Turkey should seek new export markets amid rows with Germany, Russia: Expert

Turkey should seek new export markets amid rows with Germany, Russia: Expert

Öykü Altuntaş – ISTANBUL/Doğan News Agency
Turkey should seek new export markets amid rows with Germany, Russia: Expert Turkey should generate “new export markets” following the Bundestag’s approval of a resolution recognizing the events of 1915 as genocide, as well as the jet crisis with Russia, Sabancı University Finance Professor Özgür Demirtaş has urged.

Turkey should not “put all its eggs in the same basket,” Demirtaş told Doğan News Agency in an interview at the first annual conference of the newly founded Center of Excellence in Finance (CEF). 

Turkey is “left without alternatives” when major export markets like Germany, the United Kingdom and the Netherlands are put aside.

Germany, which has been targeted by Ankara since last week’s resolution on the mass killings of Ottoman Armenians, is Turkey’s largest export market. According to the Turkish Statistical Institute (TÜİK), Turkey’s annual export volume to Germany reached $15 billion in 2015, while Turkey welcomes the largest number of tourists from Germany every year.

However, following the approval of the bill, concerns on Turkish-German economic relations have become inflamed.

Question of ‘balance’ in Turkey’s export distribution

“The better a country’s foreign affairs are, the better export numbers are. Thus, we can reduce the vitality accordingly,” said Demirtaş, who is also the founder of CEF.

According to the finance expert, Turkey has “homework to do” on this issue, starting with “diversifying” its export markets.

“If we review the top four or five export markets, we see the U.K., Germany, and Netherlands on the front burner. Iraq has been higher on list; however, after the recent developments, exports went on the decline. At the same time, we observe that Iran could have a potential,” he said.

While Demirtaş described the distribution of export markets in Turkey as “relatively good,” there are outstanding risks because these countries are more prominent in the distribution, according to the expert. 

“When we put Germany, the U.K. and Netherlands aside, we see that Turkey is left without alternatives,” Demirtaş said, reiterating that Germany had a large volume of trade for Turkey’s economy.

‘First step would be to prevent avertible high tension’

Demirtaş also argued that the first thing to do would be to “prevent avertible high tension.” “Let’s say that you have not managed to prevent them; then, it is important to lean back comfortably, knowing that you own other baskets. I think that Turkey should work on that,” he added.

According to TÜİK, Turkey’s annual exports to Russia could decline from $7 billion to $2 billion. Meanwhile, annual tourism receipts may drop from around $35 billion to $20 billion this year due to the impacts of the jet crisis, according to forecasts.

“The incident with Russia, definitely had negative impacts on the tourism sector,” said Demirtaş, referring to the Russian embargo on Turkey’s exports of some vegetables and fruits after Turkey downed a Russian jet for an alleged border breach on Nov. 24, 2015.

‘Measures should be taken immediately for tourism’

Demirtaş warned that Turkey was set to face a difficult period for the tourism sector, adding that he hoped some agreements with banks in touristic regions would “ensure flexibility.”

“There is always a limited time period for tourism because following the season, tourism enters a dark period and in the upcoming term, it struggles to re-adjust itself. Measures should be taken now, for the upcoming seasons,” he said.

Demirtaş also explained that the center aimed at serving as a mediator for “transforming potential energy to kinetic energy” in Turkey’s financial sphere.