Brazil, Turkey vow to deepen military ties

Brazil and Turkey’s defense chiefs vowed Monday to boost military ties and  technology transfers between the two emerging nations.

At a meeting in Sao Paulo, Brazilian Defense Minister Celso Amorim and his  visiting counterpart Ismet Yilmaz signed a letter of intent formalizing a move  to “develop cooperation between the defense industries of both countries,  including technology transfer and joint projects.”

Yilmaz, at the start of a week-long visit to Brazil, has expressed interest  in the South American nation’s aerospace technologies, cybernetics and the  unmanned aerial craft.

At a leadership meeting in October, the two countries moved toward a closer  relationship with vows to boost trade and strengthen ties.

Brazilian President Dilma Rousseff said on a visit to Ankara that trade  between the two countries stood at $2 billion in 2011, and Turkey’s President  Abdullah Gul said the countries have a target of reaching $10 billion “in a very  short period of time.”

Co-development of a new regional airliner by Brazilian aerospace giant Embraer and Turkey’s TAI is expected to be among the projects topping their bilateral agenda.

AFP/NOW

Turkey sells mini drones to Qatar

In an effort to boost defense industry exports to Islamic states, Turkey has recently sold 10 mini drones to Qatar, a senior procurement official said Sunday.

The small unmanned aerial vehicles (SUAVs) were exported under a general agreement made during the International Defense Fair (IDEF), which convened in Istanbul May 2011, for the sale of Turkish defense goods to Qatar worth $120 million within a year.

This $2.5 million sale will become the first export of SUAVs by Turkey, and they will also be the first drones in Qatar’s inventory. The SUAVs, called “Bayraktar,” are made by Baykar Makina, which also produces the “Malazgirt” mini helicopter and the tactical “Çaldıran” unmanned aerial vehicle.

Turkey, which sold defense goods worth over $1 billion abroad in 2011, has recently attempted to bolster defense exports to Islamic countries.

In a separate development, the first drone to have been built entirely domestically by Turkey, the Anka, will compete in an international tender held by Colombia, even before entering service in Turkey, another senior procurement official said.

The Anka, Turkey’s first locally-made drone in the medium-altitude and long-endurance category, was successful in last year’s flight tests.

After crash landing in its first two attempts, the Anka successfully flew in the final two trials.

HDN

Israeli embargo on Turkey hits IAI-Boeing cooperation

Cooperation between Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1) unit Elta Systems and Boeing Company (NYSE: BA) to produce airborne early warning and control (AEW&C) is being threatened because the project is due for delivery to the Turkish Air Force, “Defense News” reports. Israel’s Ministry of Defense has instructed Elta to delay delivery of two of the four sub-systems for electronic support slated to be installed in the early warning aircraft, as part of the US Peace Eagle program for Turkey.

“Defense News” says that some Israeli defense sources fear the incident could inflict long-term damage to trade relations between the US and Israel.

“Defense News” writes that “If Elta cannot deliver the remaining systems for the Turkish program, industry sources here said Boeing may seek alternate suppliers for South Korea and other customers of the 737-based AEW&C aircraft.”

Consequently, Elta is pressing Israel’s Ministry of Defense to cancel delay of delivery. The instructions, which became valid last fall, also threaten to expose Elta to fines for violating contracts and would tarnish its good name.

“Defense News” recounts that late last year Israel’s Ministry of Defense refused to allow Elta and prime contractor Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) to complete delivery of previously authorized long-range aerial photography systems to the Turkish Air Force. The decision cost Elta $55 million, while Elta Systems reported losses of $80 million and a $65 million drop in 2011 fourth quarter net profit as a result of write-offs and other costs associated with the terminated program.

“Defense News” notes that, “Unlike the earlier contract with Turkey, government and industry sources insist Elta’s export license to Boeing is not suspended is not suspended but rather put on hold pending additional review. In contrast to the terminated long-range pod program, industry sources said the ESM subcontract to Boeing involves a passive, purely defensive system that in now way enhances the attack capabilities of the Turkish Air Force.”

There is a danger that Boeing will declare force majeure and kick us out of this prestigious and lucrative program,” one industry source said.

An Elta spokesman confirmed that delivery of the two electronic sub-systems had been delayed for “political reasons.” He said, “We’re trying to work it all out, before it becomes a much bigger problem.”

Boeing spokesman David Sloan declined to discuss licensing issues or delivery delays associated with the firm’s Israeli subcontractor. He said, “We continue to be on plan for delivery of Turkey’s first Peace Eagle aircraft by the end of the year.”

