(zaman.com) - Turkeys recent political and economic stability has become a significant enough to attraction the attention of both foreign and local investors.
Factories that relocated to countries such as Romania and Bulgaria for the sake of economic survival are now considering moving back to Turkey, reports Trend.
There has been an increase in the number of manufacturers relocating their factories in Turkey and a decrease in the number of businessmen investing abroad.
According to figures released by the Treasury, capital exports for direct investment showed a remarkable decrease in the first half of the year when compared to last years figures in the same period.
Last year, a total of 122 companies sent $1.344 million abroad for investment; this figure fell to $115 million in the first half of 2006. The number of international investments remained at 32 in the same period.
Experts relate the development to economic growth and drop in inflation, in addition to a simplification of bureaucratic procedure and a reduction of Corporate Tax that also encouraged domestic capital to stay at home.
Kayseri Chamber of Industry Chairman Mustafa Boydak told the route of investments switched direction, while Independent Industrialists and Businessman's Association (MUSIAD) Chairman Omer Bolat said that investors prefer to invest at home rather than abroad due to the countrys stable economic growth.
Ankara Industrialists Association (ASO) President Zafer Caglayan noted that the government made important progress by reducing Corporate Tax by 10 points, adding that more remains to be done.
According to Caglayan, Turkey will attract more investments if labor and energy costs are reduced further.
The private sector in Turkey saw 70 billion New Turkish Liras (YTL) worth of investment last year out of a total YTL 90 billion, Bolat informed, stressing that there is a direct relation between the loss of political stability and the flow of investments to foreign countries.
Sivas Chamber of Industry Chairman Osman Yildirim said many companies moved abroad due to Turkeys labor laws and high energy costs that resulted in low profitability.
Although there is cheap labor available abroad, investors were unable to achieve their desired targets in other areas. When things do not turn out as expected, they came back to Turkey, Yildirim explained.
Officials from the International Investors Association acknowledged that Turkey has begun to once again to appeal to investors after the necessary arrangements were made to remove obstacles and to implement the adaptation of European Union (EU) legislation.
Businessmen Favor the Netherlands
Turkey, which broke a record in foreign capital investments totaling $9.7 billion in 2005, sustained its successful performance this year as well.
Direct capital investments to Turkey reached $8.1 billion in the first five months of the year, while capital flow abroad decreased in the same period.
A total of 32 Turkish companies invested outside the country in the first half of the year, and exported capital remained at $115 million.
This figure was $671 million in the first 10 months of the year. A total of 160 companies relocated abroad and invested $841 million last year.
The number of companies going abroad was 1,759 and the amount of exported capital was $8.527 billion at the end of June.
The Netherlands ranked the first among those countries in terms of capital export with $2.6 billion encouraging foreign investment by offering tax breaks; it is followed by Azerbaijan, the UK, Germany and Kazakhstan.
Capital exports were primarily realized in the manufacturing, energy and finance sectors.