Tag: Zafer Caglayan

Turkey Minister repeats criticism on valued currency

Turkey’s foreign trade minister maintained its critical stance on valued currency on Wednesday.Thursday, 21 October 2010 11:59

Turkey’s foreign trade minister maintained its critical stance on valued currency saying on Wednesday that Turkey was the only country whose currency was gaining in value.

State Minister for foreign trade Zafer Caglayan said that Turkish lira (TL) was gaining in value, which was against Turkey.

“Currencies of other countries are also gaining in value, but not as much as Turkey,” Caglayan told reporters in New York.

Caglayan said the world economy was shifting towards developing countries from developed countries, and Turkey had to follow that process.

On Turkish-U.S. relations, Caglayan said Turkish exports to the United States were 3.2 billion USD and its imports were 8.5 billion USD in 2009, and Turkish imports from the United States were up three-folds from 2002 to 2009.

However, its exports had not risen and Turkey had a foreign trade deficit with the United States, Caglayan said.

Turkey made 3.35 billion USD of exports to the United States and 3.1 billion USD of imports in 2002.

Caglayan said Turkey had chosen New York, Texas, California, Illinois, Florida and Georgia as target markets, and the U.S. companies had 6.5 billion USD of investments in Turkey and were eager to invest in particulary energy.

There are more than 1,000 U.S. companies and 25,000 international investors in Turkey.

Caglayan said Turkey had drawn 85 billion USD direct foreign capital between 2003 and 2010, and more than 70 percent of that capital had come from Europe.

“Europe has seen Turkey as its product and service base,” Caglayan also said.

Caglayan will proceed to Canada after completing talks in New York.

AA

October 22, 2010
Turkey, spurning U.S., says companies free to trade with Iran

WASHINGTON – Turkey on Wednesday rebuffed a U.S. effort to persuade it to scale back its trade ties with Iran, despite a persistent U.S. lobbying campaign this week in Washington and Ankara.

Ali Babacan, Turkey’s deputy foreign minister, told reporters in Washington that Turkish companies will remain “free to make their own decisions” about whether to comply with U.S. and European sanctions aimed at cutting off trade with Iran.

The sanctions, adopted last summer, were designed to build enough economic pressure on Iran to persuade its leaders to limit its disputed nuclear program. The United States and many other countries believe the program is aimed at obtaining know-how to build nuclear weapons, while Iran insists it seeks only peaceful uses of nuclear energy.

Turkey is a major trading partner with its neighbor to the east, and its failure to comply with the sanctions is a major threat to their success. Turkey’s Prime Minister Recep Tayyip Erdogan said last month that his country wanted to triple its trade with Iran.

The Obama administration this week mounted a major effort to bring Turkey in line. The Treasury Department’s point man on Iran sanctions, Stuart Levey, visited Ankara on Wednesday to urge Turkish officials to cooperate in the sanctions effort, even as U.S. officials in Washington offered to broaden U.S.-Turkish trade ties.

Yet Babacan, a founding member of Turkey’s ruling Justice and Development party, said Turkish businesses would be unwise to break off ties to Iranian firms when many European, Chinese and Russian companies “are still doing quite a big business with Iran and finding open doors.”

Babacan, though acknowledging that the Iranian economy is coming under “more and more pressure,” said he still doubted whether Iran’s leadership — which had faced decades of sanctions — would fold. “It is very difficult to expect them to move just because they’re under pressure,” he said.

Turkey receives about one-third of its energy from Iran, and the two-way trade, valued at more than $10 billion, is especially important to impoverished areas along the border with Iran.

Despite the government’s attitude, the U.S. and European sanctions may have some bite, including for Turkish banks, which risk losing access to the U.S. market if they do business with companies that trade with Iran.

Turkish Trade Minister Zafer Caglayan complained this month about U.S. pressure on the banks, saying, “We cannot tolerate it.”

Meanwhile, the Obama administration is also trying to sharpen pressure on Chinese companies, whose behavior is the greatest threat to the sanctions. As other companies cut ties with Iran, Chinese firms appear to be snapping up energy, financial and arms business.

Philip Crowley, the chief State Department spokesman, said Monday the administration has given China the names of companies it suspects are violating sanctions rules, and have received promises that China will investigate.

paul.richter@latimes.com

Source: ctnow

October 21, 2010
US wants backing on missile shield plans, Turkey insists on terms

Turkey has insisted that a planned NATO anti-missile system should not be perceived as a threat against any of its eastern neighbors with which its economic and political relations have particularly flourished in the last few years, while US authorities called on Ankara to approve hosting a part of the Europe-wide shield.

