US-Turkey Cooperation Growing Stronger
Turkey, which already has access to some of the world’s largest markets, has also strengthened its importance as a hub for global supply chain management during the Coronavirus pandemic. As a result, Georgia’s southern neighbour is believed to be in a better position now than before the global pandemic. According to AmCham Turkey, there is strong potential for a closer economic and commercial relationship between Turkey and the U.S. in the future.
Forbes Georgia interviewed Aslı Özelli, executive director at AmCham (American Chamber of Commerce) Turkey, who talked about U.S. businesses in Turkey during the pandemic, shared the chamber’s expectations and recognised the importance of embedding mental health support in corporate culture.
“The Covid-19 pandemic has further elevated the importance of discussing mental health. Throughout the crisis, people have struggled with grief due to the loss of a loved one, isolation or loneliness, general anxiety about the future, and an overload caused by working long hours or juggling work with other commitments such as childcare. To retain the best and the brightest talent, and build trust with their workers, employers need to embed mental wellness support in their corporate culture because the health and safety of employees is critical to long-term value creation,” suggests Özelli.
US-Turkey Cooperation Stronger during the Pandemic
Solidarity and cooperation between the U.S. and Turkey have grown stronger during the Covid-19 pandemic. AmCham Turkey has taken comprehensive measures along with its 110+ members to overcome the effects of the Covid-19 pandemic with the least damage possible. To date, the chamber’s member companies have provided TRY 40million worth of financial and in-kind support to prevent the spread of Covid-19 in Turkey. Some examples include medical equipment donations to hospitals and testing centres, delivery of food boxes, cleaning materials and basic hygiene goods to quarantined residences and free online communication services.
AmCham Turkey is currently working on different projects regarding the integration of Turkish SMEs and start-ups into the global supply chain, which is expected to be restructured after the Covid-19 pandemic. In the upcoming period, AmCham Turkey plans to accelerate its efforts to maintain the continuity of the supply chain and increase the participation of Turkish SMEs in the global value chain in order to ensure the stability of the economy and trade between the two countries.
Economic Relief Package
From the beginning of the pandemic, Turkey implemented the necessary actions regarding public healthcare; this has always been a resilient sector in Turkey and it has already taken long-term measures to provide sustainable economic growth. Self-sufficiency in terms of supply has become vitally important given the current global context. As Özelli says, Turkey is among the few countries across the world that managed the pandemic period and did not experience a major break in its supply chains.
Government bodies have put great importance on mutual communication during the pandemic, and AmCham Turkey in collaboration with Turkish authorities, worked on contribution areas to overcome the effects of Covid-19. AmCham member companies continue to make long-term investments in Turkey through their production facilities, R&D, engineering, and innovation centres.
The Five Priorities of AmCham Turkey for 2020-2021
Before the pandemic, AmCham Turkey determined five priorities for 2020-2021.
- Protect existing U.S. investments and trade in Turkey;
- Provide active support to attract new U.S. investments and trade;
- Promote Turkey and Istanbul as a regional hub;
- Pursue greater participation in global value chains for its Turkish partner SMEs;
- Participate in the development of world-class diverse talent and improve corporate governance and ethics.
Now in this extraordinary global environment, members of the chamber have realized that their priorities have become even more important in terms of the sectors that were rapidly evolving before the crisis. In Özelli’s words, the physical logistics of goods of course cannot and will not be ruled out at any time soon. However, “the way of doing business unexpectedly altered and this is expected to remain the same for a long period of time; this indeed has come with its benefits as well as some challenges.”
“Looking forward, businesses are expected to use both physical and virtual facilities efficiently. Merging conventional and technology-led new business models in a sustainable manner will be at the heart of the transformation that the business world is undergoing,” said Özelli.
US-Turkey Relations in Figures
According to data from the Central Bank of Turkey, the country has attracted $2.8 billion of foreign direct investment from the U.S. in 2019. According to Özelli, in 2020, FDI figures may not reach this level because of the Covid-19 pandemic. However, she does see an overall upward trend in Turkey’s exports to the United States– total exports to the U.S. in 2019 amounted to $9 billion, while imports from the U.S.totalled$12 billion. The trade volume between the two countries exceeded $21 billion. Turkey's export to the United States was just over $3 billion in 2009. So, Turkey's exports to the U.S. tripled in ten years. These figures are significant indicators of Turkey’s increasing share of trade in the global market.
AmCham Turkey represents more than 110 U.S. companies, which have over $50 billion of investment in the country. Pursuant to Özelli, “many U.S. companies position Turkey as a regional hub; they manage their investments across the region from Turkey. Approximately twenty AmCham members position Turkey as a hub for their operations in nearly 80 countries.”
The New Normal
AmCham members, who position Turkey as a regional hub, operate in various sectors – such as automotive, fast-moving consumer goods, industrial production, and information technologies. Looking at the FDI data of 2019, U.S. companies mostly invested in finance, production, energy, IT services, wholesale and retail trade, logistics, storage and construction. AmCham members aim to increase the value they add to Turkey in the new normal of digitalisation and a focus on healthcare.
Building Further on the US-Turkey Business Dialogue
The current trade volume is around $20 billion, President Trump and President Erdoğan agreed that this should reach up to $100 billion, which creates motivation for both sides to study opportunities for more focused trade in priority areas. According to Özelli, Turkey and the U.S. have been strong strategic allies for nearly seventy years, adding that the NATO collaboration and the existing $50 billion of U.S. investments in Turkey are strong pillars of this relationship.
AmCham Turkey pursues its agenda items with regards to the business and investment climate via technical committees and working groups. Public and government affairs, healthcare and life sciences, digital economy, food and agriculture, sustainability, investment environment –are all industries represented by chamber member companies. AmCham intends to build further on the constructive US-Turkey business dialogue in 2020 and beyond. “The key here is to build decisively and innovatively around the positive spark that we have created and ensure that both cultures combine the best of both approaches to yield continuous and joint success,” Özelli told.
Women on Board
There are many studies that show that companies have a better financial performance when different perspectives are represented and where male and female representation is equal at all levels. Özelli believes that sustainability, one of the most important issues in the business world, is directly linked to the representation of different perspectives in the boardroom. “This vision brings diversity and inclusiveness with it. In other words, the fact that women are on the board of directors is not a social issue, but an economic issue that directly concerns the future of companies. When our country increases the female labour force participation rate from 30% to 63%, which is the OECD average, it has the potential to increase its GDP by 20% in 2025.”
Özelli distinguished some fundamental actions that should be taken to solve the issue of gender inequality: addressing gender equality within the scope of corporate culture, carrying out studies to remove unconscious bias, making measurements differently in performance evaluation, adopting change at the top level first, setting goals and making commitments by sharing with stakeholders. In addition to these changes, Özelli thinks that the more important thing is to accelerate the efforts to attract young female talents to the STEM (Science, Technology, Engineering, and Mathematics) sectors.
AmCham Turkey supports women’s empowerment and participation of women in the labour force through its Women Leadership platform. Its Women Executive Mentorship Program, aiming to empower women at mid-senior roles, has reached out to 150 women executives across five years.