International Financial Conference 34th Annual Meeting Session VI. Turkey as a Trade Finance Center

Transcription

1 International Financial Conference 34th Annual Meeting Session VI Turkey as a Trade Finance Center

2 What does it take to become a Trade Finance Center A long and distinguished history of trade Levant is the name applied widely to the eastern Mediterranean coastal lands of Asia Minor and Phoenicia (modern-day Turkey, Syria, and Lebanon). In a wider sense, the term can be used to encompass the entire coastline from Greece to Egypt. The Levant is part for the Fertile Crescent and was home to some of the ancient Mediterranean trade centers, such as Ugarit, Tyre and Sidon. It is the homeland of the Phoenician civilization. 1

3 What does it take to become a Trade Finance Center The Ottoman Empire - blocking the land route eastwards, controlling the spice route The Ottoman Empire Osmanlı İmparatorluğu

4 The Turkish Bazaar A clash of cultures: The fixed price regime against flexible price environments Wozu verwendet man die Redewendung "Türkischer Basar"? Türken handeln gerne, es ist in ihrer Kultur verwurzelt, und wer nicht handelt beleidigt den Händler fast. Weil es üblich ist zu feilschen auf Deubel komm raus. In Deutschland sieht man das als negative Eigenschaft, denn hier geht man davon aus, dass der Preis sofort stimmt und nicht noch runtergehandelt werden muss. 3

5 The Turkish Debt Experience A reasonable sovereign debt record since 1453 Source: This Time is Different: A Panoramic View of Eight Centuries of Financial Crises, Carmen Reinhart, Kenneth Rogoff 4

6 Development of imports Turkey: an interesting case study for sustainable trade deficits İhracat Exports İthalat Imports İhracatın Dış ticaret Dış ticaret ithalatı dengesi hacmi karşılama Balance of Volume of oranı Foreign Trade Foreign Trade Proportion of Değer Değişim Değer Değişim Değer Değer Imports Covered Yıllar Value Change Value Change Value Value by Exports Years '000 $ % '000 $ % '000 $ '000 $ % , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,5 2013* , , ,3 5

7 And some more recent data Sustainable development or ponzi scheme? (Billion US Dollars) Trade Balance -43,3-54,0-62,8-69,9-38,8-71,7-105,9-84,1-99,8 Exports 73,5 85,5 107,3 132,0 102,1 113,9 134,9 152,5 151,8* Imports 116,8 139,6 170,1 202,0 140,9 185,5 240,8 236,5 251,6* Gross Domestic Product 483,0 530,9 647,1 730,3 614,6 731,1 774,8 788,3 821,8** Exports/GDP 15,2% 16,1% 16,6% 18,1% 16,6% 15,6% 17,4% 19,3% 18,5% Imports/GDP 24,2% 26,3% 26,3% 27,7% 22,9% 25,4% 31,1% 30,0% 30,6% Trade Balance / GDP -9,0% -10,2% -9,7% -9,6% -6,3% -9,8% -13,7% -10,7% -12,1% External debt 170,5 208,3 250,3 281,1 269,1 291,8 304,3 338,8 372,5** External debt / GDP 35,3% 39,2% 38,7% 38,5% 43,8% 39,9% 39,3% 43,0% 45,3% * = provisional figure, ** = Q figure Year Source: Turkish Statistical Institute (TURKSTAT), Undersecretariat of Treasury, IMF 6

8 The need for growth and what would happen if Markets like Turkey are not favoured by Investors anymore? (Million USD) PUBLIC SECTOR PRIVATE SECTOR SHORT TERM LONG TERM TOTAL (I) SHORT TERM LONG TERM (*) TOTAL (III) GROSS EXTERNAL DEBT (I+II+III) GROSS EXTERNAL DEBT / GDP (%) , , , , , , , , , , , Q Q Q

9 Let s take a short summary A great history as a trading nation and trade center Sizeable and growing imports A large domestic market A reasonable debt track record over the centuries High volatility over the years A country business modell of addiction to growth A continuous need to borrow money in all available forms Perfect ingredients for a Trade Finance Center 8

10 Turkey Today Global Competitiveness Source: World Economic Forum, The Global Competitiveness Report

11 Turkey Today Global Competitiveness in more detail Source: World Economic Forum, The Global Competitiveness Report

12 Turkey Today Export performance and export partners Rank Country (Exports To) Trade Value (thousands) Share (%) Growth (% 5yr) 1 Germany 12,505, United Kingdom 7,869, United Arab Emirates 7,768, Italy 7,438, France 6,331, Russia 6,140, United States 3,973, (17.24) 8 Spain 3,796, Romania 3,634, Iraq 3,564, Netherlands 2,870, Switzerland 2,738, Greece 2,112, Ukraine 1,968, Saudi Arabia 1,958, Belgium 1,886, Bulgaria 1,810, Iran 1,695, Israel 1,689, Algeria 1,410,

13 Turkey Today Import performance and import partners Rank Country (Imports From) Trade Value (thousands) Share (%) Growth (% 5yr) 1 Russia 20,355, Germany 17,986, China 15,171, United States 11,416, Italy 10,517, France 8,620, Iran 6,227, Ukraine 6,072, Switzerland 5,396, United Kingdom 4,896, Spain 4,210, South Korea 3,856, Japan 3,810, Romania 3,436, Saudi Arabia 3,306, Belgium 2,910, Netherlands 2,765, Kazakhstan 2,323, India 2,219, Poland 1,840,

14 Turkey Today Trade by products 13

15 Turkey Today Import Letters of Credit opened in 2013 Source: SWIFT Watch 14

16 Turkey Today Export Letters of Credit received in 2013 Source: SWIFT Watch 15

17 A short digression What s so special about Trade Finance? Source: Oliver Wyman & ICC, Short Term Trade Register Workshop 16

18 A short digression Different people have different views on the nature of Trade Finance transactions Theory I (the protestant view) Trade Finance as a device to facilitate import or export transactions Theory II (the catholic view) Trade Finance as a device to facilitate import or export transactions and tool to access reasonably priced funding in foreign currency Theory III (the chinese view) Trade Finance as a device to facilitate import or export transactions, tool to access to reasonable priced funding in foreign currency coupled with an extra currency chance if unhedged 17

19 Turkey Trade forecast TR will continue to be an important market 18

20 Turkey Trade forecast Who will participate most in trade growth with Turkey? 19

21 Turkey Trade forecast What are they going to import? 20

22 1 Turkey: a great history as a Trade Center and a superb development since the establishment of the Republic in A large and growing market that continues to be dependent on substantial capital imports 3 A lot of Trade Finance business but not the for the faint hearted 21

23 Christof Gabriel Maetze Member of the Executive Management Board Commerzbank AG Financial Institutions Kaiserplatz Frankfurt am Main Postal Address Frankfurt am Main