US defense sources said that beyond immediate commercial and legal repercussions for Elta, the freeze on deliveries to Boeing carries grave, long-term implications for the future of US-Israeli defense trade.

A former Israeli defense official told “Defense News” that the case, if not resolved promptly, threatens to hamper a high priority US-Turkish program with operational implications for NATO. He said that it might also impede Boeing’s ability to perform as required under its $1.6 billion contract with Turkey and discourage other US firms from entering into strategic international cooperation with Israeli suppliers.

Globes

Iran develops laser-guided artillery rounds

Tehran —  Iran has developed laser-guided artillery rounds designed to home in on stationary or moving targets at a distance of up to 12 miles, Defence Minister Ahmad Vahidi told state media Jan. 30.

State television showed images of artillery being fired, saying it showed the precision-guided ammunition in action.

No details were given on the technology purported to be used.

“Iran is now one of just five countries in the world able to manufacture these sorts of weapons through domestic technology,” Vahidi said.

The Islamic republic is subject to a U.N. embargo on foreign arms imports because of suspicions over its nuclear program.

It frequently announces domestically produced, hi-tech breakthroughs in the military sector, though gives few details.

Early this month, it test-fired short-range missiles during navy war games.

And Vahidi last week said new air and sea defense systems, and electronic warfare technology, would be presented next month, when Iran commemorates the anniversary of its 1979 Islamic revolution.

DefenseNews

Boeing wins $3.48 bln missile defense contract

Boeing beat out Lockheed Martin to retain its position as the prime contractor for the U.S. long-range missile shield, the Pentagon said on Dec. 30.

The U.S. Defense Department said it was awarding Boeing a $3.48 billion, seven-year contract to develop, test, engineer and manufacture missile defense systems.

A team led by Lockheed Martin and Raytheon had vied with Boeing to expand and maintain the “Ground-based Midcourse Defense” (GMD) hub of layered antimissile protection.
Boeing partnered with Northrop Grumman to retain the work.

“We believe the government conducted a fair and open competition, making the right decision for the future of the program,” Norm Tew, Boeing vice president and program director of GMD, said in a statement.

‘Shield against Iran, North Korea’

The GMD contract’s value to Boeing will have been about $18 billion from January 2001, when it formally became the system’s prime contractor, through the end of this year, Boeing has said.

GMD uses radar and other sensors plus a more than 32,000-kilometer fiber optic communications network to cue interceptors in silos at Fort Greely, Alaska and Vandenberg Air Force Base, California.

The shield has been shaped initially to guard against ballistic missiles that could be fired by Iran and North Korea. It is the only U.S. defense against long-range missiles that could be tipped with chemical, biological or nuclear warheads.

Reuters

September unemployment slips to lowest level in 10 years at 8.8 pct

Turkey’s unemployment dropped to 8.8 percent in September from 11.3 percent in the same month of the preceding year, hitting the lowest level since a 2001 domestic financial crisis, data from the Turkish Statistics Institute (TurkStat) revealed on Thursday.
(Photo: AA)
(Photo: AA)

The lowest unemployment rate Turkey experienced in the past decade was 7.8 percent in the third quarter of 2001. Turkey’s unemployment was down 2.5 percent in September over the ninth month of 2010, Thursday’s TurkStat Household Labor Force Survey shows. This follows a 2.2 percent year-on-year drop in August: Turkey’s unemployment rate was at 9.2 percent in August, representing a drop of 2.2 percent compared to the eighth month of 2010. Observers argued the latest indices gave hope of further recovery in job markets through the end of the year. The government’s Medium-Term Economic Program (OVP) estimates the year-end unemployment in Turkey for 2011 at 12 percent. Deputy Prime Minister Ali Babacan earlier this week said the year-end unemployment figures could be lower than what the government predicted in the OVP.

Turkey’s unemployment rate hit a worrisome 15 percent in 2009 when the global financial crisis hit the world economy the hardest. Last year, the government’s fight against inflation paid off, and the unemployment rate was able to be brought down as low as 10.5 percent.

More than 1.7 million people joined the pool of the employed in Turkey in the past 12 months to reach 24.75 million. Likewise, the number of unemployed decreased by 536,000 in September over the same period of the previous year and reached 2.4 million.

Stable growth in the economy is expected to help drive the country’s unemployment further down. Turkey registered the world’s fastest economic growth rate with 9.6 percent in the first three quarters over the same nine months in 2010.

