Ankara: Trkiye is making strategic moves to bolster its foreign direct investment (FDI) landscape, as outlined by President Recep Tayyip Erdogan in the recently unveiled 2024-2028 Foreign Direct Investment Strategy. The strategy aims to provide a conducive environment for international investors through continuous reforms, aligning with the country's 12th Development Plan which prioritizes competitiveness, increased investment, production, employment, and exports.
According to Anadolu Agency, a salient opportunity for Trkiye lies in the newly negotiated Investment Facilitation for Development Agreement at the World Trade Organization (WTO). This agreement, which has garnered the support of 126 WTO members, including 90 developing countries, offers a framework that Trkiye could leverage to enhance its domestic investment climate, particularly benefiting small and medium enterprises by reducing bureaucratic hurdles.
The agreement focuses on fostering transparency and predictability in regulatory frameworks, which are key factors in attracting FDI. It encourages the publication of laws related to FDI, the establishment of online information portals, and the adoption of responsible business conduct practices. Furthermore, it provides technical assistance and capacity-building resources, which Trkiye can utilize to streamline its investment processes and infrastructure, thereby attracting quality FDI projects.
Trkiye's potential to improve its FDI intake is substantial. Despite receiving an average of $11 billion in FDI annually from 2021 to 2023, Trkiye trails behind the UAE, which attracted $22 billion in the same period. By adopting the WTO agreement, Trkiye can enhance its global competitiveness and signal to international investors its commitment to reforming its investment environment.
Additionally, the agreement's provisions could benefit Trkiye's outward investors by ensuring a more transparent and predictable investment climate in host countries. This is crucial as Trkiye seeks to expand its firms' international presence, which is seen as a method to sustain domestic job creation and competitiveness. Trkiye's outward FDI has stagnated at around $5 billion, markedly lower than the UAE's $23 billion, indicating room for growth.
While the agreement is not without its limitations-lacking a clear definition of 'investment' and comprehensive provisions on the movement of businesspersons-Trkiye can address these issues through ongoing bilateral and multilateral negotiations. The country's engagement in free trade agreements with various nations offers additional avenues to refine its investment strategy.
The decision to join the WTO agreement presents Trkiye with significant advantages, including access to special treatment and technical assistance. It also positions the nation to benefit from improved investment environments globally. As Trkiye continues its reform journey, incorporating this agreement into its strategy could be pivotal in achieving its FDI objectives, enhancing investment, production, and exports through qualified FDI.