Minister of Trade Ruhsar Pekcan gave details on Turkey’s trade path and the Ministry’s digitalisation activities during the COVID-19 process.
The novel coronavirus (COVID-19) adversely affected the trade activities of the whole world. T.R. Ministry of Trade implemented exemplary practices in order for foreign trade to overcome this process with as little damage as possible. One of them was the “Easy Export Platform.” And, as the Business Diplomacy, we asked Ruhsar Pekcan, Minister of Trade, questions about the Ministry’s recent activities and Turkey’s place in the new world order after the pandemic.
The Ministry of Trade accelerated its digitalisation activities, especially during the pandemic. In this regard, could you tell us about the purpose, services, and aims of the Easy Export Platform you have launched to increase exports?
Our country has serious economic growth, development, domestic-national production, and export goals. We need to adapt to the digital economy as much as we can to achieve these goals. So, we developed quite an extensive project to put the digitalisation infrastructure of the digital age we are in into the service of our traders.
With the introduction of the Easy Export Platform, far ahead of all its foreign counterparts, we have stepped into a brand-new era in foreign trade and started a digital export revolution in our Ministry. We believe that with its scope, quality, target group, influence area, and its technology, the Easy Export Platform went beyond all projects that we completed until now and has the quality to directly influence Turkey’s export.
We aim to serve not only active and regular exporters but also to reach a large entrepreneur category who has business ideas for export. With this platform, we are able to transmit a wide range of actual information such as foreign trade statistics provided by national and international sources, target market information, and opportunities through a single medium.
We have gathered internal trade information obtained from customs declarations, the latest foreign trade data from 15 different domestic and foreign sources with fast and extensive data flow, and automatic data integration, as well as all information provided by the Ministry on various digital platforms. Thus, our platform uses more than 10 million rows of data for more than 10 thousand data fields related to more than 5,400 products and 190 countries, and it creates smart solutions for our exporters.
In addition to its automatic data integration, its artificial intelligence technology is another important feature carrying the Easy Export Platform ahead of its all global equivalents in terms of its scope, nature, target group, and information update. Our exporters can now determine to which markets they want to export their products and the potential within these markets via the “Smart Export Robot” module, which processes millions of data compiled from all data sources integrated into the platform and edits them with analytical modelling with a machine learning algorithm.
What we want to achieve here is that our exporters enter into new markets in a “smart” way and perform a sound export projection. Thus, we aim to enable our exporters to be able to expand towards target markets that offer potential with enough information and develop on-point market strategies, securing their places in the market.
With our belief that the service we provide in this scope has a very important function in terms of sustaining our country’s export increase, we continue to develop its content and scope.
The Easy Export Platform is now available to many industries. How can organisations wanting to increase their export rates in these areas use the platform? What kind of feedback do you get from users?
Exporters in many different sectors doing business via the Easy Export Platform can make both product-based and country-based inquiries with “Country Page” and “Sector Page” modules. Thus, the modules act as a guide in some way by providing all necessary information for target markets step by step specific to their products.
Besides critical information such as socio-economic indicators related to their target markets and market shares and size of competitor companies; the customs tax rates, non-tariff measures, current developments as indicated by our trade consultants abroad are also shared with users through a single platform. Additionally, almost all information that an exporter needs to enter into a market such as changes and trends in import-export data by country and sector, mandatory documents in export, basic criteria and legislation in entering into markets, sectoral news and fairs is available to our exporters with the most effective images and up-to-date data.
As the Ministry, we aim to create customised content for all of our companies via the Easy Export Platform. We increase the efficiency by designing an infrastructure to enable it and significantly making the platform different from its counterparts. With a module that we named “Export Cockpit”, every company can build its own web page. In this area, companies, whose export amount or state support amount provided by our Ministry is evaluated to be below the potential, are specifically guided and advised according to the nature of their company. Additionally, companies can quickly access their favourite country and sector page and follow up-to-date news and events.
Since its launch in August, the Easy Export Platform receives positive feedback from exporters and entrepreneurs who consider getting into this sector. We also find the opportunity to examine the evaluations of different users one by one through the requests and suggestions that reach our Ministry through the platform, and we continue our work on various development areas in this direction. We also plan to finish developing a “chatbot” that uses artificial intelligence natural language processing algorithms to answer the questions from our companies 24/7, creating the list of potential purchaser companies abroad and allowing our companies to contact exporters by exhibiting their products on the platform on their own page.
I can gladly say that our platform attracts great attention and interest. We have now over 60,000 users and 300,000 page views, only within a month. And we receive lots of messages regarding the platform. Every week, we make presentations to the members of our exporters’ associations, industry, and trade chambers through different online channels in order to tell entrepreneurs how to benefit from the platform in the most efficient way. These figures will increase rapidly. I invite all entrepreneurs aiming to do exports onto our platform.
The e-commerce industry rose to fame during the pandemic. Considering our country’s geopolitical position and logistics advantages, could you talk a little bit about the support you offer for the e-commerce industry?
Connecting the continents of Europe, Asia, and Africa and having a good command of road, air, and seaways, Turkey has an undeniable geopolitical importance in the world. This position has turned Turkey into a regional base in logistics. Turkey is now the biggest country in Europe for road transport. And with our ports that are operating and new ports under construction, we are also an important player in the maritime sector. Having flights to the world’s most visited destination in international passenger and cargo transportation, Turkey is also moving towards to become one of the world’s most important players in passenger and cargo transportation with its large fleet.
