globalEDGE Blog - By Tag: turkey

The current earthquakes seen in Turkey are a devastating event that will have ramifications in all sectors of life. In this blog we will be discussing the economic impact. The recent 7.8 earthquakes in Turkey will significantly impact the Turkish economy, which will ripple throughout the world economy. Turkey has the 19th largest economy in the world at nearly 1 trillion USD. Economic consequences of this disaster are seeming to be high inflation, a collapsing stock market, and a devastated agricultural sector.

With inflation among the highest in the world, Turkey is on the brink of an economic crisis concerning the dispute between Russia and Ukraine. Key economic contributors such as natural gas, oil, and tourists from Russia and Ukraine are relied upon by Turkey. The possible Russian invasion of Ukraine poses a major threat to Turkey’s already fragile economy.

Food, everyone eats it. It is a nutritious substance that helps maintain life and growth. What started as hunting in gathering turned into strolling through a grocery store, and paying a price for food. This year, world food prices have risen for the third month in a row according to the United Nations Food Agency. The price for food is at an all time high and is continuously rising.

An underground controversy right now is the tariff laws surrounding cherries. The cherry market is seeing a trend that many other states and countries are dealing with, specifically in dried cherries that are used for canning and juice. The decision made on this product could affect how the United States deals with foreign imports on a global scale.

Recent currency declines against the U.S. Dollar highlight a dependence of emerging-market currencies on dollars. As the Federal Reserve continues to raise interest rates and subsequently boosts the power of the U.S. Dollar, some emerging markets have seen weakness in their own currencies. Two notable currencies displaying weakness are the Argentine peso and the Turkish lira.

Austria's foreign minister, Sebastian Kurz, has threatened to oppose any attempts by Turkey to join the European Union. Kurz claimed he will use his position in the EU foreign ministers' council to vote against further negotiation chapters with Turkey. His announcement was made Sunday, following a recommendation by Chancellor Christian Kern to completely terminate said negotiations. Several other Austrian government members have echoed their sentiments, citing the recent coup, the respective purges, and Turkish president Recep Tayyip Erdogan's powerful rule. While recent events have tensed Turkey's relationship with the EU, not all nations are ready to give up negotiations just yet.

Somewhat provocatively, let's pose the question: Are good dictators better for a country (and the world) than bad elected presidents?

Traveling the world, mainly for business-related reasons, has gotten me thinking about country governments, infrastructure-building, and the world community. The United Nations has 193 members, which means almost all countries in the world are UN members (54 countries or territories, recognized as such, are not, including notable exceptions such as Taiwan, Kosovo, Vatican City, and Palestine).

On my most recent trip to Kenya and the meetings of the United Nations Conference on Trade and Development (UNCTAD) and the World Investment Forum, there was a plethora of countries represented and numerous high-level officials. And, since the meeting was in Africa, most of the 55 countries in Africa and its 1.2 billion people were represented by officials. Africa has seen its share of “dictators” and elected leaders, and that begs the question of which is the best – it seems the answer should be easy, but is it?

The United States Federal Reserve’s recent rate hike after a decade has prompted fears of financial turmoil in emerging markets. This rate hike is significant to global markets because the strengthening of the U.S. dollar could cause trouble in countries where firms have borrowed heavily with American currency, and the weaker domestic currencies could make it more difficult to pay back the dollar debt. In 2015, investors have withdrawn $500 billion from emerging markets, and this new development could prompt a larger outflow in the coming months from emerging markets.

Relations between Russia and Turkey have been strained ever since a Russian Sukhoi Su-24M bomber was downed by a Turkish F-16 fighter jet over the border between Turkey and Syria in late November. Turkey claimed the shooting was done because the bomber was violating Turkish airspace. Turkey also made a statement professing their awareness of the presence of Russian warplanes in the Syrian area, leading Russia to believe that the strike was a premeditated attack. In retaliation, Vladimir Putin signed a series of economic sanctions against Ankara on November 28. Now, Russia is discussing passing additional sanctions against Turkey.

