Direct Foreign Investment Inflows To Turkey And Its Neighbors

When the foreign direct investments in the world between 2000 and 2012 are surveyed, it is seen that the highest investment was made in 2007 with 3.1 trillion dollars. It is seen that the FDI, which was 2.6 Trillion Dollars in 2016, decreased to 1.1 Trillion Dollars in 2018, and then increased to 1.6 Trillion Dollars in 2019.

When we look at Turkey's FDI, it has received the most FDI in 2015(almost 20 Billion Dolar) . It is seen that FDI continue with a decreasing momentum after this year. Turkey has received 8.7 billion dollars of foreign investment inflows in 2019.

Turkey And Its Neighbor

Turkey's neighbors that receive FDI outside are as follows, respectively;

Russia; It is the country that receives the most foreign direct investment among Turkey's neighboring countries. While Russia received 74.7 Billion Dollars of FDI in 2008, this amount decreased to 69 Billion Dollars in 2013. With Russia's annexation of Crimea in 2014, the FDI declined rapidly. FDI, which decreased to 22 billion dollars in 2014, decreased to 6.8 billion dollars in 2015, which was its lowest point. After this year, FDI increased again to 31.9 Billion Dollars in 2019.

Ukraine; Ukraine received app.10 Billion Dollars FDI in 2008. In the following years, FDI inflow continued to decrease and turned negative in 2015. After Russia annexed Crimea, it has increased again in the following years and in 2019, it has reached to 5.8 Billion dollars.

Bulgaria; Bulgaria has received the least FDI among the neighboring countries . This country has received varying between 1 Billion and 2 Billion Dollars FDI over the years.

Greece; Foreign direct investments entering Greece follow a horizontal course. FDI, which was 2.9 Billion Dollars in 2013, decreased to 1.2 Billion Dollars in 2015. It has increase trend since 2015 and has reached 4.6 Billion Dollars in 2019. By the way, the interesting point is; Turkey have shown a steady decline in FDI since 2015, it might be that investors who already have decided to invest in turkey may have shifted to Greece.

Romania; Romania received 2.3 Billion Dollars FDI in 2011. From this year it is observed that there is a steadily increase in investment inflows. FDI reached 4.3 Billion Dollars in 2015, 7.3 Billion Dollars in 2018 and 6.9 Billion Dollars in 2019. Since 2015, the amount of FDI has been decreasing to inflow to Russia and Turkey. During the same years, there was an increase in FDI flows to Greece and Romania and with the small amount to Ukraine and Bulgaria.

Conclusion;

• There has been a steady increase FDI inflow to Turkey until 2015 and this year reached its highest point. After this year, the flow of FDI continued at a slower rate and fell to its lowest point in 2019.
• With the annexation of Crimea by Russia, the FDI declined seriously till 2018 and entered an upward trend again in 2019.
• Parallel to decline of inflowing FDI to Turkey and Russia, there has been observed significantly increase in FDI flows to Bulgaria, Ukraine, Romania and Greece. 
• If Turkey implement new arrangements(including liberalizing FDI regime and pursue other policies) regarding regain the capital inflow in order to push the economic growth upward, It would have more capital flow to Turkey in the coming year. Because, Turkey with infrastructure development, human resource potantial and geopolitical position is the most prepared countries.