1. Investment Support and Promotion Agency of Turkey
(ISPAT)
REPUBLIC OF TURKEY
PRIME MINISTRY
“Protection and promotion of investments in the Mediterranean:
The Case of Turkey”
Necmettin KAYMAZ
Chief Project Director
The Parliamentary Assembly of the Union for the Mediterranean, Meeting of the Committee on Economic & Financial Affairs, Social Affairs & Education
Ankara, 01 December 2014

2. AGENDA
Global FDI Landscape
FDI potential of UfM
The Case of Turkey:
Positioning itself as an attractive FDI destination
Improving Investment Climate in Turkey
Improving Investment & Trade Relations with UfM

3. Global FDI Landscape

4. Global FDI Landscape
Source: UNCTAD
Fierce Competition
Global FDI Flows
($ Trillion)
0,6
0,7
1,0
1,5
2,0
1,8
1,2
1,4
1,7
1,3
1,5
0,0
0,5
1,0
1,5
2,0
2,5
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Advanced Economies
Developing Economies
Around $1,5 trillion FDI is being circulated annually in the world over the past decade
Fierce competition between advanced and developing economies to attract FDI
61% of Global FDI went to developing economies in 2013, up from 34% in 2007

5. Global FDI Landscape
Source: UNCTAD
Main Benefits of FDI
Long-term capital inflow
Employment
Integrating local companies into Global Value Chain, hence increasing their competitiveness
Technology transfer
Improving labor skills
Improving exports
Benefits of FDI
Why are countries competing to attract FDI?

6. Global FDI Landscape
Source: UNCTAD World Investment Report 1998: Trends and Determinants.
Determinants of FDI
Host country determinants
1.Policy Framework
•Economic, political & social stability
•Rules regarding entry & operations
•Policies on functioning and structure of markets
•International agreements on FDI
•Privatization policy
•Trade policy
•Tax policy
2.Economic determinants
3.Business facilitation
•Investment promotion & facilitation
•Investment incentives
•Hassle costs (related corruption, administrative efficiency, etc.)
•Social amenities (bilingual schools, quality of life, etc.)
•After-investment services
Motives of TNCs
Principal economic determinants in the host countries
A. Market- seeking
•Market size, income per capita
•Market growth
•Access to regional & global markets
•Country-specific consumer preferences
•Structure of markets
B. Recourse/asset seeking
•Raw materials
•Low-cost unskilled labor
•Skilled labor
•Technological, innovatory & other created assets (e.g. brand name), including as embodied in individuals, firms and clusters
•Physical infrastructure (port, roads..)
C. Efficiency-seeking
•Cost of resources & assets listed under B, adjusted for productivity for labor resources
•Other input costs , eg. Transport & communication costs to/from /within host economy and cost of other intermediate goods
•Membership of a regional integration agreements conducive to the establishment of regional corporate networks
Host country determinants of FDI

7. FDI Potential of UfM

8. FDI potential of UfM
FDI Flows into UfM Countries 2003-2013
Destination
$ Billion
EU 28
4.721,8
Turkey
136,5
Israel
88,2
Egypt
63,9
Lebanon
38,6
Morocco
24,8
Jordan
21,3
Algeria
19,7
Tunisia
16,7
Syria*
9,2
Albania
7,7
Montenegro
7,0
Bosnia and Herzegovina
6,5
Mauritania
5,2
Palestine
1,3
TOTAL
5.168,6
UfM attracted 35% of Global FDI (32% to EU28)
Source: UNCTAD Note: No data available for Monaco *Self-suspended
UfM attracted over $5 trillion FDI between 2003-2013
FDI Flows
300
244
535
650
923
611
402
420
532
260
291
0
200
400
600
800
1000
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Other UfM
EU28
FDI Flows into UfM
($ Billion)

9. Outward FDI Flows from UfM 2003-2013
Source
$ Billion
EU 28
6.143,2
Israel
63,9
Turkey
20,5
Lebanon
8,5
Egypt
5,9
Morocco
3,6
Algeria
1,4
Other UfM countries
1,8
TOTAL
6.248,8
Over 41% of Global FDI was done by UfM, led by EU with 40%
Source: UNCTAD
FDI Inflows
UfM invested over $6 trillion abroad between 2003-2013
298
381
609
706
1272
997
390
496
595
246
260
0
150
300
450
600
750
900
1050
1200
1350
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Other UfM
EU28
FDI Flows from UfM
($ Billion)
FDI potential of UfM

