Turkey’s exports sharply decline
Author: Taraf (Turkey) Posted June 3, 2015
Turkey’s exports in May 2015 were 19% lower than the same month last year. Exporters Assembly of Turkey has announced that exports that were $12.87 billion in May 2014 this year has fallen to $10.82 billion. Total exports for the year is about $6 billion less than 2014. It's now likely that the $173 billion exports goal for 2015 will not be achieved.
One must remember that the decline in exports will have a negative effect on 2015 national income. As long as the AKP cannot come up with a new economic policy, national income will go down. National income, $823 billion in 2013, had already regressed to $800 billion in 2014 and per capita income had gone down from $10,822 to $10,404. If conditions don’t change this year, per capita income could well go below $10,000.
The question all ask is why Turkey’s exports are declining: It is because Turkey has lost its competitiveness. So much so that although there has been a 55% devaluation in dollar parity over the past 24 months, we can’t still sell our products. Other countries applied the declining world crude oil prices to their domestic prices and lowered their energy costs by 50%. But Turkey, as it finances its budget from indirect taxes on oil and energy, did not apply lower energy prices to its domestic prices. This meant that the devaluation caused further increases in domestic prices. That is, while other developing countries were increasing their exports, Turkey lost significantly.
Here we have to note that exports in the month of May to Germany were reduced by 26%, to Britain by 16%, to Italy by 22% and to the United States by 15%.
Meanwhile, Turkey was already suffering export losses to Arab countries because of the negative ramifications of its Middle East policies. For example, in May 2015, exports to Iraq declined by 38%, which means a 27% loss for the year, so far.
Of course, as Turkey spends its resources on fancy malls, restaurants, high-end residences, luxury vehicles and showy state buildings, there was no investment in industry and agriculture that would produce goods for export. The supply of commodities available for export shrank further, pushing up their domestic prices.
In short, the AKP government that opts for luxury consumption has turned Turkey into a country that can’t export.
Read More: http://www.al-monitor.com/pulse/politics/2015/06/turkey-export-decline-sharp.html