1. FOREIGN DIRECT INVESTMENT STATISTICS IN TURKEY MENA/OECD TASK FORCE ON FDI STATISTICS NOVEMBER 9, 2006 İSTANBUL Yeşim Şişik Balance of Payment Division Statistics Department Central Bank of Turkey FOREIGN DIRECT INVESTMENT STATISTICS IN TURKEY MENA/OECD TASK FORCE ON FDI STATISTICS NOVEMBER 9, 2006 İSTANBUL Yeşim Şişik Balance of Payment Division Statistics Department Central Bank of Turkey

2. CONTENTS A. LEGAL FRAMEWORK 1) Legal Framework related to Treasury 2) Legal Framework related to CBRT B. METHODS OF DATA COLLECTION 1) FDI Flow Data 2) FDI Position Data a. Direct Investment Abroad b. Direct Investment in Turkey (Survey System) C. RELATIONS WITH THE INTERNATIONAL ORGANISATIONS AND USERS

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

4. A. LEGAL FRAMEWORK Legal Framework related to Undersecretariat of Treasury. Legal Framework related to Undersecretariat of Treasury. The new FDI Law facilitates the establishment of an investment monitoring system instead of an investment permission system

5. Legal Framework related to Undersecretariat of Treasury. Internationally accepted FDI definition is included to the new FDI Law. Also, the new Law contains comprehensive investor rights.

6. Regarding outward FDI, Turkish residents may freely transfer up to USD 5 million through banks in order to establish companies abroad. The transfer of capital exceeding USD 5 million is authorized by Treasury. The banks and customs administrations give information to the Treasury within 30 days from the date of each transaction.

7. Legal Framework related to Central Bank of Turkey Legal Framework related to Central Bank of Turkey The compilation of BOP data is regulated by the CBRT Law. Confidentiality of data reported by banks are guaranteed by CBRT Law.

8. B. METHODS OF DATA COLLECTION 1) FDI FLOW DATA 1) FDI FLOW DATA Banks are submitted the Monthly Foreign Exchange Position Report to the CBRT within 21 days after the end of the reference period. Banks are submitted the Monthly Foreign Exchange Position Report to the CBRT within 21 days after the end of the reference period. Data on FDI flows are collected from this monthly report and details are also provided to the CBRT. Data on FDI flows are collected from this monthly report and details are also provided to the CBRT. Private sectors external debt monitoring system is a data source for inward FDI other capital transactions. Private sectors external debt monitoring system is a data source for inward FDI other capital transactions.

9. 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 Treasurys records for non-bank sector Sectoral and geographical breakdown are also available

10. b.Direct Investment in Turkey b.Direct Investment in Turkey –Annual FDI survey conducted by Central Bank of Turkey –The first survey was a pilot study and outcomes were not published. –In 2001, the first official survey was conducted. –Every year, response rate has increased gradually. –Conducting annual survey was a challenging task for the CBRT.

11. Implementations, difficulties, and improvements.............. Implementations, difficulties, and improvements.............. I- Sampling method Threshold was determined to select survey population in early years of the survey. Threshold was determined to select survey population in early years of the survey. Stratified sampling method has been added to the selection process last year. Stratified sampling method has been added to the selection process last year.

12. Implementations, difficulties, and improvements.............. Implementations, difficulties, and improvements.............. II- Technical Improvements Official e-mail addresses are provided. Official e-mail addresses are provided. Sample survey, which can be downloaded by respondents, is posted to the CBRTs website. Sample survey, which can be downloaded by respondents, is posted to the CBRTs website. This website address is not accessible to the public and it was only provided to respondents. This website address is not accessible to the public and it was only provided to respondents.

13. Implementations, difficulties, and improvements.............. Implementations, difficulties, and improvements.............. III- The coverage of FDI survey FDI enterprises are required to report both the book value and the market value. FDI enterprises are required to report both the 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 years profit - non-distributed profits including the current years profit Market values were included in IIP Market values were included in IIP Next year, trade credits related questions are planned to be included into FDI survey Next year, trade credits related questions are planned to be included into FDI survey

14. Implementations, difficulties, and improvements.............. Implementations, difficulties, and improvements.............. IV- Valuation of FDI position Following the finalization of the survey, FDI stocks are adjusted to market prices by using market value/book value ratios for non-listed FDI enterprises. Following the finalization of the survey, FDI stocks are adjusted to market prices by using market value/book value ratios for non-listed FDI enterprises. If the respondent FDI enterprises equity shares are traded in the IMKB, the announced (or reported) market values of these enterprises are used. If the respondent FDI enterprises equity shares are traded in the IMKB, the announced (or reported) market values of these enterprises are used.

15. C- RELATIONS WITH THE INTERNATIONAL ORGANIZATIONS AND USERS Users of FDI data and international organisations such as the IMF, OECD and EUROSTAT request very detailed and timely information. Users of FDI data and international organisations such as the IMF, OECD and EUROSTAT request very detailed and timely information. FDI flow and stock data with geographical and economic activity breakdown are submitted to the OECD and EUROSTAT. Only, FDI flow and stock data are sent to the IMF as a part of BOP and IIP data submission on an annual and quarterly basis. FDI flow and stock data with geographical and economic activity breakdown are submitted to the OECD and EUROSTAT. Only, FDI flow and stock data are sent to the IMF as a part of BOP and IIP data submission on an annual and quarterly basis. For other national and international users, the detailed FDI data with geographical and economic activity breakdown are posted on the CBRTs internet website and can be reached from the following links (www.tcmb.gov.tr/odemedenge/iip.xls and www.tcmb.gov.tr/odemedenge/bop.xls) For other national and international users, the detailed FDI data with geographical and economic activity breakdown are posted on the CBRTs internet website and can be reached from the following links (www.tcmb.gov.tr/odemedenge/iip.xls and www.tcmb.gov.tr/odemedenge/bop.xls)www.tcmb.gov.tr/odemedenge/iip.xls www.tcmb.gov.tr/odemedenge/bop.xlswww.tcmb.gov.tr/odemedenge/iip.xls www.tcmb.gov.tr/odemedenge/bop.xls

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