How lucrative is Turkey’s defense industry?
Author: Fehim Tastekin Posted May 19, 2017
Among the most grandiose ambitions of Turkey's Justice and Development Party (AKP) government is making giant strides in national defense, diminishing dependence on foreign sources and eventually becoming an exporter of defense products. Concurrently, the government is making a point of emphasizing "defense and weapons" in its diplomacy.
With abundant embellished reports of inventions and major successes in production of armored vehicles, missiles, helicopters and drones, the ground is prepared for President Recep Tayyip Erdogan’s foreign travels.
Ismail Demir, who was appointed undersecretary of the defense industry in 2014, has accompanied Erdogan on 17 of his foreign trips. According to state-owned media Anatolian Agency, Turkey has signed agreements for defense industry cooperation with the countries of Benin, Chad, Congo, Mali, Senegal, Gabon, Romania, Gambia, Somali and Indonesia, and memorandums of understanding with Britain, Kuwait, United Arab Emirates, Chile and Ukraine. Turkey also has signed more-concrete military cooperation agreements with Niger, Nigeria, Djibouti, Ivory Coast, Montenegro, Qatar and Sweden. Ankara also agreed to a framework accord with British defense giant BAE Systems for Turkish national combat aircraft. Recently, Turkey was awarded Pakistan's submarine modernization project.
According to government officials, this marathon campaign supported by Erdogan’s personal credibility is based on solid foundations. But what is its scope? The latest effort to add credence to ambitious claims came at the International Defense Industry Fair held May 9-13 in Istanbul. Pro-government media claimed the fair was a sensational success.
Companies displayed an ATAK helicopter, Altay tank, Hurkus and Anka drones, reconnaissance and kamikaze drones (Alpagu, Kargu and Togan), missiles (Kaan, TRG-122, TRG 300 Kaplan, Gokdogan and Bozdogan), air defense systems from Korkut and Hisar, and armored vehicles from HIZIR, Kaplan and Pars. There were two major transactions: submarine sales to Indonesia and an agreement with Pakistan for the sale of four Turkish-made Mil-Gem warships.
Another landmark agreement came in February between Turkish military vehicle manufacturer Otokar and the United Arab Emirates' Tawazun. In a $661 million agreement, the pair formed a joint venture, Al Jasoor, to make 8x8-wheeled amphibious armored vehicles.
Turkish media get carried away by these promising events. According to economist Gungor Uras, in 2003, only 25% of the needs of the Turkish Armed Forces were met locally; that figure has reached 68%.
Turkey's investments in the sector now total $3.5 billion, with annual production of $2 billion to $3 billion. The Defense Industry Undersecretariat now supervises 269 projects. Yet Turkey's military expenditures have been stable for more than 15 years. According to data provided by Stockholm International Peace Research Institute (SIPRI), Turkey’s military expenditures were $15.3 billion in 2002 and $14.9 billion in 2016.
Turkey’s political discourse and media reports are constantly referring to cooperation protocols and agreements. But it is not clear how many of these massive investments are actually realized. There's a lack of transparency in the defense industry, and the Turkish government makes a habit of exaggerating pleasing news. Available export figures are modest compared to sensational ambitions. Most of the media's promising articles start with, for example, “Defense industry exports are up seven times over 15 years” — but seven times what? How significant is this increase?
During the past 15 years, annual research and development expenditures have climbed from $1.8 billion to $20 billion.
According to Prime Minister Binali Yildirim, in 2002, Turkey exported $250 million worth of defense products. Figures from Turkey’s Exporters Assembly show that in 2016, Turkey’s defense and aeronautics sector made foreign sales of $1.68 billion. One-third of those sales in 2016 were to the United States, followed by sales to Germany, Malaysia, Azerbaijan, Britain, UAE, Qatar, Saudi Arabia and Tunisia.
Given the emphasis and efforts made, these figures are not mind-boggling, especially as the AKP Vision Document for 2023 calls for $25 billion of annual defense industry exports. In 2011, annual defense exports were $883.8 million.
There is a long way to go to achieve the 2023 target. But Demir tried to sound optimistic. “We want to reach the $25 billion level in 2023. We are determined. We are not going to change that target, although it seems somewhat ambitious. We will expand the sector and increase international cooperation,” he said.
This vibrancy in the defense industry, although not yet backed up by numbers, indicates Turkey’s goals. The psychological motivation here comes from a government mesmerized by the grandeur of the Ottoman era and that dreams of making Turkey's army the strongest and increasing Turkey's global influence. Turkey is not content with its place among weapons-exporting countries. SIPRI says Turkey is the 16th-largest exporter in that sector.
Several other factors encourage Turkey’s focus on this sector. First, Turkey is aware of Iran’s advances in developing its own defense systems and doesn't want to lag behind. Second, Turkey now believes that it can’t be a regional leader simply by depending on NATO. Moreover, Turkey’s disputes with the West encourage it to become more independent in defense. Of course, Turkey’s increasingly interventionist foreign policy is another element encouraging its national defense industry.
Read More: http://www.al-monitor.com/pulse/originals/2017/05/turkey-how-lucrative-defense-industry.html
Fehim Tastekin is a Turkish journalist and a columnist for Turkey Pulse who previously wrote for Radikal and Hurriyet. He has also been the host of the weekly program "SINIRSIZ," on IMC TV. As an analyst, Tastekin specializes in Turkish foreign policy and Caucasus, Middle East and EU affairs. He is the author of “Suriye: Yikil Git, Diren Kal,” “Rojava: Kurtlerin Zamani” and “Karanlık Coktugunde - ISID.” Tastekin is founding editor of the Agency Caucasus. On Twitter: @fehimtastekin
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