10. Greenfield FDI Projects in UfM 2003-2013
Destination
$ Billion
EU28
1.944,0
Turkey
119,8
Egypt
111,0
Algeria
69,8
Morocco
51,3
Tunisia
45,4
Jordan
42,5
Syria*
33,7
Israel
17,4
Bosnia & Herzegovina
14,1
Lebanon
11,6
Albania
10,6
Mauritania
4,2
Montenegro
3,9
Palestine
1,2
TOTAL
2.480,5
UfM attracts 27% of Global Greenfield FDI, (21% by EU28)
Source: fDi Intelligence
UfM attracted c. $2,5 trillion Greenfield FDI between 2003-2013
Greenfield Investment
156
158
212
269
288
409
268
199
203
164
155
0
50
100
150
200
250
300
350
400
450
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Other UfM
EU28
Greenfield FDI Projects in UfM
($ Billion)
FDI potential of UfM

11. Greenfield FDI Projects in UfM 2003-2013
Source
$ Billion
EU 28
3.536,1
Israel
53,2
Turkey
41,8
Egypt
18,2
Lebanon
7,5
Jordan
4,7
Tunisia
1,8
Algeria
1,7
Morocco
1,6
Rest of UfM
1,7
TOTAL
3.668,1
39% of Global Greenfield FDI is done by UfM (38% by EU28)
Source: fDi Intelligence
UfM invested $3,7 trillion Greenfield FDI abroad between 2003-2013
Potential
293
236
255
336
385
573
424
366
335
225
241
0
100
200
300
400
500
600
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Other UfM
EU28
Greenfield FDI Projects by UfM ($ Billion)
Greenfield Investment
FDI potential of UfM

12. The Case of Turkey: Positioning itself as an attractive FDI destination in the region

13. Source: IMF World Economic Outlook April 2014, Eurostat, OECD, TurkStat, OECD Economic Outlook No.93, May 2013
4,9
4,6
4,3
4,1
4,0
3,7
3,5
3,4
3,4
2,6
2,6
1,8
1,1
1,1
0,9
0
1
2
3
4
5
Average Annual Real GDP Growth (%) 2002-2013
5,1
5,0
4,6
4,1
3,8
3,7
3,5
3,3
3,3
3,2
3,2
3,0
2,9
2,7
2,7
2,6
2,4
2,1
2,1
2,0
2,0
1,9
1,7
1,7
1,5
1,5
1,5
1,4
1,4
1,3
1,2
1,1
1,0
1,0
0,8
0,8
0,8
0,2
0,1
0
1
2
3
4
5
6
Turkey
Chile
South Africa
Korea
Argentina
Brazil
Israel
Australia
Russia
Slovakia
Mexico
Estonia
Poland
Norway
Sweden
Luxembourg
New Zealand
Czech Rep.
Switzerland
US
Canada
OECD
Austria
UK
France
Finland
Belgium
Netherlands
Ireland
Hungary
Germany
Slovenia
Euro area
Denmark
Japan
Iceland
Spain
Portugal
Italy
Average Annual Real GDP Growth (%) 2012-2017
Strong record, bright future
Economic Performance
Turkey: Positioning itself as an attractive FDI Destination

14. Source: Indicators are based on the compilations of OECD and Turkstat data
Quarterly Real GDP Growth (Index: Q1-2009=100) Seasonally adjusted
Fastest growing economy in Europe and one of the fastest growing economies in the world
The fastest recovering economy since the onset of global financial crisis in 2009
95
100
105
110
115
120
125
130
135
140
Q1-2009
Q2-2009
Q3-2009
Q4-2009
Q1-2010
Q2-2010
Q3-2010
Q4-2010
Q1-2011
Q2-2011
Q3-2011
Q4-2011
Q1-2012
Q2-2012
Q3-2012
Q4-2012
Q1-2013
Q2-2013
Q3-2013
Q4-2013
Q1-2014
Q2-2014
Turkey
Russia
Brazil
Poland
Czech Rep.
Hungary
Economic Performance
Turkey: Positioning itself as an attractive FDI Destination

