FOREIGN DIRECT INVESTMENT FOREIGN DIRECT INVESTMENT STATISTICS IN TURKEYSTATISTICS IN TURKEY

MENA/OECD TASK FORCE ON FDI STATISTICSMENA/OECD TASK FORCE ON FDI STATISTICSNOVEMBER 9, 2006NOVEMBER 9, 2006

İSTANBULİSTANBULYeşim ŞişikYeşim Şişik

Balance of Payment DivisionBalance of Payment DivisionStatistics DepartmentStatistics Department

Central Bank of TurkeyCentral Bank of Turkey

CONTENTSCONTENTSA. LEGAL FRAMEWORKA. LEGAL FRAMEWORK1)1) Legal Framework related to TreasuryLegal Framework related to Treasury

2)2) Legal Framework related to CBRTLegal Framework related to CBRT

B. METHODS OF DATA COLLECTIONB. METHODS OF DATA COLLECTION1)1) FDI Flow DataFDI Flow Data

2)2) FDI Position DataFDI Position Dataa.a. Direct Investment AbroadDirect Investment Abroad

b.b. Direct Investment in Turkey (Survey System)Direct Investment in Turkey (Survey System)

C. RELATIONS WITH THE C. RELATIONS WITH THE INTERNATIONAL ORGANISATIONS INTERNATIONAL ORGANISATIONS AND USERSAND USERS

INTRODUCTIONINTRODUCTION

FDI Statistics are compiled and FDI Statistics are compiled and disseminated by the CBRT as a part disseminated by the CBRT as a part of BOP and IIP statistics.of BOP and IIP statistics.

A. LEGAL FRAMEWORKA. LEGAL FRAMEWORK

Legal Framework related to Legal Framework related to Undersecretariat of TreasuryUndersecretariat of Treasury..

The new FDI Law facilitates tThe new FDI Law facilitates the he establishment of an ‘investment establishment of an ‘investment monitoring system’ instead of an monitoring system’ instead of an ‘investment permission system’‘investment permission system’

Legal Framework related to Legal Framework related to Undersecretariat of TreasuryUndersecretariat of Treasury..

Internationally accepted FDI Internationally accepted FDI definition is definition is

included to the new FDI Law.included to the new FDI Law.

Also, the new Law contains Also, the new Law contains comprehensive comprehensive investor rights.investor rights.

Regarding outward FDI, Turkish Regarding outward FDI, Turkish residents may freely transfer up to residents may freely transfer up to

USD 5 million through banks in order USD 5 million through banks in order to establish companies abroad.to establish companies abroad.

The transfer of capital exceeding USD The transfer of capital exceeding USD 5 million is authorized by Treasury.5 million is authorized by Treasury.

The banks and customs The banks and customs administrations give information to administrations give information to

the Treasury within 30 days from the the Treasury within 30 days from the date of each transaction. date of each transaction.

Legal Framework related to Legal Framework related to Central Bank of TurkeyCentral Bank of Turkey

The compilation of BOP data is The compilation of BOP data is regulated by the CBRT Law.regulated by the CBRT Law.

Confidentiality of data reported by Confidentiality of data reported by banks are guaranteed by CBRT Law.banks are guaranteed by CBRT Law.

B. METHODS OF DATA COLLECTION

1) FDI FLOW DATA1) FDI FLOW DATA

Banks are submitted the “Monthly Foreign Banks are submitted the “Monthly Foreign Exchange Position Report” to the CBRT Exchange Position Report” to the CBRT within 21 days after the end of the reference within 21 days after the end of the reference period.period.

Data on FDI flows are collected from this Data on FDI flows are collected from this monthly report and details are also provided monthly report and details are also provided to the CBRT.to the CBRT.

Private sector’s external debt monitoring Private sector’s external debt monitoring

system is a data source for inward FDI other system is a data source for inward FDI other capital transactions.capital transactions.

