International outreach of Turkish private sector

International outreach of Turkish private sector

International outreach of Turkish private sector

Turkish industrial sectors have been experiencing a major shift since the mid-1980s. AA photo

The world’s economic order is changing and Turkey is emerging as a key player. The country managed to transform itself from an agricultural economy to an industrial one over the last three decades. Private-sector investment has become the engine of economic growth and job creation.

The economic transformation of Turkey began in the mid-1980s. Before that time, the main aim of Turkey’s industry was to substitute import gaps and the state was heavily involved in monetary and trade policies. By the efforts of then-Prime Minister Turgut Özal, Turkey transformed into a free-market economy. The liberalization and privatization policies gave rise to bustling industrial cities in the Anatolian heartland.

Another prominent turning point for Turkey was the 2001 economic crisis. The stabilization program and political stability following the crisis directly improved the Turkish economy. The economy rapidly shifted from labor intensive and low technology to technology-intensive sectors, export-oriented industrialization accelerated and the entrepreneurial spirit of Turkey’s business community thrived in the process.

Nowadays, 92 percent of Turkey’s exports are manufacturing goods, as opposed to 10 percent in 1980. The country’s manufacturing exports span a large range of goods; and the diversification trend is continuing: The number of product groups that Turkey exports at more than $500 million has increased nearly threefold in the last 10 years. Product diversification went hand in hand with the location of production. While production used to be centralized in the Western regions, cities of the Anatolian heartland, such as Kayseri, Gaziantep, Konya and Denizli, have emerged as entrepreneurial export hubs. The “Anatolian Tigers,” as they are called, targeted hitherto unexplored export markets – Turkish exports to the Middle East and North African (MENA) region doubled in the last 10 years, and now constitute a quarter of the export basket. Today, Turkey is a three-hour flight away from most countries between Italy and China, and our entrepreneurs dot every part of this 10 trillion-dollar region.

The political transformation in the MENA region and the debt crisis in Europe will reshape the political and economic structure of the world in the upcoming days. On the other side, China and India are triggering international competitiveness.

What must be done is to be prepared for change. Turkey heavily produces middle-technology products such as white goods, chemical substances, telecommunication devices, medical devices and automobiles. It is of significant importance to switch from medium-technology to high-technology production for Turkey to make a leap in the global market and sustain competitiveness.

To reach Turkey’s goals, fostering a conducive business environment is among the highest priorities. Through public-private dialogue, Turkey is adapting investor-friendly policies, reforming its macro- and micro-economic foundations, and improving its investment climate.