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Turkey 2012 | ECONOMY | VIP INTERVIEW

TBY talks to Mehmet Büyükekşi, Chairman of the Turkish Exporters Assembly (TİM), on growing export markets, R&D, and the current account deficit saga.

The 18.5% rise in exports between December 2010 and December 2011 to reach $135 billion was unprecedented. What is behind this success?

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 within Turkish society. At first, we were fighting a large inflation rate, and nobody could make any long-term investments or long-term 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 in front of 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 is a 10% increase. The top countries we export to are Germany, Iraq, Italy, France, Russia, the UK, Spain, the Netherlands, and Iran.

“In order to support innovation, TİM has paid more attention and interest to the R&D, design, and branding side of companies' activities."

Given that five of your top export destinations are in the euro zone, 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 to 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 of Turkey, the Prime Minister of Turkey, and our Minister of Economy. In 2011, we made trips to 17 different countries and during those visits we conducted over 30,000 business meetings.

What is the Turkish Exporters Assembly (TİM) doing internally to educate Turkish companies about export opportunities?

Within Turkey we run training programs in 11 different cities, as well as 546 different programs for over 17,000 people. Our target is to give more importance to high value-added products.

With respect to these value-added products, what is 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 market 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.

To what extent can Turkish exports reduce the current account deficit?

Actually, the current deficit is not a recent issue, and we all know that Turkey is industrializing and growing, and our growth depends on our imports as well. We are always looking for very competitive currency exchange rates. Low exchange rates also encourage a rapid increase in imports. Those exchange rates are also affecting our deficits directly. However, because of the precautions we have taken recently, we believe that 2012 will be a year to balance the deficit. We believe that a stable exchange rate is the best way to go, and we are looking for around TL1.70 to TL1.80 to the dollar.

© The Business Year - March 2012