15. Source: TurkStat
Main Drivers of the Economic Growth
67,6%
29,7%
29,7%
10,1%
5,5%
-1,8%
-40,9%
-45%
-25%
-05%
15%
35%
55%
75%
Contribution to Real GDP Growth
2002-2013
An economy driven by entrepreneurial spirit of private sector, robust domestic market and lucrative export opportunities
Manufacturing; 27,1%
Financial intermediation; 18,3%
Transport, storage & communication; 17,1%
Wholesale & retail trade; 14,3%
Other; 23,3%
Contribution to Real GDP Growth
2002-2013
Economic Performance
Turkey: Positioning itself as an attractive FDI Destination

16. Gross Public Debt Stock (% of GDP)
Strong macroeconomic fundamentals
Maastricht Criteria: 60 %
Maastricht Criteria: -3 %,
74
36,3
60,3
89,4
30
35
40
45
50
55
60
65
70
75
80
85
90
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
TURKEY
EU
Source: Treasury, European Commission,
-10,2
-1,6
-2,5
-3,3
-12
-9
-6
-3
0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
TURKEY
EU
Central Government Budget Balance (% of GDP)
Economic Performance
Turkey: Positioning itself as an attractive FDI Destination

17. Source: UN, IMF, national sources
2013 Ranking of Countries with Population over 70 million
1.367
1.261
319
252
203
188
179
157
146
127
120
100
90
88
87
81
78
77
-
300
600
900
1.200
1.500
China (1)
India (2)
US (3)
Indonesia (4)
Brazil (5)
Pakistan (6)
Nigeria (7)
Bangladesh (8)
Russia (9)
Japan (10)
Mexico (11)
Philippines (12)
Vietnam (13)
Ethiopia (14)
Egypt (15)
Germany (16)
Iran (17)
Turkey (18)
Population
(Million)
16.768
9.469
4.899
3.636
2.246
2.097
1.877
1.261
870
822
522
367
272
271
233
171
162
46
-
5.000
10.000
15.000
20.000
US (1)
China (2)
Japan (3)
Germany (4)
Brazil (5)
Russia (6)
India (7)
Mexico (8)
Indonesia (9)
Turkey (10)
Nigeria (11)
Iran (12)
Philippines (13)
Egypt (14)
Pakistan (15)
Vietnam (16)
Bangladesh (17)
Ethiopia (18)
GDP ($ Billion)
52,6
45,0
38,5
14,4
11,1
10,8
10,5
6,9
4,7
3,5
3,1
2,9
2,7
1,9
1,5
1,2
1,0
0,5
0
10
20
30
40
50
US (1)
Germany (2)
Japan (3)
Russia (4)
Brazil (5)
Turkey (6)
Mexico (7)
China (8)
Iran (9)
Indonesia (10)
Egypt (11)
Nigeria (12)
Philippines (13)
Vietnam (14)
India (15)
Pakistan (16)
Bangladesh (17)
Ethiopia (18)
GDP per capita ($K)
Turkey: Positioning itself as an attractive FDI Destination
Domestic Market

18. Source: TURKSTAT, OECD
30,3
23,8
20,9
16,4
13,3
8,4
6,8
4,4
3,7
2,8
2,3
2,1
0
5
10
15
20
25
30
35
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Percentage (%) of Poor People Living on Less than $4,3 Per Day
63,6
47,4
40,5
40,2
39,8
39,2
34,3
30,8
25,1
7,3
0
10
20
30
40
50
60
1
2
3
4
5
6
7
8
9
10
Lowest
income
top
income
group
Real Increase (%) in Household Income 2002-2012
Income Decile Groups (10%)
-0,1
-0,08
-0,06
-0,04
-0,02
0
0,02
0,04
0,06
Turkey
Mexico
Ireland
Greece
Belgium
Spain
Hungary
Italy
Slovakia
Portugal
UK
Poland
Czech Rep.
Japan
Norway
Korea
France
USA
Austria
Australia
Germany
Finland
Denmark
Canada
Sweden
Percentage point changes in the Gini coefficient
(Mid-1990s to Mid-2000s)
Increasing income
Turkey: Positioning itself as an attractive FDI Destination