Unemployment was 11.1 percent in urban areas in September, a 2.8 percent drop year-on-year, and was 4.5 percent in rural areas, a 1.8 percent drop in the same period. Unregistered employment — the share of people who have no social security benefits — was 42.8 percent, marking a 1.2 point decrease from the previous year. Looking at a sector-specific distribution of the employed, agriculture employed 26.2 percent of total workers in September 2011, industry 19 percent, construction 7.6 percent and services 47.2 percent. Employment in agriculture increased by 0.1 percentage point and construction increased by 1 percentage point while that of industry and services decreased by 0.5 percentage point.

More opportunity for young job-seekers

In additional critical data showing the improvement in Turkish job markets, Turkey’s youth unemployment declined to 17.3 percent in September, representing an encouraging 3.9 percent recovery when compared to the same four-week period in 2010.

The data is prominent considering more people are looking for jobs in the country every passing month. Turkey’s working age population — those over 15 years of age — increased by 1.1 million in September 2011 compared to the same period of the previous year.

In relative terms, Turkey has a higher young population in comparison to European countries. The country aspires to become an EU member, and observers argue this could help inject dynamism into the debt-ridden union’s volatile job market. Overall eurozone unemployment hit 9.8 percent in October 2011, while the union’s youth unemployment has jumped to 22 percent in the same month from 16 percent in 2007, data provided by the European Commission indicates. Elsewhere, the US, another economic powerhouse currently having problems, saw its unemployment slipped to 8.6 percent in November. This might have heralded a recovery for American job markets; but observers argue the EU will have to wait a bit longer to enjoy a similar recuperation.

Notable recovery in non-agricultural employment

According to a Bahçeşehir University Center for Economic and Social Research (BETAM) report, non-agricultural employment dropped by 3 percent to 11.3 percent in September over the same month of 2010. The report underlined that Turkey’s non-agricultural employment increased noticeably during the third quarter. BETAM attributed the recovery in employment in the months July, August and September to growth particularly in service industry employment in the given period. One encouraging detail the BETAM report drew attention to was that Turkey’s industrial employment increased for the first time in September since April this year. The report said a swift decline in non-agricultural employment during the third quarter would slow down in October. Turkey’s non-agricultural employment reached its peak at 18.2 percent in April 2009 and has been declining ever since. The highest monthly increase in the number of employed in non-agricultural sectors was experienced in April with 196,000 new jobs.


Online job sites report increased activity

Data provided by Turkey’s online employment sites acknowledge a recovery in the country’s job markets. According to an employment index report released by Kariyer.net, 39,000 people found jobs [via the website’s job search channels] in Turkey in November. The sector to experience the highest increase in new jobs was tourism with 55 percent in the 10th month. The report also indicated that the decline in employment in such key sectors as automotive, IT and food slowed down in the same month. Kariyer.net saw 11,122 new job postings in November, 33 percent higher than the same month of 2010.

Another employment site Yenibiriş.com said they expected Turkey’s food industry alone would provide 150,000 new jobs in 2012. The website recalled the food sector grew by 15 percent annually on average, adding a similar performance is expected in 2012 as well. With a total market size of $32 billion, Turkey’s food industry provides jobs to more than 977,000 people. The job applications for food companies increased by 16 percent on Yenibiriş.com this year so far.

 

15 December 2011 / ERGİN HAVA, İSTANBUL

BUSINESS > Turkish shipyard delivers fast intervention boats to Malaysia

Yonca Onuk, a top Turkish shipyard, has delivered the first four of 10 MRTP-16 fast intervention boats to Malaysia’s Coast Guard Command as part of a $100 million contract, a senior Turkish procurement official said yesterday.

This company photo shows a RTP-16 model fast intervention boat produced by Yonca Onuk.
This company photo shows a RTP-16 model fast intervention boat produced by Yonca Onuk.

Three of the four boats were delivered and launched earlier this year, while the fourth was unveiled this week at a ceremony at Malaysia’s Langkawi shipyard that was attended by senior officials from both countries, according to authorities.

Two of the ships were directly built by Yonca Onuk while the two others were constructed by Malaysia’s Bousted shipyard under contract, Malaysian Maritime Enforcement Agency Director General Adm. Datuk Mohd Amdan Kurish said at the ceremony, according to Turkish procurement officials who attended the event.

“The remaining six are expected to be delivered in June next year. Of the six, two will be built in Turkey and four here,” he said.

The fast intervention boats are slated to be used mainly in anti-piracy and anti-smuggling missions, Malaysian officials said. The MRTP-16 has a maximum speed of 60 knots and can carry 10 crew members.

