the economic policy research foundation of turkey...İstanbul islamabad istanbul – tehran -...

tepav The Economic Policy Research Foundation of Turkey

Ussal Sahbaz

Dhaka, June 26, 2013

Transport Connectivity: Turkey in the SSWA

Framework

Why does connecting to SSWA matter for Turkish economy?

Transformation of Turkish economy

Shifting trade patterns

Role of transport connectivity

Turkish view: Big picture of transport corridors

Connections to South & Southwest

Connections to Central Asia & China

Connections to inland Europe

The way forward

Pillars of a new transport development approach

Institutional structures for international transport corridors

Concluding remarks

Slide 2 Transport Connectivity: Turkey in the SSWA

EUROPE

ASIA

High Growth Low Export Growth

Low Growth High Export Growth

Low Growth Low Export Growth

High Growth High Export Growth

Source: World Development Indicators

Does connectivity matter?

Transport Connectivity: Turkey in the SSWA Slide 3

Turkey’s adjustment is mostly through markets not products

Transforming into:

High-growth products

Low-growth markets

Contribution of Geographic adaptation to

World market share change, %, 2000-2010

Source: BACI

dataset, Memedovic

ve Iapadre (2009),

TEPAV calculations

Co

ntr

ibu

tio

n o

f S

ecto

ral

ad

ap

tati

on

to

Wo

rld

mark

et

sh

are

ch

an

ge,

%,

2000

-20

10

Transforming into:

High-growth products

High-growth markets

Transforming into:

Low-growth products

High-growth markets

Transforming into:

Low-growth products

Low-growth markets

Decompositon of the change in world market share,

geographic vs. sectoral adaptation, 2000-2010, %


So far, MENA markets compensated the loss in the EU; sustainining this will get increasingly hard, ..

Source: Turkstat and TEPAV Calculations

56.4% 56.3% 48.0% 46.0% 46.3% 46.2%

38.2%

13.2% 17.8% 23.7% 26.1% 26.6% 25.7%

35.3%

30.4% 25.9% 28.3% 27.9% 27.1% 28.1% 26.6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000 2007 2008 2009 2010 2011 2012

Others

MENA

EU-27

Share of geographic regions in Turkey’s exports


18%

13%17%

7%

44%

100

4%

33%

33%

100

Resource Based

Primary Products 19%

1991 2001 2011

High Tech

Medium Tech

Low Tech

3%

14%

46%

100

25%

12% 13%

Technological breakdown of Turkey’s total exports,

2000-2005-2010, %

..which makes new markets for mid-tech products essential

Source: UN COMTRADE,

TEPAV Calculations

Slide 6

7 %


Where does Turkey’s trade with SSWA stand?

Share of Turkey’s exports in the imports of main regions

2000-2005-2010, %


TEPAV Calculations

Slide 7

0.5

0.10.2

0.7

1.7

0.7

0.10.3

1.1

2.9

1.0

0.10.2

1.1

4.0

MENA EU N. America E. Asia SSWA

2000

2005

2010


A more focused view to Turkey’s trade to SSWA trade shows that the potential is huge

Share of Turkey’s exports in the imports of SSWA countries

2000-2005-2010, %


TEPAV Calculations

Slide 8

0.2

0.9

0.20.1

1.6

0.1

0.4

1.8

0.5

0.8

0.3

2.3

0.2

0.8

3.1

0.3

0.6

0.2

0.7

4.6

0.20.0

0.7

2.6

Iran India Bhutan

0,3

Bangladesh Afghanistan Maldives Nepal Pakistan Sri Lanka

2005

2000

2010


Istanbul

Frankfurt

Islamabad

Tehran

Dhakka

Mumbai

How would you ship your cargo from Istanbul to Karachi or Mumbai?

Karachi

Container train railroad


Istanbul

Frankfurt

Islamabad

Tehran

Dhakka

Mumbai

How would you ship your cargo from Istanbul to Karachi or Mumbai?

