Introduction

1. Foreign Direct Investment in European Union Members Poland, Romania, Bulgaria and Non-EU member TurkeyOkanBüyükbay&OğuzhanŞahin

2. Introduction By starting 1980’s importance of foreign direct investment has been rise in European economy and also rest of the world.

3. Introduction By starting 1980’s importance of foreign direct investment has been rise in European economy and also rest of the world. By becoming more integrated relations between member states of European Union and other developed countries transfer of tangible and intangible assets rise which refers to foreign direct investment rise too.

4. Introduction By removing tariffs, quotas and barriers, capital movement increased between member states.

5. Introduction By removing tariffs, quotas and barriers, capital movement increased between member states. In other words, globalization and liberalization process increased privatization which impact on foreign direct investment.

6. Introduction By removing tariffs, quotas and barriers, capital movement increased between member states. In other words, globalization and liberalization process increased privatization which impact on foreign direct investment. With the enlargement of European Union while market sharing increased also trade increased too, however every member states effected differently because of their economical structures and features.

7. Introduction In this presentation Poland which became a member of the European Union in 2004 and also Romania and Bulgaria which they became a member in 2007 will be examining to understand how being a member of the European Union effects their foreign direct investments and lastly it will be compare with Turkey’s FDI flows during the accession period because those countries economic structures approximately same with Turkey.

8. Poland and FDI After the WW2 approximately 45 years Poland isolated itself because of communist tradition.

9. Poland and FDI After the WW2 approximately 45 years Poland isolated itself because of communist tradition. Therefore, it can be say that central planning economy, internal development policies, political and ideological factors made investors to not invest in Poland until the late 1980’s.

10. Poland and FDI After the WW2 approximately 45 years Poland isolated itself because of communist tradition. Therefore, it can be say that central planning economy, internal development policies, political and ideological factors made investors to not invest in Poland until the late 1980’s. Also under controlled foreign trades in Poland effected exporting sectors because producers only export their products by using interagents which limited numbers of foreign trade companies.

11. Poland and FDI That caused non-relations between exporters of Poland and importers abroad. Therefore, there were not efficient and sustainable trade relations with Poland in that period.

12. Poland and FDI That caused non-relations between exporters of Poland and importers abroad. Therefore, there were not efficient and sustainable trade relations with Poland in that period. Between 1980-1989 economical growth rate approximately 0,12%. There were radical changes in political and economical issues in the late 1980’s and in 1989 electionscommunism removed in Poland.

13. Poland and FDI That caused non-relations between exporters of Poland and importers abroad. Therefore, there were not efficient and sustainable trade relations with Poland in that period. Between 1980-1989 economical growth rate approximately 0,12%. There were radical changes in political and economical issues in the late 1980’s and in 1989 elections communism removed in Poland. Between 1990-1991 economy decline 7% however those radical changes brought 5% economical growth between 1991-2000.

14. Poland and FDI According to table below unfortunately with the global stagnation in 2001 economical growth of Poland in 2001 1,2 % and in 2002 1,4% which meansthat growth rate declining step by step.

15. Poland and FDI By opening market reforms, following transparency politics and being a member of OECD in 1996, NATO in 1999 and EU in 2004, Poland economy effected between 1990-2006 as a result of this effect Poland FDI flows reached 100billion $ in 2006.

16. Poland and FDI By opening market reforms, following transparency politics and being a member of OECD in 1996, NATO in 1999 and EU in 2004, Poland economy effected between 1990-2006 as a result of this effect Poland FDI flows reached 100billion $ in 2006. According to table below, it can be say that 96% of FDI flows came from OECD countries and 89% FDI came from European countries to Poland between 2000-2005.

17. Poland and FDI

18. Poland and FDI Moreover, in Poland, there was an investment incentives for foreign investors, therefore 14 private economic area established to decline regional economic differences and making an investment incentives for both foreign investors and domestic investors.

19. Poland and FDI Moreover, in Poland, there was an investment incentives for foreign investors, therefore 14 private economic area established to decline regional economic differences and making an investment incentives for both foreign investors and domestic investors. In addition to this, Poland derived benefit from European Union structural funds such as;

20. Poland and FDI Moreover, in Poland, there was an investment incentives for foreign investors, therefore 14 private economic area established to decline regional economic differences and making an investment incentives for both foreign investors and domestic investors. Inadditiontothis, PolandderivedbenefitfromEuropeanUnionstructuralfundssuch as; -EuropeanSocialFunds

21. Poland and FDI Moreover, in Poland, there was an investment incentives for foreign investors, therefore 14 private economic area established to decline regional economic differences and making an investment incentives for both foreign investors and domestic investors. In addition to this, Poland derived benefit from European Union structural funds such as; -European Social Funds -Regional Development Funds

22. Poland and FDI Moreover, in Poland, there was an investment incentives for foreign investors, therefore 14 private economic area established to decline regional economic differences and making an investment incentives for both foreign investors and domestic investors. In addition to this, Poland derived benefit from European Union structural funds such as; -European Social Funds -Regional Development Funds - Agricultural and Fishing Funds

23. Poland and FDI So far, it can be say thatthosefactorsbirngseconomicaldevelopmentand it providesmoreinvestmentfrominvestors.

24. Poland and FDI Accordingtographabove, it can be say that FDI inwards, increasebystarting 2004 andreachedhighestlevel.

