IMPROVEMENT OF INVESTMENT ENVIRONMENT & IMPACT on FDI

1. Prime Ministry Undersecretariat for Treasury IMPROVEMENT OF INVESTMENT ENVIRONMENT & IMPACT on FDI Mehmet Dündar Department Head Undersecretariat of Treasury April 2009

2. OUTLiNE • Improving Investment Climate: Why? • Improvement of Investment Climate Turkey’s Experience • Coordination Council for the Improvement of Investment Environment (YOiKK) • Investment Advisory Council (iAC) • Major Achievements • Indicators of the Success • FDi Statistics of Turkey • International Indices and Reports • Experience Sharing Programme

3. IMPROViNG INVESTMENT CLIMATE WHY?

4. Improving Investment Climate: Why? • Predictability • Economic Stability • Political Stability • Free Market Economy • investor-friendly framework GLOBALIZATION

5. IMPROVEMENT OF INVESTMENT CLiMATE TURKEY’S EXPERiENCE

6. improvement of Investment Climate: Turkey’s Experience Diagnosis on Problem Areas of investment Environment in Turkey Determination of Priorities with All Relevant Parties Design of an Appropriate Structure involving the Stakeholders

7. Improvement of investment Climate: Turkey’s Experience Road Map for Reform Programme for improving the investment Environment August 2000 September 2001 December 2001 December 2002 1st Report of FiAS 2nd Report of FiAS WORKSHOP P/2001/10 COUNCiL OF MiNiSTERS LEADiNG DECiSiON P/2002/10 COUNCiL OF MiNiSTERS LEADiNG DECiSiON Administrative Barriers Report Public-private Workshop • YOiKK was established. • President: Undersecretary Of Prime Ministry • President: Minister Of State Responsible For Treasury • SME Technical Committee was established. Diagnostic Study on investment Environment

8. Improvement of investment Climate: Turkey’s Experience STRUCTURE Investment Advisory Council Coordination Council for the Improvement of Investment Environment (YOIKK) Steering Committee Location of investment Foreign Trade & Customs Licensing Taxes and Incentives Company Establishment Employment Intellectual Property Rights Foreign Direct Investment Legislation Research & Development Corporate Governance SMEs Investment Promotion

9. improvement of investment Climate: Turkey’s Experience YOİKK MEMBERS STEERiNG COMMiTTEE MEMBERS MEMBERS MEMBERS YOİKK SECRETARiAT

10. The Coordination Council for the Improvement of the Investment Environment(YOIKK) YOiKK WORKiNG PRiNCiPLES AGENDA SETTiNG WORKING OUTCOMES • Recommendations of public institutions • Recommendations of private sector • Assessments in international indices and publications • iAC recommendations • Technical Committee Action Plans • Basic policy guides • Draft regulations • institutional capacity building • Recommendations related to enforcement YOiKK STEERiNG COMMiTTEE TECHNiCAL COMMiTTEES Council of Ministers is regularly informed about YOiKK studies.

11. The Coordination Council for the Improvement of the Investment Environment(YOIKK) MONITORiNG&EVALUATION Structure Methodology • Action plans • informing Council of Ministers • Annual progress reports • international indices • YOiKK mechanism is responsible for M&E

12. Improvement of Investment Climate: Turkey’s Experience Investment Advisory Council • Executives of leading multinational firms, • Heads of international institutions (iMF, World Bank, European investment Bank) and • TOBB, TUSiAD, YASED, TiM. Investment Advisory Council of Turkey had 5 meetings so far.

13. MAJOR ACHIEVEMENTS

14. Major Achievements FDILaw • No Pre-entry Screening Requirement • No Minimum Capital Requirement • National Treatment • Simplification of Business Start-Up Investment Support and Promotion Agency of Turkey www.invest.gov.tr

15. IMPACT OF INVESTMENT CLIMATE REFORM ON FDI

16. Indicators of Success - FDI Statistics increased FDi inflows... USD Billion Source: Turkish Treasury, Provisional Data

17. Indicators of Success - FDI Statistics Upward Trend in Number of Companies with international Capital (Cumulative) Source: Turkish Treasury, Provisional Data

18. Indicators of Success - FDI Statistics World Investment Report 2008, UNCTAD Turkey has been selected as 15th attractive country to invest in 2008-2010 term. Turkey has been 21st in terms of FDI stock; while it was 25th in 2006.

19. Indicators of Success - FDI Statistics World Bank - Doing Business 2009 Report • Doing Business 2009 Report Turkey has displayed progress in; • employing workers, • protecting investors and • enforcing contracts.

20. Improvement in International Competitiveness Indicators of Success - FDI Statistics

21. Turkey’s Experience Sharing Program on Investment Climate Reform • Importance of investment climate on FDI inflows, • Success stories on the country experiences, • Corporate capacity requirements, • Importance of public private partnership in reform process, • Turkey’s hands-on experience in the investment climate reforms, • The main criteria behind Turkey’s success in implementing reform program, • Awareness building in disseminating the improvements in the investment climate reform program. Content of the Program • Two main linkages: Global trends and Turkey’s experience in the improvement of investment climate. The program aims at providing information on:

22. Turkey’s Experience Sharing Program on Investment Climate Reform Theme 1 • Global Trends in improving the Investment Climate • Workshops/Case Studies in Creating Platforms Necessary for Improvement of Investment Environment • Diagnosis Study and Awareness Building Theme 2 • Building Structures and Platforms for Reform Theme 3 Theme 4 Alternative Topics Offered in the Program: • FDI legislation • Negotiations on Bilateral Investment Treaties (BIT’s) • Company establishment • Corporate governance • Customs&Foreign Trade • Licensing • Small and Medium Size Enterprises (SME’s) • Investment Support and Promotion Agency of Turkey

23. Application Address Address: İnönü Bulvari No:36 06510 Emek/ ANKARA Phone: + 90 312 212 5877 Fax: + 90 312 212 8916 E-mail: yoikk@hazine.gov.tr www.yoikk.gov.tr Undersecretariat of Treasury General Directorate of Foreign investments