1. Is Turkey lagging behind the legendary countries of FDI? Kalman Kalotay, UNCTAD Conference on Turkey Where the Opportunities Abound: On the Way to Success 21-22 February 2007 Swissotel, Istanbul

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

3. Outline Landslide in global FDI: How the composition of inflows has changed recently 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 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… 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 the global recovery? Countries continued to liberalize FDI – except in Latin America Why does FDI surge in emerging economies? Push and pull factors 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 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 What is the UNCTAD Inward FDI Performance Index Turkey versus Brazil, China, India and the Russian Federation (the global leaders) 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 the Czech Republic, Estonia and Hungary (the EU-10) Turkey versus Azerbaijan, Bulgaria, Georgia and Romania (the neighbourhood) Turkey versus Azerbaijan, Bulgaria, Georgia and Romania (the neighbourhood) More lights for Turkey in outward FDI? More lights for Turkey in outward FDI? The largest emerging-economy source countries of outward FDI stock The largest emerging-economy source countries of outward FDI stock

4. How the composition of inflows has changed recently I. Landslide in global FDI

5. Emerging countries have been resilient to the global roller coaster of FDI inflows (1993-2006) (Millions of dollars)

6. Changes in the composition of global FDI flows between 2000 and 2005 2000: 20% emerging 2000: 20% emerging 2005: 41% emerging

7. (2005 data) Why the global recovery? Countries continued to liberalize FDI – except in Latin America (2005 data)

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

9. 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

10. The UNCTAD Inward FDI Performance Index Measures inward FDI flows against GDP Measures inward FDI flows against GDP Uses three-year periods to offset annual fluctuations in data 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) 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 The index excludes tax havens

11. Turkey versus Brazil, China, India and the Russian Federation (the global leaders)

12. Turkey versus the Czech Republic, Estonia and Hungary (the EU-10)

13. Turkey versus Azerbaijan, Bulgaria, Georgia and Romania (the non-legendary neighbourhood)

14. III. More lights for Turkey in outward FDI?

15. The largest emerging-economy source countries of outward FDI stock, 2005 (Billions of dollars)

16. Thank you! Visit the website of the World Investment Report: http://www.unctad.org/wir You can also send your questions to: kalman.kalotay@unctad.org