New motto in Foreign trade: Diversify export markets amid crisis
Posted by meb at March 28th, 2009
With Turkey’s export markets — particularly those in the EU — being strongly affected by the adverse effects of the ongoing global financial crisis, “diversifying export markets” has become the motto of Turkey’s foreign trade policy, a safe way to provide fresh opportunities to Turkish exporters who have lost ground in their traditional markets due to shrinking demand.
In this way, both the government and entrepreneurs have intensified their quest to diversify export markets, a move that has a critical role in keeping the negative at bay.
Turkey’s exports to the West, especially to European markets, embarked a downward trend with the emergence of the crisis. Thus the government has accelerated work to enter new export markets with the contributions of Turkish entrepreneurs. Foreign Trade Minister Kürşad Tüzmen stepped up visits to a number of countries, particularly in the last two months, as an attempt to strengthen Turkey’s presence in alternate markets and reduce dependence on the country’s traditional trading partners.
Tüzmen’s trips, in which he was accompanied by large groups of Turkish businessmen, yielded fruits sooner than expected as Turkey guaranteed over $1 billion in new business deals and signed free-trade agreements with some countries through the visits. Turkey’s exports to Eastern markets boomed in the first two months of 2009. For instance, exports to Iraq increased by 75 percent in January and February combined over same months of 2008.
However, it will not be as easy for Turkey to return to its heyday in exports. The country’s exports in February dropped 35 percent when compared to the same month of last year, hitting only $6.8 billion. Following such news, Tüzmen said exceeding a figure of $100 billion in exports in 2009 would imply success for the Turkish economy. Turkey’s exports exceeded $130 billion in 2008.
Turkish Confederation of Businessmen and Industrialists (TUSKON) Chairman Rızanur Meral told Sunday’s Zaman that there was a sharp contraction in exports in the first two months of the year; however, Turkey’s exports to African countries increased by 31 percent compared to the same months of 2008 thanks to efforts to enter new markets. “We are not only working to strengthen trade relations with Africa but also concurrently trying to establish relations with entrepreneurs from four continents,” he noted. Meral said they began conducting research on African markets three years ago and see the benefits of their efforts today. “Trade with Africa is an elixir of life for ailing Turkish exports as exports to Africa increased to $9 million as of 2008 from $2.5 billion in 2005. In the past three years, around 6,500 small and medium-sized enterprises [SMEs] have exported to African countries. We choose them because African countries are less affected by the crisis than others,” he said.
Meral also said they have started meeting with entrepreneurs from Latin America. “In June, the government will send a trade commission to visit Paraguay and Uruguay and our members will accompany them,” he said. Underlining that TUSKON is continuing its research in parallel with that of the government on entering new markets, Meral said they appreciate the efforts of the government to this end. He recalled that Tüzmen had been to a number of countries with the aim of boosting trade relations and that such steps had helped Turkey weather the storm to some extent.
With regard to 2009 export and import figures, Meral said both will unavoidably drop due to a severe reduction in demand. He also said Turkey’s foreign trade deficit will fall for the same reason. “The Turkish economy is well integrated with global markets and we expect a recovery in foreign trade by 2010,” he added.
Süleyman Şensoy, the chairman of the Turkish-Asian Center for Strategic Studies (TASAM), said on Friday that Turkey aims to raise its trade volume with Latin America and the Caribbean to $30 billion. Speaking at a workshop in Ankara, Şensoy defined the region, home to 33 countries with a total gross national income of $4.5 trillion, as one of the emerging markets in the world but said Turkey engaged in minimal trade with the region due to the lack of proximity between the countries.
The government has not slowed down yet, continuing research on ways to increase exports. Türk Eximbank, a state-owned bank responsible for promoting Turkey’s exports through the diversification of exported goods and services, is expected to increase the amount of country loans it extends, Foreign Trade Minister Tüzmen said on Friday. Noting that Türk Eximbank plans to extend around $300 million in country loans in 2009, Tüzmen said they expect an increase in Eximbank loans would increase Turkey’s production and exports amid the ongoing financial turbulence. Eximbank extends country loans to foreign entrepreneurs who import goods from Turkey with the aim of boosting the country’s exports.
Provinces close to emerging markets benefit more
According to Turkish Exporters Assembly (TİM) data, three provinces from southeast Anatolia have boosted export revenue in one year, becoming the “shining stars” of Turkey’s exports despite the crisis. Thanks to the region’s geographical proximity to emerging markets and its superiority in delivering orders much faster to these markets, Şırnak, Mardin and Adıyaman recorded remarkable profit from export income.
Şırnak, a relatively poor province in southeastern Anatolia, doubled exports in February over the same month in 2008. The province’s exports increased to $38.5 million in February compared to $18.5 million in the same month of the previous year. Iraq was the main importer of goods from Şırnak.
Mardin, another province in southeast Anatolia, also established good trade relations in new export markets, with exports from Mardin rising to $28 million in February from $21 million in the same month of last year. The province primarily exports construction materials to neighbors.
Exports from Adıyaman skyrocketed. The province exported goods worth $2.3 million in February 2008, while this number increased to $6 million in the same month of this year. The province mainly exported textile products.
source: Today’s Zaman
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