterday.

Turkey, which has grown strongly since 2001, is highly susceptible to external shocks and has seen a rapid flight of capital since the current global economic crisis turned investors sour on riskier emerging markets.

Turkey has attracted some $12 billion in the first 10 months of the year and is targeting $15bn by the end of the year, sharply lower than investment of $22bn last year.

"We are holding talks with global capital players, after the Eid holiday we will be heading to the Gulf and neighbouring countries, in order to continue our talks," Erdogan said.

Turkey has been trying to strengthen ties with its Islamic neighbours, including the Gulf states.

Turkey has also been in talks with the International Monetary Fund for a new agreement, after its last $10bn loan deal expired last May.

A Moody's analyst said the country would fall into recession without funds from the global lender.

But Turkey has denied that it could face a recession, and Erdogan has said that he has been looking into swap facilities with other countries in order to soothe markets.

Business leaders have criticised the government for failing to act to prevent the crisis from hitting Turkey's real economy.

Government sources have said they expect flat growth next year with lower demand from Turkey's large industrial sector and lower demand at home and abroad.

Erdogan also said that the government was not planning on raising value-added taxes on certain items, including foods.

"There are no such plans. Never, not on food. I don't think so," said Erdogan.

Government officials that the IMF wants Turkey to raise value added taxes on certain items to 18 per cent from a current 8pc.



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