“Turkey’s future is trade”
Last week, Daily Dunya spoke to two leading voices in the business world from Europe about the Turkish and regional economies. Alberto Verme, Global Head of the Corporate Customer Group at Citi and Alexis Garatti, the Macroeconomic Research Manager at the insurance company Euler Hermes, were both in Istanbul for separate meetings. Both believe regional production and a solid trade base should be the vision at the heart of the new growth story of Turkey. “We believe that Turkey can become a regional center in production and trade in the long run,” Verme said. “One of the cornerstones of Turkey’s new story will be this.” Garatti added that the new trend in trade is regionalization and Turkey is in the middle of two key regions: Asia and Europe. “Turkey can turn this into a success story by featuring its regional power card,” he said.
Geopol t cal cond t ons are chang ng
Verme, a banker for 40 years and employed at Citi for last 25 years, has been monitoring Turkish markets for two decades, paying special attention to big corporate clients and family companies of the countries in which Citi operates. Global challenges should be considered holistically and each country in the world has its own problems, Verme told DUNYA while assessing the developments in Turkey. He referred to the butterfly effect created by the commercial tensions between the U.S. and China, the rise in oil prices and geopolitical developments from Venezuela to the Middle East. “Turkey is not alone,” Verme said. “Turkey could be a passageway for the two largest consumption markets: China and India.”
“At the same time, we can expect the UK to look for cooperation in the field of trade in this period, when we are nearing the end of the negotiations on the Brexit process,” he added. “This might be a good opportunity for Turkey. With close cooperation, Turkey can be an important business partner in reaching the In- dian and Chinese market for manufacturers in the U.K. If Turkey improves its assessment of the next two years and manages its public finance in a disciplined manner to improve investor confidence, the future for the country is clear. Attracting investors in the long term is possible with balanced growth.”
Turkey: producer and m ddleman
Garatti warned that “global liquidity is going dry.” What will developing countries that depend on liquidity do? “They will find new ways, new foreign projects that could bring good cash flow,” he said. “They will avoid projects that need higher funding and will focus on export mobilization.”
Garatti noted that the new trend in trade is regionalization and regional alliances have been established both in America and Asia, including the EPA (the European Union-Japan Economic Partnership Agreement), CETA (EU-Canada Comprehensive Economic and Trade Agreement), EVFTA ( European Union-Vietnam Free Trade Agreement) and ACFTA (Southeast Asian Nations-China Free Trade Agreement).
“Regional blocs have been formed in America, Europe and Asia,” Garatti said. “These are cooperative agreements between countries. They do not get into global fights. They protect their companies and sectors with regional agreements. Therefore, they are likely to be successful. Turkey is currently between Asia and Europe and can easily take on the ‘platform’ role between these two blocs. Turkey may turn into a great success story by becoming the intermediary of European and Asian platforms. You will be both manufacturer and agent of goods and services exchange in this region. Even countries that do not have the same geopolitical advantages like Turkey try this. The UAE, Africa, and Singapore, for example, have moved in this direction.”