1. IMPROVEMENT OF INVESTMENT ENVIRONMENT & IMPACT on FDI February 2009 Cavit DAĞDAŞ Deputy Undersecretary Undersecretariat of Treasury Prime Ministry Undersecretariat for Treasury

2. Undersecretariat of Treasury OUTLINE  Improving Investment Climate: Why?  Improvement of Investment Climate Turkey’s Experience  Coordination Council for the Improvement of Investment Environment (YOIKK)  Investment Advisory Council (IAC)  Major Achievements  Indicators of the Success  FDI Statistics of Turkey  International Indices and Reports  Future Agenda

3. Undersecretariat of Treasury IMPROVING INVESTMENT CLIMATE WHY?

4. Undersecretariat of Treasury INVESTMENT CLIMATE COMPETITIVENESS FDI GLOBALIZATION  Predictability Economic Stability Political Stability  Free Market Economy  Investor-friendly framework Improving Investment Climate: Why?

5. Undersecretariat of Treasury IMPROVEMENT OF INVESTMENT CLIMATE TURKEY’S EXPERIENCE

6. Undersecretariat of Treasury Improvement of Investment Climate: Turkey’s Experience Diagnosis on Problem Areas of Investment Environment in Turkey Determination of Priorities with All Relevant Parties Design of an Appropriate Structure Involving the Stakeholders

7. Undersecretariat of Treasury Location of Investment Company Establishment Employment Foreign Trade & Customs Licensing Intellectual Property Rights Taxes and Incentives Foreign Direct Investment Legislation Investment Promotion SMEs Coordination Council for the Improvement of Investment Environment (YOIKK) Steering Committee Investment Advisory Council Corporate Governance Research & Development Improvement of Investment Climate: Turkey’s Experience

8. Undersecretariat of Treasury Investment Advisory Council Executives of leading multinational firms, Executives of leading multinational firms, Heads of international institutions Heads of international institutions (IMF, World Bank, European Investment Bank) and (IMF, World Bank, European Investment Bank) and TOBB, TUSIAD, YASED, TIM. TOBB, TUSIAD, YASED, TIM. V. Meeting June 18, 2008 IV. Meeting June 11, 2007 III. Meeting June 29, 2006 II. Meeting April 29, 2005 I. Meeting March 15, 2004 Investment Advisory Council of Turkey had 5 meetings so far. Improvement of Investment Climate: Turkey’s Experience

9. Undersecretariat of Treasury MAJOR ACHIEVEMENTS

10. Undersecretariat of Treasury Major Achievements Investment Support and Promotion Agency of Turkey Simplification of Business Start-Up www.invest.gov.tr Indicators of Business Start-UpTurkey OECD Average Pre-Refom 200 7 No. of procedures 1366 Day38614.9 FDI Law  No Pre-entry Screening Requirement  No Minimum Capital Requirement  National Treatment

11. Undersecretariat of Treasury INDICATORS OF SUCCESS

12. Undersecretariat of Treasury Indicators of Success - FDI Statistics Increased FDI Inflows... USD Billion Source: Turkish Treasury, Provisional Data

13. Undersecretariat of Treasury Upward Trend in Number of Companies with International Capital (Cumulative) Source: Turkish Treasury, Provisional Data Indicators of Success - FDI Statistics

14. Undersecretariat of Treasury World Investment Report 2008, UNCTAD Indicators of the Success- Investment Indices200520062007 FDI Stock in Turkey (USD Billion) 64.479146 Turkey has been selected as 15th attractive country to invest in 2008-2010 term. Turkey has been 21st in terms of FDI stock; while it was 25th in 2006.

15. Undersecretariat of Treasury # of countries Turkey’s Ranking DOING BUSINESS 2009 18159 DOING BUSINESS 2008 17860 DOING BUSINESS 2007 17565 DOING BUSINESS 2006 15584 World Bank - Doing Business 2009 Report Doing Business 2009 Report Turkey has displayed progress in; employing workers, protecting investors and enforcing contracts. Indicators of the Success- Investment Indices

16. Undersecretariat of Treasury Improvement in International Competitiveness Heritage Foundation Economic Freedom Index 2005200620072008 No of countries 161157157162 Ranking of Turkey 112858374 Forbes / Best Countries for Business 200620072008 No of countries 135144121 Ranking of Turkey 614841 Tranparency International/Corruption Perception Index 200620072008 No of countries 163180180 Ranking of Turkey 606458 Indicators of the Success- Investment Indices

17. Undersecretariat of Treasury FUTURE AGENDA

18. Undersecretariat of Treasury Future Agenda Investment climate reform program will focus on:  Decreasing time and cost of business start-up  Improving flexibility of the labor market  Simplifying and decreasing cost of sectoral licensing  Simplifying and decreasing cost of customs  Easing access to finance for SMEs  Enhancing corporate governance  Strengthening R&D activities

19. IMPROVEMENT OF INVESTMENT ENVIRONMENT & IMPACT on FDI February 2009 Cavit DAĞDAŞ Deputy Undersecretary Undersecretariat of Treasury Prime Ministry Undersecretariat for Treasury