“Currently Turkey is ranked the 13th most attractive destination for FDI in the world, and 9th among emerging countries. This is a great time in Turkey’s history. As a booming country with a GDP growing at an average annual rate of 5 percent for almost a decade, Turkey represents tremendous potential with numerous investment opportunities for foreign investors. Experts agree that this trend will continue into the future as the country vigorously pursues its goal of becoming one of the top 10 economies in the world over the next 10 years.”
Right time, right place!
Turkey is a country that has experienced strong structural change over the last decade. This factor has guided the country into a phase that numerous experts have characterized as a transformation process. And, as with all deep evolutionary reforms, new challenges and opportunities arise.
With a clear EU focus and a strong regional position, Turkey is playing an increasingly important role in its surrounding area and beyond. Turkey is the only country in the world that is a member of all of the following organizations: NATO, the European Council, the Organization of the Islamic Conference and the Black Sea Economic Cooperation.
Turkey’s status also changed through its becoming an official EU candidate country in October 2005. This has given a new strategic goal to the country, unifying a number of vectors towards a single direction: the Copenhagen political and Maastricht economic criteria. The structural reform process launched in 2003 has generated a new, dynamic and much more internationally-integrated Turkey.
This is a great time in Turkey’s history. As a booming country with a GDP growing at an annual average rate of 5 percent for almost a decade, Turkey is a land of opportunities. The economic power of Turkey has drastically increased in the past decade as well. Turkey has become the 18th largest economy in the world, and the 7th largest compared to the 27 EU countries.
Throughout the last decade, Turkey has been implementing an active policy to improve its investment environment. To start with, the new FDI frame law, which was passed by the Parliament in 2003, is the first installment of these significant economic reforms to change the investment environment in Turkey and make it attractive to global investors. This law guaranteed equal treatment to all investors without differentiating between local and international investors and enabled all international investors to enter Turkey without a preliminary authorization request, to transfer dividends freely, to access real estate, to be protected against expropriation, and to hire expatriates, etc. Turkey also decreased corporate taxes from 33 percent to 20 percent for all companies. Important parameters, like the acceptance of the international Arbitration Courts and the ongoing harmonization of laws with EU legislation have made Turkey one of the most liberal countries in the world, both in terms of the legal framework for FDI and the investment environment.
The sum of all the joint efforts has led Turkey to a very impressive economic output. Put differently, in a very short period of time, the FDI received by Turkey has benefited from these deep structural reforms. While Turkey attracted approximately USD 1 billion FDI per year between 1992 and 2003, this figure increased to approximately USD 3 billion in 2004, USD 10 billion in 2005, USD 20 billion in 2006 and USD 16 billion in 2011.
With its robust economy, Turkey is offering investors a secure investment environment with lucrative opportunities. The economy expanded by 9.2 percent in 2010, standing out as one of the fastest growing economies in the world. Turkey’s strong economic performance continued into 2011 with an 8.5 percent growth rate. Such a performance also encourages experts and international institutions to make confident projections about the future of the Turkish economy. As such, OECD predicted that Turkey will be the fastest growing economy among the OECD members during 2011-2017, with an average annual growth rate of 6.7 percent.
Currently Turkey is ranked the 13th most attractive destination for FDI in the world, and 9th among emerging countries according to a recent survey by A.T. Kearney. According to expert opinion, Turkey will continue to climb up the ladder of top FDI recipient countries with its vast potential.
Considering the developments mentioned above, it is certain that the Turkey of 10 years ago is very different from the Turkey of today. Similarly, the Turkey of 2023, a Turkey celebrating the centennial foundation of the republic, will also be strikingly different from today. With ambitious targets set by the current government, the Turkey of 2023 is expected to be a more prosperous and added-value generating member of the international community with a vital contributing role to global peace and welfare.
Turkey, with an improved and friendly investment environment, achieved considerable success in both domestic and foreign investments over the decade, not only raised the bar a notch, but also is now on track to realize its real and deserved potential; to be home to investments that will contribute to new jobs, new technologies and new visions.
Certainly, the right place to be at the right time…
M. İlker Aycı