We talked to Ali Güney, General Manager at Turk Eximbank, about Turkey’s exports potential, the impacts of COVID-19 on exports, and many other significant issues.
Export figures of countries can directly impact their economic development levels. And we talked to Ali Güney, General Manager of Turk Eximbank, about the bank’s activities and future goals to achieve their goal of improving Turkey’s exports.
We would like to hear your thoughts on Turkey’s export potential and performance.
The export sector was affected by the pandemic just like the others. However, you see that Turkey is not the only country in this matter when you look at the global scale. According to WTO data, the world trade declined by 11.9%, i.e. around $1.2 trillion, in the January-July period of 2020. So, we can say that Turkey performed well with over $118.4 billion export in the first nine months of 2020 considering the slowdown in the world trade. As our exports slowed less than global trade, our share from world trade increased, reaching up to 1.03%.
A study of the Central Bank of the Republic of Turkey (TCMB) revealed that the income elasticity of the Turkish exports was higher than its price elasticity. In other words, our growth rates in foreign markets have a large impact on our export figures. Depending on the course of the pandemic, a global economic recovery will rapidly increase our exports. According to the New Economic Program, our country is estimated to make $165.9 worth of exports this year and to reach $184 billion in 2021.
To talk about Turk Eximbank’s contributions to our country’s exports, what can you say about the products and services that you offer?
We divide the products and services of our Bank into four categories: domestic credits, credit insurance, buyer’s credits, and treasury products. As part of these programs, we can meet the pre- and post-shipment financing needs of our exporters with our short, medium, or long-term domestic credit programs, guarantee export receivables with our insurance, and with our international credit programs, we provide alternative support to our exporters by debiting settled foreign buyers and facilitating exporters’ access to finance. We can also provide protection against exchange and interest risks with derivative products.
And we expand our product range in line with the needs of exporters. We developed three new products this year for our exporters. We implemented the Participation Finance Investment Credit with maturity up to 10 years for exporters who want to adopt the principles of the participation finance system. With the International Letter of Guarantee, we responded to the bid bond, performance bond, and advance payment bond needs of contracting companies, shipbuilding companies, and investment goods companies. With our Credit Program Based on Insured Receivables Guarantee, exporters can now receive finance with one-year maturity by accepting all short-term receivables guaranteed by the Turk Eximbank insurance policy as a pool guarantee. We also continue our efforts to determine the needs of exporters and to develop products.
How did the novel coronavirus (COVID-19) affect Turkey’s export figures? Has Turk Eximbank taken any actions in this regard? If so, could you give us some details?
We took the necessary measures in our bank for loan and insurance programs to alleviate the financial impacts of COVID-19. We presented TRY rediscount credits to our exporters again and increased the maximum 360-day maturity in the exchange rediscount credits to 720 days. Credit Guarantee Fund surety extensions started again. We also started extending maturities in our programs and extended the maturity of more than 5 thousand credits by $4 billion. We increased the two-year export commitment period to three years and made a discount on commitment penalties. Within the scope of our insurance program, we extended the maturities given to buyers within the insured limits free of charge.
Could you share your evaluations on the Virtual Trade Academy and the Easy Export Platform opened by the Ministry of Trade?
I believe that both projects will contribute to the development of our country’s trade infrastructure and the popularisation of export culture. On Virtual Trade Academy, everyone interested in export will be able to increase their knowledge 24/7 every day. And Turkey’s workforce being directed to the export sector with certificates heralds a structural change.
The Easy Export Platform also offers very important opportunities for our companies that want to do export but do not know where to start. The Platform gives extensive consulting services from the legislations in the export countries to the companies they can market their products and so on. With the artificial intelligence-supported and high-tech infrastructure used in this platform, the information provided will be used accurately and effectively.
Both initiatives will provide a more export-oriented structure for the industry infrastructure and investment pattern of Turkey.
What does Turk Eximbank aim with the survey “Voice of Exports” that have been launched recently?
In line with the 2023 goals of our country, one of the biggest contributors to the development of our economy and country would be the increase in exports. Taking export support as a mission, Turk Eximbank initiated a major transformation project to give a new direction to our export strategies and to develop this ecosystem in a similar way to exemplary successful country models together with all of its stakeholders.
The opinions, evaluations, and expectations of our exporters, who have a prominent place in determining a bank’s strategy, are of great importance for the project to be successful. We applied to all our companies that are exporters or have the potential to become an exporter with our Voice of Exports survey. Understanding the problems faced by companies especially in export and their expectations for increasing exports will contribute to expanding the value proposals, services, and expansions that we will offer in our new strategy.
Our goal as Turk Eximbank is to create an Eximbank ecosystem with end-to-end services and enable our exporters to open up to different markets. In this respect, we aim to bring advantage and strength to our exporters in the global competition with the support of insurance, buyer credits, and rediscount credits. And in the new period, within the scope of our government’s efforts to increase exports, we aim to act with the understanding of being a business partner in international markets by going beyond only having credit relations with our export companies.
Interview: Serdar Ergün