E-commerce could naturally be free of the adverse effects of COVID-19. The retail sector, for example, was among the sectors that received the biggest blow from the pandemic due to reasons such as lockouts, disruption, and the slowing of the supply chain. What COVID-19 did was to accelerate the transformation of trade that was already taking place; that is to say, moved it from the physical environment to the virtual environment more rapidly. A rapid adaptation to digital took place in the world and in our country with the global pandemic.
In 2019, the world trade volume was $25 trillion and e-commerce constituted $3.5 trillion of it. In other words, the 3.6% volume of e-commerce in the total global trade in 2011 increased to 15% in 2019. It is obvious that the share of e-commerce will be even more in 2020.
The first six-month e-commerce data in Turkey is quite interesting. While the e-commerce volume in the first six months of 2020 in Turkey was TRY 91.7 billion, TRY 91 billion of it was domestic expenses. The e-commerce volume in 2020 increased by 64% compared to the same period last year.
The comparison between 2019 and 2020 data gives us quite interesting results as well. It is possible to say at this point that 2020 was not a normal year for anyone, and e-commerce sales reached their peak this year. For example, 81% domestic expense rate in 2019 reached 91% in 2020. On the other hand, there was a decrease in e-commerce with foreign countries.
As the Ministry, we have launched a new support mechanism to accelerate our business world’s adaptation to this transformation and to help them become actors in this. With our support mechanism, we will encourage e-export, pave and ease the way for carrying trade delegations to a digital environment and facilitate the organisation of and participation in virtual fairs, which are becoming our new normal. With all that and our e-commerce platform membership support, we stand by our companies. We see how e-commerce and especially e-export have become a way out of the isolation and restrictions caused by the pandemic. The pandemic had people who had never shopped online before try e-commerce and contact-free shopping.
And our management success in areas such as security, strategic production, supply chain, and logistics during the pandemic will obviously drive Turkey forward in e-commerce. In order to speed up this process and encourage our companies for e-export, we support the membership costs of e-commerce sites up to TRY 8,000. In this context, the support rate for 2020 will be 80 per cent and 60 per cent in the following years. With a meticulously prepared set of criteria, we will direct our Ministry’s support towards e-commerce platforms that are widely known in our country and in the world for their reliability and recognition. Our companies will be able to benefit from this support for two years for three websites. Nine e-commerce sites are approved by our Ministry now. With our membership support to e-commerce websites, we offer our companies the chance to establish business relations with purchasers all around the world and introduce their products.
What are your estimations for 2021? What will be the position of Turkey in the new post-pandemic world order?
The course of the pandemic and the success of vaccination studies will undoubtedly be the most important determinants for 2021. Even with a recovery in the global economy with the opening of economies after May 2020, the pandemic is still going strong in many countries, increasing the uncertainty regarding a full recovery in the upcoming period.
On the other hand, the trade and technology wars between the USA and China, the US elections, disruptions in the global supply chains, increasing public debts, and the narrowing of monetary and financial policy areas due to interest rates approaching zero levels, geopolitical developments and the Brexit process also increase the uncertainty for the upcoming period.
As a result, much as international organisations give optimistic numbers for global growth and trade with the base effect of 2021, current risks imposed by the pandemic maintain the uncertainty for global economy expectations for 2021.
In this regard, the World Trade Organization (WTO) estimated on October 6 that global goods trade volume will decrease by 9.2% in 2020, and increase by 7.2% in 2021. WTO’s April estimation was a 21.3% increase in global goods trade in 2021. WTO also stated that the second wave of COVID-19 will be much better managed with the accumulated knowledge of infection, and this will result in less restricted lockdown measures and a smaller economic impact; however, the organisation also warned that with the increasing debt burden, high unemployment rates, and the low possibility of early vaccine discovery will prevent going back to the pre-pandemic trend rapidly.
We see similar assessments in OECD’s (Organisation for Economic Cooperation and Development) estimations as well. The OECD stated on September 16 that institutional investments and international trade would remain weak, and most economies would have less production level at the end of 2021 compared to the ones at the end of 2019. In the same assessment, the global GDP growth forecast for 2020 was estimated to be -4.5 per cent (upward revise by 1.5 points compared to the June report), while the 2021 growth forecast was 5 per cent (downwards revise by 0.2 points compared to the June report).
As the third country that estimated to have the fastest recovery after South Korea and China in the September OECD report, Turkey proved to the whole world that it can be one of the most important partners to provide production continuity in the global value chain. In the recently-published New Economy Program, the new normal and developing business processes and models to adapt to this period were emphasised. Thus, Turkey’s position in the global value chain will be stronger in the upcoming period. Considering that a small disruption in the production of members under the global value chain can cause serious costs to other members in this chain and reduce efficiency, Turkey will secure its place in this value chain as a reliable partner.
With the effect of globally increasing uncertainty, the decline in investment desires causes a global decrease in investments globally. And investments will be prioritised in spite of these uncertainties in the New Economy Program. In the new program, it was stated that the driving force of growth will be investments that increase technology intensity together with exports. As T.R. Ministry of Trade, we will do our part to improve the business and investment environment.
Interview: Cem Eker-Gültuğ Erdöl