Turkey, not long ago Eurasia’s most promising growth market, is going through a phase of substantial political and economic change. On 16 April 2017, the country had the opportunity to vote in a referendum over whether or not to abandon a parliamentary system in favour for an executive presidency – and narrowly approved what is arguably the most controversial political change in a generation.
International media reacted with outrage to the decision, with Der Spiegel, the Independent, the Guardian, the Telegraph, Newsweek, the Huffington Post and the New Yorker all labelling President Recep Tayyip Erdogan a modern-day ‘dictator’. The Economist, meanwhile, called him a “21st-century sultan” minimally curbed by parliament.
“In recent years under Erdogan, Turkey has gone backwards,” it said, referring to the President’s rule by decree following an attempted coup in 2016, which allowed him to jail more than 40,000 people, fire or suspend more than 140,000 more, shut down about 1,500 civil groups, arrest at least 120 journalists and close more than 150 news media outlets. “Erdogan has gone far beyond what is reasonable.”
Turkey’s divisive President, meanwhile, continues to argue that the old system was holding back the country’s progress and putting it at risk – after all, the frontier state not only has to cope with the violence spewing out of war-ravaged Syria, but also navigate between Western liberalism and the authoritarian nationalism epitomised by Russia in the north.
To handle the pressure, he said Turkey needed a new constitution that would generate political stability and allow for a strong President able to “galvanise” the state and “see off its enemies” – even if it meant walking away from the country’s pending EU membership bid, which has brought stability and attracted foreign investment since it was formally launched in 2005.
While the global press did acknowledge Erdogan’s past successes – even The Economist admitted that after he came to power in 2003, he and his Justice and Development Party tamed inflation, ushered in economic growth and strengthened civil liberties – it widely condemned the President’s isolation course and likened the new Turkey to the “illiberal democracies” of Viktor Orban of Hungary or Vladimir Putin of Russia.
In line with the incredulous media echo, the April referendum saw public confidence in the country’s crisis-shaken economy drop dramatically. Despite Erdogan hoping to position his country as the linchpin of China’s Belt and Road Initiative, for example, he has yet to attract new investment on the back of the hotly anticipated infrastructure project.
“Whipping the economy into shape…is proving more difficult than amassing power,” Akihiro Sano of Nikkei Asia Review summarised – pointing out that economic growth came to just 2.9 per cent in 2016, less than half the six per cent rate logged in 2015. “Politically, Erdogan [may be] on a roll. Yet, he is presiding over an economy that is struggling to regain traction.”
The trailing equipment industry, traditionally closely tied to GDP growth, has been particularly affected by the nation’s economic demise – both before and after the referendum. According to data collated by Turkey’s trailer industry association, TREDER, the domestic trailer market decreased by nearly 50 per cent in 2016 compared to 2015. The reason for the drop, experts agree, has been the unsteady political environment. As such, having the referendum out of the way and the dust settle actually prove helpful for the industry.
“Heavy commercial vehicle sales have been stabilising again since the referendum in April, so there is hope for the market to calm during the second half of 2017,” a source told Global Trailer magazine in June. “As a result, we are expecting trailer sales to recover slightly too, once the whole situation settles.”
That cautious optimism is in line with messages emerging from the last TREDER meeting at the end of 2016. At the meeting, Turkey’s ex-Trade Minister, Kursat Tuzmen, said the market had immense growth potential and should reach US$3 billion (€2.7 billion) in exports by 2023.
TREDER President Kaan Saltık, meanwhile, set the industry’s 2023 target at a more conservative US$1 billion (€896 million) – based on an annual capacity of more than 100,000 units and current exports of around US$270 million (€242 million). To reach Tuzmen’s ambitious goal, TREDER Vice Chairman, Murat Tokatli, demanded industry to align itself stronger with international standards, especially in the refrigerated transport sector. “Only if we work together as TREDER to produce trailers in line with world standards, will we achieve $3 billion in exports, not just one.”
Representing the Union of Chambers and Commodity Exchanges of Turkey, Çetin Nuhoglu agreed that more work had to be done before the Turkish trailer industry would rise again: “From 2011 until 2014, the Turkish trailer sector ranked second in Europe after Germany,” he said at the TREDER meeting. “In 2015, England overtook us, and we fell to fifth in 2016. We are happy with the capacity and strength of the sector, [but] it appears that we still have a lot of work to do.“
Regardless of Erdogan’s stance on the EU, Saltık committed to Europe as a key technology partner in that context – after all, Turkey committed to a European-inspired transport framework as early as 1998 and fully adopted EU standards in 2007. Since then, the country has strictly applied European guidelines to ensure a truck and semi-trailer combination registered in Turkey can travel throughout Europe without restrictions. “We want European standards to continue to apply to our country to ensure the safety of cargo and navigation on the road,” he said. “We are working to make Turkey the centre of trailer production, [but] we know it won’t be easy.”
Various European and international industry personalities supported Saltık’s course at the TREDER meeting, with BPW’s European Sales Director, Dietmar Böser, saying the company still regarded Turkey as “one of the most important countries” due to its well-trained workforce, strong export focus, geographic location and young demographic. “We have long-term strategies in place, it’s not short-term successes we’re looking for.”
Incidentally, the international press is equally supportive of Turkey on a political level. “The outside world should not give up on Turkey, but be patient,” The Economist wrote in May – partly out of self-interest, knowing that as a NATO member and regional power, Turkey is too important to cut adrift.
“[Turkey] will play a vital part in any peace in Syria. Driving it into Russia’s arms makes no sense. Turkey has also been a conduit for refugees into the EU as well as vital in controlling their inflow. The refugee situation is in flux: the EU will need to keep talking to Turkey about how to cope with the resulting instability.”
Experts agree that engagement is also in Turkey’s best interest, noting that the EU still is Turkey’s biggest trading partner. Although Turkey is not likely to join the Union directly following the referendum, tensions between Ankara and the EU, they argue, will ultimately subside. On the trailer front, that development is seemingly already in motion.