The global uncertainty and concerns caused by the two “black swans” – namely the coronavirus pandemic and the Russia-Ukraine war – are not only limited to energy markets and prices or the global supply chain. The term "black swan" is defined as an event or a process that causes irreversible and radical changes in the world economy and politics. Another topic that worries the global economic system is the fate of foreign direct investments (FDIs) in the near future.
The global FDI historical record was set in 2007, reaching $2 trillion before the global financial crisis. Since the beginning of 2008, the global volume has declined to $1.2 trillion with the worldwide financial crisis. In 2015, FDIs rebounded, again reaching $1.8 trillion, and then fell back to $1.2 trillion. They later rose back to $1.3 trillion in just one year. During the pandemic in 2020 and 2021, they fell to $750 billion. Just as FDIs were recovering from the effects of the coronavirus pandemic, the Russia-Ukraine war triggered new uncertainty. Under such circumstances, it would be far-fetched to expect a revival of FDIs until the global and regional, economic and political tensions and uncertainties have passed. However, even before the pandemic, increasing FDIs to $2.5 trillion on an annual basis to achieve global sustainable development targets was being discussed.
In other words, the FDIs were supposed to surpass their previous record to reach $2.5 trillion. Now, the two-year pandemic has added another $1 trillion to this amount. In order to eliminate the effects that the Russia-Ukraine tension has caused and will continue to cause for a few more years, an additional amount of $700 billion is already being mentioned. In other words, the two black swans have increased the amount of FDIs needed to meet the global sustainable development goals from $2.5 trillion to $4.2 trillion in the last two years. With the strong expectation that Turkey's initiatives will be successful, even if the Russia-Ukraine tension is concluded in a short time, an FDI move exceeding $4 trillion over three to five years will be essential for regional and global moves.
Moreover, a group of elite economies, including Turkey, has strengthened calls that aim to prevent panic and the resurrection of protectionist trends. They also aim to strengthen fair and international rule-based approaches in direct investments and to find new approaches that will eliminate the worries and harm caused by various countries, especially in Africa. At this point, it can be observed that Japan and South Korea are quite positive in terms of cooperation and benefiting from Turkey's experience. Undoubtedly, many European, Middle Eastern and Gulf countries will speed up their cooperation with Turkey soon.
The two black swans showed the indispensability of being a self-sufficient country in various fields, ranging from agriculture and food to iron, steel and rare metals, from health to logistics, from defense to energy, from financial services to cyber security. Now, the whole world must face the risks of using "someone else's" satellites, warplanes, wheat, energy, steel and software. Countries must balance meeting their needs and boosting their economy with other countries’ know-how and resources.
