Հայ-թուրքական հարաբերությունների շուրջ
“We are looking for Saudi experience and investment in refining, petrochemical and energy development to curtail our CAD figures,” he said, adding that he was very encouraged with high-level meetings he held in both Jeddah and Riyadh as part of his trade mission trip.
The petrochemical industry is one of the six categories of industries highlighted by the Turkish government as contributing most to the CAD problem in Turkey. Others are listed as iron and steel, machinery, automotive, textile and agriculture. “We have studied our industries, and we know the specific sectors and subsectors that contribute to the CAD, and we are looking for ways to manufacture these items domestically rather than importing,” he explained to a group of reporters in the Saudi capital on Sunday.
Turkey’s CAD surged by 79.1 percent in September compared to the same period of 2010, reaching the highest level in the ninth month of the past 18 years, at $6.76 billion. The CAD was 6.5 percent of GDP last year, and it was expected to climb to 9.4 percent by yearend. In October, it saw a marked improvement with $4.2 billion in October, nearly 35 percent lower than what it was in September.
Mainly emerging from the foreign trade deficit, the CAD has become a structural problem for Turkey. The country’s export volume reached $114 billion last year, up from below $100 billion in 2009. It is set to earn $135 billion from exports this year; however, despite such a rise in export revenue, its CAD spiked to nearly 9 percent of the GDP due to the rising energy bill and industry’s dependence on foreign intermediate goods to produce products to be sold overseas. Turkey, an energy dependent country, spends nearly $50 billion each year on energy imports.
The minister said both economies are not rival but rather complementary. “What Saudis sell is what we import, especially petrochemical goods. Petkim [a petrochemical company] meets only 15 percent of Turkey’s demand. We may need five Petkims in Turkey,” he underlined. The minister was referring to the Turkish subsidiary of Azerbaijan’s SOCAR, Petkim, which held the groundbreaking ceremony for the Star Refinery in October, a joint investment with a total value of $5 billion between SOCAR and Turkey’s Turcas (SOCAR-Turcas) in what is expected to turn into a significant project to help reduce Turkey’s widening CAD. The refinery will be constructed in Aliağa in İzmir province with a capacity to process 10 million tons of raw materials, making it one of the most important processing centers in Europe. It is to be completed by 2015.
Çağlayan praised the marked improvement in trade volume between the two countries, saying it was evenly balanced. Turkey’s trade volume with Saudi Arabia was $5.5 billion in 2008 before contracting 37 percent in 2009 due to the world financial crisis. It increased 30 percent last year, reaching $4.5 billion. In the first 10 months of this year, the volume had already reached $5.1 billion. The minister said he expects the volume to reach $6 billion in 2012 and put $20 billion as the target volume for the countries without specifying a time limit, stressing that he wants to see a bigger share of Turkish products in the imports of Saudi Arabia, which totals some $125 billion.
Çağlayan said Turkey also wants Saudi Arabia to lobby for the speedy conclusion of free trade agreements (FTA) with the six-nation Gulf Cooperation Council (GCC). “We very much value the Saudi contribution in this process because they are the engine in the GCC,” he said in response to a question from Today’s Zaman. “I brought the issue up in meetings I have had with Saudi ministers here,” he added. He held talks with Commerce and Industry Minister Tawfiq bin Fawzan Alrabiah, Minister of Transport Jabara Al-Seraisry, Finance Minister Ibrahim Al-Assaf, Housing Minister Shuwaish bin Saud Al-Dhuwaihi and Municipal and Rural Affairs Minister Prince Mansour bin Miteb.
Some 100 Turkish businessmen accompanied the Turkish minister on this trip. The business forums held both in Jeddah and Riyadh brought together hundreds of businessmen from both sides. In Jeddah, the business forum saw the signing of agreements between the Jeddah Chamber of Commerce and Industry (JCCI) and the Makkah Chamber of Commerce and Turkey’s business interest group the Independent Industrialists and Businessmen’s Association (MÜSİAD). The agreement on cooperation in the construction sector between Turkey and Saudi Arabia was also signed by Çağlayan and his Saudi counterpart.
