Building up Turkey’s defense industry has long been a priority for the government, and it has made considerable progress. Turkey is now the world’s 14th largest defense exporter. Despite its success to date, the industry is facing growing pains, and challenges like brain drain, a currency crisis, dependence on foreign suppliers, and regional political disputes could hamper growth going forward.
Turkey’s defence industry targets hampered by foreign policy, brain drain - analysis
Challenges including an ongoing brain drain, a currency crisis, dependence on foreign suppliers and regional political disputes could hamper Turkey’s bid to increase its export capacity in the defence sector, political analyst Ali Bakeer said in an article for the Middle East Institute on Tuesday.
Turkish President Recep Tayyip Erdoğan has made developing Turkey’s defence industry a long-term goal since his early days in power. Around 65 percent of the sector is now indigenous, compared to 20 percent when Erdoğan came to power in 2003. In 2018, the value of defence exports reached over $2 billion.
A recent report by the Stockholm International Peace Research Institute (SIPRI) categorises Turkey as an “emerging producer”. The Turkish government aims to make the defence industry 100 percent independent and increase its export capacity to $50 billion by 2053. Achieving those goals will require a huge effort, said Bakeer, noting that arms exports by smaller exporters can fluctuate significantly according to SIPRI.
Turkish defence companies’ reliance on importing key components means the continuing slide of the Turkish lira, which dropped by 28 percent against the dollar last year, could be an obstacle for Ankara’s ambitious defence industry goals, Bakeer said.
A brain drain can also act as a brake on the development of the defence sector, Bakeer said, referring to a January survey by Turkey’s procurement authority (SSB) that said over 270 Turkish defence contractors, mostly senior engineers, had left Turkey in 2018 for new jobs abroad. Some 40 percent of those cited issues curbing their career progress as their main reason for leaving.
Bakeer also referred to problems raised by Turkey’s foreign policy as a potential stumbling block for its defence industry.
“Many foreign customers do not distinguish between the government’s position on foreign policy issues and the Turkish defence companies’ interests as private entities. As a result, Turkish firms are unable to expand into certain markets, and are often sidelined at major regional defence forums,” the analyst said.
Due to Turkish government’s support for Qatar since the Gulf crisis broke out in 2017, Saudi Arabia and the United Arab Emirates have canceled several contracts with Turkish defence companies, Bakeer said.
Turkey is also facing possible expulsion from the lucrative F-35 programme, as a result of Washington’s opposition to Ankara’s planned purchase of Russian S-400 missile systems.
Turkish companies such as Havelsan, Aselsan, Ayesaş and Alp Aviation, which produce vital components for the F-35 stealth fighters, have already been affected by the Pentagon’s decision to halt F-35 equipment transfers to Turkey.