For Turkey’s rapidly rising exports, Malaysia has become a top customer this year. In February, FNSS, an Ankara-based joint venture with the United States, signed a deal worth nearly $600 million with Malaysia for the joint development and manufacture of 257 8-by-8 Pars amphibious armored vehicles. The Pars was designed by FNSS, and also comes in 8-by-8 and 6-by-6 versions.

The MRTP-16 deal is the largest partnership in the defense business sector between Turkey and Malaysia apart from the FNSS contract.

Small naval platforms are among the strongest sectors in Turkey’s defense export sector. Yonca Onuk’s MRTP-related boats have been sold to several countries.

As part of a 2009 agreement signed with the United Arab Emirates, Yonca Onuk is also selling 34 fast interceptors to the Gulf country. Five boats have been delivered so far while two others have been put to sea and are undergoing tests.

The UAE boats are fitted by STAMP stabilized machine gun platforms, a well-exported item made by Turkish military electronics conglomerate Aselsan.

 

ANKARA – Hürriyet Daily News

December/08/2011

Egypt offers Turks barter on business

A top Egyptian business group makes Turkish firms an offer that is hard to refuse: Sell textiles to Africa, US via Egypt in exchange for construction in Russia

This photo shows textile workers at a plant in Istanbul. Turkey may make use of Egypt’s tax advantages, says Sabbour. AA photo
This photo shows textile workers at a plant in Istanbul. Turkey may make use of Egypt’s tax advantages, says Sabbour. AA photo

Egypt could become a gateway for Turkish firms intent on entering new markets in Africa, the head of a top Egyptian business group has said.

“Turkish firms are interested in penetrating 19 African countries through Egypt,” Hussein Sabbour, chairman of Egyptian Business Association (EBA), told the Hürriyet Daily News yesterday at the 12th Egyptian-Turkish Business Council meeting in Istanbul.

As a member of the Common Market for Eastern and Southern Africa (COMESA), Egypt currently pays no tax or custom fees on goods traded with other member states, which include Kenya, the Democratic Republic of the Congo, Sudan, Uganda, Zambia and Zimbabwe. “This is a great advantage for a Turkish firm to invest in developing countries in Africa.”

Sabbour said Egyptian construction and consulting firms had also developed an interest in partnering with Turkish construction companies which are already active in Russia and Turkmenistan. “If we are opening the door to Africa to Turkish firms, we would also partner with Turkish firms for construction projects in Russia and Turkmenistan.”

Another reason for the increased interest of Turkish firms in post-revolution Egypt, Sabbour said, is to export products, primarily textiles, to the U.S. market without customs fees. “Turkey has to pay a significant customs and tax fees for exporting products to the U.S. This could be avoided by partnering with Egyptian firms.”

He also said Turkish and Egyptian firms were currently having talks about their partnerships without naming companies.

“Bilateral trade between Turkey and Egypt had reached to $3.48 billion as of November. We aim to reach $10 billion in a few years’ time,” Ismail El-Nagdy, Egyptian deputy minister of industry and foreign trade, told the Daily News. He said Roll-On/Roll-Off (RORO) services between the Mediterranean Turkish port of Mersin and the Egyptian city of Alexandria would begin operating next year and would boost trade between the countries.

Turkey currently has nearly $5 billion of direct investment in Egypt, although the figure is expected to double in the next five years, according to Zuhal Mansfield, the head of Turkish-Egyptian Business Council at the Foreign Economic Relations Board of Turkey.

Nearly 7,000 firms in Turkey are manufacturing and exporting products for the Egyptian market, while 200 Turkish firms are currently operating with 80 plants in Egypt, said Abderahman Salaheldin, Egypt’s envoy to Ankara.

Despite the political unrest in Egypt that started in January, Turkey’s exports rose to $2.29 billion in the first 10 months of the year from $1.89 billion compared with the same period last year. Egypt’s exports to Turkey also rose to $1.9 billion in the first 10 months of the year, up from $795 million in the same period of 2010.

 

 

 

ISTANBUL- Hürriyet Daily News

December/08/2011

 

 

 

 

European debt crisis knocks Turkey’s door

Turkey’s top business group and the IMF issue harsh warnings on the Turkish economy, which could be in for a shock due to a large current account deficit

The main opposition CHP’s leader Kılıçdaroğlu urges workers to stand up against the government for their right as Deputy PM Bozdağ (L on screen) and Labor Minister Çelik is listening. DAILY NEWS photo, Selahattin SÖNMEZ
The main opposition CHP’s leader Kılıçdaroğlu urges workers to stand up against the government for their right as Deputy PM Bozdağ (L on screen) and Labor Minister Çelik is listening. DAILY NEWS photo, Selahattin SÖNMEZ

As eurozone leaders started a “make or break” summit in Brussels yesterday, the Turkish economy received stark warnings about a possible spillover from the ongoing debt crisis.

