Istanbul– In late July, Turkey revealed the country’s strategy for attracting international direct investment for the period from 2024 to 2028.
The “Turkey Strategy” document on international direct investments prepared by the Presidency’s Investment Office sets out the general framework for Ankara’s policy in the field of international direct investments and its direction, with the aim of increasing its share of international investments to 1.5% by 2028.
Turkey also aims to have a 12% share of international direct investment flows into its vast competitive region by 2028.
Foreign investment in Türkiye
Turkey saw $4.7 billion in international direct investment inflows in the first half of this year, according to a report by the International Investors Association. The Netherlands, the United States, Germany, Ireland, Norway and the United Kingdom were the top contributors.
Despite a 5% decline compared to the same period in 2023, the international direct investments that Turkey attracted in the first half of 2024 constituted 28% of the current deficit during this period.
Turkey has made a quantum leap in FDI inflows thanks to its rising economic performance between 2003 and 2023, along with the value propositions it has provided to investors. As a result, Turkey ranked second in its region, with total FDI reaching $262 billion.
It also witnessed a significant increase in the number of multinational companies operating on its territory, as the number rose from 5,600 companies to more than 80,000 during the same period.
This has contributed to Turkey becoming a regional economic center that supports the productive activities of these companies by establishing R&D centers, design teams, logistics bases, and management centers.
In this context, the head of the Turkish Presidency’s Investment Office, Burak Dağlıoğlu, revealed expectations that the volume of foreign direct investment will increase to between 12 and 14 billion dollars by the end of this year.
Daglioglu pointed out that Turkey’s removal from the Financial Action Task Force’s “grey list”, which is concerned with monitoring financial crimes, along with the improvement of the country’s credit rating, have contributed to increasing the interest of foreign investors.
He stressed that the “Strategy for Attracting International Direct Investments” document represents a roadmap aimed at strengthening Turkey’s position as one of the most prominent production and export centers in the world.
For his part, Vice President Cevdet Yilmaz said that Turkey has invited the heads of major international companies to attend the Investment Advisory Board meeting scheduled to be held on September 28, under the chairmanship of President Recep Tayyip Erdogan.
He stressed that these high-level meetings would enhance international direct investments in Turkey, noting that his country is striving to become a leading investment base for multinational companies, especially in light of the ongoing changes in global supply chains.
Global Center
Through its new strategy, Turkey confirms that it seeks to continue achieving its economic success and expand from a regional economic center to a global economic power.
The document notes that the development of this strategy was based on a data- and evidence-based approach, taking into account the priorities mentioned in Turkey’s basic policy documents, as well as global trends in the field of international direct investments, with a special focus on sustainable development and taking into account the directions and contributions of stakeholders.
She pointed out that green and digital transformations have become major factors influencing the flow of international direct investments.
Analyses conducted during the preparation of the strategy showed that disruptions in global supply chains and geopolitical tensions that arose after the Corona pandemic had a significant impact on international investment expectations worldwide.
She also stressed that factors such as proximity to raw materials and markets, diversification of supply chains, and reliance on friendly countries have become more important in global companies’ investment decisions.
For his part, Hakki Erol Gun, an economic researcher at Haci Bayram University, told Al Jazeera Net that preparing a strategic document for foreign investment is a vital step for any country. As for the Turkish economy, this document is an important tool for strengthening financial oversight and contributing to the comprehensive development of the economy.
He pointed out that the recent economic reforms adopted by the government have contributed to bringing Turkey back into the circle of interest of foreign investors, as it is now viewed once again as a global investment centre.
He added that Turkey’s unique geographical location, in addition to its advanced transportation infrastructure and the presence of a highly qualified workforce, provides investors with a unique advantage in terms of access to wide markets when transferring their investments to Turkey.
Erol Gun stressed that Turkey’s achievement of the goals of this strategy requires close cooperation between all relevant institutions, with a focus on simplifying procedures for investors and avoiding the bureaucracy that previously hindered government institutions.
8 priorities
Within the framework of the new strategy, the government document identified 8 direct international investment files as qualitative priorities, including:
- Environmentally friendly investments.
- Digital investments.
- Investments related to global supply chains.
- Knowledge-based investments.
- Investments that create quality job opportunities.
- Value added services investments.
- Quality financial investments that generate higher returns than the average of classic investments.
- Investments that support regional development.
To achieve the main objective of this strategy, policies were developed based on 6 main axes, which are:
- Enhancing the competitiveness of the investment environment.
- Green transformation and digital transformation.
- Global supply chains.
- Developing qualified human resources.
- Communication and promotion.
These axes included 32 specific policies, which were prepared in line with other national strategies such as the 12th Development Plan.
These policies will also be implemented through annual action plans, as the 2024 action plan included the implementation of 81 specific measures to ensure effective implementation in cooperation with institutions concerned with international direct investments.
