The political economy of foreign direct investment in Turkey 1950-1980

Abstract

In the Turkish Republic, especially in the 1960s and 1970s, Foreign Investment was regarded as a very suspicious subject in Turkey as a result of the capitulations and s substantial amount of Ottoman Dept. There were many debates about the issue in the press and in public and most of the studies in this period had generally a normative way of looking at the FDI issue. Although Law 6224, the encouragement of Foreign Investment, which was designed as a liberal law, was enacted in 1954, it was used to this suspicious attitude. During this period a very small amount of FDI entered into Turkey and its share was very insignificant in the Turkish economy.When we compare the amount of FDI coming to Turkey with the corresponding amounts in other developing countries we clearly find that our findings strengthens that the share of FDI in Turkey is insignificant. These countries enjoyed an inflow of FDI averaging one-three billion dollars per year while Turkey received averaging ten-fifty million dollars per year in this period.This master thesis studies the FDI in Turkey between 1950 and 1980 and examines the contribution of the FDI to the economic growth, employment and tax revenues. In addition, it aims to ascertain the obstacles and impediments that obstruct the greater flow of private foreign investments into Turkey.