ECONOMY

FDI surges in Turkey

ISTANBUL – Direct foreign investment in Turkey nearly tripled to $461 million in the first four months of the year, boosting hopes that 2004 investments will reach $2 billion, the Foreign Capital Association said yesterday. Foreign investment in the first four months of last year amounted to $160 million and in the whole of last year totaled $586 million, down from $1 billion in 2002. By comparison, China attracted foreign direct investment of $53 billion last year. «For the whole of 2004 an expectation of $2 billion, excluding privatization revenues, is realistic,» Saban Erdikler, chairman of the association (YASED), told a news conference held to present its regular survey of foreign investor expectations. But he said the government must take investment-promoting measures to achieve this target, pointing to regulations and the establishment of importers’ associations which are seen holding up imports. Turkey’s image internationally was also harmed by the difficulties foreign businessmen face in securing work permits, Erdikler said. There are some 6,500 companies set up with foreign capital in Turkey and 86 of the top 500 industrial concerns were founded with foreign capital, YASED said. Of the $461 million invested in the January-April period this year, the 10 biggest foreign-capitalized firms accounted for $250 million, Erdikler said. According to Treasury data, Turkey approved foreign investments totaling $35.2 billion between 1980 and June 2003, while actual investment amounted to $16.4 billion during this period. The YASED survey, based on the opinions of 300 foreign investors belonging to the association, showed consumer price inflation (CPI) was expected to amount to 12 percent in 2004 and gross national product (GNP) growth was seen at 4.9 percent. Respondents expected the lira exchange rate to the dollar to end the year at 1,608,322. Next year CPI is seen falling to 9.8 percent while GNP growth was forecast to be 4.9 percent again.