Tips on trading in Turkey

Turkey’s economic growth and geographic location should be inspiring Australian exporters to investigate exporting to Turkey. But before you set off, here’s some advice about trading in Turkey.

Export eyes are now on Turkey. As the country enters a modernisation process to boost its economic prosperity and impress the European Union (EU) during accession talks, trade opportunities are opening up for Australia Exporters.

Strikingly, Turkey’s annual growth rate is 7.5 percent, far ahead of the EU’s major economies, and even those of fast-growing China and Russia. As a result, Turkey’s 73 million-strong population has seen increased purchasing power.

“I would say that Turkey’s economy is in its best shape in 40 years. We have experienced strong levels of economic growth, low inflation, and reasonable fiscal discipline in the past few years. The Government is reform-minded and is committed to raising productivity levels and undertaking essential privatisation programs,” says Tevfik Aksoy, Deutsche Bank’s chief economist for Turkey.

Yet, while Turkey has become a magnet for European exporters, Australians are still not being drawn in. According to the Australian Bureau of Statistics, less than 300 Australian businesses export to Turkey, making it a medium range market.
Turkey imports 60 percent of its energy requirements, including a majority of coal from Australia. Non-monetary gold, aluminium, and raw hides and skins, are also imported from Australia in large numbers.

Our economic relationship with Turkey was strengthened during Prime Minister Recep Tayyip Erdogan’s 2005 visit, the first such visit by a Turkish Prime Minister. An Invest Promotion and Protection Agreement was signed, a bilateral agreement protecting investments and giving both countries most favoured nation status.

Turkey is a democratic and secular nation, but the governing AK Party’s (Justice and Development Party) religious roots have caused political instability in the past. However, AK Party defines itself as liberal conservative, and its investments in economic modernisation have brought durability to the Turkish market.

The political situation appears to have stabilised, according to Ben Ford, senior economist at Export Finance and Insurance Corporation, since the AK Party was re-elected with an astounding majority last July. “That said, there will probably continue to be periodic skirmishes between secularists and religiously-inclined conservatives, and the army remains watchful for signs of a retreat from Turkey’s secular foundations.

“There is little doubt about the Government’s commitment to create a western-style free market economy. It is moving the policy climate towards EU convergence and, even though membership doesn’t seem imminent, this should have many positive spill-overs,” says Ford. “The Government also appears to have renewed its emphasis on privatisation and is keen to attract further FDI by bolstering the investment climate.”