Made in Turkey August 2018

EconomicNewspaper
August
2 Please mention
2018
“Made in Turkey” when writing to advertisers Monthly Economic Newspaper ww.img.com.tr
Mehmet Soztutan
Editor-in-Chief
The Turkish economy
sustains its dynamism
Turkey heralds a new
era, based on its presidential
system. It should be noted
that the Turkish economy
sustains its strong position
on the path of sustainable
growth. Turkey has so far
managed to weather the
geopolitical risks. However,
from the standpoint of
exporters, it is hard to keep
their competitive positions
in the world market
full of emerging players.
As for business people of
Turkey, they have recently
shifted their operations to
value-added products and
brand names. Currently, the
manufacturers have their
own designs and brands in
international markets.
In evaluating the future
export potential of the
region using cross-country
statistics, it is possible to indicate
that Turkey has comparative
advantage regarding
labor productivity, labor cost
and the share of capital in
the value added, especially
with respect to the mature
producers in the world.
Majority of the manufacturers
compete in international
markets and set high standards
of export figures.
It is evident that competition
appears from all corners
of the globe, customers
Letters to the Editor
turkey@ihlas.net.tr
Growth forecast
revised
In its Interim Economic Outlook
report, the Organization
for Economic Cooperation
and Development (OECD)
has revised its upward for the
Turkish economy. In its press
release, the OECD declared
that Turkey’s growth rate is
estimated to have risen by 6.9
percent in 2017 instead of 6.1
percent as previously expected.
The report estimates the
Turkish economy to grow by
5.3 percent in 2018 and 5.1 in
2019, from 4.9 percent and 4.7
percent, respectively.
The International Monetary
Fund (IMF) has also revised up
its growth estimates for Turkey
by 0.8 percent for 2018 and
2019.
M.Brick/Paris
Democratization
For less developed countries,
globalization offers access
to foreign capital, global export
markets, and advanced technology
while breaking the monopoly
of inefficient and protected
domestic producers. Faster
growth, in turn, promotes poverty
reduction, democratization,
and higher labor and environmental
standards.
While globalization may
confront government officials
with more difficult choices,
the result for their citizens is
greater individual freedom. In
this sense, globalization acts as
a check on governmental power
that makes it more difficult
for governments to abuse the
freedom and property of their
citizens.
M.Murp/Berlin
Letter From
The Editor
demand more. To respond,
manufacturers are reducing
costs and increasing responsiveness
through outsourcing,
sourcing globally and implementing
demand-driven
strategies such as pull-based
inventory management.
Following the shift of the
focus on customers, markets,
products and competition
from the local level to
the global level, manufacturers
and exporters of Turkey
now position themselves
globally.
Therefore, Turkey offers
significant opportunities for
foreign investors with its
geographically perfect position
to function as a gateway
between Europe, Middle
East and Central Asia. The
opportunities exist not only
in the dynamic domestic
market, but also throughout
the region.
Besides, in order to
achieve the targets of ”Turkey
2023”, exporters have
a part to play by utilizing its
resources and the competitive
advantages to the fullest
extent.
We wish them lucrative
trade.
Dependencia theory
Well, there was a kind of dependencia
theory, which was
very much left wing in its origins.
There were some European
intellectuals who fed into
it, and the idea was that these
poor, developing countries
were so dependent on world
marketplace, they were just
being exploited by the center.
[Raul] Prebisch talked about
the center versus the periphery,
which is another version
of dependencia. But I think
that there may be some vague
notion, an element of truth
behind this idea in the sense
that markets are impersonal. I
use the analogy of an elephant
going through the jungle, and
you’re a poor mouse. Now the
elephant is not going to go after
you. He is not against you;
he couldn’t care less about you.
G.Kron/ Frankfurt
European Central
Bank
Mario Draghi, the governor
of the Frankfurt-based European
Central Bank, calls on
eurozone governments to align
their budgetary policies – a
first step toward a tighter fiscal
union.
(ECB) chief Mario Draghi
said the countries that use the
euro must tether their economies
more tightly to avoid a
repeat of the debt crisis that is
threatening the global financial
system. He also hinted that the
ECB may play a more pivotal
role in the resolution of the
crisis, but he insisted that the
governments must first back
proposals to align their budgetary
policies.
B.Mutde/ Milan
Turkish contractors have undertaken
foreign projects worth $9.2 billion in the
first half of 2018, pushing the all-time
total to over $366.5 billion.
According to the Trade Ministry,
Turkey’s overseas contracting services
sector, a key part of the country’s service
exports, has undertaken some 9,375
projects in 120 countries since 1972. The
projects were valued at $366.5 billion
as of June 2018. In the first half of the
year, Turkish contractors undertook a
total of 84 projects that cost an estimated
$9.2 billion.
In terms of sectors, housing came out
on top corresponding to at least 13 percent
($47.5 billion) of all projects carried
out by Turkish builders since 1972. It
was followed by roads, highways, tunnels
and bridge constructions worth $47.4
billion; trade centers worth $30.1 billion,
power plants valued at $26.8 billion and
airports at $25.9 billion.
