UNCTAD World Investment Report 2010 has been launched in Turkey by YASED. FDI inflows to Turkey declined by 58% in 2009 and Turkey ranked 32nd country in the world.

YASED, International Investors Association of Turkey, has launched the World Investment Report 2010 in Turkey with presentations made by Mr. Kalman Kalotay, UNCTAD representative and Mr. Mustafa Alper, Secretary General of YASED. The Report is prepared by United Nations Conference on Trade and Development (UNCTAD) and released concurrently worldwide. The Report focuses on current state of international direct investments curtailed by the global crisis, while analyzing top destinations preferred by investors that continue making direct investments, and indicates Turkey’s position in the global league and among the developing countries, and also analyzes other various investment trends. Mr. Kalotay, UNCTAD representative, made a presentation on trends in global international direct investments, and developments in the global investment policies that are covered by the Report, as well as on the subtitle of this years’ report: climate change and the role of transnational corporations in this process.

Turkey holds 32nd place in the global ranking and 15th place among the developing countries
According to the statement made by Mustafa Alper, Secretary General of YASED, top five largest recipients of international direct investment (FDI) inflows are USA, China, France, Hong Kong and UK. Having received USD 7.6 billion in FDI inflows, Turkey holds 32nd place among the largest recipients of FDI inflows. Turkey’s position fell down to 15th place in this year’s ranking for developing countries. However, last year, Turkey held 20th place in global ranking and 9th place in the ranking for developing countries.
During the presentations, Mr. Alper highlighted the decline in worldwide international direct investment (FDI) inflows by 37% to USD 1.1 trillion in 2009, over the previous year. He pointed out that in 2008, while the impact of the financial crisis was limited, investment inflows declined by 16%, however much steeper decline was observed in 2009. Mr. Alper mentioned that while FDI inflows to Turkey decreased by 18% in 2008, it has plummeted in 2009 over the previous year by 58%, contracting at a much higher rate than global FDI inflows.

Reason behind the downward trend in international direct investments
“It appears that decline in FDI inflows is connected mainly with the tightening of the financial sources, which was triggered by the global crisis. This resulted in contraction in investments, intra-company loans, reinvested earnings, profits of international subsidiaries of transnational corporations, and in mergers and acquisitions” said Mr. Mustafa Alper, Secretary General of YASED. He said developing countries have significantly increased their share in both inward and outward investments, and commented that performances of developing economies played a significant role in avoiding an even sharper decline. Mr. Alper said that the US remained to be the largest recipient of FDI in 2009, as it was in the previous year, and China, a developing country, rose to 2nd place this year for the first time by attracting USD 95 billion in FDI inflows.

Mr. Mustafa Alper said that the US and France were the leading largest outward investors in 2009 and that outward investments from developed countries accounted for 75 % of total international direct investments. Mr. Alper also said that Turkey held 45th place in outward international investment ranking, with its outward investments amounting to USD 1.6 billion. According to the Report, aggregate international direct investment stock as of 2009 amounts to USD 17.7 trillion. The US and France stand out as countries to have the largest international direct investment stock. Hong Kong, China, Brazil, Singapore, Mexico and Russia, on the other hand, are the countries that have the largest international direct investment stock in the developing world. While developing countries hold 30% share in total international investment stock, Turkey ranks 39th, holding USD 77.7 billion in FDI stock.

Mr. Alper said that international direct investments diminished both in developed and developing countries by 44% to USD 566 billion and by 27% to USD 548 billion, respectively, and commented that while share of the developed regions in international direct investments was decreasing , that of the developing regions was on the rise. “Europe is the largest recipient region of international direct investments. Among the developing regions, South and East Asia stand out as it has been in the previous years. In the Report, Turkey is included among the West Asian countries, and ranks 3rd in the region, behind Saudi Arabia, which ranks 1st.

According to the Report, service sector had 63% share in global FDI stock as of 2008. Worldwide mergers and acquisitions witnessed a contraction of 65% over the previous year, retreating to USD 250 billion level. Globally, 2009 witnessed 108 international merger and acquisition deals with a value of USD 1 billion or more. As for the new greenfield projects, according to Financial Times fDi Market data quoted by UNCTAD, a total of 13 thousand and 727 greenfield projects have been unveiled and completed in 2009. Of those, 6 thousand and 249 took place in developed countries, and 7 thousand and 478 in developing countries. Turkey holds 25th place with 153 projects” Mr. Alper continued.

Efforts for promoting low-carbon economy gains momentum in recent years
Mr. Kalotay commented on efforts for promoting low-carbon economy gaining momentum in recent years, and he stated, referring to the subtitle of the World Investment Report 2010, that transnational corporations had significant roles to play regarding the issue. Mr. Kalotay said as transnational corporations’ low-carbon FDI have already reached to substantial figures, such investments held a potential for even faster growth in the future.

Future prospects
UNCTAD representative, Mr. Kalotay said that outlook for the global economy remained to be fragile, a slight recovery in global international direct investment inflow was expected in 2010, after a sharp decline in 2009, and that however, it was not likely to rebound before 2012, to USD 2 trillion level captured prior to the global financial crisis. Speaking on future prospects, Mr. Mustafa Alper, Secretary General of YASED said; “As for Turkey, looking at USD 2.7 billion inflow within the first 5 months of the year, we expect international direct investment inflows to reach USD 7 billion by the end of 2010. We expect it to be pretty close to previous year’s figure. A sluggish trend in mergers and acquisitions and privatization activities in 2010 prevented recapturing of USD 10 billion level.”



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