Turkey has signed $3.3 billion worth of greenfield investment for early 2008 and hopes to lure fresh capital from Asia to help weather global financial turmoil, the head of Turkey's investment agency said on Friday. Turkey has seen economic growth slow in recent quarters and failed to meet its $25 billion foreign direct investment (FDI) target for 2007.
"Talks on greenfield investments worth $1.5 billion, $1.5 billion and $300 million are completed. They will be announced in the next couple of months," Alpaslan Korkmaz told Reuters in an interview. He declined to give more details.
Turkey is also looking at China and India as new sources of investment as capital from developed economies is likely to fall amid the continuing credit crunch in global markets, he said. "China and India have become investors and this will strengthen in the next two to four years. The liquidity is there and we have to go and attract it," he said.
The investment promotion agency has been touring China and India over the last 12 months to promote Turkey, Korkmaz said. "The share of non-European investment in the total has to rise to 40 percent (from 20 percent). East Asia can provide 20 percent and the Gulf 5-10 percent of this figure," he said.
Turkey's government recently said it would lower social security premiums in 2008 in order to create more jobs and also make Turkey more attractive for foreign investors.
Foreign investors have long complained about high tax rates and bureaucracy in Turkey, a fast-growing European Union candidate. Exporters and manufacturers also say interest rates are too high and the lira too strong to make new investments. Foreign capital is crucial for helping Turkey to fund a large current account deficit that is estimated to reach $39.2 billion in 2008. Turkey could surpass its $20 billion FDI goal in 2008 if the global economic environment does not deteriorate sharply, Korkmaz said.
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