Mar 14 2019

Facing economic troubles, Turkey turns to defence exports

Turkey is working to boost defence and aerospace exports to address financial and economic troubles as the country dips into recession, Defense News reported on Wednesday.

As the Turkish lira tumbled to record lows last August, President Recep Tayyip Erdoğan urged Turkey’s diplomatic missions in more than 150 countries to work harder to win contracts for Turkish manufacturers.

“Exports are increasingly important for the sustainability of the industry,” Murat Ceran, head of the government’s procurement agency, told Defense News. “We are working to boost exports in a total of 130 countries.”

The lira has recovered somewhat, ultimately losing 28 percent of its value against the dollar in 2018. But this week Turkey’s economy slid into recession, just weeks before local elections on March 31.

Since 2013, Turkey’s defence and aerospace exports have increased more than 68 percent, from $1.388 billion to $2.035 billion in 2018, according to the Turkish Exporters’ Assembly. This includes $800 million worth of deals with Qatar in the past two years, for armoured vehicles, drones, and various ships, according to Defense News.

Turkey’s top market is the United States, with sales of $726 million in 2018, followed by Germany, Oman, Qatar, and the Netherlands.

Last year, state-run Turkish Aerospace Industries won a $1.5 billion deal to sell helicopter gunships to Pakistan. The Philippines said it may also order the same helicopters, according to Defense News.

Also last year, private Turkish company Baykar signed a deal to sell six drone systems to Ukraine, a first for the Turkish industry.

Still, analysts warn that licensing problems may undermine Turkey’s exports.

“Critical parts, like engines, in many Turkish systems are Western-made, and countries like the United States and Germany may be reluctant to issue export licenses for these parts,” an Ankara-based defence analyst said.

Balkan countries have shown interest in commissioning Turkey for naval upgrade programmes, eyeing corvettes and frigates, and Pakistan and Malaysia have been identified as potential customers for Turkish-made naval systems, according to Defense News.

“The local industry is becoming more and more competitive,” said Özgür Ekşi, a senior analyst with C4Defence.