In this episode of Invest in Türkiye Talks, we are hosting the YASED | International Investors Association Chairperson Engin Aksoy, who shares valuable insights into Türkiye's investment environment, YASED's role, and the future of foreign direct investment (FDI) in the country. With a focus on enhancing Türkiye's competitiveness as an investment destination, Aksoy discusses several key topics crucial for understanding the current economic landscape and the opportunities that lie ahead.
Aksoy addresses the current state of global FDI, noting a decrease in flows due to rising trade tensions and tighter financial conditions. In 2023, global FDI flows fell by 2 percent to USD 1.3 trillion, following a more significant decline of 16 percent in 2022. Despite these challenges, developing countries, including Türkiye, continue to attract a substantial portion of global FDI, accounting for 65 percent in 2023. This trend highlights Türkiye's resilience and potential as a competitive player in the global investment arena.
Aksoy emphasizes that countries attracting the most FDI are those with stable macroeconomic environments and predictable legislative frameworks. He points out that Türkiye's medium-term program aims to provide stability and set regional targets, which are essential for fostering investor confidence. The successful implementation of these strategies is crucial for achieving the desired economic outcomes.
YASED has been instrumental in improving Türkiye's investment environment for over 44 years. With 274 members representing 85 percent of international investment equity capital in the country, YASED acts as a vital link between international investors and the Turkish government. Aksoy highlights that each member executive serves as an ambassador for Türkiye, working to attract more FDI and promote the country's investment potential.
One of the key initiatives discussed is the mobilization of the Coordination Council for the Improvement of Investment in Türkiye, chaired by the Vice President. This council focuses on addressing critical issues, such as the transfer of personal data abroad, which is essential for building trust among investors. Aksoy stresses the importance of expediting the actions defined under this committee to further enhance Türkiye's investment landscape.
A significant part of the conversation revolves around the need for structural reforms in Türkiye, particularly in the tax and incentives systems. Aksoy emphasizes that regulatory and legislative changes must be made with full deliberation and cooperation from the business community. This collaborative approach is vital for creating a transparent and efficient investment environment.
Aksoy also discusses the importance of improving the legislative deliberation system in Türkiye. He mentions the establishment of new mechanisms, such as digital opening and exchange systems, aimed at increasing transparency and streamlining processes for investors. These reforms are essential for building a more attractive investment climate and ensuring that Türkiye remains competitive in the global market.
Despite the challenges posed by global economic conditions, Aksoy highlights several strengths that position Türkiye as an attractive investment destination. The country's strategic location, young and talented workforce, and vibrant business sector are significant advantages that continue to draw international investors. Aksoy notes that Türkiye's entrepreneurial mindset and resilience, even in the face of crises such as the Covid-19 pandemic and natural disasters, demonstrate its potential as a regional hub for production, trade, and employment.
Aksoy expresses optimism about the future of FDI in Türkiye. He believes that with ongoing efforts to improve the investment environment, Türkiye can attract the level of investment it truly deserves. The commitment of YASED, alongside governmental efforts to enhance Türkiye's competitiveness, is a testament to their belief in the country's potential.