Turkish companies raise high hopes on new era with Russia

Turkish companies raise high hopes on new era with Russia

ISTANBUL – Anadolu Agency
Turkish companies raise high hopes on new era with Russia As President Recep Tayyip Erdoğan prepares for a historic meeting with Russian counterpart Vladimir Putin on Aug. 9 in St. Petersburg, along with a group of leading Turkish business representatives, local companies have raised high hopes for renewed cooperation with their once leading trade partner. 

A number of Turkish sectors, notably exports and tourism, were deeply affected by the deterioration of relations with Russia and were hoping to return to the old days in the coming term. 

Exports from Turkey to Russia showed a sharp decline this year. Russia, which ranked 9th last year during the first seven months, regressed to 20th this year. 

According to data of the Turkish Exporters’ Assembly (TIM), exports to Russia totaled $1.8 billion in the first half of last year and decreased to $737 million in the same period of 2016. 

Last year in July, exports to Russia was $281 million but decreased by 60 percent to $107million in the same period of this year. 

Turkish-Russian Business Council Chairman Tuncay Özilhan, who also owns brewer Efes Pilsen, said the meeting between Erdoğan and Putin would be a very good start for bilateral relations, and added, “We forget the past and look for the future. I believe that both countries could collaborate in many fields and create mutual economic value. It is a meeting during which very important decisions could be made in order to reach $100 billion trading volume between the two countries.”

Hopeful for 2017 

Travel Agencies Association of Turkey (TÜRSAB) head Başaran Ulusoy said they expected very important and positive results from Erdoğan’s visit to Russia. 

“The normalization of political relations between the two countries and establishment of close dialogue just like in the past will no doubt have a positive effect on tourism,” Ulusoy said.

Stating that the number of Russian tourists visiting Turkey this year decreased by 87.36 percent compared to the same period in 2015 to 183,828, Ulusoy continued: 

“According to the Turkish Statistical Institute [TÜIK], tourism spending by Russian tourists in Turkey was $2.703 billion in 2014 and fell to $1.9 billion in 2015. In the first quarter of 2016, Russian tourists’ spending decreased by 41.4 percent… compared to the same period of 2015. The figures of the second quarter of 2016 will be announced in the coming days. In case of positive relations, both markets will start recovering in 2017,” said Ulusoy. 

‘Hard to replace Russian market’

Turkish Contractors’ Union head Mithat Yenigün said that among the foreign markets for Turkish contractors, Russia always had a significant place, adding that the cost of 1941 projects that had been undertaken in the Russian market since 1988 was nearly $65 billion. 

“Just as is the case with Turkish contracting services abroad, Russia is an extremely powerful and irreplaceable market due to its demand for construction materials, which is important for our country’s exports and serves the interests of diversification with new markets,” Yenigün said. 

Stating that the amount of work undertaken in Russia totaled $4.8 billion in 2013, $3.9 billion in 2014 and $5.4 billion in 2015, Yenigün said: “Considering this, we can talk about a big annual loss. Some projects have been stopped during the crisis and then cancelled just before the signature process. A restart is expected $2 billion worth of projects and to return to the levels before the crisis.” 

‘Meeting to please exporters’

Istanbul Ready-Made Garment Exporters’ Association (IHKIB) head Hikmet Tanrıverdi said they were very hopeful and excited about the Erdoğan-Putin meeting, which they believed would please exporters. 

Tanrıverdi said Russia was one of the most important markets for the Turkish ready-made sector, adding, “We received a big blow in the Russian market after the plane crisis. Our exports to Russia were $128 million in the first seven months of 2015; it decreased by 49 percent in the first period of this year and fell to $65 million. We are very pleased that common sense won in both sides before the increase of the crisis.” 

Tanrıverdi said he believed ready-made exports to Russia would be accelerated after the meeting, and added, “Unless a new problem occurs, I believe that we will return to the old days with Russia in 2017.”