From Istanbul to Anatolia: Relocating Türkiye's industrial hub

Industrial policy is defined as selective public interventions aimed at transforming the production structure through subsidies, tax incentives, concessional financing and regulatory privileges directed at specific sectors, activities or firms, according to the International Monetary Fund (IMF). The primary objectives of these policies are to correct market failures, enhance productivity through economies of scale and learning-by-doing, develop domestic capacity in strategic sectors and support long-term growth. According to IMF findings, industrial policies can support productivity gains and technological convergence by increasing production and capacity in targeted sectors. Particularly in areas where economies of scale and learning effects are strong, the development of domestic production can reduce import dependency and enhance economic resilience. However, IMF analyses also reveal that such policies may entail short-term trade-offs, including potential price effects and fiscal implications.