ROMSO Cyprus Knowledge Base

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Turkish industry is one of the leading sectors of the Turkish economy. The production of textiles and ready-made clothing plays a key role in terms of the number of employees and the share in total exports. Primary processing of agricultural products and the food industry remain important. The importance of engineering (especially the automotive industry) and the chemical industry is increasing. In the past two decades, a broad privatization program has significantly reduced the presence of state capital in industry, and the general liberalization of the economy has attracted foreign capital and advanced foreign technologies to the industrial sector. Foreign companies are attracted primarily by the capacity of the fast-growing Turkish market, some sectors of which are still far from saturated and have great potential, a good investment climate, highly skilled and relatively inexpensive labor, as well as proximity to neighboring markets, especially European ones, which are attractive in terms of exports.

However, many of Turkey’s industrial sectors continue to be dominated by small and medium-sized (often family-owned) companies, with a heavy reliance on imported components and technologies, and weak development of its own R&D base. Regional disparities in industrial development also persist and eastern Turkey continues to lag behind western Turkey, especially the developed industrial areas around Istanbul, Izmit and Izmir.

History

During the existence of the Ottoman Empire, industry was in its infancy and was limited to arms manufacturers and shipyards, working for the needs of the Turkish army and navy. Only in the late XIX - early XX century, with the beginning of the penetration of foreign capital and the construction of railways, began to build mines, quarries, small factories and plants for the production of yarn, fabrics, clothing, tools and household utensils. Gradually, foreign capital took a dominant position in industry, its share in the mining sector reached 67.5% (mainly French capital), in manufacturing - 75% (mainly English capital). Since the early 1930s, Mustafa Kemal has carried out a series of economic reforms and embarked on the industrialization of the country (including relying on loans and technical assistance from the USSR). The economy was dominated by the policy of statism, the authorities actively influenced industrial development, infrastructure, pricing policy and foreign trade (although during this period large and medium-sized private capital, supported by the authorities, did not cease to exist in Turkey). Before World War II, there were only a few dozen large enterprises in Turkey, including the firstborn metallurgical plant (Karabyuk), the textile mills in Kayseri and Nazilli, several power plants, machine-building, sugar and tea plants, coal mines in Zonguldak, and mines