Much has been made of Turkey’s increasing efforts to develop its trade and investment links with the countries of its neighbouring regions. For some, this is one of the indicators of Turkey’s alleged turn towards the east. For others, these deepening financial ties indicate precisely the opposite, by showing commercial pragmatism at play rather than ideological realignment.
What exactly is the extent of these new ties that Turkey has been developing with its neighbours? In this post I’ll try to go a small way towards answering this question by looking at the way in which Turkey’s export markets have evolved over the past decade and a half.
My first chart illustrates the changing value of Turkey’s exports between 1996 and 2009 (unadjusted for inflation). It shows the overall value of the country’s exports each year, as well as a breakdown for various geographical regions, the two most significant of which are the European Union and the ‘Near and Middle Eastern’ category. TurkStat doesn’t specify which countries comprise the latter. (The underlying data I’ve used here can be downloaded from the TurkStat website.)
The chart reveals a clear pattern in the evolution of Turkey’s export earnings during the period covered, with sluggish growth in the second half of the 1990s leading to rapid acceleration for most of the 2000s before falling back sharply in 2009 as a result of the global economic crisis. Throughout the whole period, the European Union remains by a very large margin Turkey’s most significant regional export market. Exports to the EU peaked at US$63.4bn in 2008 as against US$25.4bn for the ‘Near and Middle Eastern’ countries.
The relative performances of Turkey’s exports to different regions are highlighted more starkly if we look at them not in absolute terms but as a percentage of the overall value of annual exports. This is illustrated in my second chart, below, which shows a clear narrowing of the gap between the share of total exports accounted for by the EU and by the Near and Middle East, respectively, in recent years.
Between 2007 and 2009 the EU’s share of total exports dropped by more than ten percentage points, from 56.3 per cent to 46.0 per cent. During the same period, the share accounted for by Near and Middle Eastern countries increased by almost five percentage points, from 14.1 per cent to 18.8 per cent.
What does this tell us? Is it a ‘turn towards the east’ of sorts? Yes and no. Yes, because there’s no doubt that there was a massive surge in the level of exports to the Near and Middle East in 2008, with values increasing by 68.2 per cent. No, because this wasn’t at the expense of exports to the key EU market in any kind of zero-sum way.
Despite the emerging crisis in many EU economies during 2008, Turkey’s exporters to that region still managed to eke out year-on-year growth of 5.0 per cent. But in terms of the shares reflected in the second chart above, 5.0 per cent growth wasn’t enough, With exports to every other region expanding more rapidly, slower-growing exports to the EU inevitably ended up with a smaller slice of a pie that others had increased in size.
When we turn to 2009 we see, paradoxically, that while exports to the EU collapsed in value (down by 25.9 per cent to US$47.0bn), the decline in the bloc’s share of overall exports decelerated sharply (dropping by two percentage points, rather than the eight that had been shed the previous year). Again, this reflects the interaction of trends in the exports to the various regions. By contrast with 2008, in 2009 exports to all but one of the regional markets declined in value, leading to a very considerable shrinking of the overall value of Turkish exports for the year. (The region which bucked the trend was North Africa, which saw exports from Turkey increase in value by 27.3 per cent to US$7.5bn.)
Let me conclude with a final table, which lists Turkey’s top ten export markets (by country rather than region) at the beginning and end of the 14-year period we’ve been looking at. There are two things worth noting here. First, Turkey’s export sector has diversified during this period. In 1996, its ten most significant markets accounted for 60.9 per cent of the total value of exports. By 2009 that figure had dropped to 48.0 per cent. The second thing to note is how similar the two lists are. Seven of the ten largest markets in 1996 remain in the top ten for 2009. Of the three new entrants, one is from Europe (Switzerland) and two are from the Middle East (Iraq and the United Arab Emirates). These take the place of one Middle Eastern country (Saudi Arabia) and two European ones (Belgium and the Netherlands).
|Turkey’s ten largest export markets in 1996 and 2009|
|US$bn||% of total||US$bn||% of total|
|Russian Fed||1.5||6.5||United Kingdom||5.9||5.8|
Source: TurkStat, Foreign Trade by Countries