TBY talks to Mehmet Büyükekşi, Chairman of the Turkish Exporters Assembly (TİM), on growing export markets, R&D, and the search for value-added.
TBY The 18.5% rise in exports between December 2010 and December 2011 to reach $135 billion was unprecedented. What is behind this success?
MEHMET BÜYÜKEKŞİ In the past, there were no expectations for Turkey; however, now we are looking to the future. There have been huge changes within Turkey and Turkish society. At first, we were fighting a large inflation rate, and nobody could make any long-term investments or plans. Turkey did not attract much FDI. Within the past 10 years, we have achieved a measure of stability, and foreign investors now have trust in Turkey and its businessmen. Inflation rates have dropped, as have interest rates. FDI has doubled in the past eight years. Through both economic and democratic developments, we have a newly created middle class that is more interested in consuming and doing business by exporting Turkish goods. Also, another very important factor is our application to become a member of the EU, and part of the process is meeting the Maastricht Criteria. Compared to some other countries in Europe, Turkey is far ahead in those criteria. In addition, Turkey is one of the fastest-growing economies in the world.
In what areas have exports increased of late?
The most significant increase we have seen is in the Iraqi market. We reached about $8.2 billion at the end of 2011, which is a 37% increase from the previous year. Aside from that, the country we exported to most in 2011 was Germany, at around $13.8 billion, which marks a 10% increase. The top countries we export to are Germany, Iraq, Italy, France, Russia, the UK, Spain, the Netherlands, and Iran.
Given that five of your top export destinations are in the eurozone, what sort of an impact do you think will be seen on Turkish exports over 2012?
There might be some difficulties over 2012, and that is why we are trying to open up new markets. We are shifting focus somewhat to areas such as Africa and the Asia-Pacific, including China, Indonesia, Vietnam, Malaysia, and Taiwan, and also Latin America. These are our new target markets. In 2010 we were able to send trade delegations to over 30 countries with the President, the Prime Minister, and the Minister of Economy. In 2011, we made trips to 17 different countries and during those visits we conducted over 30,000 business meetings.
With respect to these value-added products, what is the Turkish Exporters Assembly (TİM) doing to support innovation?
In order to support innovation, TİM has paid more attention and interest to the R&D, design, and branding side of companies’ activities. In order to support our R&D development we are carrying out R&D projects in six different sectors, and we are organizing design competition awards in all exporting sectors. We are going to build on these efforts throughout 2012.
And within those six sectors that you have identified to concentrate on R&D, which would you say has the most potential to be realized?
The foremost is automotive, then chemicals, machinery, food processing, ready-to-wear textiles, and electronics. The automotive sector doesn’t have good growth projections for 2012, as its main market is the EU. In that regard, manufacturers are working to maintain their present sales figures, which total around $20 billion.
What impact will Turkey’s shifting foreign policy focus have on Turkish exports?
In the short term, we are experiencing some difficulties, especially with Tunisia, Libya, Egypt, and Syria, as they had been some of our main markets. However, our exports are already starting to recover in Egypt, Libya, and Tunisia. We believe that human rights and the welfare of the people are more important issues than exports or economic figures right now, and that if democracy can flourish then it will be better for all of us economically in the long term. Turkish businessmen currently have around $2 billion worth of investments in Egypt, they create jobs for over 50,000 Egyptians, and 90% of their production is exported from Egypt, meaning this is also supporting the Egyptian economy in export terms. We hope that this is going to be the same for Libya and Syria.
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