Turkey needs more FDI to grow

ISTANBUL - Anadolu Agency

Turkey’s existing savings are not enough to maintain sustainable growth so the country needs more foreign direct investment (FDI), Economy Minister Nihat Zeybekci has said.

“It is not possible for Turkey to reach its 2023 economic targets with its current low levels of savings. We want to grow more through foreign direct investments into our country to achieve sustainable, predictable and stable growth,” Zeybekci said at the “Regional Hub for Sustainable Competitiveness:
Turkey” conference of the International Investors Association of Turkey (YASED) in Istanbul, vowing to do “whatever it takes” to attract more FDI to Turkey.

“We know how low our savings are, at around 16 percent of our GDP. This amount is not enough for us to maintain an average yearly growth of 5 percent. More FDI flow is therefore of great importance for us,” he added.

 “We want to create an attractive environment for foreign direct investors. We can only do this by working with them. We need to learn their opinions and to develop this attractive environment together,” Zeybekci said.

Turkey grew 2.1 percent, lower than expectations, in the second quarter of 2014 due to the slowing down in domestic demand and the shrinkage in investment levels of the private sector. Turkey’s growth forecasts have lately been revised down to 3.3 percent from 4 percent and to 4 percent from 5 percent for 2014 and 2015, respectively.

The government aims to increase the portion of savings to GDP to 15.2 percent in 2015 and to 16.2 percent in 2016.

Turkey took some 0.9 percent of share in the FDI distribution of the world in 2013, but YASED head Serpil Timuray said in her speech at the conference that this should be increased to 3 percent.

Timuray said Turkey will only be able to become a regional hub if it focuses on value-added sectors to support its export numbers.

“Global companies’ investment decisions will be of great importance for Turkey on the road to becoming a regional hub,” she noted.

The YASED report on Turkey’s potential as a regional hub focuses on a series of competitive advantages of Turkey and other potential regional hubs in four dimensions: Economic, political, social and human. Additionally, it draws a roadmap for Turkey to become more competitive within the framework of 13 criteria, including political and economic stability, proximity to global and regional transport hubs, and having a skilled workforce.

The most appropriate regions for Turkey to take its services are stated as the Middle East, North Africa, Eastern Europe and Central Asia in the report.