Turkey to attract more FDI: expert
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.