Weak world economy doesn't daunt Turkish exporters

by Andrew Jay Rosenbaum

ANKARA

Despite challenging global conditions, Turkish exporters have actually raised their share of global world trade, Mehmet Buyukeksi, chairman of the Turkish Exporters Assembly (TIM), told Anadolu Agency in an interview on Wednesday.

“Turkey has performed very well compared to other economies, increasing its share in world trade. According to current World Trade Organization (WTO), our share of export in World trade is close to 0.9 percent per thousand [in volume of goods traded]. We aim to raise this share to 1 percent by 2018 and to 1.5 percent by 2023,” Buyukeksi said.

The TIM intends to raise its share of exports to the EU, its largest export destination, as well.
“The proportion of Turkish exports of EU imports has reached a record 1.19 percent, according to the latest data of WTO,” Buyukeksi said.

Russian sanctions have had little effect on Turkish export expansion, Buyukeksi noted. “We continue to expand around the world, finding new markets,” he said.

The numbers support Buyukeksi’s claim.

In volume terms, Turkish exports have increased to key markets. “We increased our kilogram-based (physical volume) of exports to the EU, North America, Africa, and countries in Asia. There are also exceptions such as Saudi Arabia to which our export value improved by 11.7 percent in 2015, compared with the previous year,” Buyukeksi said.

The volume of exports (kilogram-based) to the EU was 6.6 percent in 2015, he noted.

“We believe the TIM’s activities have much to do with these improvements, and in confronting the global economic challenges” Buyukeksi said. “For instance, we organized trade committees to 23 countries with 723 participants, and we enabled 2160 bilateral discussions in this regard.”

All exporting countries have been confronted with three fundamental challenges in 2015, according to Buyukeksi.

“The first issue was the increasing value of the dollar against local currencies and the euro. The second challenge was the dramatic decrease in commodities prices, notably that of oil. The third main reason was geopolitical risk, which, in Turkey’s neighborhood, has been more intense than in many other parts of the World. These three basic issues have given rise to a dramatic decline in the value of exports for countries all over the World,” Buyukeksi explained.

Buyukeksi cited the latest data of WTO which showed that, in 2015, goods exports decreased 16.7 percent from India, 16,4 percent from Brazil, 11.6 percent from Germany and 32 percent from Russia.

“The decline in our exports is 8.7 percent which is comparatively favorable,” Buyukeksi pointed out. He admitted that total Turkish exports fell $13 billion in value to $144 billion in 2015 from $157 billion in the previous year.

“We forecast that our exporters lost a total of $23 billion because of the three main issues mentioned above. It means that, if we had not faced the global challenges, the adverse effects of the high dollar, commodities’ price declines and geopolitical risks, we would have increased our exports in 2015,” Buyukeksi said.

Turkey’s success in facing these global challenges is due to a successful market expansion strategy and exporter innovation, Buyukeksi said. Increasing foreign direct investment in Turkey is supporting innovation, he added.

“Of course, the volume is different in each market, because each economy has been affected by different factors with varied levels of severity. For example, oil exporter countries’ demand declined dramatically because of decreasing oil revenue, and this reduced our exports to those countries. The Middle East suffers severely from the oil price decline and geopolitical risks. Our kilogram-based exports [volume of exports] to the Middle East decreased 2.4 percent in 2015 as a result,” Buyukeksi said.

Exports, however, increased in volume terms by 13.9 percent to Africa, 11.1 percent to North America, 26.6 percent for countries in Asia, according to Buyukeksi. On the other hand, Turkish export weight declined in some markets such as the Commonwealth of Independent States, and some Asian countries.

Of course, there are various reasons of the diversity of those rates. International relations, legal arrangements, political issues are as effective as economic reasons for the volatility, Buyukeksi explained.

Somes sectors also performed especially well in 2015, Buyukeksi continued. “The defense and aerospace sectors as well as the nuts and related produce sector increased their export values in 2015, Buyukeksi said.

“Turkey has been focused on the defense and aerospace sector in recent years. Government- supported defense sector firms, along with state-owned firms and private companies made achievements. New products such as an unmanned aerial vehicle have been produced and are achieving success. Also, in aerospace sector, lots of developments took place. Especially, with the success of Turkish Airlines, investments increased,” Buyukeksi said.

As a result, exports of the defense and aerospace sectors increased 0.5 percent in 2015 from the previous year.

Another successful exporter was the nuts and related produce sector. Nuts and related produce increased the value of its exports by 22.5 percent in 2015, Buyukeksi said.

The Hazelnut Promotion Group is trying to reach new and bigger markets in the U.S., China, Japan and India, he said.

So the long history of Turkish export success continues, according to Buyukeksi, despite challenging conditions.

“In 2002, Turkey’s total exports were $36 billion. Today, it is four times that amount, at $144 billion. Turkish economic progress is also behind this success. In recent years, our economy has made progress through the government’s vision for progress by 2023,” Buyukeksi said.

“In this regard, we need to accelerate the growth of our exports even more. Producing and exporting high value-added goods is critically important for the future of our export and our economy. Thus, we highly require innovation, R&D, design and trademarking progress in order to make the 2023 vision come true,” Buyukeksi said.

“We welcomed 50,000 guests at Turkey’s Innovation Week organizations in Istanbul, and, at the same time, the program was watched by 93 thousand people on TIM TV. The share of R&D’s in GDP has reached its highest level in 2014, according to the latest data from the Turkish Statistical Institute. This shows us that the interest in and awareness of innovation, and the importance given to R&D are constantly increasing in Turkey. We will continue to increase production with high added value, and eventually we will achieve the 2023 Vision,” Buyukeksi concluded.