Is Turkey lagging behind the legendary countries of FDI Kalman Kalotay, UNCTAD

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Is Turkey lagging behind the legendary countries
of FDI? Kalman Kalotay, UNCTAD
Conference on Turkey Where the Opportunities
Abound On the Way to Success21-22 February
2007Swissotel, Istanbul
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Prologue

• Thank you to
• YASED
• The World Bank
• The Undersecretary of Treasury
• Finans Dünyasi
• Disclaimer
• The views are those of the presenter and do not
  necessarily reflect the opinion of the United
  Nations.

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Outline

• Landslide in global FDI How the composition of
  inflows has changed recently
• Emerging countries have been resilient to the
  global roller coaster of FDI inflows
• Changes in the composition of global FDI flows
  between 2000 and 2005 from 20 to 41 in emerging
  countries
• Why the global recovery? Countries continued to
  liberalize FDI except in Latin America
• Why does FDI surge in emerging economies? Push
  and pull factors
• But China is expected to attract more than Turkey
  and Turkey more than the Czech Republic What the
  UNCTAD Inward FDI Performance Index tells us
• What is the UNCTAD Inward FDI Performance Index
• Turkey versus Brazil, China, India and the
  Russian Federation (the global leaders)
• Turkey versus the Czech Republic, Estonia and
  Hungary (the EU-10)
• Turkey versus Azerbaijan, Bulgaria, Georgia and
  Romania (the neighbourhood)
• More lights for Turkey in outward FDI?
• The largest emerging-economy source countries of
  outward FDI stock

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How the composition of inflows has changed
recently
I. Landslide in global FDI
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Emerging countries have been resilient to the
global roller coaster of FDI inflows
(1993-2006)(Millions of dollars)
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Changes in the composition of global FDI flows
between 2000 and 2005

• 2000 20 emerging

• 2005 41 emerging

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Why the global recovery?Countries continued to
liberalize FDI except in Latin America (2005
data)
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Why does FDI surge in emerging economies?

• Push factors
• pressure on companies to cut costs
• skill shortages in home countries
• shortage of natural resources
• Pull factors
• growing markets and production bases
• widening pools of talent (e.g. 1/3 of global
  tertiary technical students now in China, India
  and the Russian Federation)
• cost advantages
• natural resources

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What the UNCTAD Inward FDI Performance Index
tells us
II. But China is expected to attract more than
Turkey and Turkey more than the Czech Republic
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The UNCTAD Inward FDI Performance Index

• Measures inward FDI flows against GDP
• Uses three-year periods to offset annual
  fluctuations in data
• Covers 141 economies for 1988/90 till 2003/05.
  (Some economies in transition could not be ranked
  in the early years for lack of data)
• The index excludes tax havens

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Turkey versus Brazil, China, India and the
Russian Federation (the global leaders)
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Turkey versus the Czech Republic, Estonia and
Hungary (the EU-10)
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Turkey versus Azerbaijan, Bulgaria, Georgia and
Romania (the non-legendary neighbourhood)
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III. More lights for Turkey in outward FDI?
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The largest emerging-economy source countries of
outward FDI stock, 2005(Billions of dollars)
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Thank you!
Visit the website of the World Investment Report
http//www.unctad.org/wir

• You can also send your questions to
• kalman.kalotay_at_unctad.org