via Rotterdam

Karachi

Container train railroad

Shipping liner service


Railroads have negligible share as a mode for Turkey’s exports

Slide 11

Turkey’s exports according to transport modes, %

10112210001 1 67876578 66714

374042

394141434343464243 33

555146504950484949475047 51

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

1 1 1 0 1 1 1 2 1 1 1 2 1 1 2 1

2000 2001 2002

Rail

Maritime

Ground

Air

Kaynak: TÜİK, TEPAV hesaplamaları


UZBEKISTAN

TAJIKISTAN

KYRGYZSTAN

KAZAKHSTAN

TURKMENISTAN

AFGHANISTAN

IRAN

PAKISTAN

TURKEY AZERBAIJAN

ARMENIA

GERORGIA

RUSSIA

INDIA

IRAQ

SYRIA

LEBANON

ISRAEL

SAUDI ARABIA

Tahran

Ankara

Quetta Zahedan

Kerman

Tebriz Malatya Kayseri

Taftan

Esfehan

İstanbul

Islamabad

Istanbul – Tehran - Islamabad Train Project

Zahedan

Railway conversion Taftan

Customs

Kapıköy

Customs

Van Lake

Ferry

Taftan – Quetta

Old rails


istanbul

Frankfurt

Moscow

Helsinki

Baku

Xinjiang

Beijing

Big Picture: Modern Silk Road

Turkmenbashi

Aktau


istanbul

Frankfurt

Dhaka

Mumbai

Moscow

Helsinki

Baku

Xinjiang

Beijing

Conflicts over the Modern Silk Road

Islamabad

Turkmenbashi

Aktau


Current

railways

Required railway construction

Baku

Kirkovan

Delican

Corridor 1: Kirkovan – Delican - Baku

Corridor 2: Kars – Nakhcivan - Baku

Nakhcivan

Erivan

A Focus on the Caucasia: East - West


Innovative approaches: 2010 Afghan – Pakistan Transit Trade Agreement (one way corridor from Afghanistan to India)


istanbul

Frankfurt

Dhaka

Mumbai

Moscow

Helsinki

Baku

Xinjiang

Beijing

Recent conflict in Syria brought further obstacles

Islamabad

Turkmenbashi

Aktau


The connectivity matters for the market orientation: The case of inland v. Coastal Turkey

Europe,

24%

MENA,

60%

Asia;

8%

Other;

8%

Europe,

51%

MENA;

10%

Asia,

27%

Other,

12%

Europe, 78%

MENA,

12%

Asia, 4%

Source: TURKSTAT

Asia

7%

Europe

33%

MENA

44%

Other

16%

Bursa USD 11.2 billion

İstanbul USD 51 billion

Kocaeli USD 10 billion

Konya USD 1 billion

Gaziantep USD 3.6 billion Asia

8%

Europe 61%

MENA

18%

other

13%

İzmir USD 6.6 billion

Asia

11%

Europe

39% MENA 33%

Other

17%

Kayseri USD 1.1 billion


BALO will start twice a week block trains from Edirne to Munich on August 16, 2013

Land

Duration:5-6 days;

Cost: 3,100 €

Rail

Duration: 8-9 days;

Cost: 2,367 €

RoRo + Land

Duration: 8 days; Cost: 2750 €

Germany

(Koln)

Mersin

Gaziantep

Source: ecotransit, googleearth, TEPAV Calculations

Sea

Duration: 14-16

days; Cost: 2,055 €


Pillars of a new transport development approach

Transport Corridors matter

A corridor is as weak as its weakest link

Weakest links can occur at border crossings, inter-model ports, or conflict zones

Private sector should be engaged at the outset

“Build and they will come” does not work

Private sector information matters a lot for the design of the projects

Beyond a “project list”

Assessing bottlenecks

Prioritizing projects


Institutional structures for development of transport corridors

Internal mechanisms Liberalization of the Turkish railroad market (brand new)

Inter-agency dialogue on transport policy: Min of Foreign Affairs, Min of Economy, Min of Transport (informal)

Public – private partnerships at border gates: IRU’s TIR-EPD pilot (TOMORROW’S PANEL)

Bilateral and multilateral mechanisms TIR and COTIF conventions

Quotas for trucks: Problem for the EU market

Utilizing multilateral platforms for enhancing quotes: example of BSEC

Relevant international platforms UNESCAP – SSWA Transport Connectivity

Infrastructure chapter of the Istanbul Process for Afghanistan

ECO committees

Ad hoc mechanisms


Conclusions Regional integration through developing new rail /

road transport corridors ought to be a policy priority for Turkey

SSWA is a key part of the big picture in Asia

Corridor development in this region requires innovative approaches, supported by the private sector

Utilizing bilateral and multilateral platforms

Bringing (conflicting) parties together

Resolving coordination failures

Role for US policy in the region:TransAtlantic nature

Inclusive governance

Market based policy reforms

Connectivity enhancing transport infrastructure


BITTI

Connectivity in the Mediterranean Slide 25

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