In terms of the regional distribution,
Turkish contractors played a prominent
role in the Commonwealth of the
Independent States (CIS), the Middle
East and Africa. The total amount of
the projects carried out so far in the CIS
It is time for Turkey
to leap forward
Ankara – Turkey to implement policies
to narrow current deficit, industry and
technology minister says. Turkey’s Industry
and Technology Ministry will support
research and development (R&D) and
investments, the minister said. Turkey
will also implement policies to reduce the
country’s current deficit, said Industry and
Technology Minister Mustafa Varank. “It
is time for Turkey to leap forward, and it
can come true through an economy that
produces technology, uses this technology
in its industry and makes the digital
transformation in the industry,” Mustafa
Varank stressed in a press release issued
by the ministry.
Turkey’s
Economic
Policy Council
to work on
sustainable
economic
growth
Turkish contractors
undertake projects
reached $171.7 billion in terms of value,
while it stood at $95.6 billion in the Middle
East and at $65.9 billion in Africa.
In terms of the distribution of Turkish
contracting projects by countries,
Russia ranked first with 19.6 percent of
all projects, worth $71.8 billion. It was
followed by Turkmenistan with a share
of 12.9 percent share and projects worth
$47.4 billion, and by Libya with a share
of 7.9 percent and projects worth $28.9
billion.
Thanks to a vast number of projects,
Turkish contracting companies have
gained a strong footing in the global
construction sector. While there were
merely eight Turkish companies in the
Engineering News Record’s (ENR)
“Top 250 International Contractors
List” in 2003, that figure rose to 46 last
year, considering the total number of international
projects undertaken within a
year. Some 10 of these companies were
listed in the top 100, and two – with revenues
of $3 billion each – ranked among
the top 50.
In terms of the number of companies
on the list, Turkey has ranked second
only after China in the past five years.
He added that uncertainty was to
disappear following the June 24 elections,
which would pave the way for investments
in the short term, he noted. “The
presidential system will allow to make
quick decisions and effective coordination,”
said Varank. Turkey’s industrial
production continued to rise and climbed
above expectations in May, he stated. The
country’s industrial production surged
6.4 percent in May from a year ago, the
Turkish Statistical Institute said. “These
figures showed that Turkey’s economy
increased, led by the industrial sector in
the second quarter of the year,” Varank
underlined.
He added that 94 percent of the country’s
exports came from industrial production.
The rise of industrial production also
supports employment in Turkey, he said.
The duties and authorities of the
Economic Policy Council as determined
by the decree will be to
monitor and evaluate developments
related to economic stability, conduct
research on economic issues, monitor
developments related to global and
national economy and development
issues, carry out research when necessary,
formulate policy recommendations
to identify and update procedures
and principles for economic
security and economic defense, monitor
and evaluate revenue enhancing
or expenditure reducing proposals
and conduct impact analyses on those
deemed appropriate if necessary.
Among other things, the council
will operate in the field of regional
development to determine general
policies and priorities at the national
level, make suggestions, develop
proposals to accelerate investment
processes made by the public and
worth $9.2B
abroad
Foreign trade
deficit down
nearly 9 pct
Turkey’s foreign trade deficit dropped by
8.87 percent to $5.5 billion in June, according
to Customs and Trade Ministry provisional
data released.
Exports in June were about $13 billion,
decreasing by 1.21 percent year-on-year, while
imports dropped 3.62 percent to $18.5 billion
in the said period.
In January-June period this year, exports
increased by 6.33 percent year-on-year, reaching
$82.3 billion. In the last 12 months, exports
climbed 9.2 percent to $161.9 billion.
Foreign trade volume reached $31.5 billion
in June year-on-year, decreasing by 2.64
percent, while the import coverage ratio of
exports rose to 70.2 percent.
Motor land vehicles, tractors, bicycles,
motorcycles and other land vehicles were the
most exported products in June at $2.1 billion,
followed by boilers, machinery, mechanical
devices and appliances, nuclear reactors at
$1.2 billion and iron and steel at $880 million.
In the January-June period this year, most exports
came from motor land vehicles, tractors,
bicycles, motorcycles and other land vehicles
at $13.8 billion.
Meanwhile, mineral fuels, mineral oils and
products of their distillation became the most
imported in June at $3.5 billion, followed by
boilers, machinery, mechanical devices and
appliances, nuclear reactors at $2.2 billion and
iron and steel at $1.6 billion.
The top three export destinations in June
were Germany with $1.3 billion, the U.K. with
$891 million and Italy with $817 million. The
top three countries with the highest imports,
on the other hand, were China with $1.84
billion, Russia with $1.83 billion and Germany
with $1.79 billion.
private sector, develop policy recommendations
for export-oriented
production strategies, contribute
to the formation of strategies and
action plans to facilitate trade and
develop policy recommendations
to contribute to the country’s vision
of the international financial center
along with faster development of the
interest-free finance system.
In addition, it will identify and
monitor systemic risks that may
spread throughout the financial
system and determine measures and
policy recommendations needed to
reduce such risks, express opinions
on the creation and implementation
of customs and internal trade policies
and conduct research and studies on
these issues, while also developing
policy recommendations to determine
procedures and principles for
government grants.