Turkey can attract $19.2 billion in FDI by raising commitment to IPR
Posted by meb at November 21st, 2008
Turkey needs to dramatically increase the attention it affords intellectual property rights (IPR) if it is to take advantage of the benefits that flow to countries with high standards of IPR, says a new report released yesterday by the International Investors Association (YASED).
According to research models in the report, a 10 percent increase by Turkey on the Patent Rights Index would lead to an increase in the flow of foreign direct investment (FDI) by 16 percent, or $19.2 billion. Based on this figure, the report notes that 150,000 new jobs would be created, exports would grow by 12 percent ($13 billion) and national income would expand by $4.4 billion, or 0.7 percent of gross national product (GNP).
The report, presented to Prime Minister Recep Tayyip Erdoğan on Wednesday, argues that the government needs to reaffirm its commitment to harmonizing its policies with respect to IPR to those of the EU and that doing so would have considerable economic spin-offs for many sectors of the economy. Most notably, a greater commitment to IPR would generate considerably higher levels of FDI and contribute to greater Greenfield investment.
Turkey presently ranks 44th on a list of 70 countries in the 2007 IPR protection index rating of the Property Rights Alliance (PRA) — an index commonly used by investors to assess the relevance of a country when making investment decisions. The report notes that countries Turkey is competing with for FDI flows, such as Hungry, the Czech Republic, Greece and Poland, rank, 27th, 29th 33rd and 34th, respectively, with Germany occupying the first spot.
The report takes on new significance at present at a time when FDI inflows to Turkey are expected to dramatically fall as a result of the global economic crisis. Most observers predict that FDI inflows will fall to an estimated value of $15 to 20 billion in 2008 from a 2007 high of $22 billion, and estimates range from $8 to 15 billion for 2009.
International investors have long looked at a country’s IPR as a factor in whether or not they invest — not only in industries that are sensitive to copying and piracy, but also as an indicator of the overall importance a country assigns to international investors and the rule of law. The report notes that for businesses considering investing in a country, a single-point increase in the IPR Index “increases the likelihood of … investing in production, instead of sales and distribution operations, by 57 percent.”
Speaking to Today’s Zaman yesterday, Jeffrey Kemprecos, external affairs director for Merck Sharpe and Dohme, one of the world’s leading pharmaceutical research company which is highly sensitive to IPR, said that “whenever we talk about IPR, eyes tend to glaze over, but nothing sends a better signal to investors than strong patent, copyright, trademark [protection].”
source: Today’s Zaman
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