FDI is unlikely to return to Turkey's mid-2000s peak

Subject

Turkey’s failure to attract and retain FDI.

Significance

Turkey has long failed to match its peers in attracting outside investment, which peaked in 2007; there is no sign of any return to that level. More worryingly, in the past two years, a number of high-profile investors have announced plans to leave. Other investors are privately expressing growing concern at seizures of companies and assets belonging to people alleged to be connected to the July 2016 failed coup, and at the strength of government anti-Western rhetoric.

Impacts

• The level of FDI in manufacturing and business operations is likely to remain stagnant.
• Investors will be wary of committing to a country where they are unsure of their welcome over the long term.
• Political uncertainties in the United Kingdom, France, Germany and over the direction of US policy will affect Turkey’s main sources of FDI.