Turkey has big plans following exit from dirty money ‘grey’ list
Burak Dağlıoğlu, the president of Turkey’s Investment Office, anticipates FDI to rise between $12 bn and $14 bn by the end of this year. This is compared to the $10 bn in FDI Turkey received in 2023.
The prediction comes a month after Turkey was taken off the Financial Action Task Force’s (FATF) dirty money ‘grey’ list.
Planning for the future
Turkey’s investment office recently revealed the country’s FDI roadmap. One of its key goals is to further integrate itself into global value chains.
It aims to raise Turkey’s regional share of FDI in central and eastern Europe, the Middle East and north Africa to 12%, from 9.8% between 2004-2023.
Plans to achieve this seem to already be underway.
Chinese electric vehicle manufacturer BYD and Turkey’s Industry and Technology Ministry recently signed an $1 bn investment agreement to open a manufacturing plant in the country. According to the deal, the plant would have a production capacity of 150,000 vehicles and employ 5,000 people.
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There are also ongoing negotiations to secure investments from Chinese car makers Chery and SAIC which Dağlıoğlu ensures are “on the right track.” If Turkey wins the bids, they would be worth about $1 bn each.
Off the list
The confidence from the Turkish FDI sector comes a month and a half after the FATF, an anti-money laundering watchdog, took Turkey off its ‘grey’ list.
The list “identifies jurisdictions with weak measures to combat money laundering and terrorist financing.” Turkey was added in October 2021 due to insufficient supervision in sectors including banking, gold, precious stones and real estate.
While a country is on the list, it is subject to increased monitoring from the FATF.
A 2021 study by the International Monetary Fund showed that countries on the list experience a “large and statistically significant reduction in capital inflows.”
Betting on exports
Given the global trend of nearshoring, Turkey’s focus on growing their manufacturing base may be the right path to attracting FDI.
With geographic access to Europe, the Middle East, North Africa and Asia, firms looking to bring production closer to consumer markets may find a home in Turkey.
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