Property in Turkey

Turkey has the potential to attract $10 billion more in foreign direct investment (FDI) in the coming years, an advisor to the Organization for Economic Co-operation and Development (OECD) said Tuesday.

A $30-billion inflow of FDI in the coming years is realistic, said Charles Kovacs, who is also a consultant to Lehman Brothers Europe. “A country must decide how much FDI it wants to attract and build its regulatory framework accordingly. The growth in the inflow of FDI in Turkey is a major success story, but if regulations in Turkey were developed further, Turkey could attract a lot more in FDI,” he said.

The case of Hungary shows FDI inflow enables cultural transfer and creates new jobs, he added. “These are both positive developments, which could hopefully also happen in Turkey.”



Economy to reach $1.5 trillion

The Turkish economy has enormous growth potential, said Kovacs. “Turkey obviously has good economic potential. Turkey today has an economy of approximately $500 billion, and by the time the country is likely to join the European Union, its economy will have reached $1.5 trillion, depending, of course, on growth figures,” he said.

Today $1.5 trillion is some 10 percent of the EU's Gross Domestic Product (GDP), he said, adding, “The EU's economy will also certainly grow in the next 10-15 years, but we can still assume that in 10-15 years the Turkish economy will make up some 6-7 percent of the EU's GDP.”

The other benefits Turkey brings to the EU process are its young population and strong military, said Kovacs. “Turkey's young population is good not only for providing social security payments, but also because it can be a source of labor by providing migrants to other European countries. Finally, he concluded, “Turkey, which has probably the largest military in the EU, will also give the EU greater military credibility.”



Corruption in Romania, Bulgaria still an issue

The expansion of the EU into the region near Turkey has not been without complications, he conceded. “The ability and dedication of new member states to maintain accession commitments and work toward integration varies immensely. The performance of some countries, like Bulgaria and Romania, in tackling domestic issues like corruption has not been great,” he said, adding that no effective measures have been taken to fight corruption in these two member states.

A possible failure to keep accession commitments is one of the reservations EU citizens have about Turkey's admission to the union. However, he said, “Resistance towards Turkey's membership by newer member states like Bulgaria and Romania is more based on politicians exploiting nationalism than the actual issues at hand today,” noted Kovacs.

Because of this, he said it is important for Turkey to focus on image building and developing bilateral relations and communication channels with each EU member state, he added.

“Relying on bureaucracy and clinically focusing on negotiation chapters is simply not enough. The process to join the EU is a multilateral public relations campaign in which the country applying needs to understand the countries it is dealing with, and what the actual and hidden agendas are,” Kovacs concluded.