19. Rise of the middle-class in Turkey
Source: Euromonitor International; Credit Suisse, Adults are defined to be individuals aged 20 or above
0
2
4
6
8
10
12
14
16
18
2002
2013
10,6
2,3
5,3
18,0
1,0
9,5
Income < $10K
Income > $10K
Income > $25K
Number of Households by Annual Disposable Income (million)
5000
10000
15000
20000
25000
30000
2002
2013
11.141
25.909
Wealth per Adult ($)
Increasing income
Turkey: Positioning itself as an attractive FDI Destination

20. Source: TurkStat
Changing consumption culture with increasing purchasing power and lower liabilities
Food & Housing 54%
Other 46%
2002
Allocation of Household Consumption Expenditures (%)
Increasing Income
21
65
85
0
20
40
60
80
100
Turkey
Euro Area
USA
Household Liability % of GDP (2012)
Turkey: Positioning itself as an attractive FDI Destination
Food & Housing 45%
Other 55%
2013

21. Source: TURKSTAT
Increasing export
Export (US$ Billion)
36,1
47,3
63,2
73,5
85,5
107,3
132
102,2
114
135
152
152
35
50
65
80
95
110
125
140
155
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Export Opportunities
Turkey: Positioning itself as an attractive FDI Destination

22.  Customs Union with the European Union
 Free Trade Agreements with 25 countries
Source: Ministry of Economy, * In ratification process *
1. Albania
14. Tunisia
2. Bosnia & Herzegovina
15. Montenegro
3. Egypt
16. Serbia
4. Georgia
17. Chile
5. Iceland
18. Jordan
6. Israel
19. Mauritius
7. Lichtenstein
20. South Korea
8. Macedonia
21. Lebanon*
9. Morocco
22. Kosovo*
10. Norway
23. Ghana*
11. Palestine
24. Malaysia*
12. Switzerland
25. Moldavia*
13. Syria
Free Trade
Export Opportunities
Turkey: Positioning itself as an attractive FDI Destination

23. Source: IMF World Economic Outlook and WTO; GDP, Imports and population figures as of 2013
Access to Multiple Markets
1,5 Billion People $26 Trillion GDP, over $8 trillion trade (45% global trade) at a 4-hour flight distance
Strategic Location
Turkey: Positioning itself as an attractive FDI Destination
EUROPE GDP: $19.7 trillion Import: $6,6 trillion Population: 670 million
RUSSIA
GDP – $2.1 trillion
Import: $344 billion
Population: 143 million
CENTRAL ASIA & CAUCASUS GDP: $433 billion Import: $106 billion Population: 84 million
MENA GDP: $3,7 trillion Import: $1 trillion Population: 665 million

24. A Manufacturing Hub
Source: Deloitte, oica, worldsteel, turkbesd
TURKEY TURKEY TURKEY
T U R K E Y
Turkey will be the 16th manufacturing hub in the world and 2nd in Europe
Strategic Location
Turkey: Positioning itself as an attractive FDI Destination
Turkey is already;
17th largest automotive manufacturer in the world & the largest commercial vehicle manufacturer in Europe (2013)
8th largest steel manufacturer in the world & 2nd in Europe (2013)
Largest TV & white goods manufacturer in Europe (2013)

25. Turkey emerges as a regional manufacturing hub for global firms
SOURCE: TSKB
PCs and peripherals
•Tripling production with new investment
•To export 90% of total production
Heavy commercial vehicles
•New model to be manufactured in Turkey and exported to 65 countries
Energy
•Tripling production to export to countries in Europe, North Africa, and South America
FMCG
•Production base for the Middle Eastern and North African markets
Filters and generators
•85% of total production to be exported
Textile
•Moving all production volume to Turkey
New line of trucks
•Regional manufacturing hub for new line of trucks
•Annual production capacity of 150K units
•Total FDI 1.6 Bn USD
• Exports to 30 countries
Strategic Location
Turkey: Positioning itself as an attractive FDI Destination

