Globalization once favored the Turkish textiles and ready wear over its more expensive European and American counterparts. Remember how surprised and pleased we were when we first stumbled upon that Made-in-Turkey labeled towel, T-shirt or pair of jeans at our local Sears Roebuck?
That is probably about to change. According to the Turkish Union of Exporters Assembly R&D Department figures, ready wear exports went up slightly from $1.29 billion in August 2003 to $1.32 billion this August.
However, this negligible 0.3 % increase was way behind the energetic 10.3 %-to-45.8 % annual increase in the other Turkish export sectors.
Since ready wear’s share within total Turkish exports is 21.6 %, such stagnation is becoming a major concern both for the exporters and the Turkish planners.
In the textile sector, the problem is more obvious: only $8.6 billion was exported within the first 8 months of this year, representing a comparable drop of 25 % over the last year.
There is a “global cause” behind this “local effect.”
Cheap Chinese and Indian ready wear is eating away into the share of the Turkish exports, fast.
This year the market pressure got so tough that some Turkish exporters, faced with losing the accounts that it took them three to five years to develop, began selling their stock at a loss just so to maintain their foothold in the global market.
Here are the latest numbers provided to the Turkish press by Tarik Bozbey, President, Chamber of Turkish Ready Wear Exporters, Union of Mediterranean Exporters (AKIB):
“We are especially hurting from the textile subsidy the Chinese state is providing for the Chinese exporters. A pair of pajamas weighs about 500 grams. You need to use 1 kg of cotton to manufacture that pair. One kilogram of cotton costs $ 1.5 dollars. But China sells the pajamas for only 85 cents. That’s why the Europeans prefer Chinese and Indian ready wear over ours.”
Bozbey added that the ready wear sector needs urgent support in order to stop the hemorrhage in exports.
Perhaps it is time for Turkey to shift from manufacturing ready wear products to generating the software… that drive the computerized machines… that Chinese and Indians use to manufacture the products… that they subsidize. However, I’m afraid China and India might be ahead of Turkey in that sector as well.
This reminds me of a conversation I had a couple of years ago with a young and patriotic Turkish engineer regarding the pirated software sold back then on the streets of major Turkish cities (how about MS Office Suite, complete with Access DB, for only $5?).
The young engineer defended the practice as some sort of global wealth redistribution exercise in "getting back even with the imperialists." If Robin Hood lived today, he would take it from the Microsoft and distribute it to the poor of the world... sort of argument.
When I reminded him that it was actually a shot in the foot of the local Turkish software industry (because no Turkish engineer would generate code for profit when you can buy the same or better code for $5 on the street) he did not have a plausible reply that would satisfy both his sense of admirable patriotism and the elemental rules of logic.
I can’t help but thinking if that kind of shortcut in “software acquisition” may now end up leaving Turkey exposed as its market share in ready wear exports draines away, with little to replace it within the same sector. I hope I am wrong.
What goes around comes around, not only in our personal dealings, but in global competition as well.