Can Turkey Become the Production Hub of the New World?
The world, which is heading towards an economic size of 100 trillion dollars by the end of 2022, is looking for new balance points after the pandemic. The pandemic has once again brought to the fore how vital it is for a country and its people to have the production items they need close by and accessible in order to meet their basic needs.
During the pandemic, many European countries and the USA realized that they had become dependent on imports, from chips in cars to dog food, from toilet paper at home to cell phones and automobiles. In the event of a shutdown, markets ran out of products, factories could not produce as chips could not be supplied.
The world GDP, which was 1.4 trillion dollars in 1960 and about 3 trillion dollars in 1970, exceeded 96 trillion US dollars in 2021. By the end of 2022, it is expected to reach $100 trillion. At the same time, by the end of 2021, the volume of mass trade had reached a record high of 28.5 trillion dollars. By the end of 2023, it is expected to exceed $30 trillion.
Rapidly increasing industrialization in the world in the last 40 years has brought China and South Asian countries to the forefront, which have become centers of attraction with cheap labor and energy costs. As of 2022, China has started to produce 30% of the world’s production by itself with a production power of 4.86 trillion dollars. It consumes 24% of the world’s energy. In the last year, production in China has more than doubled in 10 years.
China received 181 billion dollars in foreign direct investment in 2021
With the increase in China’s weight in production, trade measures against China, particularly against the US, began to be taken. Despite the ongoing trade wars, China’s investment attractiveness continues to grow. China is trying to control the routes to qualified markets with its investments through the ‘one belt one road’ project called OBOR. In 2021, foreign direct investment in China amounted to 181 billion dollars. In 2022, this trend continues to increase. The fact that foreign direct investments in the first 10 months were around 10 billion dollars, the vast majority of which were real estate purchases, shows the gap between us. China receives roughly 100 times more investment than us.
Central logistics corridor can carry Turkey to a $5 trillion economy
Turkey, which is still not among the top 20 economies with an economic size of USD 800 billion, can be a candidate to become the new destination of investments in the next 30 years if it uses its power of being right next to Europe well and manages its qualified and young labor force correctly. In the pandemic, containers that could not go from China to Europe in 12 weeks can go from Turkey to Europe’s most extreme points in just 5 days. This is a great advantage. There are 28.5 million students in Turkey. This is more than the total population of 47 countries in Europe.
The northern logistics corridor was badly damaged by the Ukraine-Russia wars. Even if the war ends, it will not return to its old days in 5 years. Traffic on the Trans-Caspian corridor has increased 6 times and volume more than 10 times in the last 2 years. All this transportation traffic passes through Turkey.
Turkey’s qualified and young workforce, its location at the crossing point of alternative energy corridors, and its ability to ship its products to European markets in just a few days makes it a privileged country. If this opportunity is well utilized, Turkey can attract more than 500 billion dollars of foreign direct investment in the next 10 years. This will create a trillion-dollar production capacity for Turkey.