Net FDI still in Turkey’s favor despite sharp fall in foreign interest
The central bank’s accounts payable data for August show that in the first eight months of this year FDI inflow decreased by 34 percent, amounting to $3 billion, compared to the same period of 2009. Likewise, outward FDI by Turkish investors also decreased in the same period, registering an 8 percent fall to $1.2 billion. The central bank data also indicate that between 2002 and 2010, FDI coming into Turkey neared $72 billion while national investors transferred $12.5 billion of capital to foreign investments.
An in-depth analysis of these data shows that between January and August, almost half of the total FDI to foreign countries, $650 million, went for investments in the service sector, while $400 million of it was transferred to financial institutions. Investment in the foreign agriculture sector increased from $3 million to $50 million in this period.
Moreover, FDI coming into Turkey was concentrated in electricity, gas, steam and hot water production and the financial services sector, with each receiving approximately $1.5 billion. Foreign investment in the agriculture sector was limited to $18 million.
The Netherlands ranked first in terms of FDI in Turkey. In the first eight months of 2010, Dutch investments neared $332 million of $2.4 billion in total European FDI. The Netherlands is followed by Czech investments, worth $294 million, and Germany, which invested $284 million.
The total sum of FDI inflow to Turkey from Europe between 2002 and August 2010 reached $55.5 billion. A breakdown by country shows the Netherlands topped the list with $14.2 billion in investment. It was followed by the US with $6.5 billion in the same period. Greece came in third with $6.4 billion. The total amount of investment from Asian countries was limited to $7.2 billion.
The central bank data showed that approximately $12.4 billion in Turkish capital moved abroad. Between 2002 and 2010, $7.6 billion of this was invested in European countries, $400 million in Africa, $950 million in North and South American countries and $3.4 billion in Asian countries. Azerbaijan and the Netherlands both share first place with approximately $2.5 billion of net FDI from Turkey, followed by Malta with $1.7 billion and Germany with $1.4 billion. Countries in the Middle East were able to attract $3.4 billion in Turkish investment in the same period.
The Turkish service sector was able to attract $52.5 billion in FDI from the total FDI of $72 billion in the eight-and-a-half-year period. FDI in the production sector neared $19.5 billion, while the agriculture sector was not able to attract more than $137 million.