Turkey’s impressive FDI draws international investment interest
Posted by meb at March 24th, 2007
Commenting on the 2001 economic crisis in Turkey, Chairman of Turkish-U.S. Business Council Ferit Şahenk said: “Turkey offers a 72 million large consumer market. On the one side there is aging Europe and on the other there is changing Middle East and there is no need to say much on the opportunities Turkey offers in such an international context.” His comments were among those of many speakers at a conference in New York City on Friday, where many big names form the international investment community gathered to discuss and examine Foreign Direct Investment (FDI), private equity, and real estate investments in Turkey. Some also offered a closer look at the restructuring process that took place among the Turkish companies after the 2001 economic crisis. Reassuring investors that his government is a FDI friendly one, Ali Babacan, State Minister of the Economy and one of the speakers at the conference, said that after long years of dramatic failure in attracting FDI, the inward FDI flows to Turkey have accelerated particularly in the last couple of years. “In a five year time period it turned into an investors’ paradise,” Nick Rohatyn, CEO & CIO of The Rohatyn Group. Lower inflation and interest rates and higher growth rates have played a role in such a sizeable change, Rohatyn said. “More importantly, willingness and ability to change among the Turkish businesses is the key for such a success.”The amount of FDI was only $19 billion between 1980 and 2003. The amount of FDI in recent years, however, has reached $1.7 billion in 2003, $2.8 billion in 2004, $9.6 billion in 2005 and almost $18 billion by the end of 2006.
Turkey’s FDI for 2005 higher than world average:
Moreover, FDI inflows as a percentage of gross fixed capital formation were 13.6 percent in 2005, higher than world average of 9.4 percent. Finally, FDI stock in Turkey in 2006 more than doubled the stock in 2000 and has become $60 billion. Despite that, the share of FDI stock in GDP has reached only 16 percent, which is still unsatisfactory when compared to world average of 22.7.
The conference was held by The American Turkish Society and Turkish-U.S. Business Council (TAIK)/DEIK, an organization founded in the aim of enhancing ties between Turkey and the United States.Speakers of the conference included Hilmi Guvenal, Founding Partner and CEO, Reform Kurumsal, Jonathan Kern, Global Chief Investment Officer, GE Real Estate, Osman Kokmen, Head of FICC, Merrill Lynch, Alpaslan Korkmaz, President, Turkish Investment Support and Promotion Agency, Mustafa Erhan Say, Founder and Managing Director, AccessTurkey Capital, Sani Sener, Board Member and CEO, TAV.Other conference attendees from the FDI community included JPMorgan Chase, The Coca-Cola Company and Warburg Pincus. Merrill Lynch, Baker & McKenzie, and American International Group (AIG) sponsored the conference.
TAIK was founded in 1985, originally in partnership with the U.S. Chamber of Commerce. It is the largest and most established of the 76 bilateral councils operating under the permanent secretariat of Turkey ‘s international trade umbrella, The Foreign Economic Relations Board of Turkey (DEİK). TAİK’s vision is to increase the volume of Turkey-U.S. trade (as a minimum to Turkey-EU level), to be recognized as the source of information and networking on bilateral issues for both Turkish and U.S. companies and to assist U.S. companies to view Turkey as a key partner and destination for direct investments in the region.
source: Turkish Daily News
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