Transcript Outward FDI from CEEs: an opporutinty for cooperation

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
Prologue
Thank you to:
YASED
 The World Bank
 The Undersecretary of Treasury
 Finans Dünyasi

Disclaimer

The views are those of the presenter and do not
necessarily reflect the opinion of the United
Nations.
Outline

Landslide in global FDI: How the composition of inflows has changed
recently
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



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

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
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…
Why the global recovery? Countries continued to liberalize FDI – except in Latin
America
Why does FDI surge in emerging economies? Push and pull factors
What is the UNCTAD Inward FDI Performance Index
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 Azerbaijan, Bulgaria, Georgia and Romania (the neighbourhood)
More lights for Turkey in outward FDI?

The largest emerging-economy source countries of outward FDI stock
I. 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 (19932006)
(Millions of dollars)
1600
1400
1200
Transition economies
1000
800
600
Developing economies
400
200
0
1993
Developed economies
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Changes in the composition of global FDI
flows between 2000 and 2005

2000: 20% emerging

2005: 41% emerging
Turkey
0%
Singapore
1%
Mexico
1%
Hong Kong, China
4%
Other emerging
7%
Brazil
2%
China
3%
Other emerging
22%
Other developed
countries
9%
EU (exc. Czech Rep.)
50%
Brazil
2%
Turkey
1%
EU (exc. Czech
Rep.)
45%
Mexico
2%
Singapore
2%
Hong Kong, China
4%
United States
23%
China
8%
Other developed
countries
2%
Czech Rep.
0%
United States
11%
Czech Rep.
1%
Why the global recovery?
Countries continued to liberalize FDI – except in Latin
America (2005 data)
100%
80%
60%
40%
More f avourable
Less f avourable
South-East Europe
and CIS
Asia and Oceania
Latin America and
the Caribbean
Africa
Developing
countries
World
0%
Developed
countries
20%
Why does FDI surge in emerging economies?

Push factors:




pressure on companies to cut costs
skill shortages in home countries
shortage of natural resources
Pull factors:




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)
cost advantages
natural resources
II. 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
The UNCTAD Inward FDI
Performance Index




Measures inward FDI flows against GDP
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)
The index excludes tax havens
Turkey versus Brazil, China, India and the
Russian Federation (the global leaders)
92-94
93-95
94-96
95-97
96-98
97-99
98-00
99-01
00-02
01-03
0
20
40
60
80
100
120
140
China
Brazil
Russian Federation
Turkey
India
02-04
03-05
Turkey versus the Czech Republic, Estonia
and Hungary (the EU-10)
92-94
93-95
94-96
95-97
96-98
97-99
98-00
99-01
00-02
0
20
40
60
80
100
120
140
Estonia
Czech Republic
Hungary
Turkey
01-03
02-04
03-05
Turkey versus Azerbaijan, Bulgaria, Georgia and
Romania (the non-legendary neighbourhood)
92-94
93-95
94-96
95-97
96-98
97-99
98-00
99-01
00-02
01-03
0
20
40
60
80
100
120
140
Azerbaijan
Bulgaria
Georgia
Romania
Turkey
02-04
03-05
III. More lights for Turkey in
outward FDI?
The largest emerging-economy source
countries of outward FDI stock, 2005
Rank Economy
1 Hong Kong, China
2 British Virgin Islands
3 Russian Federation
4 Singapore
5 Taiwan Province of China
6 Brazil
7 China
8 Malaysia
9 South Africa
10 Korea, Republic of
11 Cayman Islands
12 Mexico
(Billions of dollars)
Billion dollars
470
123
120
111
97
72
46
44
39
36
34
28
13 Argentina
14 Chile
15 Indonesia
16 Panama
17 Venezuela
18 United Arab Emirates
19 India
20 Colombia
21 Turkey
22 Bermuda
23 Kuwait
24 Bahrain
25 Nigeria
23
21
14
13
11
10
10
9
8
6
5
5
5
Thank you!
Visit the website of the World Investment Report:
http://www.unctad.org/wir
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