FDI in TURKEY by tdl18804

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									                            FDI in TURKEY

                          Undersecretariat of Treasury



                               Özge DUMLUPINAR
                                Treasury Expert



                                  October 19, 2009
                                     İSTANBUL
YOIKK Secretariat, 2008
FDI in TURKEY

     ► Outline


      Global Trends in FDI Inflows

      Basic FDI Statistics of Turkey

      FDI Policy of Turkey


YOIKK Secretariat 2008                  2
FDI in TURKEY




        I. Global Trends in FDI Inflows



YOIKK Secretariat 2008                    3
Global Trends in FDI Inflows


     ►FDI inflows: severely affected worldwide by the
      economic and financial crisis in 2008.
                         Fall from a historic high of $1,979 billion in 2007 to $1,697
                         billion in 2008 (a decline of %14)
                          Slide continuation into 2009 : Fall in inflows by %44
                         compared with their level in the same period in 2008.

           ►Expectation to fall from $1.7 trillion to below
           $1.2 trillion in 2009.
           ►Slow recovery in 2010 (to a level up to $1.4
           trillion) and 2011 (approaching $1.8 trillion)


YOIKK Secretariat 2008                                                                    4
Global Trends in FDI Inflows


       ►Change in the investment landscape:
                          Decline in FDI inflows of developed countries by %29
                         Surge to %43 in global FDI inflows in the share of
                         developing and transition economes in 2008.

       ►Decline in the numbers and values of cross
        border M&As in 2008, also decline in greenfield
        investments in the last quarter.
       ►Intentions of the majority (%58) of large TNCs to
        reduce their FDI expenditures in 2009 from their
        2008 levels.

YOIKK Secretariat 2008                                                            5
Global Trends in FDI Inflows


       ► Despite concerns about a possible rise in investment
         protectionism, greater openness in FDI policies
         worldwide:
                          During 2008, 110 new FDI –related measures were
                         introduced, of which 85 were more favourable to FDI.
                         Compared to 2007, the percentage of less favourable
                         measures for FDI remained unchanged.

       ► Trend of scrutinizing foreign investments for national
         security reasons.
       ► Expansion in the network of IIAs: signature of 59 new
         bilateral investment treaties and increase in the number
         of DTT and international agreements with investment
         provisons.
YOIKK Secretariat 2008                                                          6
FDI in TURKEY




          II. Basic FDI Statistics of Turkey




YOIKK Secretariat 2008                         7
   Basic FDI Statistics of Turkey
               Chart 3: FDI Inflows in Turkey Between 1995 and 2008

USD Million

   24.000
                                                                     22.046
   22.000
                                                            20.185
   20.000
                                                                              18.187
   18.000

   16.000

   14.000

   12.000
                                                   10.031
   10.000
                  8.469
     8.000

     6.000

     4.000                                 2.785
                                   1.702
     2.000                 1.082

          0
               1995-2001   2002    2003    2004    2005     2006     2007     2008



Source: CBRT

YOIKK Secretariat 2008                                                                 8
Basic FDI Statistics of Turkey


     FDI Inflows and Their Distribution by Components Between
     1995-2008 (USD million)
                                   1995-2001
                                                 2002       2003     2004     2005     2006     2007     2008
                                  (Cumulative)
 Cumulative FDI (net)                    8.469    1.082      1.702    2.785   10.031   20.185   22.046   18.187
   FDI                                   8.469    1.082        704    1.442    8.190   17.263   19.120   15.250

          Capital (Net)                  8.469     566        556      888     8.053   16.876   18.099   14.672
                Inflow                   9.547     571        564      986     8.454   17.533   18.842   14.707
                Outflow                 -1.078      -5         -8      -98      -401     -657     -743      -35
          Reinvested Earnings a              -          -     132      204       81      106       294     204
         Other Capitalb                      -     516         16       350       56      281      727      374
    Real Estate Purchases (Net)              -       -        998     1.343    1.841    2.922    2.926    2.937
Source: CBRT