26. Turkey is also becoming a regional management hub for global firms
Company
Regions managed from Turkey
Rationale behind chosing Turkey as a management hub
90 countries
•Eurasia
•Africa
“Turkey is a strong country due to its dynamic economy and young population” -Ahmet Bozer, Executive Vice President and President of Coca Cola International, 2011
79 countries
•Middle East
•Africa
“Besides, the business opportunities Istanbul offers, its educated workforce and infrastructure supporting expats are important” -Ala Faramawy, VP Microsoft International, 2011
64 countries
•Middle East
•Africa
"Turkish managers have the European business ethics and discipline and the strong communication skills of Eastern managers" –Intel's Business Dev.Manager, Burak Aydın, 2012
20 countries
•Caucasus
•Central Asia
•Eastern Europe
"Pfizer Turkey is referred to as 'A School of Leaders', since it continuously transfers successful executives to Pfizer companies worldwide. Today, more than 35 Turkish senior executives are appointed to Pfizer affiliates all around the world. " –ISPAT website, 2012
Source: Press releases
Strategic Location
Turkey: Positioning itself as an attractive FDI Destination

27. Largest youth population as compared to EU; half of the population is under age 30
Population Pyramid (%)
5
4
3
2
1
0
1
2
3
4
5
0-4
5-9
10-14
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
75-79
80-84
85-89
90+
Female
Male
%
Age Group
TURKEY
5
4
3
2
1
0
1
2
3
4
5
0-4
5-9
10-14
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
75-79
80-84
85-89
90+
Female
Male
%
Age Group
EUROPE
Source: Turkstat, Eurostat, UN, 2013
77 million young & dynamic people
5
4
3
2
1
0
1
2
3
4
5
0-4
5-9
10-14
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
75-79
80-84
85-89
90+
Female
Male
%
Age Group
ASIA
Demographics
Turkey: Positioning itself as an attractive FDI Destination

28. Source: UN
Favorable Demographic Trend
80
85
90
95
100
105
110
115
120
125
2013
2016
2019
2022
2025
2028
2031
2034
2037
2040
2043
2046
2049
Working Age Population (15-64), 2013=100
Europe
Turkey
40
50
60
70
80
90
100
2013
2016
2019
2022
2025
2028
2031
2034
2037
2040
2043
2046
2049
Total Dependency Ratio (%) (Age 0-14 & Age 65+) / Age 15-64
Europe
Turkey
Labor Force
Turkey: Positioning itself as an attractive FDI Destination

29. Source: IMD World Competitiveness Yearbook 2014, IMD WCY Executive Opinion Survey based on an index from 0 to 10 (0 = Not available 10 = Readily available)
Skilled Labor Force 2014
6,0
5,9
5,8
5,4
5,0
4,7
3,1
0
1
2
3
4
5
6
Turkey
Romania
Czech Rep.
Poland
China
Hungary
Bulgaria
Availability of Skilled Labor Force
6,0
5,2
5,2
5,2
4,8
4,1
2,7
0
1
2
3
4
5
6
Turkey
Czech Rep.
Romania
Poland
China
Hungary
Bulgaria
Availability of Competent Senior Managers
7,1
6,8
6,7
6,22
6,0
5,6
3,9
0
2
4
6
8
Turkey
Hungary
Romania
Czech Rep.
China
Poland
Bulgaria
Availability of Qualified Engineers
Labor Force
7,0
6,5
5,7
5,4
5,4
5,2
3,6
0
1
2
3
4
5
6
7
Turkey
Poland
Romania
China
Hungary
Czech Rep.
Bulgaria
Availability of Finance Skills
Turkey: Positioning itself as an attractive FDI Destination

