ECONOMY

Greece, Turkey grow fonder in terms of trade and investment

The pattern and volume of Greek-Turkish trade has traditionally been relatively erratic, but has grown steadily in recent years. Total volume in the first 10 months of 2002 rose 13 percent year-on-year to $689.4 million. Although Greek exporters to Turkey performed relatively well during this period as a whole and made an encouraging start early in the year, the picture changed for the worse as 2002 progressed. After shooting up by an impressive 62 percent in the first four months of last year, Greek exports then fell while imports from Turkey grew, causing Greece’s trade deficit with its neighbor to grow 3.43 percent in the first 10 months year-on-year, from $184.8 million to $191.1 million. In October, Greek exports to its neighbor were down 1 percent year-on-year to $25.4 million, while imports from Turkey surged 31 percent to $59.7 million. In the 10 months, Greek exports to Turkey were $249.1 million, up 17 percent from the same period of 2001, while imports from that country rose 10.76 percent to $440.3 million. The decline in Greek exports accelerated particularly after June, while Turkish imports followed a reverse course, rising 88 percent in September. The total volume of bilateral trade for 2002 is estimated to have reached $810-820 million. In terms of composition, Turkish imports are more dispersed, whereas Greek exports are 56 percent cotton and 90 percent is accounted for by 10 products. By contrast, Turkey’s 10 top exports to Greece make up 56 percent of the total. Investment It is true to say that relatively more Greek firms have invested in Turkey than vice versa, in both manufacturing and trade. According to data provided by the Greek Commercial Bureau in Istanbul, 61 Greek firms have invested in Turkey, to a total of about $46 million, far below the investment in other Balkan neighbors. The information technology sector has attracted the strongest interest. Respectively, Turkish companies have set up about five or six subsidiaries. The two countries’ business communities appear to have limited information about one another, which hampers the growth of bilateral business. This was confirmed by Greece’s Commercial Attache in Istanbul, Haralambos Kounalakis, who toured nine Turkish cities in the first half of last year in an attempt to record any interest in cooperation with Greek businessmen. But despite the limited knowledge, the results of the tour have been encouraging. One of them is an initiative by the Exporters’ Association of Northern Greece (SEVE) to hold an event in Thessaloniki next month or early March, for Greek businesses to register their interest in collaborating in particular sectors with their Turkish counterparts. The following step will be to organize scheduled meetings or a «mini-parteneriat» in Istanbul in April or May in which the Turkish Employers’ Organization (TUSIAD) has shown interest. The approval of foreign investment schemes in Turkey has to go through various bureaucratic channels and can last months. Applicants must go to Ankara themselves to initiate procedures. Kounalakis says that most Greek businessmen active in Turkey are happy with the local market, despite the country’s growing economic difficulties in the last two years. Opportunities The Turkish construction sector presents very good prospects for joint ventures, and it is thought that the Greek Plan for Balkan Reconstruction provides fertile ground. Similar opportunities exist in the tourism sector. The number of Greek tourists to Turkey has been rising and tour operators and Greek tourism officials have repeatedly referred to possibilities for drawing up attractive joint packages to both countries. Energy holds perhaps even stronger prospects for cooperation, with plans for building a connecting natural gas pipeline and progress in linking the two countries’ electricity grids. Opportunities are also considered to exist in combined transport ventures to third countries, as well as in sea transport for passengers and cargo to Italy, the Black Sea and the Middle East. Further potential is seen in telecommunications and the packaging of farm products.