The Presidential Circular on Foreign Direct Investment Strategy of Turkey (2021 – 2023) numbered 2021/11 ("Circular") was published in the Official Gazette dated 22 June 2021 and numbered 31519 (you can read the Circular here, available in Turkish only). Accordingly, the Foreign Direct Investment Strategy of Turkey (2021 – 2023) ("Strategy") has been published on the Investment Office of the Presidency of the Republic of Turkey's website (you can read the English version here and the Turkish version here).
With its strategic location, modern logistic infrastructure, broad production potential, etc., Turkey is a center of attraction for international investors looking to capitalize on the country's access to a giant market of 1.3 billion people and US$26 trillion worth of trade volume within a four-hour flight radius.
The Strategy's main target is to increase Turkey's foreign direct investment ("FDI") performance both in terms of quantity (targeting 1.5% of the global FDI market as of 2023) and quality, and in particular to increase knowledge-intensive, high-value-added investments that also create high-quality employment.
In order to achieve the main target, the Strategy introduces 11 strategies and a total of 72 actions under each strategy for which relevant institutions and organizations are liable and responsible. The Strategy states that it was developed based on three key principles, being investor oriented, specialized for quality FDI, and designed with the common mind that emerges with cooperation and coordination.
The 11 key strategies constructed in terms of the FDI services cycle, the investment climate and competitiveness, and cooperation and coordination among institutions are as follows:
- FDI Services Cycle
- Planning and implementing a central and holistic investment promotion campaign that focuses on quality FDI,
- Performing investment attraction studies specifically for quality FDI profiles,
- Enhancing the facilitating role of public institutions in facilitation processes,
- Improving the supply of industrial land needed by investors and access to information about land that is suitable for investment,
- Improving the supplier base in Turkey in accordance with the backward linkage requirements of quality FDI profiles,
- Investment Climate and Competitiveness
- Enhancing the policy and support mechanisms for the improvement of the investment climate in line with investor feedback,
- Developing the transportation, logistics, digital and ICT infrastructure needed to attract quality FDI to Turkey,
- Developing the regulatory framework and the support and incentive mechanisms to enable Turkey to achieve its potential in the FDI market, which transforms according to global tendencies,
- Enhancing the skill sets of the human resources needed to attract quality FDI to Turkey,
- Conducting the studies which will boost the compliance of the business climate and the regulatory framework with UN's Sustainable Development Goals and the European Green Deal,
- Cooperation, Coordination and Governance Among Institutions
- Enhancing the information exchange and cooperation mechanisms among FDI stakeholders.
Monitoring and Evaluation
A three-tier approach has been developed for monitoring and evaluating Turkey's FDI performance:
- FDI e-Coordination Team: A communication network with representatives from the institutions responsible for the 72 actions will be established and will monitor progress on a monthly basis.
- FDI Strategy Implementation Groups: Four implementation groups, which will bring together organizations responsible for the respective actions, will be established. The groups will convene once every six months and will monitor progress.
- FDI Strategy Monitoring Board: Developments and progress toward the Strategy's main target will be monitored and evaluated every six months.
According to the data announced by the United Nations Conference on Trade and Development, due to the devastating consequences of the Covid-19 outbreak, though developing economies experienced a relatively smaller shrinkage compared to developed economies, the global FDI market shrank by 35% in 2020 compared to the previous year and this value is almost 20% below the performance in 2009 after the global financial crisis of 2007-2008.1 In a period marked by the restructuring of the global economy, investment mobility and reduced predictability, Turkey aims to increase its FDI performance in order to maintain and enhance its competitiveness.
1 United Nations Conference on Trade and Development, World Investment Report 2021 Investing in Sustainable Recovery, p. X; https://unctad.org/system/files/official-document/wir2021_en.pdf/
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