YOIKK Secretariat 2008                                                                                          9
   Basic FDI Statistics of Turkey


Top 5 Inflows in 2008
                                                   Home Country of                     Foreign Direct
                                                                     Ratio of Shares
  Acquired Company             Acquiring Company   the Acquiring                       Investment
                                                                     Taken Over (%)
                                                   Company                             (USD Million)
  Migros                       Moonlight Capital   Luxembourg                   50.8                    1,918
  Türkiye Finans               The National
                                                   Saudi Arabia                 60.0                    1,080
  Katılım Bankası              Commercial Bank
  Ereğli Demir Çelik b         Arcelor-Mittal      Luxembourg                   11.3                     959
                               National Bank of
  Finansbank                                       Greece                        9.7                     697
                               Greece
                               British American
  Tekel Sigara c                                   UK                          100.0                     611
                               Tobacco
  Toplam                                                                                                9,456
Source: Undersecretariat of Treasury, CBRT




YOIKK Secretariat 2008                                                                                          10
Basic FDI Statistics of Turkey

       FDI Inflows by Sector, 2008 (USD Million)

   Rank                                 Sector                 Capital           (%)
          1     Financial Intermediation                                 5,925          39.7
          2     Manufacturing                                            3,828          25.7
          3     Wholesale and Retail Trade                               2,073          13.9
          4     Electricity,Gas and Water Supply                         1,053           7.1
          5     Construction                                              736            4.9
          6     Real Estate, Renting and Business Activities              673            4.5
          7     Mining and Quarrying                                      173            1.2
          8     Transport, Storage and Communication                      169            1.1
          9     Health and Social Work                                    150            1.0
                Other Community, Social and Personal Service               59            0.4
        10
                Activities
                Other                                                      72            0.5
                Total                                                14,911            100.0
 Source: CBRT

YOIKK Secretariat 2008                                                                         11
Basic FDI Statistics of Turkey

   FDI Inflows by Home Country 2007-2008 (USD million)
                           2007                                            2008

    Rank        Country      Capital       (%)     Rank        Country        Capital      (%)

           1 Netherlands           5,443    28.4          1 UK                     2,294    15.4
           2 USA                   4,212    22.0          2 Luxembourg             2,086    14.0
           3 Greece                2,360    12.3          3 Netherlands            1,755    11.8
           4 Germany                954      5.0          4 Saudi Arabia           1,244     8.3
           5 UK                     702      3.7          5 Germany                1,217     8.2
           6 Portugal               701      3.7          6 USA                     863      5.8
           7 Kazakhstan             613      3.2          7 Spain                   825      5.5
           8 Spain                  583      3.0          8 Greece                  779      5.2
          9 Luxembourg              583      3.0       9 France                     685      4.6
         10 Brazil                  467      2.4      10 Austria                    569      3.8
              Other                2,518    13.2            Other                  2,594    17.4
              Total               19,136   100.0            Total                 14,911   100.0
       Source: CBRT

