ISPAT’s FDI target
Invest in Turkey aims to increase FDI flow to Turkey
to $15 billion in 2017.
Under the current global outlook, there is a fierce competition among developing countries to attract foreign direct investment (FDI), which has a direct effect on growth. It’s a theme that President Recep Tayyip Erdogan uses often and the Investment Support and Promotion Agency of Turkey (ISPAT), echoes: We should convince global investors to invest in Turkey. Established during Erdogan’s prime ministerial period, ISPAT has been promoting the Turkish investment environment globally for the last 11 years. The agency has been working under an extremely accelerated job schedule for nearly a year. Arda Ermut, ISPAT President, explained why…
Ermut said that Turkey can attract one percent of global FDI flow and it could go up to 1.5-2 percent but developments in neighboring countries have affected investments in Turkey. However, he said: “Turkey still attracts a significant portion of its investments from Europe and western countries, which are also affected by crises. But at the same time we are taking steps to diversify our FDI resources. We have started to attract very serious investments from the Far East, Russia, Asia, the Near East and the Middle East as well as other Arabic-speaking countries. We are looking at ways to attract some amount of regular FDI flow to Turkey irrespective of global crises and regional developments with this diversification. Very serious steps are being taken in this sense.”
New communication strategy “We have developed a new communication strategy based on the establishment of a transparent and sustainable relationship with media and business representatives in target countries,” Ermut said, adding that investors are not affected by political tensions. Security concerns, however, have a negative effect on travel and meetings, he warned: “We have tried to explain the business and investment environment of our country in the most accurate way with business delegations we have taken abroad and international press representatives we hosted here. We are trying to reach political writers who we normally do not meet, and trying to represent ourselves accurately. But there is a re- sistance against Turkey in the western media.”
Despite a 31 percent decline in FDI to Turkey in 2016, Ermut cautioned against panic, pointing out that the recovery in the second half of the year was encouraging. 56 percent of the investments made in Turkey last year occurred after July, he said. Despite slowing investments, Ermut explained that Turkey would successfully diversify its investment portfolio, adding overall value to Turkey’s foreign invest- ment potential. “The total FDI in 2016 was $12.3 billion,” he said. “Investments totaling $1.4 billion in August and $2 billion in December are important in respect to showing international investors’ faith and confidence in Turkey. “
“Economic actors are rational” Ermut emphasized that the political problems with European countries over the past few weeks and credit rating agencies’ decisions have not changed the view of foreign investors to Turkey. “We draw a significant part of our investments – 65 percent - from Europe,” he said. “Therefore, the political agenda is important for sure. But economic actors are always more rational than political actors. They know how to disconnect with the agenda when needed. The process in Europe is temporary. Investors look at 20-30 year projections on their investments.”