Foreign investors prefer to invest in US and China
by İbrahım Acar
ISTANBULMay 18, 2016 - 12:00 am GMT+3
by İbrahım Acar
May 18, 2016 12:00 am
The Foreign Economic Relations Board (DEİK), Turkey's umbrella institution for economic relations with foreign countries, has in collaboration with Deloitte prepared an index for entrepreneurs who want to invest in foreign countries, taking into consideration various country criteria such as labor and power costs, political risk and political relations with Turkey. The U.S. ranks first for foreign investors among the high-income countries in the index, which does not include Russia. The first place among the middle and low-income countries belongs to China.
The index was started after Turkish investors have invested nearly $25 billion abroad over the past 10 years. This trend has gradually increased. The study will be prepared annually and will be a guide for businesspeople. The index will differ according to the characteristics of the countries, and mostly serves as a study of attractive countries for investment.
Speaking at a press conference, DEİK President Ömer Cihad said Turkey's process of integration into the global economy, starting with exports in the 1980s, has continued with companies production capacity and capital accumulation as well as foreign investment. Stating that the investments of the companies in the global markets were seen and supported as a strategic issue for Turkey's long-term objectives, Cihad said foreign investment could reduce Turkey's structural problem foreign deficit, make possible the transfer of technological know-how and contribute to supply security, which should be encouraged and supported.
Deloitte Turkey Partner and Financial Advisory Services leader Başak Vardar said people were reaching out to them from Anatolia seeking to make foreign investment. According to Vardar, foreign investment is an important topic for Turkish companies, in particular large holding groups with a certain capital power and leading firms in their sectors are actively evaluating international investment alternatives with the objective of becoming regional powers. Stating that international purchases by Turkish companies have increased substantially every year, Vardar said Turkish companies have undersigned nearly $25 billion in 250 purchases over the past 10 years in international markets, including in neighboring countries, main trade partner countries and countries with strong political relations. The largest amount of investment was made in the sectors of production, construction, infrastructure, energy, tourism, food, chemistry and retail.
DEİK Foreign Investments Business Council President Volkan Kara said the incentive and support mechanisms developed by countries that have gone through similar procedures with Turkey should be evaluated, in order to increase the production, finance, employment and investment capacities of Turkish investors in foreign countries, as well as their international competitiveness, productivity, efficiency and determination. Kara said that they were preparing a road map regarding this issue, and are currently working in collaboration with government economists.
While China is the top country among the middle and small-income countries, the U.S. leads the way among high-income countries. With the highest share of Turkish investment, European countries also have an important place on the index.
Considering the origins and economic growth of the important brands that Turkish companies have purchased, developed European countries kept their places as important investment spots. However, countries joining the EU after 2004 such as Romania, Poland, Hungary and the Baltic countries, as well as emerging countries, are seen as attractive areas for Turkish investors.
Countries in the Americas have a very limited share of current investment by Turkish companies; however they have potential to come to the fore as attractive countries in the near future, due to either the need to vary markets or simply to their abundance of resources.
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