YOIKK Secretariat 2008                                                                             12
Basic FDI Statistics of Turkey
     Breakdown of Companies with International Capital According to
     their Country of Origin
                                                  1954-2002                                                         1954-2008
                    Countries                                      2003    2004    2005    2006     2007    2008
                                                (Cumulative)                                                          Total
        European Union                                     2.787     436   1.006   1.545    1.979   2.084   1.789      11.626
        Germany                                              925     137     355     469      556     563     595       3.600
        The Netherlands                                      467      65     138     192      270     255     286       1.673
        United Kingdom                                       351      67     130     308      461     456     248       2.021
        Other European Countries                           1.044     167     383     576      692     810     660       4.332
        Other European Countries
      (Excluding EU)                                        585      134     265     320     372      492     548       2.716
        African Countries                                    83       30      37      55      43       47      52         347
        North America                                       349       53      98     111     136      165     149       1.061
        U.S.A.                                              326       44      87      97     113      132     130         929
        Canada                                               23        9      11      14      23       33      19         132
        Central-South America And
      Caribbean                                               39       5      12      16       10      21      12         115
        Near And Middle Eastern Countries                  1.060     255     349     380      410     506     567       3.527
        Azerbaijan                                            91      37      51      55       81     120     136         571
        Iraq                                                 161      38      46      57       73     112      88         575
        Iran                                                 319     102     123     121      109     106     139       1.019
        Other                                                489      78     129     147      147     168     204       1.362
        Other Asian Countries                                328     102     151     163      165     278     233       1.420
        China                                                 98      41      56      32       22      42      46         337
        South Korea                                           47      12      16      18       12      24      13         142
        Other                                                183      49      79     113      131     212     174         941
        Other Countries                                       63      14      30      23       54      36      47         267
        Total                                              5.294   1.029   1.948   2.613    3.169   3.629   3.397      21.079
     Source:Undersecretariat of Turkey, Porvisional Data

YOIKK Secretariat 2008                                                                                                          13
Basic FDI Statistics of Turkey

                 FDI Inflows by economy (USD million)
                  Rank               Country              2008
                               1 United States          316.112
                               2 France                 117.510
                               3 China                  108.312
                               4 United Kingdom          96.939
                               5 Russian Federation      70.320
                               6 Spain                   65.539
                               7 Hong Kong, China        63.003
                               8 Belgium                 59.680
                               9 Australia               46.774
                             10 Brazil                   45.058
                             20 Turkey                   18.198
                  Source: WIR 2009

YOIKK Secretariat 2008                                            14
Basic FDI Statistics of Turkey

                  FDI Inflows by West Asia region (USD million)
                    Rank          Country                2008

                             1 Saudi Arabia             38.223

                             2 Turkey                   18.198

                             3 United Arab Emirates     13.700

                             4 Qatar                     6.700

                             5 Oman                      2.928

                    Source: WIR 2009




YOIKK Secretariat 2008                                            15
Basic FDI Statistics of Turkey

          FDI Stock by economy (USD million)
            Rank              Country              2008
                         1 United States       2.278.892
                         2 France               991.377
                         3 United Kingdom       982.877

                         4 Hong Kong, China     835.764
                         5 Germany              700.471
                         6 Netherlands          644.598
                         7 Spain                634.788
                         8 Belgium              518.940
                         9 Canada               412.268
                         10 China               378.083
                         40 Turkey               69.871
           Source: WIR 2009

YOIKK Secretariat 2008                                     16
Basic FDI Statistics of Turkey

                  FDI Stock by West Asia region (USD million)

                   Rank         Country               2008

                           1 Saudi Arabia           114.277

                           2 Turkey                  69.871

                           3 United Arab Emirates    69.420

                           4 Lebanon                 24.170

                           5 Qatar                   22.055

                  Source: WIR 2009




YOIKK Secretariat 2008                                          17
FDI in TURKEY




                         III. FDI Policy of Turkey




YOIKK Secretariat 2008                               18
FDI Policy of Turkey


       ►Three basic components:

              Increasing predictability in the economy
                Economic stability
                Political stability
              Maintaining a functioning free market
               economy
              Creating an investor friendly environment


YOIKK Secretariat 2008                                     19
FDI Policy of Turkey
       ►Creating an Investor Friendly Environment:
        Investment Environment Reform Programme


                           Diagnosis on Problem Areas of
                         Investment Environment in Turkey



                                    Determination of Priorities with All
                                            Relevant Parties




                                                Design of an Appropriate Structure
                                                   Involving the Stakeholders



YOIKK Secretariat 2008                                                               20
FDI Policy of Turkey


       ►Creating an Investor Friendly Environment: Two
        basic platforms based on public-private sector
        dialogue and cooperation