Speaking at panel discussions held as part of the two-day 29th Annual American-Turkish Council (ATC) Conference in Washington on Monday, Turkish Minister of Defense Vecdi Gönül and US Defense Secretary Robert Gates both said the talks over the proposed missile shield are continuing on the basis of mutual trust and dialogue as two allies. “Contrary to some press reports, we are not pressuring Turkey to make a contribution. But we do look to Turkey to support NATO’s adoption at the Lisbon summit of a territorial missile defense capability,” Gates said, addressing the high-profile audience of politicians and businessmen from both sides on Monday in the US capital.

Amid these calls from the US for approval, Turkey is particularly seeking guarantees from the West for the system not to be perceived as an anti-Iran or anti-Russia move while also trying to reduce the cost of a national anti-missile shield by agreeing to host a part of it at the NATO’s Lisbon summit next month.

Gönül underlined that Ankara in principle supports the idea of the anti-missile system but said it should counter the full range of ballistic missile threats. Turkish Foreign Minister Ahmet Davutoğlu said recently that Turkey does not perceive any threat from any neighboring countries and does not think its neighbors present a threat to NATO, either. The transatlantic alliance, on the other hand, says the system is intended to defend all its members against possible missile attacks by “rogue states.” NATO operates by consensus and needs approval of its 28 members for the proposed system to be put into practice. Earlier, Gönül also underlined that his government was seeking an agreement on technical issues, including how the NATO-wide shield system would affect Turkey’s national missile system and if it would cover the entire country as well.

Gönül and Gates were the luncheon speakers on Monday.

On the sidelines of a panel discussion the same day, US Assistant Secretary of Defense for International Security Affairs Alexander Vershbow however — without naming the missile defense issue outright — called on Ankara to “demonstrate publicly” that bilateral and NATO alliance relations were moving forward. He made references to Turkey’s refusal of a new round of UN sanctions against Iran and also its tense relations with Israel but assessed the issues in the context of the run-up to the Lisbon summit.

“Unfortunately, Turkey’s statements and actions last spring regarding Israel and Iran have contributed to a political environment in which it may be more difficult to move forward, at least in the short term, on some important projects that the administration supports. … With a historic NATO summit just a month away, we should seize the opportunity to publicly demonstrate our commitment to one another,” Vershbow said. A US defense official, speaking on condition of anonymity with Reuters, later clarified that the projects Vershbow had referred to were the sale of pilotless drone aircraft to Turkey.

Also delivering speeches at the event on Monday, two leading diplomats from both sides gave rather positive messages as to the strength of the alliance between their countries though they sometimes differ on certain issues. While Philip Gordon, the US assistant secretary of state for Europe and Eurasian affairs, said Turkey and the US had a very close and active dialogue in foreign policy and also had common interests within NATO, Turkish Foreign Ministry Undersecretary Feridun Sinirlioğlu maintained that “the two countries can have different approaches on some issues but we should always remember that we have a common goal.” The same views were reiterated by Turkish Deputy Prime Minister Ali Babacan as well.

“Disagreements are embedded in the nature of all healthy relations. If there aren’t any, then it means that someone is being intimidated in that relationship. Therefore, we try to develop a healthy relationship with the US while always keeping in mind our common goals and values,” he said.

Turkish Foreign Trade Minister Zafer Çağlayan also took the floor at the event on Monday and touched upon Turkey’s adherence to UN sanctions against Iran, though it voted against them at the UN Security Council meeting in June. However, stressing that the sanctions should not overstep defined boundaries and hamper Turkey’s trade with Iran in the areas that are not subject to them, Çağlayan said Turkey’s share in Iran’s imports is very minimal. “Now I am asking: Iran had an import volume of $66 billion last year. Of this, Turkey’s share was only $2 billion. So, who made up the remaining $64 billion in exports to Iran? This needs to be discussed,” he said. In his speech, Çağlayan also touched upon “non-developing” economic relations with the US. “While the world economy is advancing, as are Turkey’s exports and foreign trade, we haven’t see even a tiny improvement in trade with the US,” he noted.

20 October 2010, Wednesday
TODAY’S ZAMAN WITH WIRES İSTANBUL

October 21, 2010
Turkey’s “Economic Recovery” Raises Questions

Turkey’s “Economic Recovery” Raises Questions

Publication: Eurasia Daily Monitor Volume: 7 Issue: 150

August 4, 2010

By Saban Kardas

The Turkish Exporters’ Assembly (TIM) announced statistics on Turkish export figures in July 2010. Turkey exported around $9.5 billion in goods, which amounted to a 5.97 percent increase since July 2009. Between January and July 2010, its exports increased by 13.14 percent compared to the same period last year and reached $64.2 billion. Turkey’s leading export industries were in the automotive, textiles and chemicals sectors (www.tim.org.tr, August 1).

The export trends are an important indicator in order to understand the Turkish government’s handling of the economy in the face of the global economic crisis. After coming to power in 2002, the governing Justice and Development Party (AKP) managed to stabilize the Turkish economy, which had suffered from a series of home-grown financial crises throughout the 1990’s and early 2000’s. The Turkish economy reported record growth rates under the AKP’s rule, with Turkish exports surpassing the important psychological threshold of $100 billion.