25. Romania and FDI LikeeveryotherformerSovietUnioncountry, Romaniawasalsogovernedbycentralplannedeconomy.

26. Romania and FDI LikeeveryotherformerSovietUnioncountry, Romaniawasalsogovernedbycentralplannedeconomy. Therefore, closedeconomycausedfinancialproblemssuch as;

27. Romania and FDI LikeeveryotherformerSovietUnioncountry, Romaniawasalsogovernedbycentralplannedeconomy. Therefore, closedeconomycausedfinancialproblemssuch as; -Highdeficit

28. Romania and FDI LikeeveryotherformerSovietUnioncountry, Romaniawasalsogovernedbycentralplannedeconomy. Therefore, closedeconomycausedfinancialproblemssuch as; -Highdeficit -Decreasing of moneysupply

29. Romania and FDI LikeeveryotherformerSovietUnioncountry, Romaniawasalsogovernedbycentralplannedeconomy. Therefore, closedeconomycausedfinancialproblemssuch as; -Highdeficit -Decreasing of moneysupply SothesebroughtunstableeconomicalconditionstoRomania.

30. Romania and FDI After the collapse of communist regime in Romania, bystarting in 1989 step by step Romania’seconomyshiftedtofree market economy.

31. Romania and FDI After the collapse of communist regime in Romania, bystarting in 1989 step by step Romania’seconomyshiftedtofree market economy. However, therewas a stagnationperiodbetween 1990-2000 in Romaniabecause of deficentreformsboth in politicsandeconomics.

32. Romania and FDI Accordingtotablebelow, it can be say thatafter 2002 FDI flowsincreasesandreachedhighestlevel in 2006 approximately 9 billion Euro.

33. Romania and FDI Inadditiontothis, accordingtotablebelow it can be say thatEuropeanUnioncountries in 2005 madeinvestmentmorethan USA and rest of theworld in Romania in total amount of investment.

34. Romania and FDI In 2002, ForeignInvestmentAgency of Romaniaestablishedwhichprovidesinvestmentincentivesforforeigninvestors in institutionallevel.

35. Romania and FDI In 2002, ForeignInvestmentAgency of Romaniaestablishedwhichprovidesinvestmentincentivesforforeigninvestors in institutionallevel. Moreover, beforebecame a memberstate of EuropeanUnion, Romania had fundsfrom EU such as;

36. Romania and FDI In 2002, ForeignInvestmentAgency of Romaniaestablishedwhichprovidesinvestmentincentivesforforeigninvestors in institutionallevel. Moreover, beforebecame a memberstate of EuropeanUnion, Romania had fundsfrom EU such as; -Phare

37. Romania and FDI In 2002, ForeignInvestmentAgency of Romaniaestablishedwhichprovidesinvestmentincentivesforforeigninvestors in institutionallevel. Moreover, beforebecame a memberstate of EuropeanUnion, Romania had fundsfrom EU such as; -Phare -Sapard

38. Romania and FDI In 2002, ForeignInvestmentAgency of Romaniaestablishedwhichprovidesinvestmentincentivesforforeigninvestors in institutionallevel. Moreover, beforebecame a memberstate of EuropeanUnion, Romania had fundsfrom EU such as; -Phare -Sapard -Ispa

39. Romania and FDI However, afterbecame a member of EuropeanUnion, Romaniagets 6,6 billion Euro foraccordance, 12,7 billion Euro fromEuropeanRegionalDevelopmentFundsand 7,1 billion Euro fromEuropeanagriculturalfunds.

40. Romania and FDI Accordingtographbelow, it can be say thatafterbeing a member of EU, Romaniareached FDI flows in top level in 2008

41. Bulgariaand FDI LikePolandandRomania, Bulgariagovernedbycommunistregime, thereforeaftercollapse of USSR, Bulgaria had difficultproblems in 1990’s. Such as;

42. Bulgariaand FDI LikePolandandRomania, Bulgariagovernedbycommunistregime, thereforeaftercollapse of USSR, Bulgaria had difficultproblems in 1990’s. Such as; -Inrealsector

43. Bulgariaand FDI LikePolandandRomania, Bulgariagovernedbycommunistregime, thereforeaftercollapse of USSR, Bulgaria had difficultproblems in 1990’s. Such as; -Inrealsector -Inbankingsector

44. Bulgariaand FDI LikePolandandRomania, Bulgariagovernedbycommunistregime, thereforeaftercollapse of USSR, Bulgaria had difficultproblems in 1990’s. Such as; -Inrealsector -Inbankingsector -Infinancingsector

45. Bulgariaand FDI Like Poland and Romania, Bulgaria governed by communist regime, therefore after collapse of USSR, Bulgaria had difficult problems in 1990’s. Such as; -In real sector -In banking sector -In financing sector To solve those problem Bulgarian Central Bank print money which brought inflation to highest level.

46. Bulgariaand FDI Therefore, interestratesandbudgetdeficitincreaseafterthebankingsystemcollapsed.

47. Bulgariaand FDI Therefore, interestratesandbudgetdeficitincreaseafterthebankingsystemcollapsed. Tosolvethis problem in theeconomy, in 1997 Bulgariastartedtonegotiatewith IMF.

48. Bulgariaand FDI Therefore, interestratesandbudgetdeficitincreaseafterthebankingsystemcollapsed. Tosolvethis problem in theeconomy, in 1997 Bulgariastartedtonegotiatewith IMF. Accordingto IMF suggestionBulgariaestablishedmonetaryinstitutionandfirstly, fixeditsowncurrencytoGermancurrencyandthenfixeditsowncurrencyto Euro in 1999.

49. Bulgariaand FDI Afterallthese, Bulgariamadepriceliberalizationandreforms in socialsector. Also, Bulgariamadereconsturction in agricultureandenergysector.

50. Bulgariaand FDI Afterallthese, Bulgariamadepriceliberalizationandreforms in socialsector. Also, Bulgariamadereconsturction in agricultureandenergysector. Bythosereformsand IMF cooperationsbroughtstabilitytotheBulgarianeconomy.