Among the Countries that Attract the Largest FDI Inflows, Turkey Climbed to Rank 16
 
YASED, International Investors Association, has announced to public the 2007 World Investment Report published by UNCTAD, United Nations Conference on Trade and Development, concurrently around the globe, which shows the distribution of the global investments by countries and regions and the position of Turkey in the global ranking list as well as the current trends of FDI.  The Report shows based on the finalized data of 2006 that Turkey ranks 16th among the countries that attract the highest FDI (FDI), ranks 51st among the countries that has the highest FDI outflow and ranks 27th among the countries that has the highest FDI stock.

Mr. Tahir Uysal, the Chairman of the Board of Directors of YASED, other Board Members of the Association and Mr. Mustafa Alper, Secretary General of YASED have attended the press conference where YASED, International Investors Association, has announced to public the World Investment Report prepared by UNCTAD, United Nations Conference on Trade and Development and presented the new trends in the foreign investments which affects Turkey as well.

The World Investment Report is published with a different subtitle every year depending on the FDI trends and the subtitle of 2007 World Investment Report is “Transnational Corporations, Extractive Industries and Development”. Following the opening speech of Mr. Tahir Uysal, the Chairman of the Board of Directors of YASED, the presentation given by Mr. Mustafa Alper, Secretary General shared with public the data concerning the countries that have the highest foreign investment inflows and outflows; the trends in foreign investments; differences between the developed countries, developing countries and transition economies, major mergers and acquisitions around the globe; direction of the greenfield investments.

According to the report, global FDI inflows amounted to US$ 1.3 billion in 2006, rising 38% over the previous year. While the host countries attracting the highest global FDI were USA and United Kingdom, Turkey has ascended to rank 16 with its US$ 20.1 million inflows. Our country was ranking 23rd in the same category in 2005. On the other hand, Turkey has ranked 5th among the developing countries. China, ranking 5th globally and with its US$ 70 billion investment attraction, is the leading host country among the developing countries.

While our country has increased its share in the global FDI to 1.5% as of 2006, it has increased its share among 160 developing countries to over 5%.

While USA and France are the leading countries in FDI outflows, Turkey is in 51st place with its US$ 934 million investment outflow. According to the data of UNCTAD, as of 2006, while the total FDI stock has reached US$ 12 trillion, USA and United Kingdom were the countries with the highest FDI stock. Turkey has ranked 27th in the global league with its stock of US$ 79 billion.

When the distribution of FDI by country groups is reviewed, it is observed that in 2006, the FDI have reached to US$ 857 billion by increasing 45% in the developed countries, to US$ 379 billion by increasing 21% in the developing countries and to US$ 69 billion by increasing 68% in the transition economies (Commonwealth of Independent States and South-East Europe countries). The Report also shows that the share of the developed regions in the FDI inflows declines in the recent years whereas this share increases in the developing regions.

The World Investment Report announced by UNCTAD and presented to Turkish public by YASED concurrently with the globe shows that the cross-border mergers and acquisitions have increased from US$ 716 billion in 2005 to US$ 880 billion in 2006. Among these mergers and acquisitions, 17% of them were realized in developing countries and in transition economies. Among the major mergers and acquisitions of 2006, the leading transaction is the acquisition of the steel company in Luxembourg, Arcelor, by the Dutch company Mittal Steel for US$ 32.2 billion, whereas Turkey has entered the world league from the 34th rank with the acquisition of Telsim by Vodafone for US$ 4.6 billion.

In addition to the mergers and acquisitions, the Report which presents all the interesting data regarding foreign investments has shown the picture of the greenfield investments as well. In the greenfield investments which YASED considers among the subjects of priority with regard to the future of the foreign investments, from the total 11.813 greenfield projects, 5.197 of them were attracted by developed countries, 5.218 were attracted by developing countries and 1.398 of them were attracted by transition economies. Turkey has ranked 37th in the international list with 84 projects.

Mr. Tahir Uysal, the Chairman of the Board of Directors of YASED and Mr. Mustafa Alper, Secretary General, based on their general evaluation of the UNCTAD’s data, have attracted attention to the facts such as in the financing of mergers and acquisitions, the exchange of shares has been replaced by cash and debt; the activities of transnational companies from developing countries are increasing and direct investment flows among developing countries are increasing. According to the forecast of YASED which are supported by the data of the UNCTAD report,  it is expected that in the 2007-2009 period, the growth in foreign investments shall continue, the cross-border mergers and acquisitions shall maintain their share in foreign investments and the greenfield investments shall increase especially in the developing countries. 

Among the negative elements that may affect the positive trend of increase in investments, attention was attracted to certain factors such as global current account imbalances and impacts of exchange rates, fluctuation in oil prices, possible tightening in financial markets, increase in certain protective and restrictive regulations in certain countries and risks of terrorism and war.