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“Türkiye has achieved remarkable success in service exports, driving positive growth across other sectors of the economy”

Şekib Avdagiç, the Chairman of the Board of Directors of the Service Exporters’ Association (SEA), evaluated Türkiye’s performance in service exports for Business Diplomacy readers.

HOW DO YOU EVALUATE TÜRKİYE’S PERFORMANCE IN SERVICE EXPORTS IN RECENT YEARS?

To put it in one sentence, it displayed a high performance that positively affected other sectors as well. As you know, service sectors are considered to be an important stabilizing force in the economy as they are less affected by periods of crisis around the world. It contributes to global GDP well above the value added generated by the manufacturing sector. Thus, it leverages the manufacturing industry to operate more effectively and efficiently. For this reason, with the establishment of the Service Exporters’ Association, we have completed the deficiencies in our exports caused by the fact that service exports were not included in the export item for many years.

We have seen the importance of the sector more clearly. With the establishment of our association, our service exporters not only showed how great their potential is, but also started to use it more efficiently. As a result, I find the performance of our service exporters in recent years to be admirable in every sense of the word. While Türkiye exported $255 billion worth of goods last year, it exported $101.6 billion worth of services. This figure marks a record in service exports. In foreign trade in services, we had a surplus of 52.5 billion dollars last year. Our export target for this year is 120 billion dollars, and our target for 2028 is 200 billion dollars. Our service exporters have the potential and determination to achieve these targets.

WHICH SERVICE SECTORS STAND OUT IN EXPORTS?

It would not be right to say that only one sector stands out. There are 10 sectors within the Services Exporters’ Association, each more valuable than the other. Although some of them seem to be exporting relatively less in this process, each of them has high potential in itself. Therefore, each service sector is a major exporter of the future. Having noted this, I would like to state that our tourism and travel-related services sector is currently the largest exporter with exports of $49.5 billion last year. Our passenger transportation services sector ranks second with $20.3 billion in exports, and the freight transportation and logistics sector ranks third with $14.6 billion in exports. However, in addition to all these, sectors such as software and informatics, health tourism, contracting, entertainment, and cultural services, including TV series exports, are developing rapidly, and we have a say in the world in each of them. Our goal in all of our service sectors is to be among the world’s leading countries.

WHAT ARE TÜRKİYE’S BIGGEST COMPETITIVE ADVANTAGES AND CHALLENGES FOR SERVICE EXPORTS IN GLOBAL AND REGIONAL MARKETS?

Türkiye is a very developed country in the service sector. For example, our country, which has been at the forefront of the tourism sector in its region and globally for years, has become one of the largest airline companies in the world with our flag carrier airline. Likewise, it is only a matter of time before we become one of the top 3 countries in health tourism. All these are features that overlap with the friendly and hospitable characteristics of Turkish people. Our biggest advantage is that we see those who want to receive services from us as guests first, not customers. In this sense, our biggest competitive power as service exporters is our human assets. We are living in a period of rising costs in every sector all over the world. This has two consequences: Declining profitability and quality.

However, many of our sector representatives in service exports are insistent and stubborn about not going below a certain quality even if their profitability rates decrease. In other words, they do not compromise on quality. In this way, while quality is decreasing all over the world due to cost increases, we maintain our quality. This not only puts us ahead, but also reveals the fact that our quality has relatively increased, and customers perceive this. Therefore, I think this situation makes a positive contribution to our competitiveness. As for the challenges, there are problems that need to be solved in order for our sectors to move forward quickly.

Our sectors expressed all these demands at the “Services Export Strategy Conference” we organized in April. If these demands of our sectors can be met urgently, a significant part of the difficulties will disappear. In addition, our biggest problem in service exports, as in all export sectors, is the suppression of the exchange rate. We think that the exchange rate and inflation should be in balance. We do not want the exchange rate to be too high, nor do we want it to be below inflation. If the exchange rate and inflation move in a certain correlation, this major problem will disappear.

CAN YOU GIVE INFORMATION ABOUT THE SUPPORT PROVIDED TO SECTORS TO INCREASE SERVICE EXPORTS?

There are supports provided by our government for our exporters. Within the scope of Decision No. 5448 on Defining, Classifying, and Supporting Service Exports, our companies can benefit from various supports in many areas such as education services, real estate services, cultural and creative industry services, logistics and transportation services, health and sports tourism services, and management consultancy services. Under Decision 5449 on Supporting Overseas Logistics Distribution Networks, our companies can increase their capacities with the support provided to the Freight Transportation and Logistics sector. As we all know, the Software and Information Services sector is one of the most important sectors of our future as a result of the recent revolutionary developments in the field of artificial intelligence and software. Within the scope of the Circular No. 5447 on the Implementation Procedures and Principles of the Decision on the Internationalization of the Turkish Informatics Sector and E-Turquality (Stars of Informatics) Program, we are building our future by providing support to our related companies.

Within the scope of the Decree No. 2564 on Branding Supports for Foreign Currency Earning Service Sectors and the TURQUALITY Program, we provide domestic and international support to our companies in the branding process. At the same time, the green passport, which is issued to representatives of our companies that export at a certain level, allows these companies to act much more proactively. With all our activities, we increase our export revenues by supporting companies that export services, and we are working hard to contribute to the reduction of the foreign trade deficit and the development of our country.