Download - Zenith

illustration: Lesprenger
reached by Sumru Altug, an economist at
Koc University in Istanbul.
The Turkish republic also suffered for a
long time from the discrepancy between its
political aspirations and economic performance.
Now the tables are turning – the
Turkish industry is producing household
and kitchen appliances for export. Turkey
has long been the world leader in bathroom
ceramics, but now Turkish televisions are
turning up in German electronics stores –
and at the recent CeBIT computer show in
Hanover, Turkey tried to steal some limelight.
Laptops are even being produced in
the Izmir region these days. Even though
they are yet to find their way into the offices
of German companies, they are proving
popular in the Middle East and Central
Asia – where the price means more than
the brand name.
For a long time, the world East of Gaziantep
was merely a dark smudge on the
consumer map. Even the economic policy
makers of Turkey, most of whom had
studied economics in Europe and America,
looked to the European market for
inspiration.
This focus went hand-in-hand with the
political desire to become a strategic partner
of the USA and an equally valued member
of the European Union. Europe still
takes over 40 percent of Turkey’s exports
– at least on a balance-sheet basis. Yet exports
to Armenia, long considered to be the
arch-enemy of Turkey, rose in 2010 to
around USD 211 million.
The volume of trade between Turkey and
Iran is currently worth USD 10 billion.
This figure is naturally attributable to its
natural gas imports from Iran, but one
glance at the reservation lists of mid-range
hotels in Istanbul is enough to confirm that
Iranian businesspeople, who can enter
Turkey without a visa, are certainly regular
visitors to the country. The cost of flights
from Teheran to Istanbul is quite stiff – yet
the planes are often booked out. For that
reason alone, it is small wonder that Turkey
has no time for sanctions against Iran. And
many Turks wonder how well they would
be doing if they had already gained entry
into the EU. Its lucrative business with Iran
would be threatened, and in the end they
would be helping to prop up the debt umbrella
over Greece.
Exactly where Turkish companies had
their fingers in the pie became clear in the
recent Libyan crisis. Some 25,000 Turkish
citizens, most of whom were stationed in
Gaddafi’s oil empire as employees of construction
companies, had to be flown out of
the country. The mass exodus of »ex-pats«
might serve as a reminder that the Turks
did not flinch during Libya’s first liberation
struggle against Italy in 1911, but stayed to
fight with the rebels. Kemal Pascha, later
known by the name of Atatürk, stood his
ground there as a young officer of the military
secret service.
Where to with so
much cash?
However, Turkish foreign trade is not limited
to the former provinces of the Ottoman
Empire. Between Turkey and Angola, the
El Dorado of South-west Africa, turnover
of around USD 200 million was generated
in 2010, in the mining and energy industry
in particular. Steel production helped
Turkey’s trade with Chile rise by almost 65
percent year-on-year in 2010. USD 393
million convinced both governments of
the merits of a free trade agreement – this
time to the benefit of the Turks.
Such success stories make it seem almost
surprising that, in 2010, Turkey posted a
deficit of 5.9 percent in its current account
– which was twice as high as in 2009. But
importing energy and raw materials to service
a growing economy always means
spending some foreign currency. The weak
euro over the past few months has made the
lira, and consequently Turkish products,
expensive for Europe. The central bank has
had to devalue the currency, while simultaneously
guarding against the risk of fuelling
the inherent inflation tendencies.
»The behaviour of the central bank here
sometimes seems contradictory to outsiders,«
says Marc Landau, CEO of the German-Turkish
Chamber of Industry and
Commerce in Istanbul. Turkish econo-
TuRkEy
mists talk of »unconventional methods« in
the country’s monetary policy. On the one
hand, key interest rates fell as a means of
weakening the lira, while minimum reserve
ratios rose in early 2010 from 6 to 10 percent.
As a result, the commercial banks had
to store money with the central bank,
which reduced their liquidity. At the same
time, the rate of the European Central
Bank was about 2 percent.
The flow of foreign capital onto the Turkish
market made monetary authorities
nervous. Where to with the capital that was
coming partly from funds and partly from
being loaned in Europe at low interest rates?
Between January and November 2010,
around USD 4.1 billion worth of investment
money flowed onto the Turkish market
– as opposed to 6.2 billion of foreign
direct investment (FDI).
The major stock corporations are currently
paying respectable dividends. Over
the past five years, the Turkcell mobile phone
company has distributed a total of EUR
3.7 billion to shareholders. Petrogiant
Tüpras paid out EUR 2.9 billion and Akbank
some EUR 2.4 billion. But not all sectors
are booming by any means. High-end
department stores and the imported sedans
that are the vehicle of choice in the
major metropolitan centres, are also a reminder
of the flip side of development.
When an economy imports more than it
exports, it has to borrow to pay the bills.
The regional differences in the trend are
typical of fast-emerging nations like Turkey
– and they tend to be extreme in nature.
The average income in the greater Istanbul
region is four times as high as in the East
Anatolian province of Van, and not just because
several hundred millionaires on the
Bosporus tend to distort the statistics. The
greater Istanbul area is followed by the Kocaeli
Province in the Marmara region.
Kayseri in Central Turkey likes to think
of itself as the »Anatolian Tiger« but even it
has only half the purchasing power of Istanbul.
Prime Minister Erdogan comes
from Istanbul; Kayseri is the birth place of
President Gül and is seen as the Islamic
conservative stronghold of the ruling party,
AKP.
BusinessReport 1/2011 15
>>