Peace talks between the Turkey and the PKK, a Kurdish militant organization, are making the biggest progress seen in decades in resolving Turkey’s difficult relationship with its Kurdish population. Although many roadblocks to the successful completion of the process remain, the peace talks warrant multinationals’ attention as they could create increased investment opportunities. The process is already supporting Turkish stocks and ratings agencies are speaking about its potential to bring Turkey to investment-grade status.
Here are some of the implications of successful peace talks for multinationals operating in Turkey:
- Access to new customers – Improved physical security in southeastern Turkey will lead to decreased shipping and insurance costs for getting goods to customers in the region
- Increased private investment – Despite generous government incentives, companies have shied away from investing in the region due to security concerns. Private investment will begin to pick up as companies gain confidence that the ceasefire will hold. Private investment will be led by Turkish players who have deeper regional knowledge and who will be more aggressive in seizing investment opportunities. Multinationals should ensure that they monitor competitor activity in the region to avoid losing market share
- Attractive export hub – Producing in southeastern Turkey could provide avenues for exporting into northern Iraq, GCC, and the Levant. Companies looking to leverage Turkey’s regional hub position may be able to use southeastern Turkey as a cheap production and sales hub
- Branding opportunity – Companies looking to capture market share among the Kurdish population can use the peace process to position their products as part of a historic, positive change happening in Turkish society, especially among young people