30. Source: Eurostat , TurkStat, Mercer
4,6
5,5
5,7
6,6
6,7
7,8
8,3
8,3
8,3
9,7
10,8
11,9
22
0
5
10
15
20
25
Annual average number of sick days per employee, 2008
52,0
42,7
41,9
41,9
41,7
41,5
41,5
41,5
40,8
40,4
40,1
40,0
39,6
38,8
30
35
40
45
50
55
Productive and Cost-effective Labor Force
Annual Average Hours worked per week, 2013
95
110
125
140
155
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Turkey
Poland
Czech Rep.
Hungary
Productivity: Real GDP per hour worked (Index: 2001=100)
45,8
45,0
39,2
28,8
27,2
18,8
12,4
11,5
9,7
8,8
6,9
0
5
10
15
20
25
30
35
40
45
50
France
Germany
Ireland
Spain
UK
Slovenia
Czech Rep.
Slovakia
Hungary
Poland
Turkey
Labor Cost Per Hour in Manufacturing ($), 2012
Labor Force
Turkey: Positioning itself as an attractive FDI Destination

31. Improving Investment Climate in Turkey

32. National Treatment
Guarantee of Transfers
International Arbitration
Purchase of Real Estate
Employment of Expats
International standards (IFRS & IAS)
Transparency & Accountability
Institutionalization of companies
Opportunity to perform board meetings online
27
29
30
30
31
36
37
38
39
25
30
35
40
Romania
Russia
Bangladesh
Bulgaria
Poland
Morocco
Cameroon
Turkey
Guatemala
6,5
8,0
11,2
13,0
19,0
28,4
30,0
31,4
0
5
10
15
20
25
30
35
Turkey
Romania
Russia
Spain
Czech Rep.
India
Poland
China
Reforms
Number of Days to Establish a Company in 2013
Number of Days to Establish a Company in 2003
New FDI Law in 2003
CIT reduced to 20% in 2006
New Commercial Code in 2012
Source: World Bank
Improving Investment Climate

33. Source: OECD
-0,1
0
0,1
0,2
0,3
0,4
0,5
0,6
China
Indonesia
India
New Zealand
Malaysia
Mexico
Russia
Canada
Iceland
Korea
Australia
Israel
Austria
Brazil
United States
Norway
Switzerland
Poland
OECD - Average
UK
Turkey
Sweden
Japan
Italy
Slovakia
France
Ireland
Argentina
Denmark
Greece
Hungary
Germany
Spain
Finland
Netherlands
Czech Rep.
Luxembourg
Drop in Index Score from 2003 to 2013 2013 Score
TOP REFORMERS
1.Turkey
2.Malaysia
3.Finland
4.India
5.Russia
------ OECD Average Score in 2013
Index Score: 1=Closed to FDI, 0=Open to FDI
More Restrictive
Less Restrictive
Reforms
FDI Regulatory Restrictiveness Index
Turkey has emerged as the biggest reformer
Improving Investment Climate

34. Investment Zones (Technology Development Zones, Organized Industrial Zones, Free Zones)
Corporate and Personal Income Tax allowances
Exemption from custom duties
VAT exemption
Social Security Premiums Support
 R&D and Innovation Support Law
R&D allowances and Enhanced Tax allowances
Income Withholding Tax Deduction
Cash support for entrepreneurial scientists
 New incentive system (General, Regional, Large-scale, Priority, Strategic Investment)
Reduced corporate tax rates
Social security premium support
Allocation of state land
Interest support
Withholding tax support
INVESTMENT INCENTIVES IN TURKEY
Incentives
Improving Investment Climate

35. Bilateral Agreements for the Promotion and Protection of Investments
Turkey signed bilateral treaties with 76 countries to promote and protect investments
•Afghanistan
•Albania
•Argentina
•Australia
•Austria
•Azerbaijan
•Bangladesh
•Belarus
•Belgium
•Bosnia and Herzegovina
•Bulgaria
•China
•Croatia
•Cuba
•Czech Republic
•Denmark
•Egypt
•Estonia
•Ethiopia
•Finland
•France
•Georgia
•Germany
•Greece
•Hungary
•India
•Indonesia
•Iran
•Israel
•Italy
•Japan
•Jordan
•Kazakhstan
•Kuwait
•Kyrgyzstan
•Latvia
•Lebanon
•Libya
•Lithuania
•Luxembourg
•Macedonia
•Malaysia
•Malta
•Moldova
•Mongolia
•Morocco
•Netherlands
•Oman
•Pakistan
•Philippines
•Poland
•Portugal
•Qatar
•Romania
•Russia
•Saudi Arabia
•Senegal
•Serbia
•Singapore
•Slovakia
•Slovenia
•South Korea
•Spain
•Sweden
•Switzerland
•Syria
•Tajikistan
•Thailand
•Tunisia
•Turkmenistan
•Ukraine
•Uzbekistan
•UAE
•USA
•UK
•Yemen
Improving Investment Climate