However, the global financial crisis shattered this optimistic picture. Under pressure from a contracting global economy and weak domestic demand, Turkey’s production sector was badly hit, resulting in a hike in unemployment figures. With the lessons learned from earlier financial crises, however, Turkish financial institutions weathered the storm successfully. Ankara did not experience the collapse of the mortgage system or a credit crunch, and the Turkish banking sector grew even in those difficult conditions.

Nonetheless, the Turkish government came under criticism for its economic policies. For skeptics, the government could not take effective measures to protect the economy, especially through its refusal to accept international assistance (EDM, April 2, 2009). Some Turkish business groups pressured the government to conclude a stand-by agreement with the International Monetary Fund (IMF) so that it could serve as an anchor of stability and attract fresh loans to non-financial sectors. Others argued that Turkey could overcome financing problems independently without the IMF’s help. After many rounds of talks, Prime Minister, Recep Tayyip Erdogan, refused to sign a loan deal with the IMF, on the grounds that it would reduce Turkey’s flexibility to initiate appropriate measures. Instead, Erdogan’s government launched various stimulus packages to boost domestic demand and initiated a medium-term economic recovery plan (EDM, September 23, 2009).

The government’s efforts helped revitalize industrial production, easing the effects of the crisis. For a healthy recovery, however, it was necessary to expand Turkey’s export volume, given the limitations of its domestic market to sustain industrial growth alone. The trends in exports are thus a key indicator to understand the fate of Turkey’s crisis recovery policies.

Supporters of the government’s economic policy have referred to the country’s ability to avoid a major economic breakdown without outside help and the signs of recovery in recent months. In their view, through its successful road map, Turkey proved its self-sufficiency and resilience to crises, and that it could sustain this momentum without the injection of foreign capital through an IMF deal (Today’s Zaman, March 11).

Thus, Turkish government officials welcomed the recently announced export figures as further evidence that Turkey was emerging from recession. In a written statement, Turkish State Minister, Zafer Caglayan, responsible for foreign trade, interpreted these developments as signs that Turkish export levels were on the path to recovery. He analyzed the trends in exports and argued that the government will be able to reach the export volume predictions of the medium-term economic plan (www.ntvmsnbc.com, August 1).

Nonetheless, Turkish economists call for caution in evaluating Turkey’s performance in coming out of recession. For instance, a leading Turkish economist, Guven Sak, based on the results of a study conducted by the Economic Policy Research Foundation of Turkey (TEPAV), identifies a worrying pattern. He argues that although the export volume in the global economy expanded in the first quarter of 2010, Turkish exports remained rather stagnant. He reached the conclusion that while the global economy is rapidly returning to pre-crisis levels, Turkey is having difficulty catching up with these wider trends; Turkey was able to recover only 75 percent of the export volume lost due to the crisis. Thus, he called for a more effective export promotion strategy (Referans, July 29, www.tepav.org, July 28).

Indeed, reaching new markets has been a key component of the government’s recent foreign economic strategy. Caglayan and other Turkish officials have traveled extensively in order to boost Turkey’s foreign trade. For instance, Caglayan was in the US recently. Traditionally, Turkish exports to the US remained limited compared to its trade ties with the EU and Turkey now seeks to gain a larger share of the US market. Similarly, Turkey wants to form a free trade zone in the Middle East to include Turkey, Syria, Lebanon and Jordan, hoping that it might improve Turkish trade with the region. A meeting in Istanbul brought together the representatives of these countries last weekend, where they agreed further steps towards realization of this objective (Anadolu Ajansi, July 31).

The need for a more effective export-oriented growth strategy, in addition to penetrating into new markets, is also recognized by the government. In a recent meeting aimed at formulating a road map for Turkish exports, bringing together representatives from the treasury, central bank and other state institutions, Caglayan stressed that industrial products still accounts for nearly 80 percent of the country’s exports. The meeting concluded that Turkey had to reduce its dependence on the export of low and medium-technology products and move to more profitable sectors. Also, the meeting highlighted Turkey’s heavy reliance on foreign energy sources as a liability affecting its foreign trade balance (Anadolu Ajansi, July 12).

This last point highlights another major challenge facing Turkey’s economic recovery: dependence upon imports to sustain its economic growth. Parallel to the increase in domestic production and exports, Turkish imports also soared in recent months. The foreign trade deficit, which had been a prime source of concern for the Turkish economy, contracted sharply during the global financial crisis. Figures released recently show that as of June 2010 the foreign trade deficit increased by 34.9 percent since last year and Turkey’s exports are far from meeting its imports (www.tuik.gov.tr, July 30).

https://jamestown.org/program/turkeys-economic-recovery-raises-questions/

August 5, 2010