Opportunities in Turkey for Irish businesses

Terrorist attacks and political turmoil have upended Turkey's economy over the past few years but in the eyes of Jonathan Ryan, Enterprise Ireland's former Turkey director, opportunities remain for Irish businesses in the specific sectors that continue to function well.

The Dalkey native returned home this year having established EI’s Istanbul presence in 2014. “One of the frustrations that I encountered was that Turks’ knowledge of Ireland’s economic situation is quite limited, and likewise the perception from Irish people of Turkey’s economic development is also misunderstood,” he says. “One of EI’s tasks is to try to bridge that gap.”

On the fringes of Europe, Turkey has for decades represented opportunity for Ireland. Bilateral trade between the countries increased by 42 per cent between 2013 and 2015, and in the same period Ireland recorded a growth in traded services of 55 per cent. The recent opening of live cattle exports to Turkey has also been a boon to our agriculture sector.

“It’s a huge market – 80 million people – and there are areas of the market that are extraordinarily well developed. The financial services industry is as good as you’ll find in most developed economies, the automotive sector is extremely advanced,” Mr Ryan says.

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Business cultures

Turkish car manufacturers produced 980,000 vehicles last year, a record for the country.

In comparing Ireland and Turkey’s business cultures, differences are most stark in decision making, which in Turkey is very much a top-down process. Mr Ryan believes that can have significant merits because decisions can be acted upon very quickly. “However, it means that to get that decision you have to influence at a very senior level, and that can take time,” he says.

The post-coup purge that has seen more than 100,000 people fired or suspended from their jobs and tens of thousands more detained has resulted in a slowdown of economic growth. The IMF projects a growth rate of 2.7 per cent for 2017.

And it is because decision-making has slowed down that in some instances Irish companies are starting to look at other emerging markets. Several Irish companies that had planned visits to Turkey over the past year, companies Mr Ryan wouldn’t name, cancelled due to security fears. “For Irish companies, they’ve become frustrated because they see that if decisions are not being made they’ll look to other markets,” he says.

Terror attacks have had a major impact on the business landscape, with international executives much less inclined to visit. “At the end of the day, it’s very hard to do business when people don’t want to visit the market,” Mr Ryan says.

Foreign investment into Turkey, once a popular destination for foreign capital, fell by almost a half last year even as the lira’s value against the euro dropped by 20 per cent over the same period. The lira’s decline, however, is expected to push exports up by 20 per cent year-on-year for July.

A troubling period

Irish exports to Turkey stood at €40 million in December 2015, with imports reaching €50 million. A year later, exports remained at a similar level while imports fell by €15 million, according to the CSO.

Turkey has provided Mr Ryan with a close-up view of a country passing through a troubling period. His Istanbul apartment was several hundred metres from a double bombing outside a football stadium that killed 46 people last December. “The night the bomb went off I was at home and I heard what I thought were fireworks going off after the game. I went out to the balcony and could see these explosions going off.”

Yet the perception that Turkey is a war zone is inaccurate, he says. “Everyone goes to work every day, life goes on.”

A delegation led by a yet-to-be-named minister and involving Irish business interests is expected to visit Turkey later this year. In April, a Turkish trade delegation headed by the minister for economy, Nihat Zeybekci, met with Irish businesses and ministers in Dublin.