Dr. Mehmet Muş, Minister of Trade of the Republic of Türkiye, said, “The strong relationship between our industrialists, producers, exporters, and entrepreneurs is one of the most significant components that ensure sustainable growth” and emphasized that DEİK’s contribution to the export success achieved by Türkiye today, as one of the combinations of this set of relations, is enormous. Dr. Mehmet Muş, Minister of Trade of the Republic of Türkiye, evaluated the export data for 2021, the new road map of the Ministry of Trade, the Turkish economy forecasts for 2022 and beyond, and DEİK’s activities for the Business Diplomacy journal.
How do you see the export data for 2021? Based on these data, what can you say about the past year in terms of the Turkish economy?
As you know, as a result of the pandemic, the global economy is going through an unprecedented period. All economies around the world were adversely affected by this process. However, despite the unforeseen developments on a global scale, production in the Turkish economy continued without pausing. In addition, as we took measures for all segments of our society to maintain employment, our economy created employment while performing production in this process, and Turkish products continued to be exported all over the world.
We are glad because 2021 has brought many records along in the field of foreign trade, these positive developments have contributed positively to our economy and it has been a year in which we have been rewarded for our efforts. Breaking the historical record of the Republic, our exports increased by 32.9% compared to the same period of the previous year and reached $225.4 billion. The monthly average for our exports reached record-breaking levels with $18.8 billion.
The ratio of exports to imports increased by 5.8 points compared to the previous year and reached the level of 83.1%. This ratio is the second-highest value in the last twenty years. What makes this a valuable occasion is that our country achieved such a strong coverage ratio while achieving great growth in 2021. As a matter of fact, years in which the ratio of exports to imports was high in the past corresponded to either crisis or very low growth rates. This year, however, while breaking records in our exports, this success also contributed positively to the growth, and double-digit growth rates were achieved.
Net exports of goods and services contributed 5.1 points to our economy, which grew by 11.7% in the first 3 quarters of 2021. As you know, the 2021 growth target in the Medium Term Programme was 9%. The Turkish economy has also signalled that it will exceed this level through its 11.7% growth performance in the first three quarters of the year.
We have received good news in the regional dispersion of our exports according to the chapters in 2021. We have observed a balanced and strong increase in our exports to all regions of the world, both compared to 2020 and to the pre-pandemic period. Compared to the previous year, exports increase were seen in 94 of the 97 chapters of product groups in 2021, while the highest export values in the history of our Republic were achieved in the 75 chapter product group.
Turkey is integrating with the world, and to the extent that it integrates, it achieves new records in foreign trade, reaches new peaks in exports, and keeps raising its position in global trade. In 2021, the annualized share of Turkish exports in world exports exceeded 1% for the first time. This success will keep increasing and the quality of Turkish goods will continue to find their places everywhere around the world.
In the new roadmap of the Ministry of Trade, you announced that the support for exports will continue. Could you inform us about the activities that have been done and planned to be done in this context?
As you know, we have many special support mechanisms that differ according to the competency level of our companies, from the first preparation for export to the development of marketing capabilities and branding in the foreign market. In 2021, we made support payments to 12,701 companies within the scope of export-oriented state aid. The budget we allocated to our exporters for 2022 is TRY 4 billion in goods exports. We use this budget to support many activities.
One of the most significant agenda items of our exports is access to financing. In order to eliminate the collateral problem in our exporters’ access to financing, the İhracatı Geliştirme Anonim Şirketi, which is only available for exporters, was established in October with the equities of TIM and Eximbank. In November, we strengthened the capital structure of the company with the partnership of Exporters’ Associations. Together with the established Company, we aim to eliminate the credit guarantee problem, which is the biggest problem of our exporters, thereby reducing the cost of our exporters’ access to credit and spreading our exports to the base level. We foresee that İGE A.Ş. will be put on operation on March 1, 2022, and will start to contribute to the elimination of the problem of our exporters in terms of access to financing.
We cannot overlook the new technologies and digitalization in exports. We keep supporting our exporters by carrying out important activities and realizing projects in these fields. Prepared by us with the vision that both our traders and our companies that will perform e-commerce will access the information they will need before or during export through a single platform, the Easy Export Platform is our most up-to-date work in this field.
In addition to the export of goods, the export of services is also a field that we find important. The service sector is the apple of the eye of the Turkish economy with its net foreign currency inflow, high employment, and positive contribution to our goods exports, thanks to the power of Türkiye’s young, dynamic, and educated human capital.
In this context, we established the General Directorate of International Service Trade under our Ministry in order to develop and support international service trade for the benefit of our country’s economy. As a result of the intense contacts of this newly established General Directorate with sector organizations, we have brought the preparations of a comprehensive, innovative, and flexible state aid program that adapts to current developments to the final stage. We believe that this new state aid mechanism will make a great contribution to many service sectors such as health and travel services, cultural services and creative industries, exhibitions, real estate services, logistics and transportation services, overseas technical consultancy, informatics, training, and innovative services.
As a result of the pandemic process, where the transformative power and high added value of all sectors of technology and informatics were once again understood, we also finished our preparations for the E-TURQUALITY program specific to the software and video game industries.
