Thursday, 29 September 2016 | RSS

As 2011 ticked over into 2012, many in Turkey celebrated how full of economic achievements the last year had been.

Whereas the joy shown on every government official’s face nowadays may be justified, they are still being warned against complacency or what may also be termed as “over-euphoria of victory.” The Investment Support and Promotion Agency of Turkey (ISPAT) is certainly one of those institutions heeding calls for continuous efforts to bring much brighter days to the country.



A sector-based analysis, as part of which the agency’s experts study potential investors one by one in the fields highly important to Turkey, strengthens confidence in the prospect of higher foreign direct investment (FDI) inflow to Turkey. According to information ISPAT President İlker Aycı provided at a meeting with a group of journalists late on Tuesday, the agency has already completed its analysis of the automotive and chemicals/petrochemicals sectors, short listing 12 and “nearly 20” companies, respectively, that may show a serious interest in investing in Turkey. Aycı says his agency has already started courting those companies and a couple of them are likely to announce their investment plans to the country before the year ends. “Here, we are trying to see which company can make how much investment to Turkey, their global corporate plans and how suitable they are for Turkey. We are focusing particularly on the fields where Turkey can be competitive on a world scale,” Aycı told the group.



Turkey received $11.5 billion in FDI in the first 10 months of last year, 82 percent more than what it did in the same period a year earlier. Turkey attracted only $6.3 billion in FDI in January-October 2010. The most attractive sectors for foreigners to invest in were banking and insurance, with $5.4 billion in the first 10 months of this year. They were followed by the energy and manufacturing sectors, which received $2.7 billion and $1.8 billion, respectively, in international capital in the given period.

Turkey has become a safe haven for European investors as they try to park their cash at a time when the European Union is having a hard time finding a lasting solution to the ongoing debt issues in a number of its members, including the continent’s largest economies, such as France, Italy and Spain. Eighty-six percent of all the FDI received in the first 10 months of last year came from European countries. According to the United Nations Conference on Trade and Development (UNCTAD), Turkey attracted $9.1 billion in FDI in 2010 and became the 27th most appealing destination for investment around the world. Turkey ranked 30th in UNCTAD’s list of the world’s top FDI destinations in 2009, attracting $8.5 billion in FDI. The country attracted the highest amount of FDI between 2006 and 2008, with an annual average of more than $20 billion.

BRICS saturated, now Turkey’s turn

For many years, Turkey was mostly compared to the countries in Central and Eastern Europe, such as Poland, the Czech Republic and Hungary, when it came to measuring how enticing it was for international investments. Acknowledging this, Aycı said, Turkey has now become the most attractive destination for foreign investors interested in doing business outside what is together called the BRICS countries (Brazil, Russia, India, China and South Africa) because they think these popular markets are saturated. In yet another sign of Turkey’s appeal, Aycı heralded on Tuesday that an Indian group is about to conclude some $250 million in investment to the country, which has benefited from political stability and also shown strong economic growth in the past decade.

The ruling Justice and Development Party (AK Party) has been in office since late 2002, bringing its share of the votes to as high as nearly 50 percent in the last elections. Under AK Party rule, Turkey has seen its budget deficits diminish to nearly 1 percent of its gross domestic product (GDP), whereas its economy enjoyed almost uninterrupted growth, creating ever more employment opportunities for its young population. In the same period, the government also managed to bring the country’s public debt-to-GDP ratio to as low as 40 percent last year from over 100 percent at the end of 2001. The inflation in consumer prices, likewise, came down to below 10 percent recently from nearly 70 percent a decade ago. The Indian corporation, which Aycı did not name but found it more important to mention that it will invest some $250 million in Turkey, will follow another Indian group, Aditya Birla, which recently invested $510 million to establish a viscose staple fiber (VSF) plant in the southern province of Adana. Aycı said his agency was in contact with Aditya for two years preceding its final decision to go ahead with the said investment and not channel it to elsewhere in the region.

Source:  January 16, 2012 TODAY'S ZAMAN, İSTANBUL