July exports show alarming weakness for Turkish economy
Sunday, August 1, 2010
ALİAĞA, İzmir - Hürriyet Daily News
| Photo: Members of the Turkish Exporters' Assembly, and İzmir's top industrialists pose for cameras Sunday in Aliağa, İzmir. |
Speaking to journalists at a press meeting held in the industrial town of Aliağa in İzmir, Mehmet Büyükekşi, chairman of the Turkish Exporters’ Assembly, or TİM, said in the first seven months of the year, exports increased by 13.4 percent compared to the same period last year. The volume of exports reached $64.24 billion in the period.
July’s export champion was again the automotive industry, with a volume of $1.38 billion, followed by the ready wear industry with $1.38 billion. The chemicals industry ranked third at $1.9 billion.
Agricultural exports reached $1.11 billion with a share of 11.7 percent in total exports in July. With a share of 84.65 percent in total exports, Turkish industry overall reached a volume of $7.97 billion in the month.
The highest rate of annual increases was recorded by hazelnuts, with a rise of 43.6 percent, followed by tobacco products at 38.35 percent and the mining sector at 32.05 percent.
Büyükekşi called for “immediate action” by policy makers to overcome the difficulties preventing the increase of exports. “Foreign exchange policy should be changed and the Central Bank should intervene as the Turkish Lira keeps appreciating This causes a hike in the imports of raw materials, elevating the current account deficit to reach an alarming level,” he said.
“The Central Bank should raise the level of daily purchases of foreign currency to $50 million and 50 million euros from the current $30 million,” he said. Complaining about speculative transactions, he suggested that there should be a 1-percent commission taken from foreign currency transactions by individual investors.
The lira has gained 5.2 percent against the U.S. dollar since the start of June while it has lost 1.7 percent against the euro in the same period.
Controversy over İzmir Port
Discussing exports from İzmir, Büyükekşi said exports from the city were declining.
“We wanted to take a further step in the privatization of the İzmir Port, as the Aegean Exporters’ Association joined a consortium that won the bidding. Then the case was taken to the State Council and we were forced to wait for 30 months for nothing. Now, final approval has been given to run the port but a devastating crisis started in the meantime. Why did we have to wait for 30 months?” he said.
“Turkey is the fastest growing economy in all OECD [Organisation for Economic Co-operation and Development] countries and comes second after China in G-20 countries. Total exports of Turkey posted an increase of 22.3 percent during the first quarter of this year, a trend that we expect to continue,” said Mustafa Türkmenoğlu, chairman of the Aegean Exporters’ Association.
“Unfortunately, the appreciation of the lira hurts exporting sectors and also increases the unemployment rate,” he said. “An overvalued lira paves the way for many people to import rather than purchasing the material from small- and medium-size enterprises in the country. Those enterprises are going through a hard time.”
The press conference was hosted by Petkim, Turkey’s biggest chemicals maker. Speaking at the event, Hayati Öztürk, the general manager of the company, said with new investments, Petkim aims to be the biggest in Europe in petrochemical production by integrating refinery, petrochemical, energy and logistic facilities.
The current operations of Petkim in Aliağa will be extended by founding a new university and a logistic center, creating 10,000 jobs, according to Öztürk. The company is targeting a new port of 1 million TEU – a unit of measure for standard dimensioned cargo boxes of 6.1 meters in length, 2.4 meters in width and 2.6 meters in height – capacity, exceeding the 900 TEU handling capacity of the İzmir Port.
“Turkey acts as a bridge between energy producing and energy consuming countries,” he said. “This is a great chance to achieve the goal of $500 billion of total exports by the year 2023.”
July’s export champion was again the automotive industry, with a volume of $1.38 billion, followed by the ready wear industry with $1.38 billion. The chemicals industry ranked third at $1.9 billion.
Agricultural exports reached $1.11 billion with a share of 11.7 percent in total exports in July. With a share of 84.65 percent in total exports, Turkish industry overall reached a volume of $7.97 billion in the month.
 | |
| Minister bashes research report on exports | |
| State Minister Zafer Çağlayan has heavily criticized a report that said export destinations are shifting from their traditional market of the European Union, adding this constitutes a “shift in axis.” “As we seek to boost exports in the markets that we are strong in, we are also striving to get a foothold in new markets,” the minister said in a written statement Sunday. “This development does not stem from a shift in axis, but the making use of the geopolitical position of our country that is taught at [even] primary schools.” The Turkish Exporters’ Assembly, or TİM, also criticized last week’s report by the Economic Policy Research Foundation of Turkey, or TEPAV. In light of the global crisis, TİM said in a statement, “logic requires orientation toward regions that demand has not shrunk.” “Exports toward Iraq, Syria, Egypt, Algeria and Libya increased by nearly $10 billion,” TİM said. “Last year, exports toward 86 countries, nearly all in Africa and the Middle East, increased. If we had not done this, overall exports in 2009 would not have been $102.2 billion, but around $95 billion. Unemployment would have risen further and industrial production would have retreated further.” Turkey’s orientation toward Africa and Middle Eastern markets constitutes a “widening of orbit,” not “a shift in axis,” TİM said. | |
| |
Büyükekşi called for “immediate action” by policy makers to overcome the difficulties preventing the increase of exports. “Foreign exchange policy should be changed and the Central Bank should intervene as the Turkish Lira keeps appreciating This causes a hike in the imports of raw materials, elevating the current account deficit to reach an alarming level,” he said.
“The Central Bank should raise the level of daily purchases of foreign currency to $50 million and 50 million euros from the current $30 million,” he said. Complaining about speculative transactions, he suggested that there should be a 1-percent commission taken from foreign currency transactions by individual investors.
The lira has gained 5.2 percent against the U.S. dollar since the start of June while it has lost 1.7 percent against the euro in the same period.
Controversy over İzmir Port
Discussing exports from İzmir, Büyükekşi said exports from the city were declining.
“We wanted to take a further step in the privatization of the İzmir Port, as the Aegean Exporters’ Association joined a consortium that won the bidding. Then the case was taken to the State Council and we were forced to wait for 30 months for nothing. Now, final approval has been given to run the port but a devastating crisis started in the meantime. Why did we have to wait for 30 months?” he said.
“Turkey is the fastest growing economy in all OECD [Organisation for Economic Co-operation and Development] countries and comes second after China in G-20 countries. Total exports of Turkey posted an increase of 22.3 percent during the first quarter of this year, a trend that we expect to continue,” said Mustafa Türkmenoğlu, chairman of the Aegean Exporters’ Association.
“Unfortunately, the appreciation of the lira hurts exporting sectors and also increases the unemployment rate,” he said. “An overvalued lira paves the way for many people to import rather than purchasing the material from small- and medium-size enterprises in the country. Those enterprises are going through a hard time.”
The press conference was hosted by Petkim, Turkey’s biggest chemicals maker. Speaking at the event, Hayati Öztürk, the general manager of the company, said with new investments, Petkim aims to be the biggest in Europe in petrochemical production by integrating refinery, petrochemical, energy and logistic facilities.
The current operations of Petkim in Aliağa will be extended by founding a new university and a logistic center, creating 10,000 jobs, according to Öztürk. The company is targeting a new port of 1 million TEU – a unit of measure for standard dimensioned cargo boxes of 6.1 meters in length, 2.4 meters in width and 2.6 meters in height – capacity, exceeding the 900 TEU handling capacity of the İzmir Port.
“Turkey acts as a bridge between energy producing and energy consuming countries,” he said. “This is a great chance to achieve the goal of $500 billion of total exports by the year 2023.”
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