The International Monetary Fund (IMF) on Dec. 7 predicted economic growth of just 2 percent next year for Turkey, providing an assessment that hints at the possibility of a short recession early next year. But Economy Minister Zafer Çağlayan brushed off the pessimistic review, saying the IMF would have to revise its projections.

However, a similar warning came yesterday from Turkey’s top business organization. “External crises can come knocking on our door at any time,” Ümit Boyner, chairwoman of the Turkish Industry & Business Association, said in a speech that intimated an unsustainable current account deficit. (p. 10)

Hopes for a managed slowdown in the economy were dented yesterday as industrial output continued to grow at a rapid pace. In October, the pace of expansion was 7.3 percent; on a month-to-month basis, the increase was the biggest since December 2010.

Meanwhile, the European Central Bank cut its main interest rate to 1 percent yesterday, displaying its concern for the health of the eurozone economy.

 

 

December/08/2011

ISTANBUL / FRANKFURT

TDN

 

 

 

 

Russia’s RenCap bets on rapid growth in Turkey

The recent buyer of a Turkish brokerage, Renaissance Capital, is aiming for the top in all aspects of the Turkish capital markets. Speaking to the Daily News, the acting CEO for Turkey points toward economic ties between Turkey and Russia.

The headquarters of Renaissance Capital in Moscow is seen in this company photo. The investment bank recently acquired Mira Securities, an Istanbul-based brokerage. Company photos
The headquarters of Renaissance Capital in Moscow is seen in this company photo. The investment bank recently acquired Mira Securities, an Istanbul-based brokerage. Company photos

It remains to be seen whether Turkey, along with other fast-growing emerging economies, will be able to weather the spillover from the troubles in developing economies. Moscow-based investment bank Renaissance Capital, however, is betting that emerging markets will continue to offer solid returns for investors.

RenCap acquired Istanbul-based brokerage Mira Securities for an undisclosed sum last month.

According to Burak Akbulut, the company’s acting chief executive for Turkey, this is only the first step in gaining a solid foothold in Turkish capital markets.

“Renaissance Capital is very experienced in all emerging markets. It aims to be the leading investment bank in emerging markets,” Akbulut said in a phone interview with the Hürriyet Daily News. “We target to be active in all aspects of Turkish capital markets – brokerage, investment banking and initial public offerings. But initially, we’ll target trading and also will have a huge focus on research.”

RenCap, led by CEO Stephen Jennings, was established in 1995. Today, it ranks as the number-one researcher in Russia, South Africa and other markets, and has the same ambitious target for Turkey.

The company’s Istanbul office will be based at the old Mira Securities headquarters in the city’s Baltalimanı neighborhood. Akbulut said there was likely to be an initial staff of 15 individuals, including researchers.

A new trend

The acquisition comes at a time when Turkey’s trade and economic ties with Russia are flourishing, echoing rapidly developing relations between emerging markets, instead of the traditional focus on tying up with the West’s developed economies.

“Fund flows between the two countries are increasing. And RenCap is going to play a key role in these flows,” Akbulut told the Daily News. “And it’s not only about Russian firms that wish to invest in Turkey. Big Turkish companies have also been investing in Russia.”

Noting Turkey’s energy imports from Russia, Akbulut said he saw energy as a major sector in bilateral ties, especially once Russia officially becomes the 155th member of the World Trade Organization at the Dec. 15-17 summit of the international trade body.

Turkey obtains 40 percent of its oil imports and 64 percent of its natural gas imports from Russia, figures that make it highly dependent on the $1.9-trillion Russian economy. “RenCap will play a key role in bringing its expertise to Turkey regarding the energy sector,” Akbulut said.

The RenCap Turkey CEO said he hoped Russian banks’ interest in Turkey would continue. Russia’s Sberbank was named as one of the potential bidders for Denizbank, the Turkish unit of Franco-Belgian lender Dexia that had to be bailed out and is now in the process of breaking up.

RenCap may also use Turkey as a “gateway” to the Middle East and North Africa given Turkey’s key role in the ongoing Arab Spring, according to Akbulut.

 

 

December/04/2011

TDN