Turkey to at­tract more FDI: ex­pert

Dünya Executive - - REPORT -

Af­ter re­ceiv­ing $13 bil­lion in for­eign di­rect in­vest­ment (FDI) in 2018, Turkey will at­tract more in­vest­ment from across the world, ac­cord­ing to a strate­gist and an­a­lyst.

Com­ment­ing on the Global In­vest­ment Re­port 2019 of the United Na­tions Con­fer­ence on Trade and De­vel­op­ment, Cuneyt Pak­soy told Anadolu Agency that Turkey at­tracted more in­vest­ment in an era where the global FDI was on a down­ward trend.

If Turkey di­ver­si­fies in­vest­ment in­stru­ments and com­pletes its re­forms on jus­tice, ed­u­ca­tion, agri­cul­ture, and live­stock, it can steer the global FDI, Pak­soy as­serted.

Last year, the FDI re­ceived by Turkey in­creased by 13 per­cent while the global FDI saw a de­crease of 13 per­cent to $1.3 tril­lion, ac­cord­ing to the re­port pub­lished in June.

The re­port said the FDI dropped by 27 per­cent in de­vel­oped coun­tries while it climbed by 2 per­cent

in de­vel­op­ing coun­tries and 4 per­cent in de­vel­op­ing Asian economies. “Four coun­tries ab­sorbed ap­prox­i­mately 90 per­cent of the FDI in West Asia. Turkey was the largest re­cip­i­ent, with in­flows ris­ing by 13 per­cent to $13 bil­lion, de­spite slower than usual eco­nomic growth and un­cer­tainty sur­round­ing the Turk­ish lira,” the re­port noted.

For­eign in­vestors trust Turkey

Turkey is mak­ing struc­tural re­forms and pro­vides fi­nan­cial bal­ance, Pak­soy said, stress­ing its pro­duc­tion-based growth and in­crease in ex­ports and tourism rev­enues.

For­eign in­vestors did not lose con­fi­dence in Turkey, he said. “Turkey be­came a strong coun­try in its re­gion and in the world. It is a fac­tor the global ma­jor coun­tries, es­pe­cially the U.S., China, and Rus­sia, should keep an eye on” Pak­soy noted.

The re­port showed the Turk­ish econ­omy was the most ac­tive in con­clud­ing in­ter­na­tional in­vest­ment deals in 2018 with eight bi­lat­eral agree­ments.

Turkey is also rnks fourth among the de­vel­op­ing Asian economies with its 102 spe­cial eco­nomic zones - China has 2,543, the Philip­pines has 528, and In­dia has 373.

Trade ten­sions axe global FDI

Pak­soy also re­called that Turkey is the only coun­try which is a bridge be­tween the east and west. “Turkey is also a per­ma­nent tran­si­tion zone of trade and en­ergy routes. There can be no so­lu­tion in the east­ern Mediter­ranean with­out Turkey,” he stressed.

De­spite a weaker growth per­for­mance, for­eign­ers con­tinue to in­vest in the coun­try due to its young pop­u­la­tion and growth po­ten­tial, he said.

Pak­soy cited Azer­bai­jan’s SOCAR in­vest­ment and Ger­man Volk­swa­gen’s in­vest­ment plan in Turkey as a proof.

The $6.3 bil­lion SOCAR deal was one of the largest for­eign in­vest­ments in Turkey, ac­cord­ing to the UN re­port.

Also ad­dress­ing the re­ces­sion in global FDI, Pak­soy said U.S.-China trade ten­sions and struc­tural prob­lems in the EU are the main rea­sons.

The re­port fore­casted that the FDI would see a weak re­cov­ery of 10 per­cent in 2019 to reach $1.5 tril­lion, be­low av­er­age for the last decade.

Un­cer­tainty af­fects global econ­omy

En­ver Erkan, an econ­o­mist at GCM Menkul Kiymetler in Is­tan­bul, said: “In­vest­ments are on a down­ward trend as global economies are head­ing to un­cer­tainty.”

He said that the un­cer­tainty stemmed from the trade wars and other po­lit­i­cal is­sues such as Brexit. “Many coun­tries will be af­fected by the eco­nomic down­turn cre­ated by the trade war, es­pe­cially those economies re­liant on ex­ports,” Erkan added. He also said prob­lems in de­vel­oped economies may neg­a­tively af­fect mar­ket di­ver­si­fi­ca­tion strate­gies which would have an im­pact on de­vel­op­ing economies.

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