Turkey also eyes a bigger share in the multi-billion dollar Saudi construction and contracting industries. With almost $700 billion, Saudi Arabia leads the fastest growing construction industry in the Gulf region, which is estimated to have a total $1.9 trillion market value. In the contracting, the ninth Development Plan envisages $385 billion in public investment in Saudi Arabia. As of December 2011, the total value of contracting projects undertaken by Turkish companies in this country was almost $10 billion. Çağlayan said there is a lot of room to improve in these sectors. He said the Saudi Binladin Group and Turkey’s Yapı Merkezi are successfully working together on joint projects. The two companies won the contract to build passenger stations in Medina and Makkah.
He also mentioned Nesma Eser Onur Contracting Co. Ltd. as one of the success stories in joint investment schemes in Saudi Arabia. The company was established in 2008 as a joint venture between Saudi Arabia’s Nesma Holding Co. Ltd., and ETS ESER Contracting & Industry Co. Inc. and ONUR Contracting Transportation & Trading Co. Ltd., both from Turkey. According to the company’s website, the joint venture provides heavy civil and infrastructure construction services such as heavy infrastructure works, landfill and shore protection, roads and highways, bridges, dams, irrigation canals systems, water and sewage systems, sewage treatment plants, etc. across the Kingdom of Saudi Arabia.
Çağlayan called on Saudi businesses to invest more in Turkey, saying he laments the low figures in this area. Saudi companies have $1.4 billion in investments in Turkey, while Turkish companies have $600 million in investment in Saudi Arabia. He said Turkey is set to liberalize land and property sales to foreigners, including Saudis. “The draft law is in Parliament, and we will adopt it soon, allowing greater flexibility on this issue.” Çağlayan said both countries are also talking on visa liberalization issues for businessmen to facilitate trade and business contacts. “The difficulties in visa approval procedures create unfair competition. We are making progress and I understand it will take some time,” he noted.
In his speeches in Riyadh and Jeddah, Çağlayan said Turkey — with a booming robust economy and stable government — is the perfect place to make long-term investments. “That is why companies from the EU come to Turkey for investment to capitalize on the vibrant economy, utilize the young labor force and expand to third markets in our neighborhood,” he said. Making mention of improvements in attracting foreign investment to Turkey, the minister recalled that Turkey received $10.9 billion in FDI in the first nine months of this year, more than twice the amount for the same period a year ago. “One important fact was that 87 percent of international capital inflows to Turkey in the given period were from financially troubled EU countries.
The October performance was even more impressive, he said, noting the total amount of FDI the country attracted in the first 10 months of this year was $11.5 billion, or 82 percent more than in the same period a year ago. Turkey received only $6.3 billion in FDI in January-October 2010. According to the United Nations Conference on Trade and Development (UNCTAD), Turkey attracted $9.1 billion in FDI in 2010 and became the 27th most appealing destination for investment around the world. Çağlayan said investors show their confidence in the Turkish economy by investing in the Turkish market. From the growth perspective, Turkey looks very appealing to foreign companies as well. In the third quarter of this year, according to the Turkish Statistics Institute (TurkStat), Turkey’s gross domestic product (GDP) expanded by 8.2 percent in the July-September period, marking the eighth quarter in a row the country’s economy has grown.
With that growth rate, Turkey became the second-fastest growing economy worldwide, after China, in the third quarter. In cumulative terms, Turkey has grown 9.6 percent in three quarters. Çağlayan said they expect a growth rate of no less than 4 percent next year, dismissing International Monetary Fund (IMF) estimates that the Turkish economy will grow by 2 percent next year.
25 December 2011 / ABDULLAH BOZKURT, RIYADH/JEDDAH