What are your predictions and export projections for the Turkish economy for 2022 and beyond?
The IMF predicts that the global economy will grow by 5.9% in 2021. It foresees that the recovery will continue in 2022 and the world economy will grow by 4.9%. Parallel to global growth, there are signs of recovery in global trade. According to WTO data, the volume of global goods trade is expected to grow by 10.8% and 4.7% in 2021 and 2022, respectively.
Our country is fully integrated into the global economy. Reaching inclusive growth rates and improving our foreign trade success in a sustainable way will continue to be among our top priorities in 2022, as they were in the previous year. Net exports had been the driving force in Turkey’s growth performance in 2021. With the target of strong exports and growth in 2022, exports will continue to be the main driving force of growth.
I would like to emphasize once again to that we are taking firm steps towards our goal of becoming a country with surplus in goods and services trade and producing and exporting with added value. It should be underlined that the key to Türkiye’s growth, improvement, development, and enrichment is exports. In the upcoming period, it is one of our priorities to share the wealth that has emerged by carrying the gains we have made in the fields of investment, production, employment, and export even further.
In our 2022 exports, we will work on reaching the $250 billion export figure stated by our President of the Republic of Türkiye, which is above the MTP target. Our goal in the field of foreign trade is to reduce our country’s need for foreign resources by increasing the export-import coverage ratio to high levels permanently. Undoubtedly, this situation is of utmost importance in terms of strengthening macroeconomic stability.
On the other hand, the ongoing problems in global supply chains, the high course of global commodity prices and the end of expansionary policies after the increasing inflation, the partial slowdown of the recovery, and geopolitical developments that may affect global and regional economic and commercial activity stand out as risk factors in the global economy and global trade in 2022.
At a period when the balance of power and competitive conditions in world politics and economy is constantly changing, and globalization and digitalization have reached extraordinary levels, we take advantage of the opportunities that we get, we make our preparations for the changes very carefully by consulting with all our stakeholders, and we take very firm steps. Having performed much better than the MTP targets in 2021, our economy will maintain the same success in 2022.
The Foreign Economic Relations Board (DEİİK) carries out significant trade diplomacy activities along with the Business Councils under the coordination of our Ministry of Trade in order to carry the power of Türkiye to the world. What can you say about the activities of DEİK in this context?
Türkiye achieved an export of $225 billion in 2021 with an increase of 32%. I think that the activities carried out by DEİK in the last period are very valuable considering these figures. As the private sector’s umbrella organization in trade diplomacy, DEİK has been the key to opening many doors to Turkish businesspeople from North Africa to the Turkic Republics, from Balkans to Sub-Saharan Africa, from Eastern Europe to South Asia.
Our Business Council Chairpersons and DEİK members are able to maintain their activities in a strong manner on the increasingly slippery ground as a result of external phenomena such as pandemic and trade wars. DEİK spent 2021 in the best way possible, both on a sectoral and country basis. The Türkiye-Africa III. Economic and Business Forum, which was held on October 21-22 under the auspices of our President of the Republic of Turkey and to which I also attended, was held in cooperation with DEİK and our Ministry. Organized by DEİK on November 11, 2021, right after the Türkiye-Africa Economic and Business Forum, the Turkey-Turkic Republics Economy and Trade Conference offered a significant opportunity to discuss issues such as bilateral trade, investments, logistics, and infrastructure between our businesspeople and the business circle of the Turkic Republics. In addition to these comprehensive business forums, the business forums organized by DEİK in 2021 with the business circles of Azerbaijan, Angola, Kosovo, Georgia, UAE, Nigeria, Moldova, Tajikistan, Kyrgyzstan, and Uzbekistan were also significant events for Türkiye in terms of keeping our business relations strong in the political and economic context.
Our strength in global value chains has been increasing thanks to the Business Councils successfully organized by DEİK all over the world. I am also pleased that DEİK, in addition to its conventional activities, focuses on innovative activities under the changing global trade and economic relations. In this sense, the activities carried out by DEİK in 2021 for the green economy, renewable energy, start-up activities, e-commerce, EU’s green deal vision are very valuable in terms of the activities carried out together with the relevant business circles and private sector organizations of Finland, UK, China, New Zealand, and many more countries and the readiness of the Turkish business circles for the transformation in the global economy.
With our belief that we can implement policies aimed at adapting our country to the changing economic and commercial order in the most effective way only through the cooperation of public and private sectors, the strengthening of the cooperation we have established with DEİK is of critical importance in maintaining and moving our country’s competitiveness forward.
Did you have other things to mention?
The strong relationship between our industrialists, producers, exporters, and entrepreneurs is one of the most significant components of sustainable growth. As one of the combinations of this set of relations, DEİK made a great contribution to the export success we have achieved today. I believe that our success will increase exponentially in the future through our efforts to strengthen our current position in global trade and towards the common goal of Turkey, which has a foreign trade surplus. I would like to thank everyone who works in countries in different geographies with different dynamics for the growth and development of our country under the roof of DEİK and those who take on responsibility. We are glad that we are getting and keep getting the reward of our activities and efforts with the effect created by the synergy we provide in unity and integrity.