While waiting for foreign investors local ones are fleeing the country
The Egypt International Economy Conference organized in the Egyptian resort Sharm el-Sheikh in mid-March resulted in a contract worth $36.2 billion.
The owner of the biggest contract is British oil giant BP, which will invest in the natural gas resources west of the Nile delta. Egypt signed a memorandum of understandings for potential deals worth $92 billion according to Egyptian Investment Minister Ashraf Salman.
Egyptian President Abdel Fattah el-Sisi, whom I had the opportunity to listen to at this year’s Economic Forum in Davos, had said an amount between $200 and $300 billion worth of investment was needed for the welfare of some 90 million Egyptians.
Although this number was not reached at the Sharm el-Sheikh economic conference, which attracted 3,500 participants including some world leaders, experts argue it was a turning point in breeding hope for the future.
I recall reading a title in the French Daily Le monde which said, “The world is intensively investing in Sisi’s Egypt.”
While Egypt is looking with hope to the future in terms of foreign investors, what is the situation in Turkey?
If we are to give the example of Brazil, the Foreign Direct Investment (FDI) that country attracted in 2014 was $64 billion. This was nearly five times that of Turkey.
Then, what is Turkey’s expectation for 2015? The FDI expectation for 2015 is $13.1 billion according to a briefing of the undersecretariat of the treasury, a $1 billion increase from the previous year.
A businessperson who is a member of the International Investors Association (YASED) mentioned more than one reason when I asked why much less FDI had come to Turkey compared to the past.
First and foremost, the tense political atmosphere which includes claims of authoritarianism is hurting Turkey’s image as a country suitable for investment. But there are also factors like a lack of trust in the legal system, the slow functioning civil service, the difficulty in getting work and residence permits and fast changes in regulations.
But what’s more interesting is this:
While Turkey is waiting for foreign investors like it waits for Godot, a rise in Turkish investments abroad is being observed.
The amount of these investments, which were around $3.5 billion in 2013, reached $6.6 billion in 2014.
When there are more attractive options abroad, it isn’t natural for Turkish investors to benefit from them.
Turkey’s prominent Koç Holding not only built a shipyard, it also bought a surf club dating from the 1930s for $116 million. It also began the construction of a residential building where the cheapest apartment will be sold for $3.5 million.
Based on the example of Koç, the investment climate in Miami is much better than the one in Istanbul. Only a few days ago we found out Koç, which had bought the management rights of the Kalamış Yatch Port for 30 years for $664 million, has decided to revise its decision due to legal problems.
Officials should better think on why Koç decided to back down from Kalamış, which is located in one of Istanbul’s best districts, and instead opt to go with enthusiasm to Miami.