06.06.2016 17:00

Turkey should turn to new export markets after row

Turkey should generate "new export markets" over the recognition of “Armenian Genocide” by the German parliament, as well as the jet crisis with Russia, urged Sabancı University Chair Professor of Finance Özgür Demirtaş.
Turkey should not “put all eggs in the same basket” Demirtaş told Doğan News Agency in an interview, at the first annual conference of newly-founded Center of Excellence in Finance (CEF). Speaking to DHA, Özgür Demirtaş noted that Turkey is “left without alternatives” when its major export markets including Germany, the U.K. and Netherlands are put aside.

Germany, having had harsh response from Ankara after the vote, is known as Turkey’s largest export market. According to the Turkish Statistical Institute (Turkstat), Turkey’s annual overall data of exports to Germany reached 15 billion dollars in 2015, while Turkey hosts the highest number of tourists from Germany every year.

However, following the approval of a bill that s the 1915 events as "genocide", concerns on Turkey-Germany economic relations flamed up.

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” Founder of CEF, Professor Özgür Demirtaş told DHA.

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 can have a potential” he said.

While Prof. Demirtaş described the distribution of export markets in Turkey as “relatively good” some risks remain as some of these countries have "higher dominance" in this distribution, according to the expert.

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

“First step would be to prevent avertible high tension”

Demirtaş also argued that 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 Turkstat, Turkey’s annual exports to Russia can decline from 7 billion dollars to 2 billion dollars. Meanwhile, annual tourism receipts may drop from around 35 billion dollars to 20 billion dollars 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” added Professor Demirtaş, referring to the Russian embargo on Turkey’s exports of some vegetables and fruits, over Turkey’s downing of a Russian jet for border breach on Nov. 24, 2015.

“Measures should be taken immediately for tourism”

Prof. Demirtaş urged that Turkey currently faces a difficult term for the tourism sector, saying he hoped that some agreements with banks in the touristic regions would “ensure a 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.”

“Mediator for transforming potential energy to kinetic energy”

The founder of Center of Excellence in Finance (CEF), Özgür Demirtaş also explained that the center aimed at serving as a mediator for “transforming potential energy to kinetic energy” in the financial sphere of Turkey.

“We can divide the society to scholars, praticians and representatives of real sector and finance sectors, students and policy makers. When you consider these groups, you will recognize that they all go into their shells. We want to make these relations more solid and we think that these groups should come together.”

CEF will be offering trainings and certificate programmes, where leading finance experts including Professor Aswath Damodaran from New York University, and Professor Turan Bali from Georgetown University will teach. These “tailor made” trainings will be hold in Sabancı Center rather than campuses, which are mostly outside the city center, Demirtaş said. Programmes will be specific to different institutions, and will focus on project and company assessment and risk management, he announced.
Öykü Altuntaş / Istanbul DHA