36. Source: A.T. Kearney
Likelihood of investment in a market over the next 3 years
Confidence
0
0,5
1
1,5
2
2,5
3
USA (1)
China (2)
Canada (3)
UK(4)
Brazil (5)
Germany (6)
India (7)
Australia (8)
Singapore (9)
France (10)
UAE (11)
Mexico (12)
South Africa (13)
Switzerland (14)
Malaysia (15)
Sweden (16)
Chile (17)
Spain (18)
Japan (19)
Italy (20)
Belgium (21)
Netherlands (22)
Denmark (23)
Turkey (24)
Indonesia (25)
Foreign Direct Investment Confidence Index 2014 (0=Low Confidence; 3=High Confidence)
Low Confidence
High Confidence
Improving Investment Climate
Increasing Confidence in Turkey: FDI Confidence Index based on 300 companies’ responses
The Index examines overarching trends and ranks countries on how changes in their political, economic, and regulatory systems are likely to affect FDI inflows in the coming years.

37. Source: Central Bank of Republic of Turkey, *as of 2014 September, Ministry of Economy
Increasing Foreign Direct Investment (FDI)
15
146
0
30
60
90
120
150
1923-2002 (80 years)
2003-2014*
FDI Inflows
($ billion)
Investment Climate
FDI
5,6
40,9
0
5
10
15
20
25
30
35
40
45
Number of Foreign Companies (Thousand)

38. Improving Investment & Trade Relations with UfM

39. Source: Central Bank of Republic of Turkey, Ministry of Economy, *as of 2014 September
71% of FDI in Turkey is done by UfM (EU:70%)
Investment & Trade relations with UfM
Investment
0
3000
6000
9000
12000
15000
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014*
Other UfM
EU 28
FDI Flows from UfM into Turkey ($ million)
FDI Flows from UfM into Turkey
Source
Cumulative Value 2003-2014* ($ Million)
EU 28
82.624
Lebanon
1.135
Israel
384
Jordan
215
Albania
5
TOTAL
84.363
Number of UfM companies in Turkey 2014*
EU
19.186
Syria**
1.503
Israel
306
Jordan
297
Egypt
277
Lebanon
276
Algeria
91
Palestine
86
Tunisia
71
Bosnia-Herzegovina
65
Morocco
63
Albania
57
Monaco
9
Montenegro
7
Mauritania
2
TOTAL
22.296

40. Source: Central Bank of Republic of Turkey, Ministry of Economy, *as of 2014 September **self-suspended
Turkey has invested c.$16 billion in UfM countries since 2003
0
500
1000
1500
2000
2500
3000
3500
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014*
Other UfM
EU28
FDI Flows from Turkey into UfM ($ million)
FDI Flows from Turkey into UfM
Cumulative Value 2003-2014*
Destination
($ Million)
EU 28
14.860
Tunisia
220
Egypt
174
Bosnia -Herzegovina
148
Macedonia
110
Morocco
68
Albania
67
Lebanon
31
Algeria
29
Lebanon
31
Syria**
18
Israel
6
Jordan
4
TOTAL
15.757
Investment & Trade relations with UfM
Investment

41. Source: TurkStat
Turkey’s foreign trade with UfM exponentially increased and reached $175 bn in 2013, up from $50bn in 2002
Investment & Trade relations with UfM
Trade
23
54
64
76
-
20
40
60
80
2002
2006
2010
2013
Othe UfM
EU28
Export ($ Billion)
27
62
77
99
-
20
40
60
80
100
2002
2006
2010
2013
Other UfM
EU28
Import ($ Billion)
50
116
141
175
0
25
50
75
100
125
150
175
2002
2006
2010
2013
Export
Import
Turkey’s Foreign Trade with UfM ($ Billion)

42. THANK YOU