2) FDI POSITION DATA

a) Direct Investment Abroad

Data on direct investment abroad are based on

Banks’ foreign exchange records for banking sector and

Undersecretariat of Treasury’s records for non-bank sector

Sectoral and geographical breakdown are also available

b.Direct Investment in Turkeyb.Direct Investment in Turkey

– Annual FDI survey conducted by Central Annual FDI survey conducted by Central Bank of TurkeyBank of Turkey

– The first survey was a pilot study and The first survey was a pilot study and outcomes were not published.outcomes were not published.

– In 2001, the first official survey was In 2001, the first official survey was conducted.conducted.

– Every year, response rate has increased Every year, response rate has increased gradually.gradually.

– Conducting annual survey was a Conducting annual survey was a challenging task for the CBRT.challenging task for the CBRT.

Implementations, difficulties, Implementations, difficulties, and improvements..............and improvements..............

I- Sampling methodI- Sampling method

Threshold was determined to select Threshold was determined to select survey population in early years of survey population in early years of the survey.the survey.

Stratified sampling method has Stratified sampling method has been added to the selection process been added to the selection process last year.last year.

Implementations, difficulties, and Implementations, difficulties, and improvements..............improvements..............

II- Technical ImprovementsII- Technical Improvements Official e-mail addresses are provided.Official e-mail addresses are provided.

Sample survey, which can be Sample survey, which can be downloaded by respondents, is posted to downloaded by respondents, is posted to the CBRT’s website.the CBRT’s website.

This website address is not accessible This website address is not accessible to the public and it was only provided to to the public and it was only provided to respondents.respondents.

Implementations, difficulties, and Implementations, difficulties, and improvements..............improvements..............

III- The coverage of FDI surveyIII- The coverage of FDI survey

FDI enterprises are required to report both the FDI enterprises are required to report both the book value and the market value.book value and the market value.

Book value of a FDI enterprise consists of Book value of a FDI enterprise consists of

- paid-up capital- paid-up capital

- all types of reserves- all types of reserves

- reinvested earnings- reinvested earnings

- non-distributed profits including the current - non-distributed profits including the current year’s profit year’s profit

Market values were included in IIPMarket values were included in IIP

Next year, trade credits related questions are Next year, trade credits related questions are planned to be included into FDI survey planned to be included into FDI survey

Implementations, difficulties, Implementations, difficulties, and improvements..............and improvements..............

IV- Valuation of FDI positionIV- Valuation of FDI position

Following the finalization of the survey, Following the finalization of the survey, FDI stocks are adjusted to market prices FDI stocks are adjusted to market prices by using market value/book value ratios by using market value/book value ratios for non-listed FDI enterprises. for non-listed FDI enterprises.

If the respondent FDI enterprises’ equity If the respondent FDI enterprises’ equity shares are traded in the IMKB, the shares are traded in the IMKB, the announced (or reported) market values of announced (or reported) market values of these enterprises are used. these enterprises are used.

C- RELATIONS WITH THE INTERNATIONAL C- RELATIONS WITH THE INTERNATIONAL ORGANIZATIONS AND USERSORGANIZATIONS AND USERS

UUsers of FDI data and international organisations sers of FDI data and international organisations such as the IMF, OECD and EUROSTAT request such as the IMF, OECD and EUROSTAT request very detailed and timely informationvery detailed and timely information..

FDI flow and stock data with geographical and FDI flow and stock data with geographical and economic activity breakdown are submitted to the economic activity breakdown are submitted to the OECD and EUROSTAT. Only, FDI flow and stock OECD and EUROSTAT. Only, FDI flow and stock data are sent to the IMF as a part of BOP and IIP data are sent to the IMF as a part of BOP and IIP data submission on an annual and quarterly basis.data submission on an annual and quarterly basis.

For For other national and international users, the other national and international users, the detailed FDI data with geographical and economic detailed FDI data with geographical and economic activity breakdown are posted on the CBRT’s activity breakdown are posted on the CBRT’s internet website and can be reached from the internet website and can be reached from the following links (following links (www.tcmb.gov.tr/odemedenge/iip.xls and and www.tcmb.gov.tr/odemedenge/bop.xls))

THANK YOU FOR YOUR THANK YOU FOR YOUR ATTENTIONATTENTION