Prime Minister Binali Yildirim last month unveiled an investment support package for the conflict-torn provinces in Turkey’s mainly Kurdish east and southeast, including a pledge perhaps unprecedented in the world. Speaking in Diyarbakir, the largest city of the region, Yildirim promised that the government would build dozens of turnkey factories and hand them over to entrepreneurs.
The package aims to prop up the region’s economy and stop the flight of investors who have been scared away by the fighting between the security forces and Kurdish militants, who have also been attacking construction sites, killing workers and burning down machinery. Along with incentives, tax facilities and infrastructure projects to rebuild cities devastated in the latest round of violence, Yildirim pledged the government would build 80 factories in the region each year and hand them over to entrepreneurs to operate.
Here are the key points of the plan, according to the prime minister’s statements: “Centers of attraction” will be created in 23 provinces, divided into five clusters. Van, for instance, will be the center of one cluster, which will include three other provinces. “The state will build factories and hand them over to those willing to make investments there,” Yildirim said, stressing the private sector would be relieved from the burden of fixed investments such as land and buildings. Every year, eight provinces will get 10 factories each, meaning 80 new facilities every year. The factories will provide 200 to 800 jobs each, meaning an average of 40,000 new jobs every year. Zero-interest loans will be available for machinery and equipment. Such incentives, including operational loans, will be available until 2027.
The government is also pledging a “purchase guarantee” for the products the factories will manufacture. In other words, the output will be free of marketing risks, with the state buying everything.
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