Most of the economic pundits are in agreement that Turkey has
increasingly been playing a prominent role in the world economy and
redefining itself as an attractive hub for Foreign Direct
Investments (FDIs). The country has already been associated with
the economic powerhouses of BRIC and accentuated its appeal for
foreign investors by its resilient economic standing during the
latest global economic recession.
Figures in FDI
Turkey has managed to attract $123.7bn dollars of FDI during the
course of the last decade and this number is even more staggering
given the poor state of Turkish economy before 2003 which could
only managed to attract a total of $14.6bn worth of FDI during the
80 years of its modern Republican history until 2003. Moreover,
despite a 20.82% decline in overall FDI projects in Europe in 2012,
Turkey increased its FDI market share in Europe by 3.4% and its
share of capital investments by 6.14%. These figures make Turkey
one of the powerhouses of FDI in the region which elevated it to be
ranked as the second most country that attracts FDI in the region
after Saudi Arabia.
Almost one third of the top 500 Turkish companies have already
been financed by international investors in various degrees and
around 30.000 foreign companies have established their business
operations in Turkey as of 2011. Most of the FDI to Turkey emanates
from the EU countries with 16,928 established companies in the
country. However, 7,901 Near and Middle East based companies
demonstrate that the FDI inflow to Turkey is not only confined to
the EU zone countries but has a more diversified base. Finance and
insurance with around $15.8bn dollars, electricity and gas with
around $10bn dollars, manufacturing with around $14.4bn and
wholesale and retail trade with around $3.8bn dollars of FDI
between 2008-2012 attest the diversified nature of the inflows; not
only concentrating in one specific business sector but penetrating
to a broader range of business fields.
The good and improving state of the Turkish economy is visible
in other fronts as well. Amid the concerns for high level of
imports, Turkish exports has been surging during the last decade
where it jumped from $36bn dollars in 2003 to over $100bn dollars
during the course of the last ten years and stands at around
$152.6bn dollars as of August 2013.
Demographics; young and a dynamic population, the economy of the
scale; a population numbering around 76 million and the national
legal framework that guarantees equal treatment for the companies
with foreign capital are usually put forward as the pillars behind
the growth of FDI in Turkey. However a critical addition to these
three should be made; the stable political situation in Turkey in a
period when it's closer vicinity is marked by instability.
Political prospects: Further stability in the future?
2014 seems to be an ultra occupied year in terms of the
political agenda in Turkey. Turkish voters will go to polls to
decide on country's new President and the local elections will
decide who are going to rule the municipal governments in Turkish
cities. This might seem to be another addition to the already
burdened Turkish politics after the incumbent government's
decision to suppress the Gezi protests which had started over a
controversial government decision to built a new shopping mall
modeled as a replica of Ottoman army barracks on the site of a
public park in Taksim square. However, the latest polls covering
the period between 10-19 August 2013, suggest, despite the
widespread protests for Gezi, AKP still commands slightly more than
50% of the overall votes.
Moreover what unites almost all of the political analysts from
different political backgrounds, who rarely agree on anything, that
there is no serious and united opposition in Turkey that can
challenge Mr. Erdoğan's rule. Even though the Kurdish
issue is and has always been Turkey's soft belly, expectations
are running high that Mr. Erdoğan might show resolve with
regard to the peace process in exchange of the much needed support
of the Kurdish opposition party BDP, to garner enough votes for the
critical constitutional amendment that would transform Turkish
political system from parliamentary to a presidential one which
will give complete mastery to Mr. Erdoğan in Turkish
In short, 2014 despite two elections, is highly likely to
witness the continuation of AKP rule in Turkey and the stable
political situation which has been going on more than a decade that
is highly favorable for FDI in Turkey.
Originally published in Globe Trader, Friday, 13th September
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