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

2. Undersecretariat of Treasury 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. Undersecretariat of Treasury 3 IMPROViNG INVESTMENT CLIMATE WHY?

4. Undersecretariat of Treasury 4 INVESTMENT CLiMATE COMPETITIVENESS FDI GLOBALIZATION  Predictability Economic Stability Political Stability  Free Market Economy  investor-friendly framework Improving Investment Climate: Why?

5. Undersecretariat of Treasury 5 IMPROVEMENT OF INVESTMENT CLiMATE TURKEY’S EXPERiENCE

6. Undersecretariat of Treasury 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. Undersecretariat of Treasury 7 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 Road Map for Reform Programme for improving the investment Environment Diagnostic Study on investment Environment 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. Improvement of investment Climate: Turkey’s Experience

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

9. Undersecretariat of Treasury 9 PRESiDENT State Minister YOİKK MEMBERS STEERiNG COMMiTTEE MEMBERS PRESiDENT Undersecretary of Treasury YOİKK SECRETARiAT MEMBERS Deputy Undersecretary of Prime Ministry Deputy Undersecretary of Ministry of industry and Trade Deputy Undersecretary of State Planning Organisation Deputy Undersecretary of Foreign Trade Deputy Undersecretary of Ministry of Finance Secretary General of TOBB Secretary General of TUSİAD Secretary General of YASED Secretary General of TiM MEMBERS Undersecretary of Ministry of Finance Undersecretary of Ministry of industry and Trade Undersecretary of State Planning Organisation Undersecretary of Treasury Undersecretary of Foreign Trade President of TOBB President of TUSiAD President of YASED President of TiM Presidents of Technical Committees improvement of investment Climate: Turkey’s Experience

10. Undersecretariat of Treasury 10 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 YOiKK STEERiNG COMMiTTEE TECHNiCAL COMMiTTEES Draft regulations institutional capacity building Recommendations related to enforcement The Coordination Council for the Improvement of the Investment Environment (YOIKK) Council of Ministers is regularly informed about YOiKK studies.

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

12. Undersecretariat of Treasury 12 Investment Advisory Council Executives of leading multinational firms, Executives of leading multinational firms, Heads of international institutions Heads of international institutions (iMF, World Bank, European investment Bank) and (iMF, World Bank, European investment Bank) and TOBB, TUSiAD, YASED, TiM. TOBB, TUSiAD, YASED, TiM. V. Meeting June 18, 2008 iV. Meeting June 11, 2007 iii. Meeting June 29, 2006 ii. Meeting April 29, 2005 i. Meeting March 15, 2004 Investment Advisory Council of Turkey had 5 meetings so far. Improvement of Investment Climate: Turkey’s Experience

13. Undersecretariat of Treasury 13 MAJOR ACHIEVEMENTS

14. Undersecretariat of Treasury 14 Major Achievements Investment Support and Promotion Agency of Turkey Simplification of Business Start-Up www.invest.gov.tr indicators of Business Start-UpTurkey OECD Average Pre-Refom 200 7 No. of procedures 1366 Day38614.9 FDI Law  No Pre-entry Screening Requirement  No Minimum Capital Requirement  National Treatment

15. Undersecretariat of Treasury 15 IMPACT OF INVESTMENT CLIMATE REFORM ON FDI

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

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

18. Undersecretariat of Treasury 18 World Investment Report 2008, UNCTAD Indicators of Success - FDI Statistics 200520062007 FDI Stock in Turkey (USD Billion) 64.479146 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. Undersecretariat of Treasury 19 # of countries Turkey’s Ranking Doing Business 2009 18159 Doing Business 2008 17860 Doing Business 2007 17565 Doing Business 2006 15584 World Bank - Doing Business 2009 Report Doing Business 2009 Report Turkey has displayed progress in; employing workers, protecting investors and enforcing contracts. Indicators of Success - FDI Statistics

20. Undersecretariat of Treasury 20 Improvement in International Competitiveness Heritage Foundation Economic Freedom index 2005200620072008 No of countries 161157157162 Ranking of Turkey 112858374 Forbes / Best Countries for Business 200620072008 No of countries 135144121 Ranking of Turkey 614841 Tranparency International/Corruption Perception index 200620072008 No of countries 163180180 Ranking of Turkey 606458 Indicators of Success - FDI Statistics

21. Undersecretariat of Treasury 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. improvement of investment climate. The program aims at providing information on:

22. Undersecretariat of Treasury 22   Workshops/Case Studies in Creating Platforms Necessary for Improvement of Investment Environment  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 Alternative Topics Offered in the Program:  Diagnosis Study and Awareness Building  Building Structures and Platforms for Reform  Global Trends in improving the Investment Climate Theme 1 Theme 2 Theme 3 Theme 4 Turkey’s Experience Sharing Program on Investment Climate Reform

23. Undersecretariat of Treasury 23 Application Address Address: İnönü Bulvari No:36 06510 Emek/ ANKARA 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