ISTANBUL FINANCE SUMMIT
Ayşem Sargın, the Chairperson of the
International Investors Association (YASED), delivered a speech at "the
Istanbul Finance Summit" held on October 9, 2019.
Sargın shared the following information in her speech:
“As the International Investors Association (YASED), we represent 80 percent of
international direct investments in our country. Our members have been
supporting the development of our country for years, some for more than 100 years.
Through their investments, they create added value to various fields from
manufacturing to employment, technology and export in Turkey. We consider these
investments leaving their marks in Turkey as the main catalysts for the
sustainable development of our country.
As YASED, we have valuable knowledge and experience. As many of our members
have been operating in Turkey for long years, they have attained their
long-term goals by overcoming a number of challenges faced by our country over
the years. Therefore, we are also proud of representing an investor base
approaching Turkey from a long-term perspective and believing in the potential
of our country.
We are leaving behind a period of about 5 years during which global capital
flows ran between developed and developing countries and international direct
investments declined at global level.
Currently, Turkey obtains about 1 percent of global FDI. However, we believe
that our country holds a much higher potential than this. Recent international
investment movements also support our view.
The United Nations Conference on Trade and Development's (UNCTAD) World
Investment Report 2019 states that Turkey takes the 21st place with a rise of 4
ranks in terms of global FDI.
The same report also indicates that the global direct investments fell by 13
percent to $ 1.3 trillion in 2018 but it went up by 13 percent to $ 13 billion
in Turkey. Observing a rise in investments inflows to our country within a
period of decline in global direct investments is an extremely positive
So far the news is so good. However, we experience these developments on one
hand while we go through a period where global competition for direct
investments is quite tough and we must achieve and maintain success in the face
of many uncertainties from geo-political risks to trade wars on the other. In
this competitive environment, we must both attract these investments by getting
ahead of our rivals and focus on qualified and transformative investments that
will prepare our country for the future world by acting in a selective manner.
As you know, trade and investment are complementary elements that go hand in
hand. Trade wars and protectionist policies, which have increasingly marked the
past few years, prevent the free movement of goods. We observe that these and
many other developments have recently led to the differentiation of the
criteria that have influenced investment decisions. In this difficult
conjuncture, we see that factors such as finance, financial stability, market
size and qualified labor force come to the forefront in investment preferences
for international investors. Our studies also show that new incentive systems
have emerged, such as providing direct financing to investors, and are
preferred by investors.
Today, developed countries are also affected by this competition and take more
ambitious steps to attract international investments. The US tax reform at the end of 2017 is one
of the most important examples of this. As you know, the USA reduced corporate
tax from 35 percent to 21 percent through this tax reform. Although this is
seen as a step for the domestic market, it is expected to affect half of the
total direct investments in the world in the medium term. Corporate tax reliefs
and a tight policy to keep investments within the country in the US led to the
achievement of previous profits by American companies. So much so that this tax
reform in the USA affected the European Union the most.
When we look at the European investment market, we observe a contraction in
parallel with global trends. Europe's global direct investment market share,
which was around 50 percent in 2007, declined to 8.4 percent in 2018. One of the main reasons for the sharp decline
in investment inflows to Europe in 2018 seems to be the withdrawal of
accumulated profits by American companies following the corporate tax cut in
the United States.
Another important development affecting FDI is the efficiency of investments.
In this respect, we observe that the impacts of an increase in productivity
from digitalization on investment decisions gradually increase. In this period
where the elements of global competition have changed in production, investors
are increasingly turning to countries offering conditions to support their
In addition to all these developments, there are also some decisive constant
criteria for investments, the most important of which are related to financing.
Impacts of the abundance, cost and diversity of financing on investments are
still considerable today as always. Although the economic slowdown puts
pressure on investments in the upcoming period, we believe that the downward
trend in interest rates will facilitate the balancing of this contraction and
the encouragement of investments.
We believe that the Istanbul Finance Center is an important step taken towards
the diversification of the finance resources needed for investments and the
strengthening of how investors perceive Turkey.
As YASED, we attach great importance to this project because we foresee that
the emergence of Istanbul as a regional and global finance center will support
employment, technology and international fund inflows and also increase direct
investments. We welcome the actions taken in the areas of “strong human
resources”, “technological infrastructure and digitalization” and “regulations
and incentive mechanisms" needed for the successful implementation of the
project. We also work with relevant institutions on issues such as further
increasing the diversity of financial products and services, ensuring the
competitiveness of transaction costs, simplifying the tax system, developing
the regulatory and supervisory framework, and data security and roaming, and
share our suggestions to bring to our country the best practices in other
international finance centers.
We, as international investors in Turkey and indeed as Turkey's investors, know
the strengths of our country as an investment destination so far and support
all efforts in this direction. Our research also supports this belief. Currently,
we see that existing investors in our country have a much higher tendency to
make new investments than new investors. Investors that are happy and know
Turkey well constitute the real and the most powerful references for Turkey. We
wholeheartedly believe that the potential of our country is high and it has the
power to attract more investment.
However, as I have just mentioned, we now observe investors that set new
directions in today's world and strong rivals competing to attract them to
their countries. We must rapidly adapt our country to these changing conditions
and focus on investments that will make us competitive beyond today and in the
economy of tomorrow. We have to achieve this transformation so that our country
can continue to attract international direct investments in the long-term so as
to meet its financing needs permanently.
As YASED, we are working with our public and private sector stakeholders within
the scope of many studies conducted on the investment competitiveness of our
country. We assume a leading role in activities such as Turkey's FDI Strategy,
the Framework Law of Investments and the identification of priority investment
Our goal is to make sure that Turkey is among top 10 countries that attract FDI
the most. To achieve this, our share in global investments, which is 1 percent
today, should increase to 3 percent. Turkey holds this potential, but the way
of achieving this potential is to catch up with the global transformation and
increase its competitiveness in line with emerging conditions.
We, as YASED, are ready to contribute to the steps that need to be taken by
Turkey throughout this process with our experience and the global knowledge of