UPDATE - Türkiye aims to increase its share to 1.5% in global FDI flows by 2028

UPDATES WITH DETAILS AND PRESIDENT ERDOGAN'S COMMENTS

By Gokhan Ergocun

ISTANBUL (AA) - Türkiye revealed its foreign direct investment (FDI) strategy for the 2024-2028 period for outlining the general framework of the country's policies and guiding the practices in the field.

The main goal of the strategy, revealed via a document titled "Türkiye Foreign Direct Investment Strategy 2024-2028," is to increase the country's share of the FDI pie to 1.5% on the global scale through qualified projects by 2028 and increasing its regional share in FDI inflows to 12%, according to the country's Official Gazette and its Investment Office on Monday.

According to the strategy prepared by the Investment Office, Türkiye, with its dynamic and robust economy, is an important center of attraction for international direct investments, while its geostrategic location at the intersection of Europe, Asia and Africa and world-class transportation infrastructure facilitate companies' access to global markets.

Türkiye also provides the skilled labor force needed by companies with its large talent pool and supports the competitiveness of all sectors.

The country, which has continuously improved its business and investment environment over the last 21 years with investor-friendly reforms, investments in infrastructure and superstructure, and attractive incentives, has become one of the leading destinations for FDIs.

Thanks to its rising economic performance in the 2003-2023 period and the high level of value proposition it offered to investors, Türkiye achieved a significant acceleration in FDI inflows and ranked 2nd in its region with a total FDI inflow of $262 billion.

In the same period, Türkiye increased the number of multinational companies it hosts from 5,600 to more than 80,000 and became a regional economic hub where the production activities of these companies are supported by R&D centers, design teams, logistics bases and management centers.

Türkiye is expected to continue its successful performance in the new period and transform itself from a regional economic hub into a global economic powerhouse.

The strategy report is available at https://www.invest.gov.tr/en/pages/fdi-strategy.aspx page.

- Road map

President Recep Tayyip Erdogan, commenting in the report, said Türkiye has successfully implemented major development moves in the last 21 years.

"We have made revolutionary breakthroughs in many fields, from education to health, from transportation to energy, from industry to technology," he said.

As a result of the steps the country took with determination, it built a globally competitive economy and reached the 100th anniversary of its Republic by breaking records in production, employment, exports and national
income, he stated.

He stressed that in the second century, which the government declared as the “Century of Türkiye”, the country set higher targets for itself to become one of the main science, technology, production and trade centers in the world.

"One of our most important driving forces in achieving these goals is undoubtedly foreign direct investments," he underlined.

Erdogan said for this reason, the country is determined to make the Century of Türkiye also the “Century of Investment”.

"With the reform process we have been carrying out uninterruptedly for 21 years, we have created an investor-friendly climate that paves the way for the private sector in the economy," he said.

He noted that Today Türkiye is a profitable and safe harbor for international investors with its competitive business environment, deep talent pool, geostrategic location, attractive incentives, strong financial system and macroeconomic structure.

Continuing to strengthen its outstanding position in the new period, Türkiye will be one of the leading economies which international investors prefer and expand, he highlighted.

The country's FDI strategy has been designed as a road map that will guide all the stakeholders in the country and bring quality investments, he said.

"I hope that this strategy document, which will guide all actors of our investment environment, will be beneficial for our country, and I congratulate all public institutions, non-governmental organizations, academia and private sector representatives who contributed, especially the Presidential Investment Office," he added.

- Digitalization most critical factor

The strategy report said while global FDI flows have remained stagnant, FDI inflows have notably surged in the region where Türkiye is situated.

Investments in the high-value-added service sector in the region have maintained a consistent upward trajectory in recent years, and “green transformation” and “sustainability” have become significant determinants of global FDI flows.

Global value chains are being reshaped with trends of “near-shoring” and “friend-shoring” impacting FDI flows, while digitalization stands out as one of the most critical factors transforming global FDI flows.

Protectionism rising from trade and technology wars, is significantly influencing FDI flow, it said, noting that the share of mega projects in FDI flows is increasing, with Türkiye’s region being one of the leading destinations for such investments.

"Türkiye is one of the top FDI destinations in the region, particularly in food-agriculture and manufacturing projects, as well as in expansion-type investments," it said.

International investors significantly contribute to Türkiye’s emergence as a prominent production and export hub in the region and Investments in technology startups are gaining prominence as a key component of global FDI flows, it added.

The country also determines number of targeted projects in six different fields over a 5-year period: 360 projects high-quality job generating FDI, 360 in global value chain related FDI, 300 in knowledge intensive FDI, 270 in high-end service FDI, 240 in digital FDI and 120 climate FDI.

Country's main policy areas are investment climate and competitiveness, green transformation, digital transformation, global value chains, talent pool, communication and promotion.