Article Number : 1301 |
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| Date | 8/30/2006 6:49:00 PM |
| Written By | LGM & Associates Technical Flooring Services |
| View this article at: | //floorbiz.com/BizResources/NPViewArticle.asp?ArticleID=1301 |
| Abstract | In 1993, the United States recognized that the nation of Turkey was one of the world’s ten “Big Emerging Markets.” During the past 13 years, some of the other nations also named – China, Brazil, India South Korea – have garnered the attention of the world as they have grown and developed... |
| Article | In 1993, the United States recognized that the nation of Turkey was one of the world’s ten “Big Emerging Markets.” During the past 13 years, some of the other nations also named – China, Brazil, India South Korea – have garnered the attention of the world as they have grown and developed. After several years of economic, political and social reform Turkey now seems poised to deserve that designation. Once known mainly for its beautiful beaches, its Greek and Roman ruins and its rugs and textiles, Turkey has transformed itself into a regional economic powerhouse, slowly but surely diversifying its economy. Today, almost half of Europe’s refrigerators and air conditioners are now made in Turkey. Its iron and steel industry is now the world’s 11th largest and the fifth largest in Europe. Its natural stone industry sends its marble, granite and travertine to 160 countries around the world and can be found in upscale hotels in Singapore, Shanghai and India as well as the homes of American celebrities like Jennifer Lopez. Turkish marble is used in opera houses in Russia, office buildings in the Middle East and Europe and airports worldwide. Even that icon of American culture, Disneyland is built with Turkish stone. The roots of Turkey’s transformation are many. Beginning in the 1980’s Turkey began a conversion to a free market economy including liberalizing its foreign trade and global integration. Governmental economic policies of the late 1990’s of protecting state owned industries, sheltering bad loans and limiting foreign investment led to a 2001 financial crises that, while painful, freed the government to address long term structural problems. The drive toward membership in the European Union pushed market transformation as Turkey sought to meet European economic standards. This was accelerated after 2002 when Turkey’s current ruling party, the Justice and Development Party, came to power. As a result, foreign trade climbed from $11 billion in 1980 to over $190 billion today. Over 19,000 different products made in Turkey are sent to markets in 200 nations Like the Asian Tigers whose economic development strategy Turkey (the Asia Minor Lion) is following, the results are impressive. Over the past five years: o Turkey’s gross national product averaged 7.8% annual growth; o Its annual inflation rate fell from 69.5% to 7.7% o The budget deficit as a percentage of GNP fell from 14.7% to 3.1%; o Foreign direct investment increased from $1.1 billion per year to $9.6 billion; o Total foreign trade increased from $88 billion to $190 billion and now makes up 53% of gross domestic product; and o Exports doubled to $73.4 billion from $36 billion. One of the architects of Turkey’s export led growth and development is the State Minister for Foreign Trade and Customs, Kursad Tuzmen. Minister Tuzmen, a former Turkish swimming champion who holds a masters degree from the University of Illinois, focused Turkey’s energies first on its Mediterranean neighbors, such as Greece and Egypt, then its European trading partners, including the rapidly developing Russian market and then on Africa and China. Trade with all those regions has increased dramatically as part of Turkey’s “Trade Development Strategy with Neighboring and Surrounding Countries” which Tuzmen created. Trade volume with these 50 nations tripled from $20 billion to $59 billion. “Our economy by the end of 2006 will surpass that of Sweden, Belgium and Switzerland becoming the 20th largest in the world,” Tuzmen said recently. The one area where Turkey’s economic transformation has yet to reap big dividends is trade with the United States. Historically, the United States has been Turkey’s 4th largest export destination and its 6th largest import partner. Between 2000 and 2005 bilateral trade between the two nations rose by 50% - from $7 billion to $10.5 billion. This increase fell far short of the overall 129% increase in the volume of Turkish trade globally. Moreover, textiles still dominate Turkish exports to the United States, with almost 33% of all Turkish exports heading to New York, the fashion capital of the United States. Turkey’s government and industrial leaders aim to change that. Building on their prior trade development strategies and declaring 2006-2007 “The Year of Turkey in America” they are focusing their energies on increasing Turkey’s economic relations with the United States. “First, we raise awareness of Turkey in the minds of the American business community and then we eliminate any barriers that they identify that might prevent freer trade and investment,” said Tuzmen. “After all,” Tuzmen conclused, “this is also about creating opportunities for American companies in Turkey as it is for Turkish companies in the United States.” Mr. Mutlu Oktem, the leader of Turkey’s leading industrial business chamber, Istanbul Mineral and Metals Association (IMMIB), whose 26,000 export members, covering far more sectors than just minerals and metals and which accounts for 32% of all of Turkey’s 2005 exports said “We see the U.S. as the last great market for Turkey’s products. Given the historical political and economic ties between our two nations, we believe that now is the time for Turkey to show American companies how we can help them meet the demands of the American consumer. We are up for the challenge.” Turkey’s other great export area is textile and apparel. Mr. Afif Yurtcan, secretary general of the Istanbul Textile and Apparel Exporters’ Association (ITKIB) whose 17,000 members account for 20% of Turkey’s total exports echoed Mr. Oktem, “We want to build on the fact that Turkish textiles and apparel are sold widely in the United States and has a good reputation with consumers. We think more can be done.” Given its successes in other parts of the world, there may soon be evidence of that all over the United States. |