Turkey poised to set new record on exports

Barçın Yinanç - barcin.yinanc@hdn.com.tr

Turkey is set to break a new record in terms of exports, the head of the country’s exporters assembly has said, noting that the export industry has now begun displaying a positive trend following the upheaval after the July 2016 coup attempt.

“Although we are aiming at reaching a volume of $155 billion, we could break a new record if we were to go higher than $157 billion,” Turkish Exporters Assembly (TİM) head Mehmet Büyükekşi said.

Tell us about your new campaign.

Following the July 15 [2016] coup attempt, a negative perception operation started abroad. Some $560 billion has been spent each year on communications. No matter how much we spend, it would never have been enough compared to this amount. So we decided to do something different. We said to ourselves, “Let’s not do the explaining ourselves, let our friends talk about us.”

A recommendation is much better than a communication campaign or a commercial. The impact of a recommendation from prominent personalities known by the public is much higher than the impact of a commercial.

Some of the CEOs of international companies active in Turkey live in the country. We worked with them as well as with people like the CEOs of Ford, Cyberbank, BNP Paribas and the deputy head of GE. We approached 16 CEOs of companies that ranged from Toyota to Unilever. They all accepted it.

We allowed them to say whatever they wanted to about Turkey. We told them, “Say it however you want to say it.” We shot 30 seconds advertorials with each, and we only asked them to use the same sentence at the end: “Come to Turkey, Discover your own story!”

The campaign started at the end of March in seven countries: the United States, United Kingdom, France, Germany, Italy, Russia and the United Arab Emirates. We are half-way through. We have not targeted the people in the street but the business community and the decision makers. We will soon have the CEOs of Nasdaq and Yandex online. We have also done shots with football players Lukas Podolski, Wesley Sneijder and Samuel Eto’o.

Our aim was to improve the perception of Turkey as well as improve the perception of Turkish products.
This is also part of our efforts at branding. We want to create a Turkey brand, a regional brand, a city brand and sector brands. 

By 2013, we are aiming to have 10 brands known all over the world.

The economy has its own dynamic. It’s understandable to a certain degree that tourism was highly affected by developments in Turkey. To what degree have the perception of economic activities been affected by the coup attempt? 

We did all this work so it was not affected. At the beginning, several companies asked to cancel their orders saying, “If you can’t send them in time we will suffer losses.” A lot of our exporters traveled from one country to another to explain that there wouldn’t be a problem with the transactions. Some connected to their plants on Facetime to show that production was continuing as usual.

Sustainability is crucial for certain companies; that’s why we took these measures.

Some high-level officials of certain purchasers abstained from coming to Turkey due to security reasons, especially after certain terror incidents. We also wanted to convey the message “come to Turkey; there’s no problem.” And instead of us saying it, we preferred foreign CEOs to say it.

Currently, for the first time in 20 months; there has been an increase in tourism numbers. We are also going quite well on exports.

There has been an increase of nearly 10 percent in the first five months. The inputs of the first four months come from TÜİK [Turkish Statistical İnstitute], while the input for the fifth month belongs to us. We expect things to get better. 

Let’s not forget that the incidents in Turkey coincided with elections in some countries; Turkey became an issue of domestic politics in those countries. Those elections are now over, and there are elections left only in Germany. So we are expecting things to get back to normal. We will continue to explain the country’s potential. Currently, we have exports worth $150 billion. If we can better position Turkey’s brand on every platform and if we could sell our products at a price of 20 percent more, that would mean an additional $20 billion in income. So we want to make our products more valuable. 

Is Turkey’s export profile changing?

That is one of our aims. Currently, Turkey’s export price for one kilogram is $1.3. If we continue like that, we won’t be able to reach our aim of $500 billion. By 2023 we want our share of global trade to reach 1.5 percent. Currently, we are at 0.89. We are trying to increase to 1 percent by 2018.

And for that, we need high value added exports. That’s one of the reasons why we focus so much on brands. We have two sectors that have now come to dominate the market as brands: [One is] Turkish bathrobes – now, when you talk about bathrobes, the first thing that comes to mind is Turkey. The olive oil industry is doing well. 

We are also good in textiles, ranking second in Europe in readywear. 

But on exports the automotive industry ranks first. The automotive sector has ranked first for the past decade in terms of exports. They registered a $2.6 billion increase in the first five months.

2016 was a year of turbulence; what are the prospects for 2017

There has been an improvement globally since the beginning of 2017 with the rise of commodity prices, especially with the rise in oil prices. World trade was around $18.3 trillion in 2008. This dropped to 16.5 trillion in 2015, while it went further down to 16 trillion in 2016. The current expectation is around 17.2 trillion. Turkey is moving in parallel to this improvement. The World Bank has revised Turkey’s growth rate from 3 to 3.5 percent for 2017.

I need to add the fact that the problems we had with Russia and Iraq did have an impact on exports.
Currently, our exports to Russia in May registered an increase of 74 percent. The increase in the first five months was 37 percent. Similarly, we had a 38 percent increase in May in our exports to Iraq; the increase in the first five months was around 26 percent.

Our exports to the European Union are going really well. There has been an increase of around 10 percent. The improvement in the European economy has had a positive impact on us, as there has been an increase of 21 percent in exports to the U.S. We have just been to Israel, and we are expecting some positive developments there as well.

In the past we reached $158 billion in export volume. We ended 2016 with $153 billion. This year, we are aiming higher than $155 billion.

To want degree have difficulties with Russia been overcome?

I can say that 90 percent of problems have been solved. With the exception of tomatoes, Russia’s president has signed a decree to lift all bans. We will see in a few days that this will come into force.

We have had political difficulties with the EU, but it remains a market unaffected by politics, it seems.

That’s the difference between developed countries and developing countries. We had difficulties with Israel for five years; but our export increased 50 percent in the course of those five years. We have had difficulties with Russia and Egypt and our exports have fallen 50 percent.

Developed countries do not confuse politics with trade. There are actually no problems with businesspeople. Governments enforce non-tariff barriers, especially at customs.

With the EU, Turkey’s image must be a problem, however.

We feel that rather in tourism. Russia enforced a tourism ban, and while Europe has not, there was a decrease not so much because of the image problem but because of security concerns.

The government is working on improving relations with the EU. We will hopefully start upgrading the customs union by the end of the year. This is going to provide advantages to both sides.

But the EU has certain expectations like the end of the state of emergency.

Yes, but there is also the fact that they have not delivered on their promises, such as on the refugee deal.

But certainly your interlocutors must be worried about the state of emergency.

We need to properly explain it. The state of emergency plays no role in our daily lives except in terms of security.

In short, you are telling us that the exporters are getting over the trauma of the failed coup?

Indeed. We are expecting a growth around 3.5 percent in the first quarter; 2 percent of which will come from exports. For a long time, especially for the last four or five quarters, foreign trade gave a negative contribution to growth. In the first quarter of this year, this will turn into a positive trend. This is highly important.

Actually, there was an incorrect perception. Exports never negatively affected growth figures but because of the difference between import and exports, the foreign trade deficit has been negatively contributing to growth.

And we have to underline the fact that the incentives provided by the government have played a role in the increase in exports. The support provided for R&D and design centers, as well as the increase from 1 billion to 3 billion liras in the budget earmarked for exports, are among them. Eximbank’s capital has also been increased from 3.7 billion liras to 10 billion liras.

This is moral and financial support to our sector. We need to see the trends in the coming months, and although we are aiming at reaching a volume of $155 billion, we could break a new record if we were to go higher than $157 billion.