              Coordination Council for the Improvement of
               Investment Environment (YOİKK)

              Investment Advisory Council (IAC)



YOIKK Secretariat 2008                                       21
FDI Policy of Turkey
                         YOIKK STRUCTURE

     Coordination Council for the Improvement                    Investment
        of Investment Environment (YOIKK)                         Advisory
                                                                   Council


       Steering Committee


         Location of     Foreign Trade
                                              Licensing           Taxes and
         Investment       & Customs                               Incentives

          Company
                         Employment      Intellectual Property   Foreign Direct
        Establishment
                                                 Rights           Investment
                                                                  Legislation
         Research &
                          Corporate          Investment
        Development                                                  SMEs
                         Governance           Promotion

YOIKK Secretariat 2008                                                            22
FDI Policy of Turkey

                                   YOIKK WORKING PRINCIPLES

     AGENDA SETTING                             WORKING                            OUTCOMES


   •   Recommendations of public
       institutions                                   YOIKK
   •   Recommendations of
       private sector                                                         •   Draft regulations
   •   Assessments in                                                         •   Institutional capacity
       international indices and                   STEERING
                                                   COMMITTEE                      building
       publications
   •   IAC recommendations
                                                                              •   Recommendations related
                                                                                  to enforcement
   •   Technical Committee Action
                                                 TECHNICAL
       Plans
                                                 COMMITTEES
   •   Basic policy guides
   •   Twinning Project


                          Council of Ministers is regularly informed about YOIKK studies.

YOIKK Secretariat 2008                                                                                     23
FDI Policy of Turkey
                             IAC STRUCTURE

       Executives of leading
        multinational firms,
       Heads of international
        institutions (IMF, World Bank,
        European Investment Bank),
       TOBB, TUSİAD, YASED, TİM

          Investment Advisory Council of Turkey had 5 meetings so far.

                         V. Meeting      June 18, 2008
                         IV. Meeting     June 11, 2007
                         III. Meeting    June 29, 2006
                         II. Meeting     April 29, 2005
                         I. Meeting      March 15, 2004
YOIKK Secretariat 2008                                                   24
FDI Policy of Turkey

       ► The main achievements in the investment environment
         of Turkey:
               FDI law
               Simplification of Business Start-Up
               Investment Support and Promotion Agency of Turkey
               Trade Registry Automation Project
              Employment Package
              Social Security Reform
               Regulations on mining and fuel sectors
               Minimum living allowance system
              Communique on Principles to be Followed by Joint Stock
               Corporations Subject To Capital Market Law
              Increased flexibility in the labor market
              Improved infrastructure in strategic sectors
              Improved protection for intellectual property rights
              New investment incentive system
YOIKK Secretariat 2008                                                  25
FDI Policy of Turkey

  The performance of Turkey in the international investment indices

        Fraser Institute/Economic Freedom
                                                  Transparency International /Corruption
                        Index
                                                            Percepitons Index
                         2006    2007    2008
                                                                    2006     2007    2008


   No of countries         141     141      141   No of
                                                                     163      180     180
                                                  countries
   Ranking of                                     Ranking of
                           80       94       90                       60       64       58
   Turkey                                         Turkey


      IMD/World Competitiveness Yearbook            WEF/Global Competitiveness Report

                         2007    2008    2009                        2007    2008    2009


   No of countries         55      55        57   No of countries      131     134    133

   Ranking of                                     Ranking of
                           48      48        47                         53      63      61
   Turkey                                         Turkey



YOIKK Secretariat 2008                                                                       26
FDI Policy of Turkey


       ►Useful Links

              www.hazine.gov.tr
              www.yoikk.gov.tr




YOIKK Secretariat 2008             27
                            FDI in TURKEY

                          Undersecretariat of Treasury



                               Özge DUMLUPINAR
                                Treasury Expert



                                  October 19, 2009
                                     İSTANBUL
YOIKK Secretariat, 2008

								
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