Many emerging markets have noted the rapid devaluation of their currencies taking place over the past year. In Colombia, the peso is now worth 2,017.01 per U.S. dollar, the weakest currency level since 2009. While other emerging markets such as South Africa and Turkey are fighting incessantly to combat currency declines by raising interest rates, Colombia is taking a different approach by fully embracing the decline of its currency.

In 2001, economist Jim O’Neill identified the world’s strongest emerging economies as the BRIC countries, which is an acronym that stands for Brazil, Russia, India, and China.  Thirteen years later, O’Neill has offered another acronym defining today’s emerging economic powerhouses – the MINT countries.  Mexico, Indonesia, Nigeria, and Turkey all show signs of strong future GDP growth and the potential to become major players in the global economy.

Foreign direct investment has a large effect on the economy of countries. It can increase production, employment, exports, imports, and economic growth. Over the past five years, emerging markets have seen an increase in foreign capital from investors in search of higher yields. Three popular emerging market countries among foreign investors that have experienced political instabilities in the past month are Brazil, Turkey, and Egypt. The political instability could prove to be detrimental to emerging market financial growth in the short run, but investors should be more worried about the slowing economies of these countries.

From the hustling cities of Asia to the scorching desert cities of the Middle East, business travel is booming in emerging countries. Last year business traffic in the emerging markets of Asia, Latin America, and the Middle East grew substantially and major infrastructure projects are underway to accommodate the rapid growth in these markets. Most emerging cities are experiencing an expansion of airports, hotels, and highway. This trend is further testament to the dynamism and growth prospects of emerging markets.

Every year globalEDGE publishes its Market Potential Index (MPI) in order to assess a market’s attractiveness for international business. The Market Potential Index provides a detailed ranking of 26 emerging countries. With the MPI, determining which international market to enter is no longer an overwhelming task. Emerging markets are ranked based on several dimensions, allowing appropriate marketing strategies to be developed for each particular country. This year the MPI highlights several significant trends among emerging markets. We will now take a closer look at some of these trends in order to obtain a better idea of the importance of emerging markets in international business.

While Cyprus is experiencing economic woes and Turkey is finding its way out of a huge European debt crisis, the energy relationship between Cyprus and Turkey regarding gas and oil is causing stress for both countries. On Wednesday, Turkey announced the suspension of energy projects with Italian giant ENI because the company expanded the exploration for oil and gas to Cyprus. ENI’s decision on the project expansion in Cyprus has created hope of economic recovery Cyprus but it infuriated Turkey since the project would cut down the energy plan in Turkey.

With Turkey’s location serving as a natural bridge between Asia and Europe, it’s no surprise that Turkey plays an important role in international trade. In fact, this is one of the key reasons why Turkey’s emerging economy is having major impacts on the region and international business. However, this is not the only reason why Turkey is becoming a regional power in today’s business world. The emergence of Turkey has been a positive development for a number of reasons and Turkey is looking to capitalize on this success by striving for continued economic growth.

Across the world there are many emerging economies that provide excellent opportunities for businesses looking to invest in these countries. In the Middle East, there is one emerging economy that is of particular importance. The country of Turkey has the largest economy in the region and is in the process of accomplishing a major milestone. Soon, Turkey will enter the group of $1 trillion economies and with this major economic growth, Turkey is certainly considered a significant emerging economy.

In 2001, global economist Jim O’Neill labeled Brazil, Russia, India, and China as the premier emerging markets of the world with enormous economic potential. The mainstream BRIC acronym was applied to these countries and the hype surrounding these countries was well deserved. Over the past decade, the countries have contributed to over a third of world GDP growth. Recently, Jim O’Neill named the next tier of large emerging economies using the term MIST – or Mexico, Indonesia, South Korea, and Turkey.

“Fast and growing” is how the Turkish market is described by Jim Fluker, Senior Commercial Officer of the United States Foreign Commercial Service.  With a population of over 72 million and a growing middle class, Turkey is poised to be an ideal export market.  The country is uniquely positioned between Eastern Europe and the Middle East, where the political climate is relatively mild in comparison to many of its neighbors.